The recently completed Airport Master Plan Update identified that the existing City owned car rental facility used to wash, detail, and maintain the car rental companies' fleets needed to be relocated, upgraded, and expanded. The design work has begun on the Quick Turn Around (QTA) Facility. Initial cost estimates for designing, building, and equipping the new QTA require that the Airport consider issuing bonds. Further evaluation by Airport staff and the City's Financial Services Manager indicate that a new source of revenue is needed to cover the annual debt service costs of a bond issue to finance this facility. Staff is proposing that a Customer Facility Charge (CFC) be implemented as a new revenue source. The proposed CFC is estimated to be a $3.00 fee, to be collected for each contract day of a car rental. The CFC would be assessed to the car rental customer, through the Airport's Car Rental Concessionaires. On April 20, 2010, the Council received a briefing packet and heard a presentation on the overall QTA Facility Project. On May 10, 2010, the Council approved Resolution #10-18933, a resolution of intent to enact an ordinance imposing a CFC for car rentals at Billings Logan International Airport and setting a public hearing on June 14, 2010. Legal notice of the public hearing was published in the Billings Times on May 20 and 27, 2010.  The Council held the public hearing on June 14, 2010, and approved the Ordinance on first reading after the public hearing.

The City Council may:

• Approve the second reading of the Ordinance to enact the CFC;
• Amend the Ordinance and approve the amended Ordinance on second reading; or
• Not approve the second reading of the Ordinance to enact the CFC.

The preliminary estimate for the design, site grading, utility extensions, construction of the QTA, and completion of the site paving and new road system is $7,000,000.  The projected $3.00/contract day CFC will generate approximately $780,000 per year.  These fees will be used to pay the annual debt service requirements on the new bonds and ongoing capital costs for the car rental facilities.

Staff recommends Council approve the Ordinance enacting the CFC on second and final reading.