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2007/04/23 City Airport UpdateTO: City Manager Mayor and City Council FM: Airport Manager Subject: Proceeding with KGEZ tower mitigation as soon as possible. 1. The Kalispell City Airport has undergone major changes in the last two years. The airport has been converted from a liability to the City of Kalispell into an economic engine that has produced over $1 Million in new aircraft hangars; a first time ever FBo lease on City owned property that just added three helicopters and four fixed wing aircraft to their training fleet, a new upscale hotel and convention center that will become a fly -in business and vacation destination. The first phase of the airport expansion project was completed last year and it provided new taxiways, parking ramp and thirteen new building sites for aircraft hangars or commercial aviation businesses. All thirteen of the new sites are either built upon or under lease waiting construction to begin. With the expansion of Phase I came all the infrastructure associated with the proposed building sites, including sewer, water, gas, electric and communications. 2. The airport how has a published set of Standard operating Procedures and a published set of Minimum Standards for doing business on the airport. These documents have given the pilots and commercial operators on the airport a set of rules to abide by. The airport has an overlay called the Airport Affected Area which protects the airport from any legal action from residences or businesses located in an area two miles off either end of the runway and one mile on either side of the airport. All real estate transactions in the AAA. will have a notice on the deed indicating the property is in an Airport Affected Area. 3. Approximately 75% of the airport is now secured with proper fencing to keep foot traffic and vehicular traffic off of the Airport operational Area. This provides a safer environment for moving aircraft on the airport. There are currently 52 aircraft permanently based at the City Airport and more have expressed a desire to move their base to the airport as soon as additional hangar space is available to house their aircraft. This count is up from 54 aircraft just one year ago. A well maintained and managed airport has turned out to be much more attractive to aircraft owners living in the southern part of Flathead County. 4. In FY 2005 the Kalispell City Airport was placed on the I IPAS list with the FAA. This entitled the airport to participate in funding through the Airport Improvement Program (AIEP). This also entitled the airport to receive an annual grant known as non -primary entitlements equal to $15 01 000 a year to be used for FAA approved prod ects on the airport. Since FY05 the grant has been accumulating with the FAA and now totals $4501,000. In 2008 the grant total will be up to its maximum of $600,000. After that we will not be allowed to accumulate more than the four years worth of non -primary entitlements. 5. The airport has applied for reimbursement from the FAA on two projects we have completed: a. The airport has applied for reimbursement (95%) of the cost of the Phase I project completed last year. This should come to approximately $1.3 Million. b. The airport has applied for reimbursement (95%) of the cost of acquisition of certain property that will be part of the expansion. This should come to approximately $1.2 Million. 6. The FAA has stated that we are not entitled to draw any of the funds set aside in para. 4 5 until we have mitigated the KGEZ towers. Mitigating the towers means we have to remove them from the protected airspace by one of several means. The Airport has issued an RFP to study the mitigation process and gyve the City Airport some options. This RFP is complete and a broadcast engineering firm from Seattle, WA was selected to do the project. They are currently waiting for the City to issue the contract. 7. The Airport Enterprise Fund has set aside $200,000 in reserve to begin this project. The engineering study will cost approximately $34,000 to get us to the decision stage on what options we have to mitigate the towers. SAY: We have developed the airport as far as we can with the property we currently own. we can not proceed any further in the expansion without making a decision on the KGEZ towers. We have been watching the legal battles going on between KGEZ and the State of Montana. The legal battles going on between KGEZ and the landowners where the towers are located (Gardners Anderson). KGEZ challenged the latest decision of the local District judge and asked that the case be moved to a different jurisdiction. The case was moved to Missoula where that judge denied the motion and returned the case to Kalispell. There are four cases pending with the Supreme Court of Montana also. with the Airport Affected Area we have legal authority on our side. The Airport Affected Area has the power of eminent domain to use in accomplishing the mitigation. we are asking the council to approve the contract with Hatfield and Dawson Broadcast Engineers to begin the study to provide the airport with their options. Once the best option is selected, we will seek advice and consent from the council to proceed with that option.