AGENDA RENO-TAHOE AIRPORT AUTHORITY FINANCE & …...Finance & Business Development Committee Meeting...

BOARD OF TRUSTEES PRESIDENT/CEO **** Shaun Carey, Chair Marily M. Mora, A.A.E.

** Lisa Gianoli, Vice Chair EXECUTIVE VICE PRESIDENT/COO **** Carol Chaplin, Secretary Dean E. Schultz, A.A.E.

∗ Jenifer Rose, Treasurer GENERAL COUNSEL Nat Carasali Ann Morgan, Fennemore Craig

*** Daniel Farahi CLERK OF THE BOARD *** Richard Jay Claire Johnson Jessica Sferrazza

Art Sperber * Chair of Finance and Business Development Committee ** Vice Chair of Finance & Business Development Committee *** Member of Finance and Business Development Committee **** Alternate on Finance and Business Development Committee

AGENDA RENO-TAHOE AIRPORT AUTHORITY

FINANCE & BUSINESS DEVELOPMENT COMMITTEE MEETING

DATE & TIME: Tuesday, May 15, 2018 9:00 a.m. LOCATION: Reno-Tahoe International Airport Administrative Offices, Conference Rooms A/B Reno, Nevada Items 2 and 5 are action items for the Committee to consider. The Committee may discuss a matter when it is brought up, but no action may be taken on it unless it has been specifically included on an agenda as an action item. AGENDA:

1. Roll Call

2. Approval of Meeting Minutes from April 10, 2018

3. Public Comment (Limited to 3 Minutes per Person)

4. Items Provided to the Finance & Business Development Committee for Information:

a. Investment Portfolio Report for the Quarter Ended March 2018 b. Review of Operating Results through March 2018 c. Review of Budget Transfers (if any) d. Review of Contracts and Professional Service Agreements through April 2018 e. Review of Legal Expenses through March 2018 f. Review of Board Budget through March 2018 g. Review of Legislative Consultants Budget through March 2018 h. Park Free Privileges List

5. Items to be Presented to the Finance and Business Development Committee for

Review and Recommendation to the Board:

a. #18(05)-23 Adoption of the Reno-Tahoe Airport Authority Fiscal Year 2018-2019 Budget (May 22, 2018 Board of Trustees Meeting)

Finance & Business Development Committee Meeting Agenda May 15, 2018 of 3

b. #18(05)-24 Authorization for the President/CEO to Purchase Computer

Networking Hardware for the Network Core Redundancy Project, from VOX Network Solutions, Inc., in the Amount of $112,712, Exempt from Competitive Bidding Pursuant to Nevada Revised Statute 332.115.1(g)

c. #18(05)-31 Authorization for the President/CEO to Negotiate Final Terms and

Execute a New 5-Year Non-Exclusive Food and Beverage Concession Lease, Located at Reno-Tahoe International Airport, with Subway Real Estate, LLC, for a Minimum Contract Value of $240,000

d. #18(05)-33 Adoption of a Reno-Tahoe Airport Authority Fiscal Year 2018-

2019 Liability and Property Insurance Program and Approval of Premiums in the Amount of $954,567

e. #18(05)-34 Authorization for the President/CEO to Execute a One-Year

Contract for the Reno-Tahoe Airport Authority Employee Worker’s Compensation Insurance Coverage for Fiscal Year 2018-2019, with QBE Insurance Group, in the Amount of $310,737

f. #18(05)-37 Adoption of Resolution No. 536: A Resolution Amending

Resolution No. 533, a Master Fee Resolution Setting Forth Airport Rates and Charges for Fiscal Year 2018-2019 Pursuant to the Reno-Tahoe Airport Authority Fiscal Year 2018-2019 Annual Budget

6. Items to be Presented to the Finance & Business Development Committee for

Approval:

a. None.

7. Items to be Presented to the Finance & Business Development Committee for Discussion:

a. Reno-Tahoe Airport Authority Offsite Data Storage

8. General Member Comments, Questions and Items for Future Committee Meetings 9. Public Comment (Limited to 3 Minutes per Person)

10. Adjournment

Items will not necessarily be considered in the sequence listed. This meeting may be continued if all of the items are not covered in the time allowed. If the meeting is to be continued, the time and place will be announced at the end of the portion of the meeting to be continued.

Finance & Business Development Committee Meeting Agenda May 15, 2018 of 3 Supporting Material: The designated contact to obtain supporting material is Claire Johnson, Clerk of the Board, P.O. Box 12490, Reno, NV, 89510 or 775-328-6410. Supporting material is also available at the Reno-Tahoe Airport (Administrative Offices) and at the scheduled meeting. Members of the public who are disabled and require special accommodations or assistance at the meeting are requested to notify the Clerk of the Board in writing at P.O. Box 12490, Reno, Nevada 89510 or by calling (775) 328-6410 prior to the meeting date. THIS NOTICE HAS BEEN POSTED AT THE FOLLOWING LOCATIONS: 1. Airport Authority Administrative Offices – 2001 E. Plumb Lane, Reno 3. Reno City Hall – One East First Street, Reno 2. Washoe County Administrative Offices – 1001 E. 9th Street, Reno 4. Sparks City Hall – 431 Prater Way, Sparks

*** These draft minutes have not yet been approved and are subject to revision at the next regularly scheduled meeting. ***

RENO-TAHOE AIRPORT AUTHORITY BOARD OF TRUSTEES FINANCE AND BUSINESS DEVELOPMENT COMMITTEE

Minutes from the Meeting April 10, 2018

9:00 a.m.

In Attendance: Jenifer Rose, Trustee*

Lisa Gianoli, Trustee* Richard Jay, Trustee* Carol Chaplin, Trustee** Shaun Carey, Trustee** Art Sperber, Trustee Ann Morgan, Fennemore Craig Marily Mora, President/CEO Dean Schultz, Executive Vice President/COO Rick Gorman, Chief Financial Officer Tina Iftiger, Vice President of Airport Economic Development Dan Bartholomew, VP of Planning Engineering & Environmental Management Mike Scott, Manager Reno-Stead Airport Gary Probert, Manager of Engineering & Construction Lora Robb, Senior Manager of Properties Leah Williams, Manager of Accounting Holly Luna, Manager of Purchasing & Materials Management

Patrick North, Senior Internal Auditor Audelia Esquivel, Administrative Assistant II Fred Telling, Reno Air Racing Association Tony Logoteta, Reno Air Racing Association Scott Birch, Vino Volo Brian Holtman, Vino Volo Lisa-Kaye Bryan * Denotes Finance Committee member ** Denotes Finance Committee alternate

TOPICS DISCUSSED:

1. ROLL CALL

Roll was called.

2. APPROVAL OF MEETING MINUTES FROM MARCH 6, 2018

RTAA Finance and Business Development Committee Minutes of April 10, 2018 Meeting Page 2 of 5

A motion was made by Trustee Gianoli, seconded by Trustee Jay, and the Committee unanimously approved the minutes from the March 6, 2018 Finance and Business Development Committee meeting.

3. PUBLIC COMMENT None. 4. ITEMS PROVIDED TO THE FINANCE AND BUSINESS DEVELOPMENT

COMMITTEE FOR INFORMATION

a. International Aviation Terminals Partnership Audit for Fiscal Year 2017-2018 b. Review of Operating Results through February 2018 c. Review of Contracts and Professional Service Agreements through March 2018 d. Review of Legal Expenses through February 2018 e. Review of Board Budget through February 2018 f. Review of Legislative Consultants Budget through February 2018 g. Review of Budget Transfers (None)

The Committee had no questions regarding the reports outlined above.

5. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR REVIEW AND RECOMMENDATION TO THE BOARD a. #18(04)-20 AUTHORIZATION FOR THE PRESIDENT/CEO TO

NEGOTIATE FINAL TERMS AND EXECUTE A NEW TWO-YEAR SPECIAL EVENT LICENSE AND COMMERCIAL HANGAR AND GROUND LEASE LOCATED AT THE RENO-STEAD AIRPORT, WITH THE RENO AIR RACING ASSOCIATION, FOR A TOTAL COMBINED MINIMUM CONTRACT VALUE OF $460,198.76 Staff gave a presentation recommending the Authorization for the President/CEO to Negotiate Final Terms and Execute a New Two-Year Special Event License and Commercial Hangar and Ground Lease Located at the Reno-Stead Airport, with the Reno Air Racing Association, for a Total Combined Minimum Contract Value of $460,198.76. Trustee Gianoli mentioned that she appreciated the chronology included in the presentation. Trustee Rose questioned if the Reno Air Racing Association (RARA) is in good standing financially with the Reno-Tahoe Airport Authority (RTAA). Staff responded that RARA is up to date on payments and is in good standing.


On motion by Trustee Jay, seconded by Trustee Gianoli, the Committee unanimously recommended this item [#18(04)-20] go to the Board for approval at the upcoming Board meeting.

b. #18(04)-21 AUTHORIZATION FOR THE PRESIDENT/CEO TO

NEGOTIATE FINAL TERMS AND EXECUTE A NEW 12-YEAR NON-EXCLUSIVE FOOD AND BEVERAGE CONCESSION LEASE AND ONE 3-YEAR OPTION TO EXTEND, LOCATED AT RENO-TAHOE INTERNATIONAL AIRPORT, WITH TASTE, INC. DOING BUSINESS AS VINO VOLO WINE BAR AND VERDI MARKET, FOR A MINIMUM CONTRACT VALUE OF $1,116,000 Staff gave a presentation recommending the Authorization for the President/CEO to Negotiate Final Terms and Execute a New 12-Year Non-Exclusive Food and Beverage Concession Lease and One 3-Year Option to Extend, Located at Reno-Tahoe International Airport, with Taste, Inc. Doing Business As Vino Volo Wine Bar and Verdi Market, for a Minimum Contract Value of $1,116,000. Trustee Rose asked for clarification as to the proposed location site in the terminal building. Staff presented a map and explained where the proposed site is located at the top of the escalators as passengers exit the TSA screening area. Trustee Rose asked where the corporate headquarters for Vino Volo are located. Brian Holtman with Vino Volo stated their headquarters are based in Oakland, California. Trustee Jay asked about the seating capacity and, if necessary, is there a possibility to expand. Mr. Holtman stated that capacity is approximately at 43. Staff indicated that the current location cannot be further expanded; however, a second location at a different site is a possibility if the first location is successful. Mr. Holtman also mentioned that they operate two locations at Oakland International Airport and Sacramento Metropolitan Airport (SMF). Staff stated that all the Vino Volo locations are performing well and mentioned that stellar references were received. Trustee Gianoli mentioned that she sat on the selection panel for proposal reviews and was very impressed with the amount of locally sourced items that were available and that it was obvious Vino Volo had researched the local market. Trustee Gianoli also mentioned that she has visited some of their other locations and felt that Vino Volo would be a great addition. Staff stated that while the RTAA did not receive local proposals for the available concession locations, they were glad that Vino Volo is committed to the use of local products.


Trustee Rose inquired as to whether the Verdi Market concept is new to the firm. Mr. Holtman indicated that Reno-Tahoe International Airport (RNO) is the second location to include a local market in the Vino Volo franchise, with Sacramento International Airport (SMF) being the first. Mr. Holtman also mentioned that the inclusion of a local market helps round out the business concept. Trustee Rose asked if the location in SMF is also called Verdi Market. Scott Birch with Vino Volo mentioned that each market is tailored to that specific area and that the market at SMF is called Taylors Market, named after a local business, Taylors Farmer’s Market. Trustee Rose asked if any Rawbry products, specifically their juice items, will be available in the Verdi Market. Mr. Birch mentioned that they have reached out to Rawbry and are working to carry some of their products. He also mentioned that Vino Volo has reached out to other local juice vendors and are working with them to make their products available in the Verdi Market. On motion by Trustee Gianoli, seconded by Trustee Jay, the Committee unanimously recommended this item [#18(04)-21] go to the Board for approval at the upcoming Board meeting.

6. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT

COMMITTEE FOR APPROVAL None. 7. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT

COMMITTEE FOR DISCUSSION None.

8. GENERAL MEMBER COMMENTS, QUESTIONS AND ITEMS FOR FUTURE

COMMITTEE MEETINGS

None.

9. PUBLIC COMMENT None.


10. ADJOURNMENT The meeting was called to order at 9:00 a.m. and was adjourned at 9:37a.m.

JR: RG/ae ** These draft minutes have not yet been approved and are subject to revision at the next

regularly scheduled meeting. ***

Administrative Report Reno-Tahoe Airport Authority

Date: May 9, 2018 Administrative Report #23-18 To: Finance and Business Development Committee Thru: Marily Mora, A.A.E., President/CEO From: Rick Gorman, Chief Financial Officer Leah Williams, Manager of Accounting Subject: INVESTMENT REPORT- EXECUTIVE SUMMARY FOR THE 3RD

QUARTER ENDED, MARCH 31, 2018 BACKGROUND Pursuant to the Reno-Tahoe Airport Authority (RTAA) investment policy, a quarterly investment report is to be submitted to the Finance and Business Development Committee reporting on the current portfolio status in terms of composition, maturity and rates of return. DISCUSSION It is the policy of RTAA to invest funds in a manner that will provide market rates of return with high standards of safety and liquidity. While meeting the daily cash flow needs of the Authority, investments must conform to all Nevada Revised Statutes and the Authority’s investment policy governing the investment of public funds. The primary objectives, in order of priority are safety, liquidity, and yield. Attached is the Investment Report-Executive Summary prepared by Government Portfolio Advisors for the third quarter of FY 2017-2018 ending March 31, 2018.

"Cg_ErFOTIONT ADvisoRs Executive Summary Quarter Ending 3/31/18

4: Reno-Tahoe i;t Airport Authority

Prepared by: Government Portfolio Advisors [email protected]

(503) 248-9973

G pA GOVERNMENT

IIPORTFOLIO ADVISORS

Table of Contents

Quarter End Commentary 1 Account Summary 2 Accrual Earnings and Activity Report 3 Compliance Report 4 Compliance Report 5 Distribution Report 6 RTAA Strategy 7 Holdings Report 8 Purchase and Sale Report 15 Disclaimer 18

21885W Park Place • Suite 100 • Portland OR 97205 • www.gpafixedincome.com • 503-248-9973

GOVERNMENT

ADVISORS GPA QUARTERLY OBSERVATIONS: ENDING MARCH 31, 2018

Market Commentary Market Yields: Interest rates continued to rise steadily during the first quarter of 2018. Inflation remained tame and the labor markets continued to be strong. The Dow Jones was volatile and suffered its first quarterly toss in two years, dropping 616 points during the quarter. Concerns over newly announced tariffs and the possibility of a trade war contributed to stock market volatility. The 2-year Treasury increased 39 basis points and 5-year notes increased 36 basis points during the quarter. The 2-year to 5-year spread flattened from 32 basis points to 29 basis points.

FOMC: As was highly anticipated, the Fed raised rates by 25 basis points from the range of 1.25% to 1.50% to a new Fed Funds target range of 1.50% to 1.75%. This is the sixth tightening since December 2015. The median projection for the fed funds rate at the end of 2018 is now 2.35% and the median projection for the end of 2019 is 2.75-3.00%. Expectations remain for a total of two additional hikes over the next three quarters. The decision to raise the fed funds rate was unanimous. The accompanying statement acknowledged that spending and investment growth had "moderated" but re-iterated the need for "further gradual" rate hikes. The Fed Funds futures are currently pricing in a 74% chance of a rate hike at the 5/02/18 meeting.

Employment: The unemployment rate remained at its 18 year low of 4.1% at the end of the quarter, (the fifth consecutive month at 4.1%). Total nonfarm payrolls were strong, however wages remain the weak part of the labor component. Non-farm payrolls increased by 148,000, 200,000 and 313,000 during the quarter.

Market Outlook GDP: Real GDP increased at an annual rate of 2.9% in the fourth quarter, according to the "third" estimate. This is compared to the third quarter of 2017 increase of 3.2%. The most recent forecast by the FOMC projects GDP growth to rise to 2.7% in 2018, 2.4% in 2019 and 2.0% in 2020.

Fed Funds: Interest rate forecasts point to two more rate hikes this year. While the increase in the Fed Funds rate was a unanimous decision, some members have questioned continuing rate hikes while inflation remains muted.

2 year: The 2 year Treasury note is forecasted by over 80 economists contributing to Bloomberg to trade at 2.18%, 2.36%, 2.53%, and 2.70% for the end of each of the next four quarters, higher expectations than last quarter.

Oil: Crude oil began the quarter at 60.42 and finished at 64.94.

Portfolio Positioning: GPA is recommending that portfolios maintain durations at 90% of benchmark durations. This defensive posture is due to expectations of higher interest rates. While higher rates will eventually result in more attractive portfolio yields, we must be cautious of the timing and magnitude of the expected moves in rates. This balance will help capture higher portfolio yields due to higher interest rates while reducing the negative impact to fixed income prices from higher rates.

Quarterly Yield Change Economist's Survey Projections Economist's Survey Projections for Rates

6/30/17 9/30/17 12/31/17 Q2-18 Q3-18 Q4-18 Q1-19 Q2-18 Q3-18 Q4-18 Q1-19

3-month bill

1.01 1.05 1.38 1.61 Real GDP 2.80 2.70 2.70 2.70 Fed Funds

1.95 2.15 2.35 2.55

CPI (YOY%) 2.90 2.70 2.50 2.30 2-year 1.38 1.49 1.88 2.27 2 Year 2.39 2.53 2.66 2.80

note Unemployment 4.00 3.90 3.80 3.80 10 year 2.95 3.05 3.14 3.23

5 -year 1.89 1.94 2.20 2.56 note

10- year 2.30 2.33 2.41 2.74 1 note

Sources: Bloomberg

_CPA RTAA Total Funds

Account Summary 3/31/2018

Weighted Averages Book Yield

Maturity

Coupon

Moody

sap

1.51

0.97

1.35

Aaa

AA+

Fixed Income Allocation

Security Type Market Value % Assets

US Agency (USD) 30,651,919.34 39.1

US Treasury (USD) 29,205,479.30 37.2

LGIP State Pool (USD) 5,189,082.74 6.6

Bank or Cash Deposit (USD) 11,288,333.00 14.5

County Pool (USD) 2,121,266.91 2.7

Fixed Income Total 78,456,081.29 100.0

Fixed Income Totals Par Value

Market Value

Amortized Book Value

Unrealized Gain/Loss

Estimated Annual Cash Flow

79,035,391

78,456,081.29

78,806,968.07

-350,886.79

1,064,123.74

2

RTAA Total Funds

Accrual Earnings and Activity

3/31/2018

Cost Basis Summary

Beginning Amortized Cost

Quarter to Date Ending 3/31/2018

78,078,711.23

Fiscal Year-to-Date 6/30/2017

72,110,598.39

Accrual Earnings Summary Quarter to Date

Ending 3/31/2018 Fiscal

Year-to-Date 6/30/2017

Investment Purchases 17,668,112.37 46,809,633.23 Amortization/Accretion 23,347.86 33,913.45

Investment Maturities/Sells/Calls (5,750,000.00) (18,498,000.00) Interest Earned 249,344.44 688,337.07

Amortization 23,347.86 33,913.45 Realized Gain (Loss) 0.00 0.00

Change in Cash Equivalents (11,213,203.38) (21,649,177.00) Total Income 272,692.29 722,250.52

Realized Gains / Losses 0.00 0.00 Average Portfolio Balance 79,822,260.72 76,108,637.67

Ending Amortized Costs 78,806,968.07 78,806,968.07 Earnings Yield 1.39% 1.26%

Marke.tValue Summary

Ending Market Value

As of 3/31/2018

78,456,081.29

Interest Earnings Summary Quarter to Date

Ending 3/31/2018 Fiscal

Year-to-Date 6/30/2017

Beginning Accrued Interest 133,724.01 74,520.04 Unrealized Gain/Loss (350,886.79)

Coupons Paid 277,987.03 724,111.72

Purchased Accrued Interest (78,649.24) (183,891.43)

Sold Accrued Interest 14,925.00 53,831.17

Ending Accrued Interest 168,805.65 168,805.65

Interest Earned 249,344.44 688,337.07

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Investment Policy Compliance Overview Policy

Requirement

RTAA Total Funds

% of Total Portfolio Within Limits

Accumulated Allocation

Compliance Report Policy 2017 I 03/31/2018

sap Moodys

Under 30 days 10% 22% $ 17,628,696 Yes Muni's AA Aa2 AA

Under 1 year 25% 58% $ 45,173,762 Yes MMkt AA Aa2 AA

Under 5 years 100% 100% $ 78,456,081 Yes C P A-1 P-1 F1

Maximum Weighted Average Maturity 2 0.97 Yes

Maximum Callable Securities 25% 13% $ 10,413,362 Yes

Maximum Single Maturity 5 Years 4.49 Yes Policy states ONE rating meets requirement

Asset Allocation Diversification Maximum Policy

Issuer Constraint Percentage of

Market Value % Within Ratings Issuer

Allocation Portfolio Limits Compliance Compliance

US Treasury Securities 100% 37.23% $ 29,205,479 Yes

US Agency Primary Securities 100% 39.07% $ 30,651,919 Yes

FHLB 35% 11.34% $ 8,894,311 Yes

FNMA 35% 2.51% $ 1,970,108 Yes

FHLMC 35% 20.68% $ 16,228,212 Yes

FFCB 35% 4.54% $ 3,559,289 Yes

US Agency Secondary Securities 10% 5%

Municipal Bonds 30% 5%

Certificates of Deposit 50% 10% 1.91% $ 1,498,105 Yes Yes Yes

Commercial Paper 20% 5%

Bankers Acceptances 20% 5%

Demand Deposit/Savings 50% 12.48% $ 9,790,228 Yes Yes Yes

Money Market Mutual Funds 50% 25%

Local Government Investment Pool 50% 6.61% $ 5,189,083 Yes .. ..

Washoe County Investment Pool 50% 2.70% $ 2,121,267 Yes **

Total 100% $ 78,456,081

* FDIC or collateralized

"* Ratings a Issuer restrictions do not apply to pool funds

4

RTAA Total Funds Compliance Report Policy 2017 I 03/31/2018

Strategy Compliance Overview

Name Par Amount Total Adjusted

Cost Market Value Unrealized Gain/Loss

Yield At Cost

Eff Dur Bench Dur Benchmark

RTAA-CFC 5,565,175 5,556,671 5,552,704 $ (3,968) 1.55 0.36 1.00 BofA Merrill 0-2 Year Treasury RIM-Consent 1,019,681 1,017,170 1,017,045 $ (125) 1.73 0.39 1.00 BofA Merrill 0-2 Year Treasury RIM-Debt Service 2,007,722 2,006,271 2,004,606 $ (1,666) 1.34 0.19 0.10 Cash RIM-Fuel Tax 224,751 224,751 224,751 1.40 0.05 0.10 Cash RTAA-General $ 34,735,767 34,661,955 $ 34,493,951 $ (168,004) 1.59 1.16 1.40 BofA Merrill 0-3 Treasury RTAA-0EtM Reserve 7,232,860 7,241,695 7,165,794 $ (75,901) 1.60 1.60 2.15 BofA Merrill 0-5 Treasury RTAA-PFC $ 14,620,392 14,593,264 $ 14,526,675 $ (66,589) 1.52 0.89 1.00 BofA Merrill 0-2 Year Treasury RIM-Revenue 5,828,187 5,715,373 5,713,938 $ (1,436) 0.86 0.08 0.10 Cash RTAA-REtR 786,925 787,527 778,315 $ (9,212) 1.57 1.64 2.15 BofA Merrill 0-5 Treasury RIM-Special 7,013,932 7,002,290 6,978,303 $ (23,986) 1.45 0.68 1.40 BofA Merrill 0-3 Treasury

TOTAL PORTFOLIO $ 79,035,391 $ 78,806,968 $ 78,456,081 (350,887) 1.51 0.94 1.24

5

RTAA Total Funds

Distribution &port 3/31/2018

Uistribution by Maturity Distribution by Duration

Maturity

Under 1 Mth

1 Mth - 12 Mths

12 Mths - 24 Mths

24 Mths - 36 Mths

36 Mths - 60 Mths

Number Market Value % Fl

Holdings Average

YTM Average Coupon

Average Duration Duration Number Market Value

% Fl Holdings

Average YTM

Average Coupon

Average Duration

7 16,842,136.55 21.4 1.1 1.140% 0.1 Under 1 Yr 42 45,671,242.38 58.1 1.6 1.154% 0.3

34 28,331,625.33 36.1 1.9 1.154% 0.5 1 Yr -2 Yrs 23 23,093,717.26 29.4 2.3 1.519% 1.4

23 22,610,268.76 28.8 2.3 1.528% 1.4 2 Yrs - 3 Yrs 8 8,137,391.11 10.4 2.2 1.781% 2.4

9 9,118,320.11 11.6 2.2 1.738% 2.3 3 Yrs - 5 Yrs 3 1,666,544.60 2.1 2.6 2.075% 3.8

3 1,666,544.60 2.1 2.6 2.075% 3.8

Distribution by SEW Rating

% Fl Average Average Average

Distribution by Moody Rating

% Fl Average Average Average SP Rating Number Market Value Holdings YTM Coupon Duration Moody Rating Number Market Value Holdings YTM Coupon Duration

AA+ 65 59,857,398.64 76.2 2.1 1.378% 1.1 Aaa 65 59,857,398.64 76.2 2.1 1.378% 1.1

N/A 11 18,711,496.71 23.8 1.3 1.242% 0.3 N/A 11 18,711,496.71 23.8 1.3 1.242% 0.3

6

GPA GOVERNMENT PORTFOLIO

dam ADVISORS

Disclaimer

This material is based on information obtained from sources generally believed to be reliable and available to the public; however, GPA cannot guarantee its accuracy, completeness, or suitability. This material is for purposes of observations and oversight and is the opinion of the author and not necessarily of GPA, LLC. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained in this document is not an offer to purchase or sell any securities.

Definition and Terms

Investment Report: Provides of summary asset allocation and maturity distribution. The activity and earnings summary provides a high level overview of the total funds.

Total Funds: This is the amount of the overall portfolio balances that are held in short term liquid investments to meet ongoing operational budgets and cash flows and investments held for longer periods. An annual assessment of the allocations to each component is evaluated through a cash flow process determining liquidity needs and District preferences, the Guideline Portfolio Strategy "GPS" is completed by Government Portfolio Advisors.

Compliance Report: Provides a comparison of the portfolio positions to the investment policy. This report includes a breakout of the specific funds and each allocation to the liquidity and investments.

Holdings Reports: Provides an overview by fund of portfolio distribution.

Security Type: Allocates the investment to a specific issuer type.

Par Value: The total face value of the investment at maturity.

Security Name: Lists the specific name of issuer.

Book Yield or Yield at Cost: Is the earning yield on each security at the time of purchase. The total is a weighting based on investment value.

Market Value: The current market value of the security based on a third party pricing source. This price represents the value if the securities were sold on the pricing date. The market value changes with interest rates.

Total Adjusted Cost: This may be referred to as "book value" and represents the cost basis to date after amortization of premiums or discounts since the purchase date.

Unrealized gain or loss: This represents the difference between the market value and the adjusted cost at the time of the report.

% of Portfolio: Represents the percent allocation dedicated to each security type in the fund.

Effective Duration: Represents the duration based on the time between the report date and the maturity of the bond. Duration is similar to average maturity and is used to measure the price sensitivity of the portfolio given interest rate changes.

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1


Date: May 9, 2018 Administrative Report # 24-18 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FINANCIAL REPORTING PACKAGE – MARCH 2018 EXECUTIVE SUMMARY Attached is the Fiscal Year 2017-18 Financial Reporting Package for the nine month period ending March 31, 2018. To enhance tracking of actual results as compared to budget, the revenue and expenditure budget now reflects the impact of predictable seasonal factors. For example, the months of July and August are historically the highest passenger and aircraft activity months. In addition, certain utility (i.e. electricity and natural gas) costs, which are driven by weather conditions (summer and winter), and special event sponsorships (National Championship Air Races) will be reflected in the budget in the months of forecasted spending.

The majority of budgeted operating expenses continue to assume one twelfth of the operating expense budget is spent each month due to the challenge of accurately predicting spending patterns for such items as fuel, maintenance, office supplies and travel.

Y E A R T O D A T E as of March 31, 2018 (In Thousands)75.0% Of Fiscal Year

CURRENT PRIOR Y-T-DYEAR YEAR VARIANCE % BUDGET VARIANCE %

Operating Revenue Airline 12,059$ 12,057$ 2$ 0.0% 12,054$ 5$ 0.0% Non-Airline 27,388 25,554 1,833 7.2% 25,656 1,732 6.8%

Total Operating Revenue 39,446 37,611 1,835 4.9% 37,709 1,737 4.6%

Non-Operating Revenues 2,231 1,666 564 33.9% 1,685 546 32.4%

Total Revenue 41,677 39,277 2,399 6.1% 39,394 2,283 5.8%

Operating Expenses (29,601) (28,359) (1,241) 4.4% (31,707) 2,107 -6.6%

Net Revenue Available for Debt Service 12,076 10,918 1,158 10.6% 7,687 4,389 57.1%

Debt Service After PFCs (1,685) (2,682) 997 -37.2% (1,685) 0 0.0%

Net Available Cashflow 10,390 8,236 2,155 26.2% 6,001 4,389 73.1%

March 2018 Financial Summary Administrative Report # 24-18 May 9, 2018 Page 2 of 8

2

Based on actual results through March 31, 2018, net available cash flow, after funding debt service, is approximately $10.390 million, an increase of approximately $4.389 million above the adopted FY 2017-18 Budget and $2.155 million above last year’s results for the same period. TOTAL OPERATING REVENUE The RTAA’s total operating revenue of $39.446 million is approximately $1.737 million or 4.6% above budget due to higher non-airline revenues of $1.732 million and airline revenues of $5,100. This increase is primarily due to higher revenues from auto rental, parking, food and beverage concession and RNO and RTS building and land rent. The revenue results are discussed in more detail later in this report. The chart below reflects actual operating revenues for the fiscal year as compared to the budget amount.


3

AIRLINE Landing Fees The RTAA executed a five-year agreement with the airlines effective July 1, 2015. The formula for calculating landing fees consists of almost 100% cost recovery of airfield related operating and capital improvement expenses offset by other airfield derived revenues. Landing fees were budgeted and are currently being collected at $2.99 per 1,000 lbs. of landed weight. For the nine month period ending March 31, 2018, landing fee revenues registered $6.261 million, which is approximately $121,700 or 1.9% under the adopted budget. The decrease is primarily due to lower than anticipated landed weight by Fed Ex, partially offset by increases by Southwest and United. The costs allocated to the Airfield Cost Center, or Net Requirement per the Airline Agreement, are 7.4% under budget based on actual results through March 31, 2018. Airline Terminal Rents Airline terminal rents reflect cost recovery of terminal costs allocated to airline occupied facilities (commercial compensatory basis) with total facility costs divided by rentable terminal square footage. For the nine months ending March 31, 2018, airline terminal rental revenue registered $5.798 million, which is approximately $126,800 or 2.2% above budget. This increase is primarily due to higher than anticipated non-preferential gate use and other non-signatory facility use fees associated with the introduction of new service by Frontier Airlines. The costs allocated to the Terminal Building Cost Center, or Net Requirement per the Airline Agreement, are 2.5% below the adopted budget based on actual results through March 31, 2018. In addition, the net revenue sharing of $3.483 million applied as an airline credit or rent reduction to terminal rents, is approximately $1.858 million above the adopted budget year-to-date. The budgeted average signatory rental rate is $54.95 per sq. ft. per annum. Due to lower terminal cost recovery and the forecasted increase in the airline revenue sharing credit, the average terminal rental rate has been decreased to $45.57 per sq. ft. per annum effective January 1, 2018. NON-AIRLINE REVENUE With airline revenues derived from cost recovery formulas and no net profit resulting directly from their operations, non-airline revenues are critical for the RTAA to meet other operating costs and to generate internal funds for equipment and capital projects that do not directly benefit the airlines.


4

Non-airline operating revenues are primarily comprised of terminal and rental car concession revenues, public parking revenue, building/land rent, and reimbursement of RTAA provided services. The monthly budgets for concession revenues, public parking, and reimbursement of costs associated with the operation of baggage handling system reflect the seasonality of passenger traffic through RNO due to the direct correlation to passenger traffic. Overall, non-airline operating revenues registered $27.388 million, an increase of approximately $1.732 million or 6.8% over budget. The increase is primarily due to $589,700 or 10.6% in higher auto rental revenues, $473,300 or 5.9% higher revenue from parking operations, $123,800 or 14.2% in higher food and beverage revenue, and $235,600 or 4.6% in higher RNO and RTS building and land rent. Enplaned passenger traffic for the first nine months of FY 2017-18 is 1,537,848, an increase of 6.5% above the seasonally forecasted budget and 8.3% above last year’s results. Further detail on passenger traffic results is provided in the Key Benchmarks section of this summary. NON-OPERATING REVENUE Non-Operating revenues of approximately $2.231 million, which are primarily comprised of interest income, aviation fuel tax, and rental car customer facility charges, are approximately $545,700 or 32.4% above budget. This increase is primarily due to higher interest income of $254,000, realized gain on sale of fixed assets of $146,700 and higher Customer Facility Charge fees of $122,800 associated with the rental car activity. OPERATING EXPENSES Operating expenses of $29.601 million for the nine month period ending March 31, 2018 are 6.6% or approximately $2.107 million below budget and $1.241 million or 4.4% above last year’s results. The savings as compared to budget include approximately $733,100 in lower Personnel costs, $38,600 in lower Utility costs, $649,900 in lower Purchased Services, $127,600 in lower Materials and Supplies, and $557,300 in lower Administrative expenses.


5

DEBT SERVICE Net debt service payments of $1.685 million, net of the application of Passenger Facility Charges (PFC), matches the FY 2017-18 adopted budget. KEY BENCHMARKS The following are key benchmarks and ratios used to measure financial activities and monitor the financial health and condition of the Authority:

Y E A R T O D A T E (March 31, 2018 )75.0% Of Fiscal Year

CURRENT PRIOR Y-T-DKey Statistics / Benchmarks YEAR YEAR VARIANCE % BUDGET VARIANCE %

Enplaned Passengers 1,537,848 1,419,372 118,476 8.3% 1,444,015 93,833 6.5% Airline Cost Per Enplaned Passenger 5.33$ 6.23$ (0.89)$ -14.3% 7.25$ (1.92) -26.4% Non-Airline Revenues per EPAX (a) 16.56$ 16.65$ (0.09)$ -0.6% 16.43$ 0.13 0.8% Operating Ratio 75.0% 75.4% -0.4% -0.5% 84.1% -9.0% -10.8% Debt Service Coverage Ratio 7.74 3.01 4.73 157.3% 5.46 2.27 41.6% Days Cash On Hand 481.7 434.6 47.1 10.8% 457.3 24.4 5.3%

(a) Excludes cost reimbursement for the Baggage Handing System (BHS) paid by the airlines.


6

Enplaned Passengers

Passenger Activity is a significant factor driving non-airline revenues such as terminal and rental car concessions and public parking. Based on actual results for the first nine months of FY 2017-18 enplaned passengers were 1,537,848, a 6.5% increase compared to the budgeted passenger traffic and an 8.3% increase as compared to the same period last year. American, Delta, Frontier, JetBlue, Southwest, and United reported 130,520 more passengers in the current fiscal year than the same period last year. These increases in passenger traffic were partially offset by the lower results reported by Alaska, Allegiant, and Volaris of 11,196. A table and chart enclosed in this package provide a comparison of enplaned passenger traffic and market share by airlines for FY 2017-18 as compared to the previous year. Airline Cost per Enplaned Passenger This ratio represents airline payments for use of airport facilities (landing fees and terminal rents) in accordance with adopted rates and charges methodology as outlined in the lease agreement between the airport and airlines. The RTAA targets to maintain a reasonable cost structure for the airlines to attract and maintain air service to our community. Due to operating expenses being 6.6% below budget and a higher than anticipated revenue sharing credit, the airline cost per enplaned passenger is estimated to be $5.33 as compared to the FY 2017-18 budget of $7.25. Non-Airline Revenue per Enplaned Passenger This ratio represents operating revenues derived from sources other than the airlines divided by enplaned passengers for the fiscal year. This financial ratio measures the Authority’s ability to generate terminal and rental car concession fees, public parking, land and building rents from non-airline facilities, interest income, and aviation fuel tax at both the Reno-Tahoe and the Reno-Stead Airports. Based on actual results for the first nine months of FY 2017-18, non-airline revenue per enplaned passenger registered $16.56, an increase of 0.8% above the FY 2017-18 Budget of $16.43 and a decrease of 0.6% from the $16.65 registered in the prior year. The most significant increase in revenue per enplaned passenger is in the rental car and food and beverage concession revenues.


7

Operating Ratio The Operating Ratio is calculated by taking operating and maintenance expenses and dividing by total operating revenues. This ratio indicates whether that level of operating expense as a proportion of operating revenues are consistent and tracking with the approved expenditures and revenues adopted in the FY 2017-18 Budget. Generally, a lower ratio of expenses to revenues is positive since it reflects an improvement in the net operating revenue available to pay debt service and generate additional cash flow. Based on actual results for the first nine months of FY 2017-18, the ratio favorably registered 75.0% as compared to the prior year actual ratio of 75.4% and the adopted budget ratio of 84.1%. This result as compared to budget reflects primarily the lower operating expenses and higher operating revenues for the fiscal year. Days Cash on Hand Days Cash on Hand is calculated by identifying unrestricted cash and investments divided by the daily operating and maintenance expenditure budget (annual operating and maintenance budget divided by 365 days). The RTAA’s cash and liquidity position remains strong with 482 days of unrestricted cash on hand to meet budgeted operating and maintenance requirements. This is slightly higher than the forecasted year-end budget target of 457 days. The 2016 median average, as compiled by Moody’s Investor Services, is 615 for all airports and 563 for small hub airports. The current RTAA ratio, while very strong, is below this industry average for all airports and similarly sized airports. In addition, the rating agencies indicate a ratio lower than 300 days is viewed negatively and may result in a ratings downgrade for the reporting airport. A chart enclosed in this package provides a comparison of liquidity balances and Days Cash on Hand as of March 31, 2018 compared to FY 2016-17 year-end actual results and forecasted year-end cash balances in the adopted FY 2017-18 Budget. Debt Service Coverage Ratio The Debt Service Coverage Ratio is the net revenue available for debt service (Operating Revenue less Operating Expenses) divided by annual debt service. This benchmark measures the ability of the RTAA’s operations to generate sufficient funds to pay the annual debt service on both the senior lien bond and the subordinate notes. The RTAA targets to maintain net revenue after operating expenses equal to or greater than 1.5 times annual debt service. Under the bond indenture, the RTAA is required to maintain at least a ratio of 1.25. The RTAA’s debt service coverage ratio of 7.74X as of March 31, 2018 is strong with lender and bond holder protection higher than the FY 2017-18 Budget estimate of 5.46X and


8

significantly above the minimum level of 1.25X established under the RTAA’s Master Bond Indenture. The coverage ratio is significantly above budget primarily due to higher non-airline revenue and lower operating expenses resulting in net revenue available to pay debt service of $12.076 million, an increase of $4.389 million or 57.1% above budget. The senior lien debt was issued to fund construction of the Parking Garage and the connector bridge. Public parking revenues are assigned to the payment of this debt. No debt service for either the senior bond or the subordinate lien notes is included in the cost recovery assigned to Airline Cost Centers. A table and chart are included in this package to outline the financial inputs used to calculate this ratio for March 2018 as compared to the same period last year and the adopted FY 2017-18 Budget.

OPERATING STATEMENTRENO-TAHOE AIRPORT AUTHORITY

For the Nine Months Ending March 31, 2018

C U R R E N T M O N T H For the Nine Months Ending March 31, 2018

75.00% OF FISCAL YEAR

CURRENT PRIOR CURRENT PRIOR Y-T-D

YEAR YEAR VARIANCE % YEAR YEAR VARIANCE % BUDGET VARIANCE %

REVENUES Landing Fees 714,964$ 667,575$ 47,389$ 7.1% 6,260,711$ 5,673,696$ 587,015$ 10.3% 6,382,391$ (121,680)$ -1.9%

Terminal Rent, Airline 594,237 674,485 (80,248) -11.9% 5,797,914 6,383,153 (585,239) -9.2% 5,671,125 126,789 2.2%

Aircraft Fees 84,557 84,982 (425) -0.5% 823,680 763,282 60,398 7.9% 726,750 96,930 13.3%

Concession Revenue 419,133 429,113 (9,980) -2.3% 3,536,846 3,457,712 79,134 2.3% 3,359,679 177,168 5.3%

Auto Rental 747,699 684,513 63,186 9.2% 6,147,740 5,448,372 699,367 12.8% 5,557,991 589,749 10.6%

Parking & Ground Transportation 1,026,471 1,014,486 11,985 1.2% 8,813,110 8,297,698 515,412 6.2% 8,311,026 502,084 6.0%

Reno-Tahoe Building/ Land Rents 608,475 592,330 16,146 2.7% 5,474,681 5,076,076 398,604 7.9% 5,278,950 195,731 3.7%

Reno-Stead Rents 48,889 43,738 5,152 11.8% 513,569 475,306 38,263 8.1% 459,037 54,531 11.9%

Reimbursed Services 241,887 233,496 8,392 3.6% 1,927,120 1,923,897 3,224 0.2% 1,934,584 (7,464) -0.4%

Miscellaneous 18,523 44,281 (25,758) -58.2% 150,846 111,771 39,075 35.0% 27,525 123,321 448.0%

OPERATING REVENUE 4,504,836$ 4,468,998$ 35,838$ 0.8% 39,446,217$ 37,610,963$ 1,835,254$ 4.9% 37,709,058$ 1,737,159$ 4.6%

EXPENSES

Personnel Services 2,443,928$ 2,202,628$ 241,299$ 11.0% 20,959,496$ 19,966,455$ 993,041$ 5.0% 21,692,561$ (733,065)$ -3.4%

Utilities and Communications 230,689 202,127 28,562 14.1% 2,056,996 1,809,138 247,858 13.7% 2,095,621 (38,626) -1.8%

Purchased Services 584,512 462,946 121,566 26.3% 3,648,791 3,404,400 244,391 7.2% 4,298,676 (649,885) -15.1%

Materials and Supplies 247,211 194,704 52,507 27.0% 1,334,796 1,220,255 114,540 9.4% 1,462,402 (127,606) -8.7%

Administrative Expense 154,541 325,204 (170,663) -52.5% 1,600,776 1,959,206 (358,430) -18.3% 2,158,106 (557,331) -25.8%

OPERATING EXPENSES 3,660,881$ 3,387,610$ 273,271$ 8.1% 29,600,854$ 28,359,454$ 1,241,401$ 4.4% 31,707,367$ (2,106,513)$ -6.6%

NET OPERATING INC. BEFORE DEPR. 843,955$ 1,081,388$ (237,433)$ -22.0% 9,845,363$ 9,251,509$ 593,854$ 6.4% 6,001,691$ 3,843,672$ 64.0%

Depreciation and Amortization 2,599,676 2,951,420 (351,744) -11.9% 23,762,268 25,718,348 (1,956,080) -7.6% 26,812,500 (3,050,232) -11.4%

OPERATING INCOME (1,755,721)$ (1,870,031)$ 114,311$ 6.1% (13,916,905)$ (16,466,839)$ 2,549,934$ 15.5% (20,810,809)$ 6,893,904$ 33.1%

NON-OPERTING INCOME (EXPENSE)

Interest Income 78,568$ 55,519$ 23,048$ 41.5% 576,890$ 395,976$ 180,914$ 45.7% 362,625$ 214,265 59.1%

Passenger Facility Charge 313,779 309,457 4,321 1.4% 5,467,779 5,084,771 383,008 7.5% 5,513,550 (45,771) -0.8%

Customer Facility Charge 143,270 134,640 8,630 6.4% 1,277,456 1,092,864 184,591 16.9% 1,154,681 122,774 10.6%

Jet Fuel Tax Revenue 22,811 15,514 7,297 47.0% 229,541 215,800 13,741 6.4% 207,300 22,241 10.7%

G/L on Sale of Capital Assets 0 0 - n.a. 146,712 10,737 135,975 1266.4% - 146,712 n.a.

Other Non-Operating Revenue (Expense) 0 0 - n.a. 0 - - n.a. - 0 n.a.

Interest Expense (40,609) (51,444) 10,835 -21.1% (365,481) (462,522) 97,041 -21.0% (365,475) (6) 0.0%

Total 517,818$ 463,686$ 54,132$ 11.7% 7,332,897$ 6,337,626$ 995,271$ 15.7% 6,872,681$ 460,215$ 6.7%

Net Income Before Capital Contributions (1,237,903)$ (1,406,345)$ 168,442$ 12.0% (6,584,008)$ (10,129,213)$ 3,545,205$ 35.0% (13,938,128)$ 7,354,119$ 52.8%

9

ANNUAL BUDGET

ANNUAL

BUDGET %

$ % $ % TO DATE

REVENUES Landing Fees 714,964$ 760,520$ (45,556)$ -6.0% 6,260,711$ 6,382,391$ (121,680)$ -1.9% 8,568,704$ 73%

Terminal Rent, Airline 594,237 630,125 (35,888) -5.7% 5,797,914 5,671,125 126,789 2.2% 7,561,500 77%

Aircraft Fees 84,557 80,750 3,807 4.7% 823,680 726,750 96,930 13.3% 969,000 85%

Concession Revenue 419,133 413,360 5,773 1.4% 3,536,846 3,359,679 177,168 5.3% 4,461,900 79%

Auto Rental 747,699 698,243 49,456 7.1% 6,147,740 5,557,991 589,749 10.6% 7,190,800 85%

Parking & Ground Transportation 1,026,471 1,013,841 12,630 1.2% 8,813,110 8,311,026 502,084 6.0% 11,330,900 78%

Reno-Tahoe Building/ Land Rents 608,475 586,550 21,925 3.7% 5,474,681 5,278,950 195,731 3.7% 7,038,600 78%

Reno-Stead Rents 48,889 51,004 (2,115) -4.1% 513,569 459,037 54,531 11.9% 612,050 84%

Reimbursed Services 241,887 232,228 9,659 4.2% 1,927,120 1,934,584 (7,464) -0.4% 2,592,581 74%

Miscellaneous 18,523 3,058 15,464 505.6% 150,846 27,525 123,321 448.0% 36,700 0%

OPERATING REVENUE 4,504,836$ 4,469,680$ 35,156$ 0.8% 39,446,217$ 37,709,058$ 1,737,159$ 4.6% 50,362,735$ 78%

EXPENSES

Personnel Services 2,443,928$ 2,383,618$ 60,310$ 2.5% 20,959,496$ 21,692,561$ (733,065)$ -3.4% 28,843,415$ 73%

Utilities and Communications 230,689 225,832 4,858 2.2% 2,056,996 2,095,621 (38,626) -1.8% 2,741,145 75%

Purchased Services 584,512 477,631 106,882 22.4% 3,648,791 4,298,676 (649,885) -15.1% 5,731,568 64%

Materials and Supplies 247,211 162,489 84,722 52.1% 1,334,796 1,462,402 (127,606) -8.7% 1,949,869 68%

Administrative Expense 154,541 225,345 (70,804) -31.4% 1,600,776 2,158,106 (557,331) -25.8% 2,834,142 56%

OPERATING EXPENSES 3,660,881$ 3,474,914$ 185,967$ 5.4% 29,600,854$ 31,707,367$ (2,106,513)$ -6.6% 42,100,139$ 70%

NET OPERATING INC. BEFORE DEPR. 843,955$ 994,766$ (150,811)$ -15.2% 9,845,363$ 6,001,691$ 3,843,672$ 64.0% 8,262,596$ 119%

Depreciation and Amortization 2,599,676 2,979,167 (379,491) -12.7% 23,762,268 26,812,500 (3,050,232) -11.4% 35,750,000 66%

OPERATING INCOME (1,755,721)$ (1,984,401)$ 228,680$ 11.5% (13,916,905)$ (20,810,809)$ 6,893,904$ 33.1% (27,487,404)$ 51%

NON-OPERTING INCOME (EXPENSE)

Interest Income 78,568$ 40,292$ 38,276$ 95.0% 576,890$ 362,625$ 214,265$ 59.1% 483,500 119%

Passenger Facility Charge 313,779 612,617 (298,838) -48.8% 5,467,779 5,513,550 (45,771) -0.8% 7,351,400 74%

Customer Facility Charge 143,270 145,061 (1,792) -1.2% 1,277,456 1,154,681 122,774 10.6% 1,493,900 86%

Jet Fuel Tax Revenue 22,811 23,033 (222) -1.0% 229,541 207,300 22,241 10.7% 276,400 83%

G/L on Sale of Capital Assets - - - n.a. 146,712 - 146,712 n.a. 0 n.a.

Other Non-Operating Revenue (Expense) - - - n.a. - - - n.a. 0 n.a.

Interest Expense (40,609) (40,608) (1) 0.0% (365,481) (365,475) (6) 0.0% (487,300) 75%

Total 517,818$ 780,394$ (262,577)$ -33.6% 7,332,897$ 6,872,681$ 460,215$ 6.7% 9,117,900$ 80%

Net Income Before Capital Contributions (1,237,903)$ (1,204,007)$ (33,897)$ -2.8% (6,584,008)$ (13,938,128)$ 7,354,119$ 52.8% (18,369,504)$ 36%

OPERATING STATEMENTRENO-TAHOE AIRPORT AUTHORITY


TOTAL

C U R R E N T M O N T H YEAR TO DATE

ACTUAL BUDGETVARIANCE

ACTUAL BUDGETVARIANCE

10

11

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

FY 2017 Revenue FY 2017 Expense FY 2018 Revenue FY 2018 Expense

Fiscal Year

Operating Revenue and ExpenseYTD through March 31, 2018

Landing fees Concession revenue

Parking and ground transportation Rentals

Reimbursements for services Other revenue

Employee wages and benefits Utilities and communications

Purchase of services Materials and supplies

Administrative expenses

SUMMARY OF NON-AIRLINE REVENUES

Over 3/31/2018 Over % of

3/31/2018 3/31/2017 (Under) % Year to Date (Under) % 2017-18 Annual

YTD Actual YTD Actual Prior Year Variance Budget Budget Variance Annual Budget Budget

Aircraft Fees - Reno 746,909$ 733,527$ 13,382$ 1.8% 708,525$ 38,384$ 5.4% 944,700$ 79.1%Aircraft Fees - Stead 76,771 29,755 47,016 158.0% 18,225 58,546 321.2% 24,300 315.9%

-

Gaming Concession 772,781 728,015 44,766 6.1% 730,230 42,551 5.8% 977,700 79.0%Food & Beverage 993,753 926,694 67,059 7.2% 869,965 123,789 14.2% 1,149,300 86.5%Retail/Merchandise 814,678 799,697 14,981 1.9% 841,559 (26,881) -3.2% 1,111,000 73.3%Advertising 529,072 503,586 25,486 5.1% 499,425 29,647 5.9% 665,900 79.5%Other Concessions 130,496 128,399 2,097 1.6% 132,825 (2,329) -1.8% 177,100 73.7%

FBO and Ground Handlers 278,672 356,658 (77,986) -21.9% 271,875 6,797 2.5% 362,500 76.9%Stead Concessions 17,393 14,663 2,730 18.6% 13,800 3,593 26.0% 18,400 94.5%

Auto Rental 6,147,740 5,448,372 699,367 12.8% 5,557,991 589,749 10.6% 7,190,800 85.5%

Ground Transportation 257,004 226,249 30,755 13.6% 228,225 28,778 12.6% 304,300 84.5%Auto Parking 8,556,106 8,071,449 484,658 6.0% 8,082,801 473,305 5.9% 11,026,600 77.6%

Other Terminal Rents 638,376 691,597 (53,221) -7.7% 623,700 14,676 2.4% 831,600 76.8%Reno-Tahoe Building Rents 2,401,701 2,245,359 156,342 7.0% 2,286,600 115,101 5.0% 3,048,800 78.8%Reno-Tahoe Land Rents 2,434,604 2,139,121 295,483 13.8% 2,368,650 65,954 2.8% 3,158,200 77.1%Reno-Stead Rents 513,569 475,306 38,263 8.1% 459,037 54,531 11.9% 612,050 83.9%

Reimbursed Services 1,927,120 1,923,897 3,224 0.2% 1,934,584 (7,464) -0.4% 2,592,581 74.3%

Miscellaneous 150,846 111,771 39,075 35.0% 27,525 123,321 448.0% 36,700 411.0%

Total Non-Airline Operating Revenue 27,387,592 25,554,114 1,833,478 7.2% 25,655,542 1,732,050 6.8% 34,232,531 80.0%-

Non Operating Revenue (a) 953,143 573,575 379,567 66.2% 530,175 422,968 79.8% 706,900 134.8%

TOTAL NON-AIRLINE REVENUE 28,340,735$ 26,127,689$ 2,213,046$ 8.5% 26,185,717$ 2,155,018$ 8.2% 34,939,431$ 81.1%

Year to Date Enplaned Passengers 1,537,848 1,419,372 1,444,015 1,948,002

Non-Airline Revenue Per EPAX (b) 16.56$ 16.65$ 16.43$ 16.24$

(a) Excludes PFC and CFC revenues

(b) Total Non-Airline Revenue less Reimbursed Services divided by enplaned passengers

Reno-Tahoe Airport Authority

12

NET REVENUE SHARING - YEAR TO DATEReno-Tahoe Airport Authority


Baggage Reno

Airfield Terminal System Landside Other Stead Total

Revenue Sharing

Airline Revenue 6,090,926 7,505,346 - - - - 13,596,272

Non Airline Revenue 759,572 4,506,232 1,232,811 15,028,084 6,064,261 607,733 28,198,694

Total Revenue 6,850,498 12,011,577 1,232,811 15,028,084 6,064,261 607,733 41,794,966

Budgeted Revenue 7,285,053 11,786,625 1,164,361 13,950,225 5,270,250 491,063 39,947,577

O&M Expense 6,363,205$ 13,031,013$ 1,113,847$ 4,615,004$ 2,921,992$ 1,126,590$ 29,171,652$

Debt Service - - - 1,685,475 - - 1,685,475

Pre Bond Loan - - - - - - -

O&M Reserve 48,184 96,367 7,997 37,647 24,889 11,113 226,197

Fixed Asset 152,831 273,807 - 91,346 73,932 86,450 678,366

Capital Project 286,800 258,750 - 57,581 801,450 78,000 1,482,581

Amort. Capital Items 506,402 46,379 40,000 417,649 86,825 230,544 1,327,799

Special Fund - 256,646 - - - - 256,646

2016-17 Carry-Over -

Total Requirement 7,357,422 13,962,962 1,161,844 6,904,703 3,909,088 1,532,697 34,828,715

Budgeted Requirement 7,796,126 14,383,729 1,164,361 7,238,521 4,155,127 1,958,640 36,696,504

Net Revenues (506,924) (1,951,384) 70,967 8,123,382 2,155,173 (924,964) 6,966,250

Budgeted Net Revenues (511,073) (2,597,104) - 6,711,704 1,115,123 (1,467,577) 3,251,073

Months 9 Airport Share 3,483,125$

Airline Share 3,483,125$

13

SUMMARY OF ENPLANED PASSENGERS BY AIRLINEReno-Tahoe International Airport

Month Year-to-date

Percent YTD YTD Percent

Enplaned passengers by Airline Mar-18 Mar-17 change 2017-18 2016-17 change

Major/national carriers (Signatory)

Alaska 17,286 19,742 -12.4% 159,781 167,495 -4.6%

American 33,819 33,137 2.1% 286,148 277,529 3.1%Delta 14,069 14,090 -0.1% 112,785 101,373 11.3%Southwest 80,872 77,406 4.5% 671,789 608,177 10.5%United 20,396 21,728 -6.1% 200,429 165,400 21.2%

Total 166,442 166,103 0.2% 1,430,932 1,319,974 8.4%

Non-Signatory and Charter

Allegiant Air 3,464 3,350 3.4% 21,965 22,847 -3.9%Frontier 2,064 0 n.a. 8,564 0 n.a.JetBlue 7,576 8,083 -6.3% 60,603 57,319 5.7%

Volaris 1,469 1,913 -23.2% 13,735 16,335 -15.9%Other Charters 126 24 425.0% 2,049 2,897 -29.3%

Total14,699 13,370 9.9% 106,916 99,398 7.6%

Total enplaned passengers 181,141 179,473 0.9% 1,537,848 1,419,372 8.3%

Alaska

10.4%American

18.6%

Delta

7.3%

Southwest

43.7%

United

13.0%Allegiant Air

1.4%

Frontier

0.1%

JetBlue

3.9%

Volaris

0.9%

Enplaned Passenger Market Share

Year to Date - March 2018

14

15

382

483 457

482

-

100

200

300

400

500

600

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

RTAA Liquidity Position

Unrestricted Cash Restricted Cash Days Cash on Hand

DEBT SERVICE COVERAGERENO-TAHOE AIRPORT AUTHORITY



75.00% OF FISCAL YEAR

CURRENT PRIOR Y-T-D

YEAR YEAR VARIANCE % BUDGET VARIANCE %

NET OPERATING INCOME 7,740,942$ 7,624,965$ 115,977$ 1.5% 6,001,691$ 1,739,251$ 29.0%

OTHER INCOME (EXPENSE)

Rate Base Interest Income 576,890$ 347,039$ 229,851$ 66.2% 322,875$ 254,015$ 78.7%

Other Revenue 1,653,709$ 1,319,401$ 334,308 25.3% 1,361,981 291,727 21.4%

2,230,598 1,666,440 564,159 33.9% 1,684,856 545,742 32.4%

Transfers

Airline Revenue Sharing 3,483,125$ 1,763,698$ 1,719,427$ 97.5% 1,625,537$ 1,857,589$ 114.3%

Gain/Loss on Sale of Assets (146,712) (10,737) (135,975) (1,387,500) 1,240,788 -89.4%

35% of gaming revenue (270,473) (254,805) (15,668) 6.1% (255,580) (14,893) 5.8%

Net Income Available for Debt Service 13,037,480$ 10,789,560$ 2,247,920$ 20.8% 7,669,003$ 5,368,477$ 70.0%

Debt Service (Senior) Parking Garage (a) 1,685,475$ 1,687,097$ (1,622)$ -0.1% 1,685,475$ -$ 0.0%

Pledged PFC Revenues - - - 0.0% - - 0.0%

1,685,475 1,687,097 (1,622) -0.1% 1,685,475 - 0.0%

Debt Service (Subordinate) -$ 2,354,545$ (2,354,545)$ -100.0% -$ -$ 0.0%

Pledged PFC Revenues - (1,359,593) 1,359,593 -100.0% - - 0.0%

- 994,952 (994,952) -100.0% - - 0.0%

Debt Service After PFC Revenue 1,685,475$ 2,682,050$ (996,575)$ -37.2% 1,685,475$ -$ 0.0%

Debt Service Coverage Ratio 7.74 3.01 4.55

Safety Margin 30.40% 22.53% 15.87%

(a) The senior lien debt was issued to fund constructed of the Parking Garage and the connector bridge. Public parking revenues are assigned

to the payment of this debt. No debt service for either the Senior Bonds or the Subordinate Lien Notes is included in cost recovery

associated with airline cost centers.

$10,790

$7,669

$13,037

$1,687 $1,685 $1,685 $995

$- $-

3.01

4.55

7.74

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

FY 2016-17 YTD Actual FY 2017-18 YTD Budget FY 2017-18 YTD Actual

Debt Service CoverageIn Thousands

Net Income Available Senior Lien Debt Service -Parking

Subordinate Lien Debt Service Debt Service Coverage

16


Date: May 9, 2018 Administrative Report: # 25-18 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: ADMINISTRATIVE AWARD OF CONTRACTS PURSUANT TO

RESOLUTION NO. 462 FOR THE MONTH OF APRIL 2018 BACKGROUND At the January 19, 2006 meeting of the Board of Trustees of the Reno-Tahoe Airport Authority, the Board approved Resolution No. 462 authorizing the President/CEO to award contracts for budgeted goods, services (other than professional services agreements exceeding $50,000), materials, and supplies when the estimated amount to perform the contract is $100,000 or less, approve a contract change order (CO) on construction projects where the total net cost of a single change order does not increase the contract sum by more than $100,000, contract for a professional services agreement (PSA) when the estimated amount to perform the work is $50,000 or less, and approve an amendment to a professional services agreement where the total net cost of a single amendment does not increase the agreement amount by more than $50,000. DISCUSSION Resolution No. 462 requires that the President/CEO provide the Board of Trustees with an administrative report setting forth a list of contracts, professional services agreements, change orders, and amendments approved administratively as a result of the resolution to be given to the Board on a monthly basis. Appended hereto is the list for the month of April 2018. MMM/hdl/cj

APRIL 2018

Date Name of Company Dollar Amount Description Funding Source Department/Division

04/11/18 Arora Engineers, Inc.

$0 Entered into PSA for producing Electronic Airport Layout Plan (eALP) for RNO June 5, 2014. This amendment (No. 5) is a non-monetary amendment to extend the PSA to allow for completion of the project by June 30, 2018. All other conditions remain in full force and effect through the date of the extension period.

N/A Engineering & Construction

04/11/18 Arora Engineers, Inc.

$34,490 Entered into PSA for producing Electronic Airport Layout Plan (eALP) for RNO June 5, 2014. This amendment (No. 6) is to extend the PSA to allow for incorporation of Taxiway C geospatial data into the RTAA GIS and will be used to measure true distances for airport planning efforts, specifically in conjunction with the Master Plan. The consultant will evaluate current as-built data for Taxiway C and perform a gap analysis with updated data collected from a ground surveyor tasked by the consultant.

$32,334 AIP Master Plan Grant $2,156 PFC Application No. 13

Engineering & Construction

04/19/18 Kimley-Horn and Associates, Inc.

$46,754 Under this PSA, the consultant will provide design and technical services, bidding assistance, construction administration and other professional services for the Rental Car Ready Return Area Reconfiguration project at RNO.

CFC Program Engineering & Construction Airport Economic Development

APRIL 2018

Date Name of Company Dollar Amount Description Funding Source Department/Division

04/19/18 Atkins North America, Inc.

$21,000 This amendment (No. 3) to the 2018 Annual Construction Management Services Agreement will include services as Owner’s Representative for onsite project facilitation for the Gate 170 Access Road Reconstruction project.

Capital Improvement Program


04/23/18 Road and Highway Builders, Inc.

($22,273) This deductive change order (No. 1) is a result of two changes to the contract. The electrical conduit encasement (concrete) in areas outside of paved areas was changed from high strength to low strength concrete. Also, the contractor was unable to purchase a Field Office Trailer to be turned over to the RTAA at the completion of the project. In lieu of this, the contractor is renting a trailer for the duration of the project.

AIP Grant Special Fund


Key to abbreviations: AIP = Airport Improvement Project CFC = Customer Facility Charge Program CO = Change Order NTE = Not to Exceed PFC = Passenger Facility Charge Program PO = Purchase Order PSA = Professional Service Agreement *Contract signed by authorized designee – Executive Vice President/COO


Date: May 9, 2018 Administrative Report #26-18 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2017-2018 GENERAL COUNSEL’S BUDGET The following is a summary of the General Counsel’s budget for the 2017-2018 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While March represents 75.0% of the budget year, actual costs are 47.7% of the total budget.

Account Classification YTD Actual

YTD Budget

Over (Under) Budget

% Variance

2017-18 Annual Budget

% of Annual Budget

Purchased Services Fennemore Craig, PC $ 199,463 $ 318,750 $(119,287) -37.4% $ 425,000 46.9%

Specialty Area, Legal 11,806 11,250 556 4.9% 15,000 78.7% Other Purchased Services 413 188 225 120.3% 250 165.2% Administrative Expense

Books 0 450 (450) -100.0% 600 0.0% Conference Registration 0 1,350 (1,350) -100.0% 1,800 0.0% Travel Expense

453 1,275 (822) -64.5% 1,700 26.6%

Total General Counsel $ 212,135 $ 333,263 $(121,128) -36.3% $ 444,350 47.7% MMM/lw/cj


Date: May 9, 2018 Administrative Report #27-18 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2017-2018 BOARD OF TRUSTEE’S BUDGET The following is a summary of the Board of Trustee’s budget for the 2017-2018 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While March represents 75.0% of the budget year, actual costs are 65.5% of the total budget.


YTD Budget

Over (Under) Budget

% Variance


% of Annual Budget

Personnel Services Trustee Stipend $ 45,920 $ 45,360 $ 560 1.2% $ 60,480 75.9% Personnel Services 34,633 34,875 (242) -0.7% 46,500 74.5% Purchased Services 23,730 29,588 (5,858) -19.8% 39,450 60.2% Materials and Supplies 1,421 1,350 71 5.3% 1,800 78.9% Administrative Expense

Conference Registration & Training 625 4,275 (3,650) -85.4% 5,700 11.0%

Meeting Expenses 5,509 6,300 (791) -12.6% 8,400 65.6% Travel and Reimbursed

Expense 1,110 7,500 (6,390) -85.2% 10,000 11.1% Total Board $ 112,948 $ 129,248 $ (16,300) -12.6% $ 172,330 65.5%

MMM/lw/cj


Date: May 9, 2018 Administrative Report #28-18 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2017-2018 LEGISLATIVE CONSULTANT’S BUDGET The following is a summary of the Legislative consultant’s budget for the 2017-2018 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While March represents 75.0% of the budget year, actual costs are 47.6% of the total budget.


YTD Budget

Over (Under) Budget

% Variance


% of Annual Budget

State and Local Governmental Relations $ 18,000 $ 56,250 $ (38,250) -68.0% $ 75,000 24.0% Legislative Consultant Washington, D.C. 63,000 71,250 (8,250) -11.6% 95,000 66.3%

Total Governmental Relations $ 81,000 $ 127,500 $ (46,500) -35.4% $ 170,000 47.6% Note: The contract for State and Local Governmental Relations expired September 2017. MMM/lw/cj


Date: May 9, 2018 Administrative Report: # 29-18 To: Chairman & Board Members From: Marily Mora, A.A.E., President/CEO Subject: PUBLIC PARKING POLICY – PARK FREE PRIVILEGES BACKGROUND Section III of the Public Parking Policy – Park Free Privileges, outlines those individuals in the region that will be offered complimentary annual passes or parking ticket validation. This privilege is offered to individuals in writing and written acceptance must be received prior to initiating free parking privileges. DISCUSSION The Public Parking Policy requires that the President/CEO provide the Board of Trustees with an administrative report through the Finance and Business Development Committee, setting forth a current list of individuals who have accepted the free parking privilege, as well as a list of those proposed for the upcoming year. In accordance with the Public Parking Policy and appended hereto, staff is providing the list of individuals who have been offered and who have accepted free parking privileges in calendar years 2017 and 2018. Proposed changes to the list for calendar years 2018 and 2019 will include any newly elected officials or agency representatives whose positions are already represented on the existing list. Newly elected officials will be offered free parking privileges in writing and their status will be indicated on the list. Furthermore, the 2017/2018 list shows that each member of the State Assembly and Legislature declined the offer. It was confirmed that State Senators and members of the Assembly are unable to accept Park Free Privileges due to Ethics and Conflicts of Interest as outlined in Chapter 281A of NRS. Therefore, consideration is warranted for next year and all subsequent years whether State Senators and members of the Assembly should be included in the Park Free offering, or removed from the list altogether. MMM/bc/cj

RNO Confidential

Park Free Privileges ListUpdated: 5/8/18

Landside Operations

Page 1 of 6

Key:

Last Name First Name Title Notes1 Abbott Donald City of Sparks Councilman2 Aker George Former Board Member3 Allen Brian Police Chief-Sparks4 Allen Chuck Sheriff5 Amodei Mark Congressman6 Anderson Elliot Assemblyman7 Anderson Paul GOED8 Araujo Nelson Assemblyman9 Arger Kosta Former Board Member

10 Atcheson Lynn Former Board Member11 Atkinson Kelvin Senator12 Averyt Kristen DRI President13 Bart Krys Former CEO14 Benitez-Thompson Teresa Assemblywoman15 Bilbray-Axelrod Shannon Assemblywoman16 Brooks Chris Assemblyman17 Berkbigler Marsha Commissioner18 Bobzien David City of Reno Councilman19 Brekhus Jenny City of Reno Councilwoman

20 Burks William Adjutant General for State of NV National Guard

21 Bustamante Adams Irene Assemblywoman22 Bybee Charlene City of Sparks Councilwoman

23 Caldeira Rick Chief of Staff to the Mayor, City of Reno

24 Cancela Yvanna Senator25 Cannizzaro Nicole Senator26 Carano Donald Former Board Member27 Carano Glenn Former Board Member28 Carasali Nat Current Board Member29 Carey Shaun Current Board Member30 Carillo Richard Assemblyman31 Carlton Maggie Assemblywoman32 Caryl Mike Former Board Member out of the area33 Cegavske Barbara Secretary of State34 Chaplin Carol Current Board Member35 Cherry Michael A. Justice36 Clark Michael E. Washoe County Assessor37 Clifton David Justice - Reno Justice Court38 Cochran David Fire Chief - Reno39 Cohen Lesley E. Assemblywoman

Red: Declined Park Free Privileges

White: Accepted Park Free Privileges

Blue: No Response to Park Free Privileges Offer

RNO Confidential


Landside Operations

Page 2 of 6

Key:

Last Name First Name Title Notes




40 Cortez Masto Catherine US Senator41 Dahir Kristopher City of Sparks Councilman42 Daly Richard "Skip" Assemblyman43 Davis Tracy WCSD Superintendent44 Delgado Oscar City of Reno Councilman45 DeLone Phil RSCVA President/CEO46 Denis Moises "Mo" Senator47 Diaz Olivia Assemblywoman48 Douglas Michael Justice49 Driscoll Steve City Manager-Sparks50 Duerr Naomi City of Reno Councilwoman51 Eck Bill Former Board Member52 Edwards Chris Assemblyman53 Ellison John Assemblyman54 Farahi Daniel Current Board Member55 Farahi John Former Board Member56 Farley Patricia Senator57 Flores Edgar Assemblyman58 Ford Aaron Senator59 Frierson Jason Assemblyman60 Fumo Ozzie Assemblyman61 Gansert Heidi Senator62 Gianoli Lisa Current Board Member63 Gibbons Dawn Former Board Member64 Gibbons Mark W. Justice65 Gibbons Michael Appeals Court Judge66 Goicoechea Pete Senator67 Gribbin Helen Former Board Member Spouse of Deceased, Tom68 Gustavson Don Senator69 Hall Jerry Former Board Member70 Hambrick John Assemblyman71 Hammond Scott Senator72 Hansen Ira Assemblyman73 Hardesty James Justice74 Hardy Joseph Senator75 Hartung Vaughn Commissioner76 Harvey Larry Former Board Member77 Hascheff Pierre Justice - Reno Justice Court78 Heller Dean US Senator79 Herman Jeanne Commissioner

RNO Confidential


Landside Operations

Page 3 of 6

Key:





80 Hicks Chris Washoe County District Attorney81 Higgins Jerry Former Board Member82 Hilgersom Karin TMCC President83 Hill Richard Former Board Member84 Houghton Mike Former Board Member85 Hutchison Mark Lt. Governor86 Jardon Neoma City of Reno Councilwoman87 Jauregui Sandra Assemblywoman88 Jay Richard Current Board Member89 Johnson Marc UNR President90 Joiner Amber Assemblywoman91 Jung Kitty Commissioner92 Katzmann Steve Former Board Member93 Kazmierski Mike President/CEO-EDAWN94 Kieckhefer Ben Senator95 Kihuen Ruben Congressman96 Knecht Ron State Controller97 Kramer Al Assemblyman98 Krasner Lisa Assemblywoman99 Landis Peter Former Board Member

100 Larkin Bob Former Board Member101 Lawson Ed City of Sparks Councilman102 Laxalt Adam Paul Attorney General103 Leighton-Manoukaian Tina Former Board Member104 Lucey Bob Commissioner105 Lynch Patricia Justice - Reno Justice Court106 Mack Luther Former Board Member107 Malfabon Rudy Director-NDOT108 Mancini Brooks Former Board Member109 Mandelle Dennis Former Board Member110 Maples Christopher Sparks Fire Chief111 Marchant Jim Assemblyman112 Martin Larry Former Board Member113 Martini Geno Mayor-Sparks114 Mayberry Adam Former Board Member115 Mayer Joe Former Board Member116 McArthur Richard Assemblyman117 McCabe Michael Former Board Member118 McCurdy II William Assemblyman119 Mckenzie Paul City of Reno - Councilman

RNO Confidential


Landside Operations

Page 4 of 6

Key:





120 Menchetti Geno Former Board Member121 Metzker John Former Board Member122 Miller Brittney Assemblywoman123 Miller Helga Former Board Member Spouse of Deceased, Phillip124 Monroe-Moreno Daniele Assemblywoman125 Moore Charles Fire Chief - Washoe Co.126 Moore John Former Board Member127 Murdock Rick Former Board Member128 Neal Dina Assemblywoman129 Newberg Bill Former Board Member130 Ohrenschall James Assemblyman131 Osborne Lt. Col Donald Former Board Member132 Oscarson James Assemblyman133 Parks David Senator134 Parraguirre Ron D. Justice135 Pearson Scott Justice - Reno Justice Court136 Peterson David NCOT Interim Director137 Pickard Keith Assemblyman138 Pickering Kris Justice139 Putnam Howard Air Service Liaison 140 Ratti Julia Senator141 Reding Robert Air Service Liaison142 Roberson Michael Senator143 Rose Jenifer Current Board Member144 Rosen Jacky Congresswoman145 Royle Bill Former Board Member146 Sandoval Brian Governor147 Scheive Hillary Mayor-Reno148 Schwartz Dan State Treasurer149 Scribner Karl FAA Manager150 Segerblom Tick Senator151 Settelmeyer James A. Senator152 Sferrazza Jessica Current Board Member153 Sferrazza Peter Justice - Reno Justice Court154 Shields Linda Atkins Consultant155 Silver Abbi Appeals Court Judge156 Simmons Mary Former Board Member157 Slaughter John Washoe Co. Mgr158 Smith Ron City of Sparks Councilman159 Smith Newby Sabra Reno City Manager

RNO Confidential


Landside Operations

Page 5 of 6

Key:





160 Soto Jason Police Chief-Reno 161 Spearman Pat Senator162 Sperber Art Current Board Member163 Spiegel Ellen Assemblywoman164 Sprinkle Michael Assemblyman165 Sullivan Ryan Justice - Reno Justice Court166 Stern Eric FAA Manager167 Stiglich Lidia NV Supreme Court Justice168 Stoess Jean Former Board Member169 Swank Heidi Assemblywoman170 Tao Jerome Appeals Court Judge171 Thompson Randi Former Board Member172 Thompson Tyrone Assemblyman173 Titus Dina Congresswoman174 Titus Robin Assemblywoman175 Tolles Jill Assemblywoman176 Wade Eric Colonel177 Wagnon John Former Board Member178 Walther Jack Former Board Member179 Watkins Justin Assemblyman180 Wheeler Jim Assemblyman181 White John UNR Chancellor 182 Wirth Andy Former Board Member183 Woodbury Melissa Assemblywoman184 Woodhouse Joyce Senator185 Yeager Steve Assemblyman

RNO Confidential


Landside Operations

Page 6 of 6

Key:





Garrison Tom Fire Chief - SparksHardy Cresent CongressmanHarris Becky SenatorHill Steve GOEDManendo Mark SenatorStark Karl ColonelVecchio Claudia NCOT

Armstrong Derek W. AssemblymanClinger Andrew City Manager-Reno No Longer City ManagerCunningham Jennifer Interim Managing Director RSCVADickman Jill AssemblywomanDooling Vicki AssemblywomanFiore Michele AssemblywomanGagosian Robert DRI PresidentGardner David M. AssemblymanHeck Joe CongressmanJones Brent A. AssemblymanKirkpatrick Marilyn AssemblywomanKirner Randy AssemblymanKlaich Daniel ChancellorLipparelli Mark SenatorMoore John AssemblymanMunford Harvey AssemblymanNelson Erv AssemblymanO'Neill Philip "PK" AssemblymanReid Harry US SenatorSaitta Nancy M. JusticeSchmitt Ron Councilman Replaced by Kristopher DahirSeaman Victoria AssemblywomanShelton Shelly M. AssemblywomanSilberkraus Stephen AssemblymanStewart Lynn AssemblymanThomas Bill Acting Reno City ManagerTrowbridge Glenn AssemblymanWells Stephen President-DRI Departing Summer 2016

REMOVED PRIOR TO FY 17/18

REMOVED IN FY 17/18

Board Memorandum Reno-Tahoe Airport Authority

Date: May 9, 2018 Memo: # 18(05)-23 To: Chairman & Board Members For: May 22, 2018 Board Meeting From: Marily M. Mora, A.A.E, President/CEO Subject: ADOPTION OF THE RENO-TAHOE AIRPORT AUTHORITY FISCAL

YEAR 2018-2019 BUDGET STAFF RECOMMENDATION Staff recommends the adoption of the proposed Fiscal Year (FY) 2018-2019 Budget for the Reno-Tahoe Airport Authority (RTAA). PURPOSE The purpose of this action is to adopt the RTAA’s annual budget for the period of July 1, 2018 through June 30, 2019. This period represents the Authority’s fiscal year. Because of the comprehensive nature of the annual budget, this action is in support of all eight (8) of the proposed Reno-Tahoe Airport Authority (RTAA) Strategic Priorities: # 1 – Passenger and Air Cargo Service, # 4 – Safety and Security, # 2 – General Aviation, # 6 – Customer Experience # 7 – People, #5 – Financial Diversification and Growth, #3 – Facilities for Future, and #8 – Sustainability. BACKGROUND Pursuant to State law, a Public Hearing on the budget is scheduled for May 22, 2018 for adoption by the RTAA Board of Trustees. The Public Hearing was noticed in the Reno Gazette-Journal on May 11, 2018. The proposed budget and airline rates were reviewed with the Airline Airport Affairs Committee on May 1, 2018, as outlined in the airline agreement. Pursuant to State law, the Board must adopt the budget on or before June 1, 2018. DISCUSSION The proposed FY 2018-2019 Budget is a balanced budget with forecasted total revenue of $61.674 million exceeding the proposed operating expense budget of $44.144 million and debt service obligations of $2.249 million. The proposed budget is projected to generate $15.281 million in net revenue after debt service, an increase of $3.056 million as compared to the FY 2017-2018 adopted budget.

Adoption of Fiscal Year 2018-2019 Budget # 18(05)-23 May 22, 2018 Budget Hearing Page 2 of 6

Budget Category FY 2016-17 Actual

FY 2017-18 Budget

FY 2018-19 Budget

Budget to Budget Change

Operating Revenue (a) $50,965,944 $52,530,135 $56,154,485 $ 3,624,350

Non-Operating Revenue 2,324,405 4,042,700 5,519,700 1,477,000

Total Revenue 53,290,349 56,572,835 61,674,185 5,101,350

O&M Expenditures (38,112,913) (42,100,139) (44,144,229) (2,044,090)

Net Available for Debt Service

$15,177,436 $14,472,696 $17,529,956 3,057,260

Debt Service after PFCs (3,576,066) (2,247,300) (2,248,900) (1,600)

Net Revenue After Debt Service

$11,601,370 $12,225,396 $15,281,056 $ 3,055,660

(a) Operating Revenue, as presented in this table, is prior to the calculation of net revenue sharing

with the airlines. RTAA gross revenues are prioritized to meet operating expense and debt service obligations before this calculation.

Operating Revenue The total FY 2018-2019 Operating Revenue, after the airline revenue sharing credit of $2,719,300, is forecasted to be $53,435,185. This $3.072 million increase represents a 6.1% increase above the FY 2017-2018 Budget and a $2.256 million increase or 4.4% above the FY 2017-2018 updated forecast revenues. The changes in operating revenues, after net revenue sharing, from the Budget Workshop held April 12, 2018, are as follows:

FY 2017-18 Workshop FinalFY 2018-19 FY 2018-19 Variance

Budget Forecast Budget Budget

Airline fees and rentalsLanding fees 8,568,704$ 8,294,573$ 8,828,743$ 8,886,621$ 57,878$ Terminal building space rental 7,561,500 6,548,200 7,769,900 7,688,700 (81,200)

TOTAL Airline fees and rentals 16,130,204 14,842,773 16,598,643 16,575,321 (23,322)

Non-Airline RevenuesOther Aircraft Fees 969,000 1,051,800 1,037,500 1,037,500 - Concession fees 11,652,700 12,680,900 12,863,400 12,980,000 116,600 Parking and Ground Transportation 11,330,900 12,059,800 12,182,500 12,182,500 - Building, Hangar and Land Rent 7,650,650 7,962,200 7,984,300 7,979,200 (5,100) Reimbursement for Services (BHS) 2,592,581 2,429,375 2,614,147 2,625,264 11,117 Other operating revenues 36,700 152,700 55,400 55,400 -

34,232,531 36,336,775 36,737,247 36,859,864 122,617

Total Operating Revenue 50,362,735 51,179,548 53,335,890 53,435,185 99,295


● Landing fee revenues increased by approximately $57,900 with the landing fee increasing from $3.12 to $3.14 per thousand pounds of landed weight. This increase is due to an allocation of the additional consulting services and community air service marketing expenses to the airfield cost center. See the Operating Expenses section below.

● Terminal rental revenues decreased by $81,200 due to JetBlue Airways forecasted to execute the airline use and lease agreement to become a signatory airline. The rates and charges for non-signatory airlines do not include the airline revenue sharing credit to offset their costs and Jet Blue is estimated to save approximately $142,000 per year. This savings is partially offset by higher terminal rental rates due to an allocation of the additional consulting services and community air service marketing expenses to the terminal cost center and lower non-signatory airline revenue decreasing the revenue sharing credit. The average terminal rental rate increased from $51.35 to $53.39 per square foot.

● Concession fees increased by $116,600 due to estimated new revenue from Vino Volo and Subway effective on January 1, 2019.

● Building, Hangar and Land rents decreased by $5,100 due primarily to Squaw

Valley Mountain vacating their leased space. Adjustments were made to tenant counter and back office rates based on the increase in terminal rates outlined above.

● Reimbursed Services increased approximately $11,100 primarily due to additional utilities to be reimbursed and the impact of JetBlue becoming a signatory airline.

The FY 2018-2019 airline rates and charges are shown below in the Fiscal Impact Section. Operating Expenses The total FY 2018-2019 Operations and Maintenance Budget request is $44,144,229. This is a $2.044 million or 4.9% increase over the FY 2017-2018 Budget and $1.913 million or 7.2% above FY 2017-2018 projected expenditures. The changes in the proposed operating expense budget presented at the April 12, 2018 Budget Workshop are as follows:


● Purchased Services increased $175,000 for the following:

1. A traffic analysis to evaluate the impact of Interstate 580 improvements and the

possible closure of the RNO “flyovers” of $100,000 2. A general aviation hangar rent rate methodology study of $40,000 3. Consultant services to assist in implementation of the new strategic plan of $40,000 4. Hangar 6 at the Reno-Stead Airport (RTS) of $5,000

● Materials and Supplies are modestly increased by $1,000 for printing and forms. ● Administrative Expenses are increased $100,400 for the following: (1) community air

service marketing of $80,000 and (2) higher auto liability insurance premiums of $20,400.

Debt Service Total combined debt service for FY 2018-2019 is budgeted to be $2,248,900, an increase of $1,600 or 0.1% above the FY 2017-2018 Budget. Property, Plant and Equipment (PP&E) The total PP&E request for FY 2018-2019 is $1,007,671. This is a decrease of $84,205 or 7.7% from the FY 2017-2018 PP&E budget amount of $1,091,876. The PP&E budget was increased by $458,000 from the proposed budget outlined at the Budget Workshop in April due to reclassification of a truck mounted cold air blower from a capital project to PP&E. Capital Projects The FY 2018-2019 Capital Project requests for RNO and RTS of $9.492 million are funded by RTAA internally generated and other local funds (primarily the general purpose, special fund, and rental car customer facility charges (CFC). This request is $651,000 higher than the proposed FY 2018-2019 Budget, outlined at the Budget Workshop in April, due to the following:

FY 2017-18 Workshop FinalFY 2018-19 FY 2018-19 Variance

Budget Forecast Budget Budget

Personnel Services $28,843,415 $28,344,335 $30,478,615 $30,478,615 -$ Utilities & Communications 2,741,145 2,714,545 2,582,230 2,582,230 - Purchased Services 5,731,568 5,289,058 5,732,323 5,907,323 175,000 Materials & Supplies 1,949,869 2,039,995 2,021,373 2,022,373 1,000 Administrative Expenses 2,834,142 2,801,636 3,053,288 3,153,688 100,400

Total 42,100,139$ 41,189,569$ 43,867,829$ 44,144,229$ 276,400$

Increase in FY 2018-19 vs Prior Year Budget 2,044,090$ Percent Increase 4.9%

Adoption of Fiscal Year 2018-2019 Budget # 18(05)-23 May 22, 2018 Budget Hearing Page 5 of 6 (1) $130,000 increase in the Rental Car Ready Return Area Configuration project; (2) addition of Airport Communication Center Remodel project in the amount of $1,194,000 for costs not eligible for Passenger Facility Charges (PFCs); and (3) addition of the IT Office Remodel project in the amount of $35,000. This increase was partially offset by the delay in the implementation of the Enterprise Asset Management System of $250,000 and the reclassification of the truck mounted cold air blower from a capital project to PP&E of $458,000. The revised capital project budget request is an increase of approximately $4.302 million above from the FY 2017-2018 Budget. FISCAL IMPACT The annual budget determines the RTAA departments’ operating budgets, employee complement, property/plant/equipment to be acquired, capital projects to be constructed, and sets the airlines’ landing fees and rental rates. The total operating revenues and airline rates and charges modestly differ from the amounts previously presented at the Budget Workshop on April 12, 2018 due to revisions based on subsequent review and alteration by staff. The impact of these changes results in an increase in the landing fee of $0.02 and average terminal rental rate of $2.04 as well as a corresponding increase of $0.11 in airline cost per enplaned passenger (CPE) to $7.07. The revised CPE ratio remains significantly below the estimate of $7.23 projected in the FY 2017-2018 adopted budget, reflecting a significantly higher airline net revenue sharing credit of $551,900 or an increase of 25.5%. The following table presents a financial summary and key ratios proposed in the FY 2018-2019 Budget:


COMMITTEE COORDINATION A Budget Workshop was held on April 12, 2018 and a budget update is scheduled for the Finance and Business Development Committee meeting to be held May 15, 2018. RECOMMENDATION It is hereby recommended that the Board adopt the following motion: “It is hereby moved that the Board of Trustees adopts the Reno-Tahoe Airport Authority Fiscal Year 2018-2019 Budget.” MMM/to/cj

FY 2018-19 Budget

Budget Category2017-18 Budget

Workshop Budget

Final Budget

Budget to Budget

Variance%

ChangeAirline Revenue 16,130,204$ 16,598,643$ 16,575,321$ 445,117$ 2.8%Non-Airline Revenue 34,232,531 36,737,247 36,859,864 2,627,333 7.7%Total Operating Revenue 50,362,735$ 53,335,890$ 53,435,185$ 3,072,450$ 6.1%

Operating Expenses 42,100,139$ 43,867,829$ 44,144,229$ 2,044,090$ 4.9%Debt Service net of PFCs 2,247,300$ 2,248,900$ 2,248,900$ 1,600$ 0.1%Debt Service Coverage Ratio 5.46X 7.76X 7.63X

Landed Weight (000's) 2,932,677 2,893,828 2,893,828 (38,849) -1.3%Enplaned Passengers 1,801,291 1,948,002 1,948,002 146,711 8.1%

Signatory Landing Fee 2.99$ 3.12$ 3.14$ 0.15$ 5.0%Terminal Rental Rate 54.95$ 51.35$ 53.39$ (1.56)$ -2.8%Net Revenue Available for Sharing 2,167,400$ 2,842,300$ 2,719,300$ 551,900 25.5%Cost per Enplanement 7.23$ 6.96$ 7.07$ (0.16)$ -2.3%


Date: May 9, 2018 Memo: # 18(05)-24 To: Chairman & Board Members For: May 17, 2018 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO PURCHASE

COMPUTER NETWORKING HARDWARE FOR THE NETWORK CORE REDUNDANCY PROJECT, FROM VOX NETWORK SOLUTIONS, INC., IN THE AMOUNT OF $112,712, EXEMPT FROM COMPETITIVE BIDDING PURSUANT TO NEVADA REVISED STATUTE 332.115.1 (g)

STAFF RECOMMENDATION Staff recommends that the Board authorize the President/CEO to purchase computer networking hardware for the Network Core Redundancy Project, from VOX Network Solutions, Inc., in the amount of $112,712, exempt from competitive bidding pursuant to Nevada Revised Statute (NRS) 332.115.1 (g). PURPOSE The purpose of this action is to authorize the purchase of computer networking hardware to provide redundancy for core data communications network componentry. This action is in support of the Reno-Tahoe Airport Authority (RTAA) Strategic Priority # 5 – Provide a Positive Environment and Experience for All, and the Guiding Principles of Financial Integrity and Safety and Security, as adopted in the Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan. BACKGROUND The RTAA relies on an interconnected system of information technologies to accomplish its mission. These include: safety and security, operational, passenger information and convenience, workforce productivity, and business information systems. These systems are interconnected by a campus-wide, high-speed data communication network. RTAA follows a “Defense-in-Depth” strategy to ensure the confidentiality, integrity, and availability of these systems and the data they contain. RTAA currently provides partial “cold” redundancy for its core data communications network equipment. This means that in the event of equipment malfunction, spare equipment can be installed, configured, and deployed to restore network connectivity. Depending on the type of malfunction, this process could take up to 12 hours, during which time most airport systems would be fully or partially inoperative.

Computer Networking Hardware for Network Core Redundancy Project #18(05)-24 May 17, 2018 Board Meeting Page 2 of 3 DISCUSSION RTAA staff recommends that “hot” failover redundancy be provided for core network components, in order to ensure that system malfunctions can be corrected without loss of network connectivity. This is highly desirable given the number of safety, security, and otherwise mission-critical systems which now require network connectivity. These include, but are not limited to: telephone, paging, emergency notification, computer-aided dispatch, and incident command systems. During the FY 2017-18 mid-year budget process, $112,712 was requested and approved for the acquisition of redundant network core components. This item was subsequently presented to and approved by the Board of Trustees, along with other mid-year budget items, at its February 2018 meeting. RTAA data communications networking technology is provided by Extreme (formerly Avaya) Networks, Inc., and is maintained under a service contract with VOX Network Solutions, Inc., a local Extreme business partner. COMPANY BACKGROUND VOX Network Solutions, Inc. is a data and telecommunications solution provider headquartered in San Francisco, California. They have a regional office in Reno where they employ 6 local support personnel. VOX currently holds support contracts for the RTAA’s VoIP (Voice over Internet Protocol) telephone system and its Avaya Fabric Connect data communications network, as well as telephone system support at the Customs and Border Protection (CBP) inspection facility. FISCAL IMPACT The State of Nevada and its affiliates are able to purchase Avaya (now Extreme) networking equipment at a 35% discount as per State of Nevada RFP 3067. VOX Network Solutions has extended RFP 3067 equivalent pricing to the RTAA for this project. In addition, staff negotiated an additional 15% reduction in price. The cost to purchase hot-failover redundancy for core networking components is $112,712. During the FY 2017-2018 mid-year budget process, a Property, Plant, and Equipment request for this amount was submitted and subsequently approved. Technology and Information Systems (TIS) staff recommends that this technology be acquired on a sole-source basis, as per Nevada Revised Statutes (NRS) Chapter 332.115.1(g), which states that sole-source purchasing can be used for the purchase of equipment by local governmental agencies for hardware and associated peripheral equipment and devices for computers. COMMITTEE COORDINATION This item is scheduled to be presented at the May 15, 2018 Finance and Business Development Committee Meeting. RECOMMENDATION It is hereby recommended that the Board adopt the following motion:

Computer Networking Hardware for Network Core Redundancy Project #18(05)-24 May 17, 2018 Board Meeting Page 3 of 3 “It is hereby moved that the Board authorizes the President/CEO to purchase computer networking hardware for the Network Core Redundancy Project, from VOX Network Solutions, Inc., in the amount of $112,712, exempt from competitive bidding as pursuant to Nevada Revised Statute 332.115.1 (g).” MMM/mlm/cj


Date: May 9, 2018 Memo: # 18(05)-31 To: Chairman & Board Members For: May 17, 2018 Board Meeting From: Marily Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO NEGOTIATE

FINAL TERMS AND EXECUTE A NEW 5-YEAR NON-EXCLUSIVE FOOD AND BEVERAGE CONCESSION LEASE, LOCATED AT RENO-TAHOE INTERNATIONAL AIRPORT, WITH SUBWAY REAL ESTATE, LLC, FOR A MINIMUM CONTRACT VALUE OF $240,000

STAFF RECOMMENDATION Staff recommends that the Board of Trustees (Board) authorize the President/CEO to negotiate final terms and execute a new 5-year Non-exclusive Food and Beverage Concession Lease, located at Reno-Tahoe International Airport (Airport), with Subway Real Estate, LLC, for a minimum contract value of $240,000. PURPOSE The purpose of this action is to request authorization for the President/CEO to negotiate final terms and execute a new 5-year Non-exclusive Food and Beverage Concession Lease, between the Reno-Tahoe Airport Authority (RTAA) and Subway Real Estate, LLC, who will assign Letap Group, Inc. (Letap Group), a franchisee, to build and operate the restaurant. This action is in support of the RTAA Strategic Priority # 4 - Facilitate Economic Development at Both Airports, to facilitate continued economic development for the RTAA and to ensure its financial growth and stability as a self-sustaining entity by maximizing non-airline revenue, and Strategic Priority # 5 - Provide a Positive Environment and Experience for All, as adopted in the RTAA Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan. BACKGROUND Today’s growing economy, new flights, and enhanced relationships with the RTAA’s partners in tourism, business, ski resorts and more have triggered a rise in passenger counts and a change in demographics at the Airport. The steady economic and employment growth in the region and the associated increase in enplanements have increased market demand for additional food and beverage options at the Airport. Passenger intercept surveys indicate customers want additional variety and quality in-terminal food and beverage options. In addition, recent market research from University of Nevada, Reno, found that millennial travelers want new and different experiences, quick and fresh food and beverage offerings, and locally-sourced foods, beverages and other concessions.

Non-Exclusive Food and Beverage Concession Lease with Subway # 18(05)-31 May 17, 2018 Board Meeting Page 2 of 6 In response to the increased market demand, staff identified four potential new concessions locations at the Airport that could be brought to market through a public competitive process in the form of a Request for Proposals (RFP). In advance of issuing an RFP for new concessions at the Airport, staff engaged the local business community to bring awareness to the upcoming RFP opportunity and to encourage local businesses to propose. Staff attended local meetings with the Wells Avenue Merchant’s Association and the MidTown District Reno Business Association to advertise the RFP opportunity, as well as met with individual local business owners. On June 15, 2017, an in-depth public workshop targeted toward local businesses was held to inform the community about the RFP opportunity, educate local business owners on the RTAA’s RFP process, as well as the unique requirements of doing business at an airport. The strategy was to maximize the potential for local participation in the RFP through awareness and education and develop a local interested parties list. On October 13, 2017, the RFP for Airport Non-exclusive Specialty Retail and/or Food and Beverage Concessions was issued. The goal of the RFP was to invite proposals that would best serve and enhance the Airport experience and meet the demands of changing customer demographics. The RFP requested proposals for concepts that were unique and would not duplicate existing Airport concessions offerings. The RFP solicitation was published on the following websites:

• Nevada Government eMarketplace • Renoairport.com • Airport Revenue News (ARN) • Airports Council International, North America (ACI-NA)

A legal ad for this solicitation was also published locally in the Reno Gazette-Journal, as well as the American Association of Airport Executives (AAAE) searchable classified database. To supplement the legal advertising and websites, RTAA staff also emailed a notice of solicitation directly to the interested parties list. On November 6, 2017, a mandatory pre-proposal meeting and Airport tour was held to explain the requirements of the RFP, review the RFP process, educate prospective proposers on Airport operational requirements, answer questions, and provide an opportunity to view the advertised spaces. The four spaces included in the RFP consisted of one pre-security space, which is currently occupied by Squaw Valley Mountain Concierge, and three vacant post-security spaces:

1. Pre-security Space (689 square feet) (Exhibit A-1) 2. Post-security C-Concourse Space (1070 square feet) 3. Post-security C-Concourse Elbow Space (700 square feet) 4. Post-security Concourse Connector Space (1680 square feet)

(Exhibit A-2)

Non-Exclusive Food and Beverage Concession Lease with Subway # 18(05)-31 May 17, 2018 Board Meeting Page 3 of 6 Proposers were obligated to meet the minimum requirements established in the RFP including a minimum of two years of continuous business operations experience (within the last five years) in one or more specialty retail stores and/or food and beverage establishments. Retail proposers were required to have generated a minimum of $150,000 in annual gross revenues. Food and beverage proposers were required to have generated a minimum of $200,000 in annual gross revenues. The RTAA further requested documented evidence that the proposers had the financial resources to develop, construct, operate and maintain the proposed concepts. In an effort to attract local businesses, the RFP did not require prior airport operations experience or prescribe business terms, such as capital investment and lease term. The RFP allowed proposers to submit retail, food and beverage, or combination retail/food and beverage concepts for any of the four advertised spaces in total or a portion thereof. The RFP did not pre-determine how the spaces should be utilized. Proposers were encouraged to be creative and were advised that concession concepts that are not currently provided at the Airport were preferred. Length of term, Minimum Annual Guarantee (MAG) of revenue, and Concession Fees were not defined in the RFP, but were offered as negotiable between the RTAA and the successful proposer. A Selection Committee of six members including Trustee Lisa Gianoli, Marily Mora, President/CEO, and RTAA staff members from Finance, Facilities and Maintenance, Engineering, and Airport Economic Development, was formed prior to the receipt of proposals. The composition of the Selection Committee sought to ensure diversity of opinions and perspectives. The Selection Committee’s goal was to select the best combination of proposals that would diversify and enhance customer experience. Four proposals for the post-security spaces met the RFP submission minimum requirements and were accepted as responsive on December 18, 2017. There were no proposals received for the Pre-security Space. On January 9, 2018, the Selection Committee met to review the four accepted proposals and agreed to invite three of the proposers for in-person interviews. On February 16, 2018, the Selection Committee and additional RTAA staff including the COO and the Vice President of Marketing and Public Affairs, interviewed the three proposers, one for each of the three post-security spaces, to learn more about their proposed concepts and business plans. The Selection Committee unanimously agreed to proceed with all three proposals. The three proposers were invited to conduct due diligence on their respective spaces. On March 20, 2018, the due diligence period was completed and Letap Group, a Subway franchisee, notified the RTAA that they accepted the Post-security C-Concourse Elbow Space in “as-is condition” (Exhibit B). DISCUSSION Letap Group’s Subway restaurant would bring made-to-order and fresh, quick-serve products to the Airport. Subway’s offerings include egg-based breakfast sandwiches, as well as traditional and signature cold and hot sandwiches and wraps. The menu also

Non-Exclusive Food and Beverage Concession Lease with Subway # 18(05)-31 May 17, 2018 Board Meeting Page 4 of 6 offers soups and fresh salads, as well as specialty items, side options, and beverages. Subway’s menu is based on freshly-baked breads, meats, vegetables, and flavorful sauces. Vegan, vegetarian, and gluten-free diets are accommodated by the range of offerings. Sandwiches, wraps, and salads are made to order in an open kitchen where customers can see and choose from a variety of ingredients. While product quality is important, Subway is also committed to nutritional leadership and high-quality ingredients. In 2012, its Fit Menu received the American Heart Association Heart Check certification and introduced vegan-friendly bread. In 2014, Subway increased its whole grains content in breads and eliminated high fructose corn syrup in its sandwiches and salads. It recently committed to removing all artificial colors, flavors, and preservatives from all of its sandwiches, salads, cookies and soups in the next 18 months. By 2020, it intends to offer antibiotic-free meats. Convenience and portability have long been key factors related to Subway’s success. Subway’s smartphone app provides additional convenience for customers who wish to order ahead. Approximately 80 percent of Subway’s sales are to-go orders. For example, a passenger making his way through the TSA Security Checkpoint can order a custom salad from his/her phone and pick it up on the way to their departing gate. Similarly, an arriving passenger can order sandwiches for his/her family while waiting to deplane, picking up the mobile order before they exit to Baggage Claim. Subway restaurants are simple operations with versatile and adaptable design. A custom floor plan will be developed for the 700 square foot Airport location at the C Concourse Elbow. Subway restaurants do not involve any frying, cooking, or grilling, making the restaurant easy, safe, and clean to operate. Subway has strict policies for cleanliness, food safety, and food quality, and the highest standards in the quick-service restaurant industry. Subway places significant importance on customer service. Its customer experience system allows toll-free calls for customers to provide input 24 hours per day. Comments and complaints are relayed to franchisees, who have 48 hours to respond to, and resolve, the customer’s issues. All credit card receipts offer customers an invitation to participate in a one-minute survey; those who complete the survey get a free cookie. Survey results are shared with franchisees. Finally, Subway corporate representatives evaluate every restaurant at least once per month to provide training and evaluate other aspects in order to ensure stores are operating to brand standards. Subway would be a welcome addition to the food and beverage options at the Airport, generating additional non-airline revenue. It complements the existing food and beverage concessions with additional variety, fresh and fast portable meals, and a range of food products including healthy options. Letap Group proposes its Subway restaurant to be open for business 7 days per week, 365 days per year and not less than 90 minutes before the first scheduled departing flight and

Non-Exclusive Food and Beverage Concession Lease with Subway # 18(05)-31 May 17, 2018 Board Meeting Page 5 of 6 30 minutes before the last departing flight. As described above, Subway’s menu has a wide variety of foods for breakfast, lunch, dinner, and between meal periods, which is consistent with other Airport food and beverage operations. The Subway business model is highly flexible with its restaurants able to serve hot meals at all hours of the day with minimal staffing. Subway and Letap Group are aware of the RTAA’s general lease terms as the RFP included a sample Non-exclusive Food and Beverage Concession Lease to ensure transparent communication. As part of the process, Letap Group signed a proposed business term sheet (Exhibit C). The proposed financial terms are as follows: • Minimum Capital Investment and Mid-Term Refurbishment: Letap Group proposes

an estimated $375,000 of Capital Investment. The refurbishment program of no less than $75,000 will be completed on a mutually agreeable schedule between the Lessee and the RTAA throughout the term of the lease.

• Lease Term: 5 years: Effective upon full execution of the Non-exclusive Food and Beverage Concession Lease (Lease), not to exceed sixty days from the date of Board approval. Options to extend the Lease are subject to the Airport’s Master Plan status and must be brought to the RTAA Board of Trustees for approval.

• Rates/Charges: The annual concession fees shall be the greater of 10% of Gross

Receipts, or a Minimum Annual Guarantee (MAG) of $48,000 to the RTAA, payable in equal monthly installments of $4,000. The MAG would be adjusted annually based on 85% of the prior year’s gross revenue, but would not be lower than $48,000.

Letap Group may lease storage space from the RTAA if needed. Letap Group intends to complete its build-out of the Subway restaurant approximately 60 days following the issuance of City of Reno building permits. Letap Group has expressed its commitment to using a local general contractor. COMPANY BACKGROUND The first Subway sandwich shop opened in Bridgeport, Connecticut, in 1965. The owners’ mission was to provide customers with made-to-order, handcrafted sandwiches at a great value while providing exceptional, personalized service. By 1974, there were 16 Subway shops across Connecticut. Today, Subway is the world’s largest sandwich and salad franchisor with more than 44,000 Quick Serve Restaurants worldwide. Subway is a well-known and instantly-recognized brand with more than 230 restaurants located in airports. Subway Real Estate, LLC, is the entity that signs all leases for Subway restaurants; the parent company intends to assign the Airport location to franchisee Mr. Akki Patel, of Letap Group, who will operate the restaurant. If Mr. Patel is unable to fulfill Subway’s commitment to RTAA, or perform to Subway’s corporate standards, Subway Real Estate, LLC, will provide a replacement franchisee to complete the term.

Non-Exclusive Food and Beverage Concession Lease with Subway # 18(05)-31 May 17, 2018 Board Meeting Page 6 of 6 Letap Group, formed by Mr. Akki Patel in 1997, oversees more than 750 Subway locations. Mr. Patel started with one Subway restaurant and today directly owns 66 Subway restaurants. Due to his outstanding performance and record, Mr. Patel has been designated a Master Subway Franchisor by Subway. While Letap Group does not currently operate in any airport locations, its team of professionals for the Airport project includes Mr. Al Hibbard. Mr. Hibbard has been involved with Subway since 1988. He handled the development of Subway restaurants at Stockton and Oakland International airports in California. The Oakland airport location is 472 square feet in size and offers the highest sales per square foot when compared to other quick serve restaurants in the Terminal. Letap Group operates several existing Subway restaurants in Reno and surrounding communities, including the new drive-through Subway in Verdi and the Subway at USA Parkway. Letap Group is currently partnered with a local advertising agency that promotes Subway in local and regional markets. FISCAL IMPACT The minimum projected revenue to the RTAA from Subway over the proposed 5-year term is $240,000 based on the MAG of $48,000 per year. The proposed concession fee is 10% of Gross Receipts for any amounts greater than the MAG. Gross Receipts are defined as all monies, amounts, sums or funds, paid, payable, owed or accrued to, or billed or received by Subway. This structure allows the RTAA to benefit from both the certainty of minimum revenue and the participation in Subway’s financial performance beyond the minimum guarantee. The minimum projected revenue does not include rents for any storage space that may be leased by the Lessee. COMMITTEE COORDINATION This item is scheduled to be presented at the May 15, 2018 Finance and Business Development Committee meeting. RECOMMENDED MOTION It is hereby recommended that the Board adopt the following motion: “It is hereby moved that the Board authorizes the President/CEO to negotiate final terms and execute a new 5-year Non-exclusive Food and Beverage Concession Lease, located at Reno-Tahoe International Airport, with Subway Real Estate, LLC, for a minimum contract value of $240,000.” MM/lr/cj

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Exhibit C


Date: May 10, 2018 Memo: # 18(05)-33 To: Chairman & Board Members For: May 17, 2018 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: ADOPTION OF A RENO-TAHOE AIRPORT AUTHORITY FISCAL YEAR

2018-2019 LIABILITY AND PROPERTY INSURANCE PROGRAM AND APPROVAL OF PREMIUMS IN THE AMOUNT OF $954,567

STAFF RECOMMENDATION Staff recommends that the Board of Trustees approve the Fiscal Year 2018-2019 liability and property insurance program and authorize the President/CEO or her designee to bind the coverages and pay the 2018-2019 premiums through Arthur J. Gallagher Risk Management Services, Inc. as the Broker of Record, in the amount of $954,567. PURPOSE The purpose of this action is to provide liability and property insurance coverage for the Reno-Tahoe Airport Authority (RTAA) and to authorize the President/CEO or her designee to bind the insurance and remit payment through Arthur J. Gallagher Risk Management Services, Inc. as the Broker of Record, of the premiums. This action is in support of the RTAA Guiding Principle of Financial Integrity, to ensure the financial stability of the Airports, as adopted in the RTAA Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan. BACKGROUND The RTAA has insurance policies to mitigate the risk associated with operating and maintaining the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS). This request covers insurance protection in the following areas: 1. Property - The RTAA purchases insurance to protect against most risks to property, such as

fire, theft, earthquakes and weather damage. The RTAA’s property insurance includes coverage related to the following: (a) damage to real property (buildings, computer equipment, runways); (b) fire and associated risks; (c) windstorm/earthquake; (d) flood; (e) commercial crime; and (f) builder’s risk - damage to buildings under construction. In addition, the RTAA obtains national flood insurance and property insurance for potential damage to RTAA equipment (inland marine) and business autos.

2. Liability - The RTAA purchases insurance to protect from the risk that the RTAA may be sued and held legally liable for activities associated with operating and maintaining both RNO and RTS. Liability insurance is designed to offer specific protection against third party insurance claims, (i.e., payment is not typically made to the insured, but rather to someone suffering a loss who is not a party to the insurance contract). When a claim is made, the insurance carrier has the duty (and right) to defend the RTAA.

http://en.wikipedia.org/wiki/Property

Liability and Property Insurance Program # 18(05)-33 May 17, 2018 Board Meeting Page 2 of 5

The RTAA Liability insurance covers the following areas: (a) airport owners/operators general; (b) cyber security; (c) public officials including employment practices; (d) law enforcement; (e) emergency medical technicians.

The current policies, with the exception of flood insurance, cover the one-year period from July 1, 2018 to June 30, 2019 with renewals provided annually. The RTAA, through a competitive request for proposal (RFP) process, has retained Arthur J. Gallagher Risk Management Services, Inc. (AJG) as the Broker of Record, to provide the following services: 1. Develop underwriting and marketing strategies to competitively secure the best insurance

coverage at the most reasonable costs. Prepare annual marketing strategy reports identifying anticipated market conditions and propose a marketing strategy for the RTAA’s major loss exposure areas, prior to policy renewal.

2. Provide trended values for property insurance policies. 3. Analyze the RTAA’s exposure to loss, adequacy of coverage, and develop options on

coverage not presently purchased by the Airport Authority. 4. Obtain bids from the insurance industry, evaluate the commitment and financial stability of

the underwriters, and negotiate the best terms and coverages for the various exposure areas on behalf of the RTAA.

5. Provide the following insurance broker services: (1) receive and analyze the underwriter’s

quotations; (2) review new and renewal insurance proposals for accuracy and conformity to specifications and negotiated coverages; (3) compare proposed policy language to the prior year and advise the Authority of changes in policy form or coverage; (4) recommend policy coverage or language changes as necessary; and (5) request modifications from the insurers upon RTAA concurrence.

In FY 2017-2018, the RTAA was able to obtain a rate guarantee for Property Insurance covering a three (3) year policy term. The rate is guaranteed in FY 2018-19 as long as the RTAA’s property schedule statement of values did not increase by more than 5%. While the RTAA retained the option to go through a competitive process if property insurance rates decreased, AJG indicates savings are not available and the RTAA is exercising the 2nd year of the property rate guarantee. In FY 2018-19, the RTAA was able to obtain a rate guarantee for Operations Liability Insurance covering a three (3) year policy term. However, if liability insurance rates decrease, the RTAA will be able to take advantage of the lower rates going forward through a competitive process. The rates are guaranteed as long as the RTAA’s enplaned passengers do not increase more than 25% from annual expiry or the incurred loss ratio does not exceed 65% of earned premium.


With all insurance lines put out to bid in FY 2017-18, AJG recommended a modification in the approach for this year’s renewal process. In January 2018, staff outlined to the Finance and Business Development Committee the following proposed changes in the FY 2018-19 renewal process:

1. Award insurance to existing incumbents with annual premium of less than $25,000 unless the following: a. Changing operations b. Failure to provide necessary services c. Price increases

2. Competitively solicit insurance with annual premiums greater than $25,000

3. All insurance competitively bid in FY 2020-21 This approach reflects AJG recommendation that the RTAA would obtain better rates from being a long-term partner rather than a commodity price buyer. Insurance providers find it very frustrating to lose business and face constant turnover due to small to moderate price differences. As a result, many carriers refuse to “bid” following multiple failures to write policies. The limit of $25,000 reflects the N.R.S. 332 requirements that the RTAA obtain competitive bids above this limit. DISCUSSION Overall, the insurance market remains “flat” this year, as it was last year. A “flat” insurance market means premium pricing has stabilized. This pricing is primarily driven by the reinsurance market (the ability of an insurance company to transfer a portion of policy risk to other insurance companies for a fee), and the mandate by insurance carriers to underwrite each risk profitably without looking to other income sources (investments) to offset premium prices. The exception to this “flat” market is Auto Liability. This is currently a “hard” market with many carriers refusing to offer coverage, including the RTAA’s current carrier. Arthur J. Gallagher began in January 2018 to market the RTAA’s insurance coverage and the following schedule is a summary of the recommended proposed insurers by policy type:

Type of Insurance Recommended Carrier Insurance Premium

Property Insurance Property American Home Assurance

(AIG) $ 590,002

Equipment – Inland Marine Travelers 21,345 National Flood Insurance** NFIP Hanover 15,600 Business Auto Federal Insurance Company 77,268

Total Property $ 704,215


Type of Insurance Recommended Carrier Insurance Premium

Liability Insurance Airport Operations Liability QBE Insurance $ 90,500 Cyber Liability CFC Underwriting Ltd 40,556 Public Officials / Employee Practices

Stafford Insurance 59,308

Law Enforcement Indian Harbor Insurance* 25,444 Emergency Medical Technician James River Insurance* 21,588 Crime and Dishonesty Great American 9,806 Fiduciary Great American 3,150

Total Liability $ 250,352 GRAND TOTAL $ 954,567

* Note: Indicates that insurance carrier is a surplus lines carrier in Nevada. The premium column includes surplus lines taxes and fees.

** Note: NFIP Flood Insurance premium is an estimate. Exact premiums cannot be determined until Policies renew in February 2019.

A detailed schedule summarizing all of the RTAA’s proposed insurance coverages, premiums, and insurers is attached. COMPANY BACKGROUND Arthur J. Gallagher Risk Management Services, Inc. is headquartered in Itasca, Illinois. All of the work associated with this project has been performed by the staff based in Las Vegas, NV and Irvine, CA. FISCAL IMPACT The FY 2018-2019 renewal premiums total $954,567, a 3.9% increase from FY 2017-2018. The proposed FY 2018-2019 Operations and Maintenance budget, completed prior to the competitive process, reflects $975,500 for liability and property insurance premiums. The recommended approval of premium is 2.1% or $20,933 less than the FY 2018-2019 Budget. The total premium as compared to the prior year expenditure and the proposed FY 2018-2019 Budget is shown below:

A detailed breakdown of each insurance coverage recommendation is provided in the attached “Summary of Insurance Premiums for Policy Term: July 1, 2018 to June 30, 2019.”

2017-18 Actual

2018-19 Quote

Difference Quote to 2017-18 Actual

Percent Change

2018-19 Budget

Difference Quote to 2018-19 Budget

Percent Change

$918,435 $954,567 $36,132 3.9% $975,500 -$20,933 -2.1%

Liability and Property Insurance Program # 18(05)-33 May 17, 2018 Board Meeting Page 5 of 5 COMMITTEE COORDINATION This item is scheduled to be presented at the May 15, 2018 Finance and Business Development Committee meeting. RECOMMENDATION It is hereby recommended that the Board adopt the following motion: “It is hereby moved that the Board of Trustees approves the Fiscal Year 2018-2019 liability and property insurance program and authorizes the President/CEO, or her designee, to bind the coverages and pay the 2018-2019 premiums in the amount of $954,567.” MMM/to/cj

Coverage Recommend Carrier Limits & Deductibles2018-2019 PREMIUM

2017-2018 PREMIUM

2018-19 Budget

FY 2018-19 Quote vs. 2017-18 Actual

2018-19 Quote vs.

Budget

Property InsuranceProperty American Home

Assurance. (AIG),

Liberty Surplus & Lloyds of London*

$672,836,486 Property ValuesLimit of Liability: $400,000,000 $50 mil EQ / $25 mil Flood B & M included Deductible: $25,000 /Loss Except:Flood $100,000; $500,000 for specified Locations Earthquake of 1% of Property Value subject to minimum of $100,000

$590,001.96 $590,003.01 $591,000.00 0% 0%

Equipment - Inland Marine

Travelers $22,234,489 Total Value

Deductible: $10,000 Per Occurence

$21,345.00 $19,876.00 $21,900.00 7% -3%

National Flood Insurance**

NFIP/Hanover $500,000 Policy Limit per building $15,600.00 $15,158.00 $15,600.00 3% 0%

Business Auto Federal Insurance Co. Auto Liability Limit: $1,000,000 CSL Deductible: $500 Comp/Collision

$77,268.00 $53,827.00 $75,000.00 44% 3%

Liability InsuranceAirport Operations Liability

QBE Insurance $300,000,000 Per Occurrence$300,000,000 Annual AggregateDeductible: $0

$90,500.00 $89,535.00 $97,800.00 1% -7%

Cyber Liability CFC Underwriting Ltd. $5,000,000 Per Claim$5,000,000 Annual AggregateDeductible: $20,000

$40,555.63 $20,277.82 $40,600.00 100% 0%

Public Official Liability / Employee Practices Liability

Stratford Insurance Co $10,000,000 E&O Annual Aggregate$10,000,000 EPL Annual AggregateDeductible: $100,000

$59,308.00 $59,308.00 $61,000.00 0% -3%

Law Enforcement Liability

Indian Harbor Insurance Co.*

$5,000,000 Each Occurrence/Annual AggregateDeductible: $50,000 Per Occurrence

$25,444.08 $36,423.18 $37,500.00 -30% -32%

Emergency Medical Technicians (EMT) Liability

James River Insurance Co.*

$5,000,000 Annual AggregateDeductible: $5,000 Each Claim

$21,588.34 $21,588.34 $22,300.00 0% -3%

Crime and Dishonesty

Great American Limit of Liability: $5,000,000 Employee Dishonesty$250,000 - Forgery Alteration$100,000 - Inside Premises$100,000 Outside Premises$500,000 Computer Fraud$50,000 Money Orders/ Counterfeit Paper$500,000 Funds Transfer Fraud DeductibleDeductible:$10,000

$9,806.00 $9,339.00 $9,600.00 5% 2%

Fiduciary Liability Great American $2,000,000 Annual AggregateDeductible: $1,000 Per Claim

$3,150.00 $3,100.00 $3,200.00 2% -2%

TOTAL $954,567.01 $918,435.35 $975,500.00 3.9% -2.1%Note: * Indicates that insurance carrier is a surplus lines carrier in Nevada. The premium column includes surplus lines taxes and fees.Note: ** NFIP Flood Insurance premium is estimated. Exact premiums can not be determined until policies renew in February, 2019

Quotes for 2018-2019 Renewal Term


Date: May 9, 2018 Memo: # 18(05)-34 To: Chairman and Board Members For: May 17, 2018 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO EXECUTE A ONE-

YEAR CONTRACT FOR THE RENO-TAHOE AIRPORT AUTHORITY EMPLOYEE WORKER’S COMPENSATION INSURANCE COVERAGE FOR FISCAL YEAR 2018-2019, WITH QBE INSURANCE GROUP, IN THE AMOUNT OF $310,737

STAFF RECOMMENDATION Staff recommends that the Board authorize the President/CEO to execute a one-year contract for the Reno-Tahoe Airport Authority (RTAA) employee worker’s compensation insurance coverage for Fiscal Year (FY) 2018-2019, with QBE Insurance Group, in the amount of $310,737. PURPOSE The purpose of this action is to provide worker’s compensation insurance for the RTAA which provides coverage for on-the-job injuries as required by State Law. This action is in support of Strategic Priority # 5 – Provide a Positive Environment and Experience for All, and the Guiding Principle of Financial Integrity, to ensure financial stability of the Airports, as adopted in the RTAA FY 2014-2018 Comprehensive Strategic Plan. BACKGROUND State law requires that each employer provide insurance coverage for on-the-job injuries. The RTAA’s current fully insured worker’s compensation insurance policy provided through QBE Insurance Group will expire on June 30, 2018. Arthur J. Gallagher Risk Management Services, the Broker of Record, markets the RTAA’s worker’s compensation insurance coverage to various companies with good financial ratings that are authorized to do business in the State of Nevada. DISCUSSION In March 2018, the RTAA’s insurance Broker of Record, Arthur J. Gallagher Risk Management Services, placed the RTAA’s worker’s compensation insurance out to bid. In April 2018, Gallagher completed its bid process and provided the RTAA with the bid information. The following are the responses received:

Worker’s Compensation Insurance Program FY 2018-2019 # 18(05)-34 May 17, 2018 Board Meeting Page 2 of 3 As indicated in the chart above, Gallagher received two quotes, including the one from our current carrier, QBE Insurance Group. The other five carriers either provided no response or declined to submit quotes based on the RTAA’s higher experience modification factor (emod) and/or because of the potential for high police and fire claim exposures due to Nevada’s generous heart & lung statutes. As QBE Insurance Group provided a substantially lower quote, staff is recommending continuing the RTAA’s fully insured worker’s compensation insurance with QBE Insurance Group. COMPANY BACKGROUND Queensland Insurance, Bankers' and Traders' and Equitable (QBE) was founded in 1973 with a merger of these three entities. It is headquartered in Sydney Australia and expanded to the United States in 1991. Retitled to QBE Insurance Group in 1997, it is recognized as one of the world's top 20 general insurance and reinsurance companies, with more than 14,500 employees residing in 37 countries. QBE’s strategy is focused on their commitment to effective risk management practices and controls, and unparalleled customer service. FISCAL IMPACT The premium quote from QBE Insurance Group in the amount of $310,737 represents an increase of $62,756 (+25%) compared to the current annual premium of $247,981 for FY 2017-2018. QBE Insurance Group did provide over $116,000 in scheduled credits and premium discounts, which helped to offset the RTAA’s higher emod factor (from 1.11 to 1.37) and higher payroll for the upcoming fiscal year (as the premium is calculated as a percentage of salaries). The proposed FY 2018-2019 budget includes $252,200 for worker’s compensation insurance premiums, which is $58,537 under QBE’s proposed premium amount of $310,737. This overrun will be evaluated as part of the FY 2018-2019 mid-year budget review. Typically, this higher than anticipated expense can be funded from identified savings in other RTAA operations. If such savings are not immediately available, the President/CEO and Executive VP/COO will take actions to modify future programs or services to cover this shortfall. COMMITTEE COORDINATION This item is scheduled to be presented at the May 15, 2018 Finance and Business Development Committee meeting. RECOMMENDATION

FY 2018-2019 Worker’s Compensation Insurance Bid Responses Carrier FY 2017-2018

Premium FY 2018-2019

Premium Quote Dollar/Percentage

Difference QBE Insurance Group $247,981 $310,737 +$62,756 / +25% AIG Aerospace N/A $351,977 +$103,996 / +42% Starr Aviation N/A Declined to quote N/A Beacon Aviation N/A No response N/A Allianz N/A No response N/A Global Aerospace N/A Declined to quote N/A Old Republic N/A No response N/A

Worker’s Compensation Insurance Program FY 2018-2019 # 18(05)-34 May 17, 2018 Board Meeting Page 3 of 3 It is hereby recommended that the Board adopt the following motion: “It is hereby moved that the Board of Trustees authorizes the President/CEO to execute a one-year contract for the Reno-Tahoe Airport Authority employee worker’s compensation insurance coverage for Fiscal Year 2018-2019, with QBE Insurance Group, in the amount of $310,737.” MMM/js/cj


Date: May 9, 2018 Memo: # 18(05)-37 To: Chairman & Board Members For: May 17, 2018 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: ADOPTION OF RESOLUTION NO. 536: A RESOLUTION AMENDING

RESOLUTION NO. 533, A MASTER FEE RESOLUTION SETTING FORTH AIRPORT RATES AND CHARGES FOR FISCAL YEAR 2018-2019 PURSUANT TO THE RENO-TAHOE AIRPORT AUTHORITY FISCAL YEAR 2018-2019 ANNUAL BUDGET

STAFF RECOMMENDATION Staff recommends Board adoption of Resolution No. 536, a Resolution amending Resolution No. 533, a Master Fee Resolution setting forth Airport Rates and Charges for Fiscal Year (FY) 2018-2019 pursuant to the Reno-Tahoe Airport Authority FY 2018-2019 Annual Budget. PURPOSE Subject to Board of Trustees approval, the purpose of this action is to establish and maintain a master list of FY 2018-2019 rates, charges, and fees assessed to users of the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS). BACKGROUND The Reno-Tahoe Airport Authority Act, Chapter 474, states that the RTAA may assess and collect fees, rentals, rates, and other charges. The RTAA has numerous resolutions, policies and agreements that set forth rates and fees for the various operators at RNO and RTS. The purpose of the Master Fee Resolution (“Resolution”) is to provide the Board, staff and users of the RTAA one document that details the majority of rates, charges and fees in one place for easy reference. DISCUSSION The Resolution is updated on an annual basis to coincide with the budget process and may be amended during the fiscal year if there are proposed changes to rates and charges not established under contract. The following significant updates have been incorporated in the proposed FY 2018-2019 Master Fee Resolution: • Landing Fees, Terminal Building Rents, and Baggage Handling System rates reflect

cost center recovery of expenditures based on the proposed FY 2018-2019 Budget. The fee structure and the method of calculating the airline rates and charges are outlined in the airline agreement effective July 1, 2015.

Master Fee Resolution FY 2018-2019 # 18(05)-37 May 17, 2018 Board Meeting Page 2 of 3

• The Landing Fee rate is higher due to the increase in operating expenses and capital

improvement projects associated with the Airfield cost center and allocating these higher expenses to a 1.3% lower landed weight forecasted for FY 2018-19.

• Terminal Building Rents for signatory airlines in all classifications of space reflect higher operating expenses and capital improvement project costs offset by a significant increase in the net revenue sharing credit applied to reduce terminal building cost recovery. The forecasted credit of $2.719 million, which is primarily due to higher non-airline revenues resulting from increased passenger traffic, results in lower terminal rental rates. Since non-signatory airlines do not participate in the net revenue sharing credit, these airlines are being assessed higher terminal building rental rates and per use charges associated with holdroom and loading bridge, ticket counters, baggage claim and baggage makeup.

• Baggage Handling System (BHS) Charges are lower due to lower forecasted expenses and an increase in the number of checked bags processed through the system due to an increase of 5.7% in enplaned passenger forecasted. These savings are partially offset by a capital improvement project of 100,000 to provide an integration of the BHS camera system for better monitoring by the Transporation Security Administration (TSA).

• Customer Facility Charges (CFCs) are increasing from $1.25 to $3.50 per rental car transaction day. This increase reflects consultation with the rental car companies of an increase in the range of $2.50 to $3.50. The review was part of the the new rental car concesion and facility lease approved by the Board of Trustees in March 2018. This increase is the first step in funding a new Consolidated Rental Car Facility (CONRAC) identified in the RNO Master Plan to address landside congestion issues. The increase in CFCs will help with pay-go CFC funding as outlined financial feasibility analysis in the Master Plan conducted by Trillion Aviation.

If the Board of Trustee approves the Master Plan for submission to the Federal Aviation Administration (FAA), staff will begin the programmic study of the CONRAC and begin stakeholder outreach with the rental car industry. Based on preliminary cost estimates, the CFC rate will need to be futher increased in future years to reduce future borrowing needs and anticipated debt service.

• Applicable Land and Hangar Rents reflect a 2.4% Consumer Price Index (CPI)

adjustment based on March 2018 as compared to the same period last year.

• Disposal Fees are increasing from $4,225 to $4,665 per month due to higher costs associated with providing these trash removal services.

Master Fee Resolution FY 2018-2019 # 18(05)-37 May 17, 2018 Board Meeting Page 3 of 3 • Tenant Keys and Locks – The replacement key and core fees are increasing to recover

airport costs associated with replacing locks and keys for tenant occupied lease space.

• Commercial Vehicle Overnight Parking – This is a new fee assessed for commercial vehicles using the old cargo parking lot just north of the taxicab staging area for overnight parking.

FISCAL IMPACT The fiscal impact relating to Resolution No. 536 is outlined in the presentation for the FY 2018-2019 budget approval and various resolutions. COMMITTEE COORDINATION This item is scheduled to be presented at the May 15, 2018 Finance and Business Development Committee meeting. RECOMMENDATION It is hereby recommended that the Board adopt the following motion: “It is hereby moved that the Board adopts Resolution No. 536: A Resolution amending Resolution No. 533, a Master Fee Resolution setting forth Airport Rates and Charges for Fiscal Year 2018-2019 pursuant to the Reno-Tahoe Airport Authority Fiscal Year 2018-2019 annual budget.” MMM/ak/cj

Resolution No. 536 - Master Fees Fiscal Year 2018-2019

Page 1 of 13

RESOLUTION NO. 536

A RESOLUTION AMENDING RESOLUTION NO. 533, A MASTER FEE RESOLUTION SETTING FORTH AIRPORT RATES AND CHARGES FOR FY 2018-2019 PURSUANT TO THE ADOPTED FY 2018-2019 ANNUAL BUDGET

(Note: Changes are in bold)

WHEREAS, Section 10 (10) of SB 198, Chapter 474, Statutes of Nevada 1977 provides that the Reno-Tahoe Airport Authority may charge fees, rentals, rates and other charges: NOW, THEREFORE, BE IT RESOLVED by the Board of Trustees of the Reno-Tahoe Airport Authority that Resolution No. 533 is amended to set forth a list of master fees for Fiscal Year 2018-2019 for the Reno-Tahoe International Airport (RNO) and the Reno-Stead Airport (RTS). Rates and charges that are being changed are noted in bold with the previous amount in red.

FEES/RENTALS/RATES AND

OTHER CHARGES AMOUNT

CORRESPONDING RESOLUTION,

POLICY OR AGREEMENT

RNO LANDING FEE CHARGES Signatory Airlines $3.14 per 1,000 lbs.

($2.99)

Resolution No. 338 Airline-Airport Use and Lease Agreement

Non Signatory Airlines $3.14 per 1,000 lbs. ($2.99)

Resolution No. 338 Airline Operating Agreement

Ramp Overnight Fee (RON’s) – Signatory

$77.00 per day over 3 hours ($73.00)

Resolution No. 338 Current Master Fee Resolution

Ramp Overnight Fee (RON’s) – Non-Signatory

$77.00 per day over 3 hours ($73.00)

Resolution No. 338 Current Master Fee Resolution

Minimum Charge $10.00 per landing

Resolution No. 338


Page 2 of 13




POLICY OR AGREEMENT

RNO SIGNATORY AIRLINE TERMINAL RENTS Ticket Counter (including passenger processing and support equipment in the queuing area)

$105.37 PSFPA* ($109.83) *Per square foot per annum

Airline-Airport Use and Lease Agreement

Office Space $84.29 PSFPA ($87.86)


Holdroom Space $84.29 PSFPA ($87.86)


Unenclosed Areas (Outside Storage)

$13.17 PSFPA ($13.73)


Baggage Service Office Space

$63.22 PSFPA ($65.90)


Operations Space $42.15 PSFPA ($43.93)


Common Use Baggage Makeup and Handling Space

$42.15 PSFPA ($43.93)


Common Use Baggage Claim

$63.22 PSFPA ($65.90)


Joint Use Area Tug Drives $26.34 PSFPA ($27.46)


RNO OTHER AIRLINE CHARGES Baggage Handling System (BHS) Charge

$1.09 ($1.29) per bag processed through the Baggage Handling System


Disposal Fees $4,665.00 ($4,225.00) monthly

Airline-Airport Use and Lease Agreement, 100% apportioned among airline users based on enplaned passengers

Customs and Border Protection Facility Use Charge

$4.50 per deplaned international passenger

Current Master Fee Resolution

Incentives for scheduled passenger air and air cargo carriers to increase air service to Reno

Policy guidelines for waiving certain fees including landing fees, terminal rents, or other charges as approved by the Board for a period of up to 365 days.

Resolution No. 535 amending Resolution No. 524 adopting Policy No. 600-007


Page 3 of 13




POLICY OR AGREEMENT

RNO NON-SIGNATORY AIRLINE AND OTHER AIRLINE TERMINAL RENTS

Ticket Counter $148.05 PSFPA ($145.37)


Office Space $118.44 PSFPA ($116.30)


Holdroom Space $118.44 PSFPA ($116.30)


Unenclosed Areas (Outside Storage)

$18.51 PSFPA ($18.17)


Baggage Service Office Space

$88.83 PSFPA ($87.22)


Operations Space $59.22 PSFPA ($58.15)


Common Use Baggage Makeup and Handling, Baggage Claim and Tug Drives

$1.35 ($1.40) per Enplaned and Deplaned Passenger


Baggage Handling System (BHS) Charge

$1.20 ($1.42) per bag processed through the Baggage Handling System


Gate Use Charge The lesser of $2.65 ($2.60) per enplaning and deplaning passenger or $280.00 ($280.00) per turn.


Passenger Boarding Ramp Equipment Use Fee

$50.00 ($50) per enplaning or deplaning operation excluding scheduled international service


Ticket Counter (Small – 8 positions/4 counters) Use Charge

The lesser of $1.35 ($1.30) per enplaning passenger or $71.00 ($70.00) per enplaning operation.


Ticket Counter (Large – 10 positions/5 counters) Use Charge

The lesser of $1.35 ($1.30) per enplaning passenger or $101.00 ($100.00) per enplaning operation.


RNO AIR CARGO LAND RENTS Improved Land Adjacent to Air Cargo Ramp

$0.95 PSFPA ($0.93)



Page 4 of 13




POLICY OR AGREEMENT

RNO AIR CARGO LAND RENTS (Continued) As-Is Land in Air Cargo Area not adjacent to the Air Cargo Ramp

$0.63 PSFPA ($0.62)


RNO MISCELLANEOUS AVIATION SERVICES Fuel Flowage Fees – Reno/Tahoe International

$0.07 per gallon Resolution No. 498

Commercial Aviation Ground Handlers and Support Service Operators

6% of Gross Revenues Commercial Aviation Ground Handling and Support Services Operating Agreement

Commercial Aeronautical Operator

6% of Gross Revenues Commercial Aeronautical Activity Operating Agreement or Commercial Aeronautical Activity Permit

RNO OTHER TERMINAL RENTS (NON-AIRLINE) Ticket Lobby/Office Support Space

$63.22 PSFPA ($65.90)


Ticket Lobby/Alcove Space $88.83 PSFPA ($87.22)


Baggage Claim Ground Transportation Facility

$84.29 PSFPA ($87.86)


Baggage Claim Ground Transportation Vestibule Counter

$400.00 per counter per month $100.00 per counter per day


Concession Office/Storage/Support Space

$8.81 PSFPA ($8.60)


RNO T- HANGAR RATES T-Hangars (Small) Less than 1,100 Sq. Ft. **

$0.426 ($0.416) per sq. ft. per month


T-Hangars (Large) Greater than 1,100 Sq. Ft.**



T-Hangar Storage Space (GA West)



T-Hangar Storage Space (GA East)




Page 5 of 13




POLICY OR AGREEMENT

RNO T- HANGAR RATES (Continued) T-Hangar Office Space (GA West)

150 sq. ft. at $0.740 ($0.723) per sq. ft. per month 176 sq. ft. at $0.529 ($0.517) per sq. ft. per month


** Per General Aviation T-Hangar Leasing Guidelines adopted on May 19, 2011, a two-tiered system will be implemented effective July 1, 2012 for all RNO T-Hangar leases:

1. All existing T-Hangar lease rental rates will be adjusted by the March 2018

(2017) CPI at 2.4% (2.4%). 2. The rental rates for all T-Hangar leases with less than a one year term and all

month-to-month T-Hangar leases will be adjusted by the CPI plus an additional 10% differential.

RNO AIRCRAFT TIE-DOWN PARKING RATES Aircraft Tie-Down Parking

$100.00 per aircraft tie-down position per month

Resolution No. 519

RNO BOX HANGAR RATES GA West Hangar #2 Hangar #7 Hangar #8



GA West Hangar #9 Hangar #10



GA West/East Aircraft Apron Parking



GA East Hangar - Building B Hangar – Building E Hangar – Building F Hangar – Building G



GA East and West Hangar Office




Page 6 of 13




POLICY OR AGREEMENT

RNO VEHICLE PARKING FEES Short Term $1.00 for the first ½ hour or

portion thereof, an additional $1.00 for the second ½ hour or portion thereof, and an additional $1.00 for each hour thereafter. The maximum charge for every 24-hour period is $24.00.

Resolution No. 496

Long Term – Garage (2nd and 3rd floors)

$1.00 for the first ½ hour or portion thereof, an additional $1.00 for the second ½ hour or portion thereof, and an additional $1.00 for each hour thereafter. The maximum charge for every 24-hour period is $14.00.

Resolution No. 496

Long Term – Surface Lot $1.00 for the first ½ hour or portion thereof, an additional $1.00 for the second ½ hour or portion thereof, and an additional $1.00 for each hour thereafter. The maximum charge for every 24-hour period is $10.00.

Resolution No. 496

Oversize Vehicle Parking Charged at the published parking rate multiplied by the number of spaces the vehicle occupies.

Resolution No. 496

Lost Ticket Minimum charge for lost ticket is $24.00.

Resolution No. 496

Parking Proximity Card Replacement

$25.00 for each replacement card


Domiciled Flight Crew-Administration Parking

$20.00 per month per employee

Resolution No. 480

Domiciled Flight Crew Parking


Resolution No. 480

Non-Domiciled Flight Crew Parking


Resolution No. 480

Tenant Employee Parking


Resolution No. 480


Page 7 of 13




POLICY OR AGREEMENT

RNO GROUND TRANSPORTATION FEES Vehicle Registration Fee $25.00 minimum annual fee

per company, $5.00 per vehicle over 5 vehicles, maximum $200.00

Resolution No. 497

New /Lost/ or Replacement Transponder

$25.00 for license plate version $15 for windshield version


Non-domicile Bus (bus with no operating permit)

$25.00 per trip Resolution No. 497

Buses (>24 seat capacity) $3.00 per trip

Resolution No. 497

Shuttles (<24 seat capacity) $1.50 per trip

Resolution No. 497

Courtesy Vehicles $1.00 per trip or $800.00 flat monthly fee

Resolution No. 497

Pay Limousine $1.00 per trip

Resolution No. 497

Taxi/ Transportation Network Companies

$1.00 per trip

Resolution No. 497

Ground Transportation Citation

$100.00

Resolution No. 497

Commercial Vehicle Overnight Parking

$10 per space per night Current Master Fee Resolution

RNO PARKING CITATIONS Unattended Vehicle $30.00 Current Master Fee

Resolution Front Curb Loading/Unloading

$25.00 Current Master Fee Resolution

Commercial Loading/Unloading

$25.00 Current Master Fee Resolution

Parking in Crosswalk $30.00 Current Master Fee Resolution

Curb Markings $30.00 Current Master Fee Resolution

Failure to Obey Sign $30.00 Current Master Fee Resolution

Accessibility Zone $250.00 Current Master Fee Resolution

Failure to Obey Officer $30.00 Current Master Fee Resolution


Page 8 of 13




POLICY OR AGREEMENT

RNO OFF-AIRPORT PARKING CONCESSION Off-Airport Parking Operator Fee

7% of Gross Revenues Resolution No. 497

RNO AUTO RENTAL – ON AIRPORT Customer Facility Charge $3.50 ($1.25)per transaction

day on each individual vehicle rental

Nonexclusive Ready/Return, Quick Turnaround Facility and Service Facility Lease, as amended

Terminal Counter Space $105.37 ($109.83) PSFPA

Nonexclusive Vehicle Rental Concessions Lease, as amended

Terminal Office Space $84.29 ($87.86) PSFPA

Nonexclusive Vehicle Rental Concessions Lease, as amended

Quick Turnaround Lot Premises and Common Area

$1.37 ($1.342) PSFPA


Quick Turnaround Building Rent (1/5th share)

$53,838.65 ($52,576.81) annual rent


Ready Parking and Return Parking

$97.00 Per space per month Nonexclusive Ready/Return, Quick Turnaround Facility and Service Facility Lease, as amended

Service Facility Building Rent

$8.59 ($8.392) PSFPA


Service Facility Land Rent

$0.78 ($0.757) PSFPA



Page 9 of 13




POLICY OR AGREEMENT

RNO AUTO RENTAL- OFF AIRPORT Off Airport Rental Cars $1.00 per rental agreement

for the first 3,000 agreements, 10% thereafter, or 7% flat fee

Resolution No. 199

RNO AIRPORT WAREHOUSING Storage Unit– 5 ft. X 10 ft. $0.70 per sq. ft. per month* Current Master Fee

Resolution Storage Unit– 10 ft. X 10 ft. $0.70 per sq. ft. per month* Current Master Fee



Resolution Storage Unit– 12 ft. X 30 ft. with Loft

$0.46 per sq. ft. per month* Current Master Fee Resolution

* Subject to promotions and discounts to increase business and lower specific vacancy rates. Month-to-month tenants are subject to individual rent increases at any time.

Administrative Fee - new rentals (non-refundable)

$10.00 per new rental Current Master Fee Resolution

Mailbox Rental – Small $21.00 per quarter Current Master Fee Resolution

Mailbox Rental – Medium $27.00 per quarter Current Master Fee Resolution

Mailbox Rental – Large $30.00 per quarter Current Master Fee Resolution

Storage Unit Lock Services – Cutting existing or providing a new lock

$10.00 per occurrence Current Master Fee Resolution

Late Fee Charge $10.00 if payment not received by 5th of each month


Returned Check Charge $25.00 for all checks returned unpaid


RNO PARK TO TRAVEL Outside Parking

$8.00 per day $50.00 per week $85.00 per month


Enclosed Parking – 12 ft. X 20 ft.

$115.00 per month Current Master Fee Resolution

Enclosed Parking – 12 ft. X 30 ft.



Page 10 of 13




POLICY OR AGREEMENT

RNO PARK TO TRAVEL - CONTINUED Enclosed Parking – 12 ft. X 30 ft. with Loft


Late Fee Charge $10.00 if payment not received by 5th of each month


Returned Check Charge $25.00 for all checks returned unpaid


Administrative Fee- new rentals (non-refundable)

$10.00 per new rental Current Master Fee Resolution

RNO MISCELLANEOUS FEES/CHARGES Photo Copying $1.25 for the first page, $0.25

for each additional page thereafter. $10.00 if sent to outside copying service plus cost of copying.

Policy dated July 3, 1990

Reimbursement for services/maintenance

Based on level of personnel ranging from $60.00 to $90.00 per hour and type of equipment ranging from $55.00 to $175.00 per hour

Airline-Airport Use and Lease Agreement, various agreements

Late Payment Service Charge

Highest rate established from time to time – currently 18% APR; minimum charge of $5.00

Various Agreements

Security ID Badges Initial Identification Badge $50.00, excluding Signatory Airlines; Badge renewal $25.00, including Signatory Airlines; Badge Replacement (Lost/Stolen) $50.00, including Signatory Airlines and Airport Authority employees; Unreturned badge fee $150.00 assessed to sponsoring company.

Airline-Airport Use and Lease Agreement; Current Master Fee Resolution

Airport Operations Area ID Badges

Air Operations Area employee/tenant identification badge $25.00



Page 11 of 13




POLICY OR AGREEMENT

RNO MISCELLANEOUS FEES/CHARGES (Continued) Tenant Fingerprinting $75.00 Airport processing fee

per employee - original Current Master Fee Resolution

Tenant Keys and Locks $25.00 ($10.00) per key $50.00 ($45.00) per core $360.00 per lockset


SIDA/Driver Training Session

$25.00 per employee


Conference Room Rental For airport tenants: - $125.00 half day - $200.00 full day

For non-tenants:

- $250.00 half day - $400.00 full day


Aspen Room $100.00 lost key Current Master Fee Resolution

Welcome Tables $250.00 per day $200.00 per day if multiple days booked


Copy of Police Report $10.00 per copy, $15.00 if mailed


*** RENO-STEAD AIRPORT (RTS) Landing Fees – Bureau of Land Management (BLM)

$90.00 per landing for aircraft less than or equal to 155,000 lbs.; $240.00 per landing for aircraft over 155,000 lbs.

BLM Permit & Airfield Use License

Fuel Flowage Fees – RTS $0.05 per gallon Resolution No. 498 Commercial Aviation Operators

3% of gross revenues RTS General Aviation Commercial Aeronautical Operating Agreement

Terminal Space Rent $1.44 per sq. ft. per month plus $0.15 per sq. ft. per month common area maintenance charges



Page 12 of 13




POLICY OR AGREEMENT

RENO-STEAD AIRPORT (RTS) (Continued) Conference Room Rental For airport tenants:

- $125.00 half day - $200.00 full day - $100.00 cleaning

deposit

For non-tenants: - $250.00 half day - $400.00 full day - $100.00 cleaning

deposit


Special Use Permit (i.e. filming, one-time use of ramp, etc.)

$500.00 per day for non-aviation impact; $800.00 per day for activity that impacts aviation


Unmanned Aircraft System (UAS) Testing Range Fee

$100.00 per hour $1,000.00 per day maximum


RTS Gate Key $25.00 deposit Current Master Fee Resolution

Wash Tokens $0.50 Current Master Fee Resolution

Storage Unit- 10 ft. X 20 ft. $ 70.00 per month Current Master Fee Resolution

Storage Unit- 20 ft. X 20 ft. $115.00 per month Current Master Fee Resolution

Aircraft Tie-Down Parking – aircraft less than 12,500 lbs. of landed weight

The lesser of $5.00 per aircraft per day or $55.00 per aircraft per month


Aircraft Ramp Parking- transient aircraft with landed weight of 12,500 lbs. or greater

The lesser of $10.00 per aircraft per day or $50.00 per aircraft per week



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On motion by Trustee , second by Trustee , the foregoing Resolution No. 536 was passed and adopted this 17th day of May 2018, by the following vote of the Board: AYES: NAYS: ABSENT: ABSTAIN: __________________________________ Chairman Shaun Carey ATTEST: _______________________________________ Secretary Carol Chaplin

AGENDA RENO-TAHOE AIRPORT AUTHORITY FINANCE & …...Finance & Business Development Committee Meeting...

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