Rio Vista Municipal Airport Potential Alternatives for the Future Ownership, Operation and Maintenance of the Airport

Rio Vista Municipal Airport Potential Alternatives for the Future Ownership, Operation and Maintenance of the Airport Prepared for City of Rio Vista Prepared by Aries Consultants Ltd. March 2015

Rio Vista Municipal Airport Potential Alternatives for the Future Ownership, Operation and Maintenance of the Airport Prepared for City of Rio Vista Prepared by Aries Consultants Ltd. March 2015

TABLE OF CONTENTS Section Page 1 INTRODUCTION AND SUMMARY 1.0 Introduction... 1-1 1.1 Alternatives Considered... 1-1 1.2 Alternatives Analysis... 1-3 1.3 Summary... 1-6 1.4 Recommendations... 1-10 2 CONSIDERATIONS FOR ALTERNATIVES ANALYSIS 2.1 Introduction... 2-1 2.2 History of the Airport... 2-1 2.3 Airport Activity and Operations... 2-1 2.3.1 Based Aircraft... 2-2 2.3.2 Aircraft Operations... 2-2 2.4 Federal Aviation Administration (FAA)... 2-2 2.4.1 FAA Airport Improvement Program Grants... 2-2 2.4.2 FAA Grant Assurances... 2-6 2.5 California Department of Transportation, Division of Aeronautics (Caltrans) 2-6 2.5.1 Annual Grants... 2-6 2.5.2 Caltrans FAA Airport Improvement Program Matching Grants... 2-7 2.5.3 Acquisition and Development Grants... 2-8 2.5.4 Airport Loan Program... 2-8 2.6 Other Grants... 2-8 2.7 City of Rio Vista... 2-9 2.7.1 Historical Operating Revenues and Expenses... 2-9 2.7.2 Airport Property... 2-11 2.7.3 Management and Operation... 2-13 3 ALTERNATIVE 1 STATUS QUO 3.1 Introduction... 3-1 3.2 Grants and Loans... 3-1 3.3 Operating Revenues and Expenses... 3-1 3.4 Management, Operation and Maintenance... 3-2 3.5 Maintain Status Quo... 3-2 3.5.1 FAA Airport Improvement Program Grants... 3-2 3.5.2 California Department of Transportation, Division of Aeronautics (Caltrans) Grants... 3-3 3.5.3 Management, Operation and Maintenance... 3-3 3.6 Summary... 3-5 Rio Vista Municipal Airport ii

TABLE OF CONTENTS continued Section Page 4 ALTERNATIVE 2 PRIVATIZATION 4.1 Introduction... 4-1 4.2 The Federal Aviation Administration (FAA) Airport Privatization Pilot Program (APPP)... 4-1 4.3 Reasons for Withdrawing Applications... 4-2 4.4 General Aviation Airports... 4-3 4.5 Rio Vista Municipal Airport... 4-4 4.5.1 FAA Considerations... 4-4 4.5.2 Caltrans Division of Aeronautics Considerations... 4-5 4.5.3 Other Considerations... 4-6 4.6 Summary of the FAA Airport Privatization Pilot Program to Date... 4-6 4.7 Summary... 4-7 5 ALTERNATIVE 3 OUTRIGHT SALE OF THE AIRPORT 5.1 Introduction... 5-1 5.2 FAA Considerations... 5-1 5.3 Caltrans, Division of Aeronautics Considerations... 5-3 5.4 Other Considerations... 5-3 5.5 Other Airports... 5-3 5.5 Summary... 5-4 6 ALTERNATIVE 4 CONTRACT MANAGEMENT 6.1 Introduction... 6-1 6.2 Contract Management Firms... 6-1 6.3 Fixed Base Operator... 6-3 6.4 Local Pilots Association... 6-4 6.5 Summary... 6-5 7 ALTERNATIVE 5 COUNTY OF SOLANO 7.1 Introduction... 7-1 7.2 Solano County... 7-1 7.3 Public Agency Contract Agreements... 7-2 7.4 Summary... 7-2 Rio Vista Municipal Airport iii

TABLE OF CONTENTS continued Section Page 8 ALTERNATIVE 6 CLOSE THE AIRPORT 8.1 Introduction... 8-1 8.2 Airport Closures... 8-1 8.2.1 Rialto Municipal Airport... 8-1 8.2.2 St. Clair Regional Airport... 8-2 8.2.3 Blue Ash Airport... 8-2 8.2.4 Blaine Municipal Airport... 8-3 8.2.5 Other Airports... 8-3 8.3 Airport Closure Issues... 8-3 8.4 Summary... 8-4 9 ALTERNATIVE 7 PORT AUTHORITY 9.1 Introduction... 9-1 9.2 Port Authority... 9-1 9.3 Formation of the Port Authority of Rio Vista... 9-2 9.5 Summary... 9-3 APPENDIXES A B Federal Aviation Administration Airport Sponsor Grant Assurances Airport Purchase and Relocation Agreement Rio Vista Municipal Airport iv

LIST OF TABLES Number Page 1-1 Alternatives Analysis Summary... 1-2 2-1 FAA Airport Improvement Program Grants... 2-4 2-2 Caltrans FAA Airport Improvement Program Matching Grants... 2-7 2-3 Historical Operating Revenues and Expenses... 2-10 LIST OF FIGURES Number Page 1 Airport Property Map... 2-12 Rio Vista Municipal Airport ii

Section 1 INTRODUCTION, SUMMARY AND RECOMMENDATIONS 1.0 INTRODUCTION The City of Rio Vista retained Aries Consultants Ltd. to evaluate the alternatives available to the City for the future ownership, operation and management of the Airport and prepare a report on the research and analysis. The Airport is owned and operated by the City of Rio Vista. The data used in preparing this report were obtained from various Federal, State, City and other sources. In addition, information was obtained from discussions with persons directly, or indirectly, associated with the operation of the Airport and other similar airports. Table 1-1 presents a summary of the analysis of the alternatives discussed below. It should be noted that quantifying the analysis into yes and no answers should not be considered definitive as there are further considerations as discussed in the text. For example, the ability of the Airport to retire the debt to other City funds is dependent on the City s financial statement audit and the City pursuing the grant history as discussed in Section 2.7.1, Historical Operating Revenues and Expenses. Increased aviation activity and its revenues could contribute to the retirement of debt to other City funds under the Status Quo and County of Solano alternatives. The City could negotiate with a new airport sponsor/owner to retire the debt under the FAA Airport Privatization Pilot Program (APPP) and the Outright Sale alternatives. The requirement to reimburse the Federal Aviation Administration (FAA) for Airport Improvement Program Grants and State of California, Department of Transportation, Division of Aeronautics (Caltrans) grants under the Close the Airport Alternative could be negated if the Airport is closed through an Act of Congress as discussed in Section 8.2 Airport Closures. The debt to other City funds could also be retired through the sale of the Airport and its facilities. 1.1 ALTERNATIVES CONSIDERED Seven alternatives were identified and analyzed for the future ownership, operation and management of the Airport. These included: Scenario 1 Status Quo. The City of Rio Vista retains the ownership, maintenance and operation of the Airport. Scenario 2 Federal Aviation Administration Airport Privatization Pilot Program. The privatization of the Rio Vista Municipal Airport under the FAA Airport Privatization Pilot Program (APPP). Rio Vista Municipal Airport 1-1

Scenario 3 Outright Sale. The outright sale of the Airport to a private entity without use of the FAA Airport Privatization Pilot Program. Scenario 4 Contract Management. The contract management scenarios include both total and partial management, maintenance and operation of the Airport with the City retaining ownership. Partial would include the retention of a fixed base operator (FBO) to operate the Airport as well as provide aviation services. Scenario 5 County of Solano. The potential of the County of Solano assuming either the ownership, management, maintenance and operation of the Airport or just the management, maintenance and operation of the Airport. Scenario 6 Close the Airport. This scenario assumes the closure of the Airport and any required reimbursements to City, FAA and State accounts. It is assumed the Airport land will be used for nonaviation purposes after the closure. Scenario 7 Port Authority. This scenario assumes that the ownership, maintenance and operation of the Airport will be included under a Port Authority as presented in the recently-completed RioVISION: Coming Together report. The report discusses the potential for a future Rio Vista Port Authority for the underdeveloped downtown waterfront and the Airport. 1.2 ALTERNATIVES ANALYSIS The potential alternatives were evaluated for their ability to address several considerations. These considerations included: Requirement to reimburse, in total or in part, any grants received from the Federal Aviation Administration (FAA); State of California, Department of Transportation Division of Aeronautics (Caltrans); Economic Development Administration; and Community Development Block Grants The City has accepted FAA Airport Improvement Program grants, beginning with the planning, land acquisition and building of the new airport totaling $9,903,050. The City has accepted Caltrans grants for FAA-matching grants totaling $265,000 beginning in 1998 and an Acquisition and Development grant totaling $197,844 in 2000. The City accepted a $1 million Economic Development Administration Grant in 1998. The City accepted a $500,000 Community Development Block Grant in 1998. Rio Vista Municipal Airport 1-3

Ability to Retire Debts Due to Other City Funds Over the years, funds have been borrowed from the City General Fund, the Water and Beach Drive Treatment Facility Enterprise Fund and the Municipal Improvement Capital Project Fund. The outstanding debt to these funds totaled $1,135,969.37 as of June 30, 2014. Historical Operating Revenues and Expenses of the Airport Enterprise Fund The historical operating revenues and expenses of the Rio Vista Municipal Airport were reviewed based on information provided by the City. Based on the review, the operating results of the Airport Enterprise Fund are provided later in Table 2-3 for fiscal years 2007 through 2014. The Fund is operated to account for Airport operations that are financed and operated in a manner similar to private business enterprises. The historical operating revenues and expenses provide a basis for assessing the ability of the Fund to meet the requirements for retiring any debts to other City funds and to continue funding capital improvement projects for future Airport development. It should also be noted that in a meeting in September 2014, FAA requested that grant revenues and services contracted under grant funds be accounted for as a subaccount in the Airport fund so as not to mix the grant revenues and expenses with the Airport revenues and expenses. Therefore, it should be noted that some of the data in Table 2-3 were modified by Aries Consultants Ltd. from the original data provided by the City. Based on these modifications, the Airport has operated with an average surplus of over $6,400 on an annual basis over the most recent eight-year historical period from 2007 through 2014. An issue with regard to the historical operating revenues and expenses of the Airport Enterprise Fund and its ability to retire outstanding loans to other City funds has surfaced based on discussions with representatives of the City. There are those that concur that the Airport Enterprise Fund operates with an annual surplus of revenues over expenses and others who see the Airport as a drain on other City resources, e.g., the City General Fund. Inherent to these opposing views is that, due to the history of the management and administration of the Airport (See Section 2.7.3), limited management and oversight responsibilities for the Airport have been vested with a variety of other City departments filling in on an as-needed basis. As many grants and loans are funded up front and reimbursed by request to the granting agency, e.g., the FAA and Caltrans, there may have been grants issued whereby up front money from the City funded a project, and reimbursement was never requested from the granting agency. In addition, based on the modifications made to the revenues and expenses for Fiscal Years 2007 through 2014 presented in Table 2-3, applying grant reimbursements to the Airport Enterprise Fund may not have occurred. Rio Vista Municipal Airport 1-4

The City should consider writing letters to the FAA and to Caltrans, under The Freedom of Information Act, requesting total grant reimbursements on each of the grants prior to the grants being closed by the issuing agency. Based on receipt of this information, the City would then be required to do an in-house audit of the Airport Enterprise Fund going back to the original 1983 FAA Airport Improvement Program grant. Terms and Conditions of the Original Acquisition of the Airport Property Some of the land for the new airport was acquired in 1989 for a total of $322,807 using FAA Airport Improvement Program Grant funding. Three other parcels were obtained by grant deed from the State of California, Department of Water Resources, Sacramento and San Joaquin Drainage District. The original Airport Purchase and Relocation Agreement includes covenants as follows: Upon receipt of the purchase price Watson Hollow will pay to the City the sum of One Hundred Thousand Dollars ($100,000) as an advance payment to be credited towards a forty-nine (49) year lease of the real property described in Exhibit C attached hereto and incorporated herein. Subject to compliance with all applicable safety and other requirements, to allow for airplane access to the new airport across Airport Road. Subject to compliance with all applicable safety and other requirements, the City shall allow airplane access to the airport runways from Baldwin s real property located adjacent to the Baldwin property being purchased herein. The Airport is zoned as airport commercial (C-2-A). However, a 12 acre parcel on the west side of the Airport is designated as a limited industrial/employment district [I/E(L)], Airport Industrial Park, on the 2002 City of Rio Vista General Plan. There is an industrial park with infrastructure already developed on a portion of this parcel. The Watson Hollow business entity intended to lease a portion of this parcel of Airport property located on the west side adjacent to Airport Road for 49 years as noted above. The parcel includes the aircraft parking apron and part of the parallel taxiway west of Runway 15-33. Based on the 2007 Rio Vista Airport Master Plan Update, the status of this proposed lease was being resolved. In any event, a legal opinion of the terms and conditions in the Airport Purchase and Relocation Agreement will be required. A copy of the 1988 Airport Purchase and Relocation Agreement is included as Appendix B. Rio Vista Municipal Airport 1-5

There are access easements onto the Airport from west of Runway 15-33 and north of Runway 7-25 in the original property agreements for acquisition of the land for the new airport as noted above. Based on the 2007 Rio Vista Airport Master Plan Update, the status of these agreements was being resolved. The Management and Operation of the Airport Based on information provided by the City, the management and operation of the Airport has varied widely since the last full-time Airport Manager left prior to 2001. Since 2001 limited management and oversight responsibilities for the Airport have been vested with a variety of other City departments filling in on an as-needed basis. The City currently does not have sufficient administrative staff within the City administration to oversee the operations and regulatory requirements for the efficient operation and management of the Airport. This includes available administrative staff time and resources to review and address FAA requirements as they relate to staffing and operating the Airport, leasing policies and procedures, airport land use planning issues, and other related issues. 1.3 SUMMARY Scenario 1 Status Quo There would be no requirement to reimburse the FAA for any grants received under the Airport Improvement Program. There would be no requirement to reimburse Caltrans for any FAA Airport Improvement Program matching grants or the Acquisition and Development grant. The Airport would continue to be eligible for FAA Airport Improvement Program grants and Caltrans grants and loans in the future as long as the Airport remains open as a public-use airport and the City of Rio Vista continues to be the Airport sponsor. The Airport, based on current management and operation and aviation activity levels, would not be able to retire the $1.1 million in debt to other City funds. The benefit to the City of retaining the Status Quo would be the retention of the control of the Airport and surrounding land uses. Scenario 2 Federal Aviation Administration Airport Privatization Pilot Program It appears that the FAA Airport Privatization Pilot Program is probably not appropriate for the Rio Vista Municipal Airport given the interest in and experience with the APPP to date. Rio Vista Municipal Airport 1-6

The general aviation airports that have inquired about the program to date have either been interested in converting the general aviation airport into an air cargo or air carrier type airport or accommodating a higher level of general aviation activity (e.g., business jets and corporate aviation) and have better facilities (e.g., longer runways, jet fuel) than those at the Rio Vista Municipal Airport. A goal of the FAA APPP is to enhance activity and development at general aviation airports. Based on experience to date with the APPP, it could cost the City an extensive amount of time and money to proceed with an application. There could be a significant reduction in potential FAA Airport Improvement Program funding for future improvement projects at the Airport. The Airport would not be eligible for annual grants and FAA Airport Improvement Program matching grants from Caltrans. Scenario 3 Outright Sale Private individuals, partnerships or corporations who own and operate an airport intended for public-use may qualify as an FAA Airport Improvement Program sponsor provided they operate as a general aviation reliever airport or have at least 2,500 annual passenger boardings (enplanements) criteria that the Rio Vista Municipal Airport does not meet. Therefore, the Airport would not be eligible for FAA airport development projects, airport master planning, noise compatibility planning and noise program implementation. The Airport would not be eligible for annual grants and FAA Airport Improvement Program matching grants from Caltrans. There have been no sales of publicly-owned airports to private operators in recent years. In fact, overcoming this was one of the goals of the FAA APPP described in Section 4. Outside of the FAA APPP, the sale of a publicly-owned airport to a private operator would face even greater hurdles, e.g., lack of future FAA and Caltrans funding. Scenario 4 Contract Management There would be no requirement to reimburse the FAA for any grants received under the Airport Improvement Program. Rio Vista Municipal Airport 1-7

There would be no requirement to reimburse Caltrans for any FAA Airport Improvement Program matching grants. There would be no requirement to reimburse Caltrans for the annual $10,000 grant for maintenance and operation of the Airport. The Airport would continue to be eligible for FAA Airport Improvement Program grants and Caltrans grants and loans in the future as long as the Airport remains open as a public-use airport. The benefit to the City of retaining the services of a contract management firm (or individual) would be to eliminate the need for day-to-day operations and maintenance of the Airport. The annual operating and maintenance costs of running the Airport would be reduced. The disadvantage to the City of retaining the services of a contract management agreement would be, based on existing activity levels, the inability of the Airport to retire the $1.1 million debt to other City funds. The City has attempted to interest a fixed base operator in operating and maintaining the Airport but so far without success. There were no responses to the 2011 Request for Proposals for a Non-Exclusive Fixed Base Operator. The current level and type of aviation activity (e.g., based aircraft, aircraft operations and jet fuel) at the Airport may not be attractive to a contract management firm. Airport facilities, e.g., runway length, are also a consideration. Scenario 5 County of Solano If the County was responsible for the maintenance and operation of the Airport, there could be financial advantages to both the City and the County. If the County obtained control of the Airport, as well as being responsible for the maintenance and operation, the County would have the County of Solano System of Airports. While it may not make much of a difference in how the two airports are managed in terms of costs, e.g., economies of scale operating two airports with one administration and staff, a system of airports is eligible for FAA funding for system planning, airport master plans, use of FAA Airport Improvement Program funds at either airport, etc. Rio Vista Municipal Airport 1-8

The County would continue to be eligible to receive Caltrans grants and loans. The City would still be responsible for any debts owed to other City funds. At this time, it is not clear whether there is any interest from either the City and/or the County in further discussions on this alternative. Scenario 6 Close the Airport The City of Rio Vista accepted FAA Airport Improvement Program grants for acquisition of about 182 acres of the Airport land in perpetuity for the new airport in 1989. Therefore, if the Airport were closed, about 182 acres of the Airport property could revert back to the FAA for disposal by the General Services Administration. The City has continued to accept FAA Airport Improvement Program funds for airport improvements at the new airport. The most recent Airport Improvement Program grant was received by the City in 2014 with a continuing FAA obligation to keep the Airport open through 2034. Based on a review of FAA grants over the past 20 years, the City could have to refund up to $1.6 million in grants received since 1994 (See Table 2-1). Because some of the Airport land was acquired with FAA funding, this obligation runs in perpetuity unless FAA releases the City from that obligation, which rarely happens. The City could also have to refund up to $463,000 in grants received from Caltrans since 1998 (See Table 2-2). Recent closures of publicly-owned airports have required Acts of Congress that supersede FAA decisions. In order to close the Airport, the City must show that civil aviation will benefit, typically by providing a new replacement airport equal to or greater than the existing Rio Vista Municipal Airport. Any attempt to close the Airport will be opposed by various pilot and aviation groups including the California Pilots Association (CPA), Aircraft Owners and Pilots Association (AOPA), National Business Aviation Association (NBAA), General Aviation Manufacturers Association (GAMA) and National Air Transportation Association (NATA). The closure would be opposed on the grounds of its adverse Rio Vista Municipal Airport 1-9

impact of limiting access to general aviation and losing an important community asset that is impossible to replace. Scenario 7 Port Authority The Rio Vista Municipal Airport could benefit through the transfer of the Airport in its entirety, including land, buildings, improvements, leases and agreements and debt, to an autonomous Port Authority serving as a public benefit corporation for other entities. The Port Authority creation could have the same powers and rights and would assume the same obligations of the City of Rio Vista with regard to federal and State grants and loans. The Port Authority would be eligible for future FAA and Caltrans grants. Prior approval of the transfer of ownership would be required from the FAA and Caltrans, Division of Aeronautics. It is not anticipated that this approval would be denied, however, it would be advisable for the City to have a representative experienced in aviation-related issues on the Committee investigating the feasibility of a Port Authority to ascertain that all the rights and powers inherent to an Airport are included in any proposed legislation. The City of Rio Vista would no longer have governing authority or control of the future development and enhancement of the Airport facilities and services. The concept of the formation of a Port Authority of Rio Vista has been proposed in recent years. Based on discussions with representatives of the City, interest has been shown by several persons and entities, including proponents for the Rio Vista Business Park and Rio Vista Army Base, expressing an interest in the formation of a Port Authority. The Port Authority alternative outlines a Port Authority under enabling legislation and how the Airport could be included. It does not include other facilities and services that would be eligible to be included in a public trust corporation such as a Port Authority. The City would need to take the initiative to begin the investigation into the formation of a Port Authority to ascertain the interest and potential participation by others. 1.4 RECOMMENDATIONS Based on the analyses, the following alternatives appear to have no potential for implementation or could be very costly and time consuming for the City to pursue; Rio Vista Municipal Airport 1-10

Scenario 2 Federal Aviation Administration Airport Privatization Pilot Program Scenario 3 Outright Sale Scenario 4 Contract Management Scenario 6 Close the Airport Therefore, it is recommended that the City pursue the following alternatives in more detail: Scenario 1 Status Quo. Once the City s financial statement audit is completed, it is assumed that the Airport can operate with a minor surplus of revenues over expenses on an annual basis. The City continues to pursue additional aviation activity and over time increases in the number of based aircraft and aircraft operations will increase the revenue sources for the Airport. In addition, the assignment of the Airport and Airportrelated activities to a specific person with sufficient time to fulfill those activities would greatly enhance the functionality of this City asset. Scenario 5 County of Solano. At this time, it is not clear whether there is any interest from either the City and/or the County in further discussions on this alternative. Previously, the City had approached the County with discussions on entering into an operating agreement to include the Nut Tree Airport and the Rio Vista Municipal Airport, however, based on information provided by the City, the County was not interested at that time. There could be financial advantages to both the City and the County as there would be economies of scale operating two airports with one administration and staff responsible for the Airports and their operations. Scenario 7 Port Authority. The Airport, including all of its assets and liabilities, could be transferred to a Rio Vista Port Authority. The on-going RioVISION project recommended initiation of the creation of a Rio Vista Port Authority as one of the Medium Term Recommendations. As enabling legislation would be required to establish a Port Authority, it is assumed that the formation of the Authority would be several years in the future. The City needs to initiate the preliminary meetings with all those interested in investigating the formation of a Port Authority. Rio Vista Municipal Airport 1-11

2.1 INTRODUCTION Section 2 CONSIDERATIONS FOR ALTERNATIVES ANALYSIS An evaluation of the major elements that will be considered in the alternatives analysis is presented in this section. These elements include the history of the Airport and the existing Airport activity and operations. Grants received from the Federal Aviation Administration (FAA), California Department of Transportation, Division of Aeronautics (Caltrans) and other grants and loans received for Airport development are discussed. The debt service retirement of funds due to other City Funds and the historical operating revenues and expenses of the Airport Enterprise Fund are included. The management and operation of the Airport are also discussed. Major considerations for the future of the Airport will include whether or not any FAA Airport Improvement Program grants, Caltrans grants or other grants and loans received by the City for acquisition, development and maintenance of the Airport will require reimbursement as a result of any changes in the ownership, management and operation of the Airport. The eligibility of the City to receive future grants and the capability of the Airport to retire any outstanding loans from the City and other funds will be addressed. The original documents for acquisition of the Airport property are also discussed. 2.2 HISTORY OF THE AIRPORT In 1984 the City adopted the Rio Vista Airport Site Selection and Master Plan Study and certified the Environmental Impact Report and Environmental Assessment to relocate the Airport to its new site at the corner of Airport Road and Baumann Road. The studies were funded in part through an FAA Airport Improvement Program grant with the overall objective of preparing a comprehensive review and evaluation of the existing and future requirements for an airport to serve the Rio Vista area. The Rio Vista Financing Authority loaned money to the Airport Enterprise Fund to close the airport at its old location and provide the local matching funds for the FAA grants to acquire the land and develop the new airport. The Airport officially opened on May 2, 1994. Initial airport development included Runways 7-25 and 14-32, taxiways, aircraft parking apron and T- hangars. 2.3 AIRPORT ACTIVITY AND OPERATIONS The Rio Vista Municipal Airport is owned and operated by the City of Rio Vista. The Airport is geographically located 3 statute miles north of the center of the business district of the City on about 273 acres of land. The Airport is classified as a General Aviation Airport Local Airport in the most recent National Plan of Integrated Airport Systems 2015-2019 (NPIAS) prepared by the FAA. The FAA defines a Local Airport as an airport supplementing local communities by providing access to local and regional markets. These airports have moderate levels of activity with some multiengine propeller Rio Vista Municipal Airport 2-1

aircraft. Nationally, these airports average about 33-based propeller-drive aircraft and no jets. The Airport is classified as a Regional Airport in the California Aviation System Plan (CASP) prepared by the State of California, Department of Transportation, Division of Aeronautics (Caltrans). Caltrans defines Regional Airports as those airports that serve as community airports but may provide international access; are located in an area with a larger population base than community airports, while serving a number of cities or counties; serve the same activities as community airports with a higher concentration of business and corporate flying; accommodate most business, multi-engine and jet aircraft; provide most services for pilots and aircraft including aviation fuel; has a published instrument approach and may have a tower. 2.3.1 Based Aircraft Based on the most recent FAA Airport Master Record, Form 5010-1, the Airport is home to approximately 46 based aircraft. Based aircraft are those aircraft that are hangared or are on tiedowns at the Airport and include those aircraft based on leaseholder sites. There is space for 46 aircraft in City-owned T-hangars on the south side of the Airport. There are an additional two hangars on the east side of the terminal area. Other privatelyowned hangars are located to the south end of the terminal area. The Airport has about 75 tiedowns with chains and anchors. 2.3.2 Aircraft Operations Based on the most recent FAA Airport Master Record, Form 5010-1, there are an estimated 35,000 annual aircraft operations with 50 percent local operations and 50 percent itinerant operations. Local operations are performed by aircraft operating in the local traffic pattern and aircraft departing for, or arriving from, local practice areas. Itinerant operations are conducted by aircraft that take off at one airport and land at another aircraft. Itinerant operations include the operations of aircraft based at the Airport and flights of other aircraft to and from the Airport. 2.4 FEDERAL AVIATION ADMINISTRATION (FAA) 2.4.1 FAA Airport Improvement Program Grants The FAA Airport Improvement Program assists the development of a nationwide system of airports by providing funding for airport planning and development projects at airports included in the National Plan of Integrated Airport Systems (NPIAS). The Airport and Airway Trust Fund, funded through taxes or user fees collected from the various segments of the aviation community, provides the revenues used to fund Airport Improvement Program projects. The Rio Vista Municipal Airport is classified as a General Aviation Airport in the NPIAS (2013-2017). The Airport is eligible for Airport Improvement Program grants under the Rio Vista Municipal Airport 2-2

general aviation airport category and is eligible for entitlement grants totaling $150,000 annually which can be used for all FAA-eligible projects. In addition, the Airport can compete for FAA Airport Improvement Program discretionary funds which are available for any eligible airport granted at the FAA s discretion. Projects at the Airport may get funded with general aviation entitlement grants or a combination of entitlements, discretionary and State apportionment funding. The general aviation entitlement funds are available to use in the fiscal year they become available and for the next three fiscal years. The FAA Airport Improvement Program grant is for 90 percent of the total eligible project costs. In 1984 the City adopted the Rio Vista Airport Site Selection and Master Plan Study and certified the Environmental Impact Report and Environmental Assessment to relocate the Rio Vista Municipal Airport to a new site. The studies were funded in part through an Airport Improvement Program grant from the FAA with the overall objective of preparing a comprehensive review and evaluation of the existing and future requirements for an airport to serve the Rio Vista area and be a general aviation reliever airport for the air carrier airports in the northeast San Francisco Bay Area and the Sacramento Area. The new Rio Vista Municipal Airport site was selected at the corner of Airport Road and Baumann Road and, beginning in 1985, the City received several FAA Airport Improvement Program grants to develop the new airport. The Rio Vista Public Financing Authority loaned money to the Airport Fund to close the airport at its old location and provide the local matching funds for the FAA grants to develop the new Airport. The Airport officially opened on May 2, 1994. Initial airport development included Runways 7-25 and 14-32, taxiways, aircraft parking apron and T-hangars. Several development projects occurred in the late 1990s after the Airport opened including construction of a new exit taxiway for Runway 7-25 and a water pollution abatement facility. The projects also included a new airport terminal/administration building and storm drainage, water, sewer, electrical and telephone utilities to the Airport Industrial Park on the west side. These projects were funded through grants from the U.S. Department of Commerce, Economic Development Administration (EDA); State of California Department of Housing and Community Development; California Aid to Airports Program; and the Federal Aviation Administration. The City of Rio Vista also contributed to funding the projects. The Airport has received FAA grant awards beginning in 1983 with the most recent grant award of $697,956 received in 2014. Historically, FAA Airport Improvement Program grants that have been awarded for projects at the Airport are presented in Table 2-1. Rio Vista Municipal Airport 2-3

Table 2-1 FAA Airport Improvement Program Grants Year Grant No. Projects Grant Amount 1983-01 Airport Master Plan $91,328 1985-02 Acquire land for airport development and clear zones $1,050,368 (approximately 273 acres). Land, airport development, Parcel B2 (158.39 acres); land development and clear zone; Parcel A2 (24.81 acres) and Parcel C2 (74.94 acres) and Parcel C3 (2.37 acres) and clear zone, Parcel B1 (8.03 acres), and Parcel B4 (0.71 acres and Parcel C1 (4.61 acres); prepare engineering design for new airport and construction plans and specifications. 1990-03 Phase I-Site preparation, stripping and mass grading; construct Runway 7-25 (4,200 feet by 75 feet) and Runway 14-32 (2,200 feet by 60 feet), including marking, drainage and electrical preparation; parallel taxiways for Runway 7-25 and 14-32; four connector taxiways; four holding aprons; 22 runway/taxiway fillets, including marking, drainage and electrical preparation; construct airfield storm drainage system; miscellaneous electrical work; install perimeter fencing; construct portion of airfield tiedown apron, including marking, drainage and lighting. 1991-04 Phase II-Construct tiedown apron, including marking, lighting and tiedowns; install airport lighting system; medium intensity runway lights (MIRL) on Runways 7-25 and 14-32; medium intensity taxiway lights (MITL) for entire airfield taxiways; runway/taxiway guidance sign system; precision approach path indicators (PAPI) for both runways; runway end identifier lights (REIL) for both runways, segmented circle with lighted windcone; one supplemental windcone; electrical equipment vault building; miscellaneous electrical equipment; airport beacon. 1991-05 Phase III-Construct tiedown apron, including marking, lighting and drainage; access road, including curb and gutter, marking and lighting; heliport, including marking, lighting and drainage; install fencing, including three gates. $3,200,400 $1,000,000 $2,946,747 0000-06 FAA has no record of this grant being issued. -- 2000-07 Construct exit taxiway and water pollution abatement facility (project included sanitary sewer, water, business park {storm drainage, water, sewer, electrical, telephone, utilities}, terminal building, small hangar). NOTE: FAA share $100,000 EDA share $1,000,000 CDBG share $500,000 Caltrans share $200,000 City share $22,222 TOTAL PROJECT: $1,822,222 $100,000 2000-08 Airport Master Plan (no money allocated) -- 2000-09 Rehabilitate runways and taxiways (slurry seal and restriping $248,438 project); rehabilitate aprons. 2002-10 Update Airport Master Plan Study $150,000 Rio Vista Municipal Airport 2-4

Table 2-1 continued FAA Airport Improvement Program Grants 2005-11 Construct service road, improve airport drainage, install apron $77,832 lighting, install perimeter fencing, install weather reporting equipment. 2010-12 Conduct miscellaneous study (pavement plan, electrical study, $139,981 drainage plan), install perimeter fencing 2011-13 Rehabilitate Runways 7-25 and 14-32 (design); rehabilitate $100,000 taxiways (design); rehabilitate apron (design); rehabilitate airfield electrical (design). 2011-14 Airport Layout Plan Update $100,000 2014-15 Runway 15-33 (approximately 2,200 x 60 including markings and signage); Runway 7-25 (approximately 4,200 x 75, crack repair/slurry seal); and associated taxiways and aprons. $697,956 NOTE: Runway 14-32 is now Runway 15-33 due to changes in the magnetic declination. SOURCE: Federal Aviation Administration and City of Rio Vista Rio Vista Municipal Airport 2-5

The recent $697,956 grant for pavement enhancements include four years (Fiscal Years 2011, 2012, 2013 and 2014) of FAA general aviation airport entitlement grants totaling $150,000 annually ($600,000) and an additional $97,956 in FAA State Apportionment funding. The City has accepted 13 FAA Airport Improvement Program grants beginning with the planning, land acquisition and building of the new airport totaling $9,903,050. 2.4.2 FAA Grant Assurances The airport sponsor (City of Rio Vista) incurs obligations which continue after a development project has been completed as a condition of receiving an FAA Airport Improvement Program grant. There are 39 Grant Assurances (obligations) that must be complied with by the airport sponsor including the requirement to keep the airport available for public use on fair and reasonable terms; not granting any exclusive rights to any entity providing aeronautical services to the public; the operation and maintenance of the airport; taking appropriate action to achieve compatible land uses in the vicinity of the airport; providing financial and operations reports as requested by the FAA; and assuring nondiscrimination in participation in any activity conducted with, or benefitting from, FAA grant funds. The City has agreed to comply with these obligations through the acceptance of FAA Airport Improvement Program grants. A copy of the Airport Sponsors Grant Assurances is presented in Appendix A. 2.5 CALIFORNIA DEPARTMENT OF TRANSPORTATION, DIVISION OF AERONAUTICS (CALTRANS) The State of California provides four financial assistance programs. (1) the State of California, Department of Transportation, Division of Aeronautics annual grant of $10,000; (2) allows the California Transportation Commission (CTC) to allocate funds to match FAA Airport Improvement Program grants for airport and aviation purposes; (3) the acquisition and development grants administered by the State Transportation Improvement Program (STIP); and (4) the Airport Loan Program. 2.5.1 Annual Grants The State provides annual non-matching $10,000 grants to airports that have not been designated as a reliever or commercial service airport by the FAA that may be used for both capital improvements and maintenance and operations. The annual grant may be accumulated for up to five years, or a maximum of $50,000, and used as matching funds for an FAA Airport Improvement Program grant. The City is eligible to receive the annual $10,000 Caltrans grant for use in operating and maintaining the Airport. Rio Vista Municipal Airport 2-6

2.5.2 Caltrans FAA Airport Improvement Program Matching Grants State funds can be allocated by the California Transportation Commission (CTC) to match an FAA Airport Improvement Program grant once an airport sponsor has accepted the grant from the FAA. The State match is available to airports that have been designated as a general aviation or reliever airport by the FAA. Only those projects that are included in the State s Capital Improvement Program are eligible to receive matching grants. The State match will be an amount equal to 5 percent of the FAA Airport Improvement Program grant. Caltrans began providing a match for FAA Airport Improvement Program funding in 1993. The match has varied from 2.5 percent to 5 percent over the years. Effective May 24, 2012, the State Airport Improvement Program match has been set at 5 percent of the Federal grant. The City of Rio Vista has received Caltrans matching for the following FAA Airport Improvement Program grants presented in Table 2-2. Table 2-2 Caltrans FAA Airport Improvement Program Matching Grants Year AIP Grant Project Description State Match 1998-99 2000-07 3-06-0199-07 2002-03 2002-10 3-06-0199-10 2005-06 2005-11 3-06-0199-11 2010-11 2010-12 3-06-0199-12 2011-12 2011-13 3-06-0199-13 2011-12 2011-14 3-06-0199-14 2014-15 2014-15 3-06-0199-15 SOURCE: Caltrans, Division of Aeronautics Construct exit taxiway, including lighting, $5,000 marking and drainage; install perimeter fencingdesign. Update Airport Master Plan Study $7,500 Install AWOS, remove obstruction, construct $9,075 service road-design; improve airport drainagedesign, install apron lighting-design; install perimeter fencing-design. Airport Pavement Maintenance Management Plan, $3,499.53 Airport Drainage Study, Airport Electrical Study and replace existing perimeter fencing (including gates) Final Phase. Rehabilitate Runways 7-25 and 14-32-Design; $2,500 Rehabilitate Taxiways-Design; Rehabilitate Apron-Design; Rehabilitate Airfield Electrical- Design. Airport Layout Plan Update $2,500 Runway 15-33, including markings and signage; Runway 7-25, crack repair/slurry seal; and associated taxiways and aprons. $34,898 PENDING To date, the City has received the 2.5 or 5 percent of matching grants for FAA Airport Improvement Program grants totaling $30,075 with an additional $34,898 pending application to, and acceptance by, Caltrans in 2014. In addition, in 1998 Caltrans provided $200,000 to the City of Rio Vista as a match for the FAA Airport Improvement Rio Vista Municipal Airport 2-7

Program grant participation in the $1.8 terminal area development project. To date, the City has received $265,000 in Caltrans matching grants. It should be noted that the City cannot apply for the 5 percent Caltrans matching funds until the FAA Airport Improvement Program grant has been received by the City. Caltrans processing time can range from two to three weeks, pending funding availability and the number of grant applications being processed, and the funds must be allocated by Caltrans prior to work starting on the project. Based on discussions with Caltrans Division of Aeronautics representatives, State grants and loans are governed by the Public Utilities Code, and an airport must be owned by a public agency to be eligible to receive Caltrans grants. 2.5.3 Acquisition and Development Grants Any publicly-owned, public-use airport may apply for a State acquisition and development grant through a structured approval process. Grant projects are evaluated and prioritized by an evaluation matrix and an airport rating form with runway maintenance projects receiving the highest priority for funding. An Airport s request may range from a minimum of $10,000 to a maximum of $500,000 per fiscal year. The City received a Caltrans Acquisition and Development grant (A&D Grant) in June 2000 for construction of the Runway Turnaround Project in accordance with plans and specifications approved by the State. Final payments from the State grant totaled $197,844. No FAA funding was received for this project. 2.5.4 Airport Loan Program The State Airport Loan Program provides financial assistance in the form of loans, repayable over a period not-to-exceed 17 years. The interest rate is based on the most recent issue of State of California bonds sold prior to the issuance of a loan agreement. Loans can be obtained for matching funds (i.e., a FAA Airport Improvement Program grant) and for revenue-generating facilities (i.e., hangars and fuel facilities). The City has never received a loan from the State Airport Loan Program. 2.6 OTHER GRANTS The requirement for repayment of any portion of the $1 million Economic Development Administration (EDA) and the $500,000 Community Development Block Grants (CDBG) to the City in 1998 for the terminal building requires review of the original grant documents and the Special Conditions attached to the grants. For example, the City established the useful life of the terminal building (not how long the building would stand but how long the building would be used for its original purpose). Rio Vista Municipal Airport 2-8

2.7 CITY OF RIO VISTA Over the years, funds have been borrowed from the City General Fund, the Water and Beach Drive Treatment Facility Enterprise Fund and the Municipal Improvement Capital Project Fund to fund deficits in the Airport Enterprise Fund as follows: 1. Due to General Fund $ 103,399.00 2. Advances from General Fund 801,656.00 3. Advances from Municipal Improvements 153,507.00 4. Advances from Water 25,883.77 5. Advances from Beach Drive Treatment Facility 51,523.60 Total $1,135,969.37 Based on information provided by the City, the outstanding debt as a result of advances from these other funds totaled $1,135,969.37 as of June 30, 2014. 2.7.1 Historical Operating Revenues and Expenses The historical operating revenues and expenses of the Rio Vista Municipal Airport were reviewed based on information provided by the City. Based on the review, the operating results of the Airport Proprietary Fund are provided in Table 2-3 for fiscal years 2007 through 2014. The Fund is operated to account for Airport operations that are financed and operated in a manner similar to private business enterprises. The historical operating revenues and expenses provide a basis for assessing the ability of the Fund to meet the requirements for retiring any debts to other City funds and to continue funding capital improvement projects for future Airport development. It should also be noted that in a meeting in September 2014, FAA requested that grant revenues and services contracted under grant funds be accounted for as a subaccount in the Airport fund so as not to mix the grant revenues and expenses with the Airport revenues and expenses. Therefore, it should be noted that some of the data in Table 2-3 were modified by Aries Consultants Ltd. from the original data provided by the City. Based on additional information provided by the City, under operating revenues, grants were reduced to the Caltrans Annual Grant of $10,000. Under operating expenses, expenses for grant-funded professional services were eliminated from both professional services and miscellaneous expenses. These included services provided by contractors working on FAA grant-funded projects and professional services provided by enxco Development Corporation funds. Rio Vista Municipal Airport 2-9

Based on a review by the City of the modified data presented in Table 2-3, the City responded that City staff are currently preparing for the upcoming financial statement audit and are unable to complete a review of the modified data at this time. In addition, the City cannot confirm the validity of the Fiscal Years 2012-2013 and 2013-2014 data until the audit is complete. Based on the modifications of the data in Table 2-3, the Airport has operated with an average surplus of over $6,400 on an annual basis over the most recent eight-year historical period from 2007 through 2014. An issue with regard to the historical operating revenues and expenses of the Airport Enterprise Fund and its ability to retire outstanding loans to other City funds has surfaced based on discussions with representatives of the City. There are those that concur that the Airport Enterprise Fund operates with an annual surplus of revenues over expenses and others who see the Airport as a drain on other City resources, e.g., the City General Fund. Inherent to these opposing views is that, due to the history of the management and administration of the Airport (See Section 2.7.3), limited management and oversight responsibilities for the Airport have been vested with a variety of other City departments filling in on an as-needed basis. As many grants and loans are funded up front and reimbursed by request to the granting agency, e.g., the FAA and Caltrans, there may have been grants issued whereby up front money from the City funded a project, and reimbursement was never requested from the granting agency. In addition, based on the modifications made to the revenues and expenses for Fiscal Years 2007 through 2014 presented earlier in Table 2-3, applying grant reimbursements to the Airport Enterprise Fund may not have occurred. The City should consider writing letters to the FAA and to Caltrans, under The Freedom of Information Act, requesting total grant reimbursements on each of the grants prior to the grants being closed by the issuing agency. Based on receipt of this information, the City would then be required to do an in-house audit of the Airport Enterprise Fund going back to the original 1983 FAA Airport Improvement Program grant. 2.7.2 Airport Property The land for the new airport was acquired in 1989 from three sources as shown on the Airport Property Map, Exhibit A. Three parcels (B1, B2 and B4) were purchased from Watson Hollow (Thomas McCormack, et al) and one parcel (A2) was purchased from Ann C. and Page Baldwin for a total of $322,807 using FAA Airport Improvement Program Grant funding. Three other parcels (C1, C2 and C3) were obtained by grant deed from the State of California, Department of Water Resources, Sacramento and San Joaquin Drainage District. Rio Vista Municipal Airport 2-11