The recently completed Airport Master Plan Update identified that the existing City owned rental car facility used to wash, detail, and maintain the rental car companies' fleets needed to be relocated, upgraded, and expanded. The design work has begun on the new Quick Turn Around Facility (QTA). 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 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.

Preliminary steps have also been initiated to structure the financing for the new facility. On April 12, 2010, the Council approved the Airport's Recovery Zone Facility Bond Application and a Resolution relating to the City's Airport Revenue Bonds, and the proposed QTA setting forth its intention to refund the outstanding Series 2000 Revenue Bonds and issue additional bonds to finance the costs of the QTA as an economic Recovery Zone Facility Bond. On April 20, 2010, the Council received a briefing packet and heard a presentation on the overall QTA Facility Project. Staff requests that the City Council endorse the business relationship and financing plan that staff has prepared for this development. Staff is requesting that Council approve a Resolution of Intention to enact an Ordinance imposing a CFC for car rentals at Billings Logan International Airport and setting a public hearing and first reading of the Ordinance on June 14, 2010.

The City Council may:

• Approve the Resolution of Intention to enact the CFC Ordinance; or
• Not approve the Resolution of Intention to enact the CFC Ordinance.

The preliminary estimate for the design, site grading, utility extensions, construction of the automated wash, detail and fueling facilities, and completion of the site paving and new road system is $7,000,000. The initial $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 Resolution of Intention to enact an Ordinance imposing a CFC for car rentals at the Airport and setting a public hearing on June 14, 2010.