AGENDA RENO-TAHOE AIRPORT AUTHORITY …...LOCATION: Reno-Tahoe International Airport Administrative...

BOARD OF TRUSTEES PRESIDENT/CEO Andy Wirth, Chair Marily M. Mora, A.A.E.

*** Rick Murdock, Vice Chair EXECUTIVE VICE PRESIDENT/COO Nat Carasali, Secretary Dean E. Schultz, A.A.E.

* Jerry Hall, Treasurer GENERAL COUNSEL Bill Eck Ann Morgan, Fennemore Craig ** Lisa Gianoli CLERK OF THE BOARD

**** Adam Mayberry Claire Johnson *** Jenifer Rose

**** Jessica Sferrazza * 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, November 10, 2015 9:00 a.m. LOCATION: Reno-Tahoe International Airport Administrative Offices, Conference Rooms A/B Reno, Nevada AGENDA:

I. Approval of meeting minutes from October 6, 2015

II. Public Comment (limited to 3 minutes)

III. Items provided to the Finance & Business Development Committee for information:

A. Annual Review of the RTAA Investment Policy B. Investment Portfolio Report for the Quarter Ended September 2015 C. Review of Operating Results through September 2015 D. Review of Budget Transfers (if any) E. Review of Contracts and Professional Service Agreements through October 2015 F. Review of Legal Expenses through September 2015 G. Review of Board Budget through September 2015 H. Review of Legislative Consultants Budget through September 2015 I. Review of Hangar Lease Execution Status through October 2015

IV. Items to be presented to the Finance and Business Development Committee for

review and recommendation to the Board:

A. #15(11)-42 Authorization for the President/CEO to Award a Contract for System Design and Construction Management Services, for the Replacement of the Flight Information Display and Overhead Paging Systems at the Reno-Tahoe International Airport, with Faith Group LLC, in the Amount of $207,600

Reno-Tahoe Airport Authority November 10, 2015 Finance & Business Development Committee Page 2 of 2

B. #15(11)-45 Authorization for the President/CEO to Execute Amendment No. 2 to the Professional Services Agreement with the Porter Group LLC, for a Three-Year Extension to January 31, 2019, for Federal Government Affairs Services

V. Items presented to the Finance & Business Development Committee for approval:

A. None.

VI. Items presented to the Finance & Business Development Committee for discussion:

A. None.

VII. General member comments, questions and items for future Committee meetings VIII. Public Comment (limited to 3 minutes)

IX. 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. 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

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*** 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 October 6th, 2015

9:00 a.m.

In Attendance: Jerry Hall, Trustee* Lisa Gianoli, Trustee *

Rick Murdock, Trustee* Jenifer Rose, Trustee * Adam Mayberry, Trustee ** Jessica Sferrazza, Trustee** Bill Eck, Trustee

Marily Mora, President/CEO Katherine Hoffman, Fennemore Craig

Rick Gorman, Chief Financial Officer Tina Iftiger, Vice President of Airport Economic Development Leah Williams, Manager of Accounting Tony Osendorf, Manager of Budget & Finance

Joyce Humphrey, Manager of Purchasing & Materials Management Stacie Huggins, Manager of Economic Development Patrick North, Senior Internal Auditor

Paula Murphy, Internal Auditor Ken Moen, Economic Development Specialist Lacy Glodowski, Administrative Assistant II Marty Mueller, Director of Technology & Information Systems Mike Scott, Vice President Operations and Public Safety Brian Moore, Director of Human Resources Tom Nelson, Chief of Airport Fire Fighters Julie Sternberg, Senior Benefits Specialist David Pittman, Director of Facilities & Maintenance Scott Harkema, Airfield Superintendent Lloyd Barnes, LP Insurance Alby Redick, Aviation Classics Rick Eaton, Aviation Classics * Denotes Finance Committee member ** Denotes Finance Committee alternate

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TOPICS DISCUSSED: I. REVIEW OF MEETING MINUTES FROM SEPTEMBER 8, 2015

A motion was made by Trustee Gianoli, Seconded by Trustee Murdock, and the Committee unanimously approved the minutes from the September 8, 2015 Finance and Business Development Committee meeting.

II. PUBLIC COMMENT None III. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT

COMMITTEE FOR INFORMATION

A. AUDIT OF FOUR SELECT SERVICE PARTNER (SSP) AMERICA CONCESSIONAIRES

Staff reported on the audit of the Select Service Partner (SSP) America concession agreement. Trustee Murdock requested an assurance that based on staff’s finding of an error during the audit that SSP would pay the discrepancy. Staff responded “yes”; SSP America will pay the shortfall. A motion was made by Trustee Rose; Seconded by Trustee Murdock and the Committee unanimously approved this item. B. FISCAL YEAR (FY) 2014-2015 AUDIT PLAN RESULTS Staff reported on the FY 2014-2015 Audit Plan Results. Trustee Rose commented on how well the reports were written.

A motion was made by Trustee Rose; Seconded by Trustee Murdock and the Committee unanimously approved this item. C. STAFF REPORTS

Trustee Hall proposed a change in the standard process by which staff reports are presented to the Committee. In the past, staff members provided an overview presentation of each report and individually answered any Trustee questions. Since the Trustees receive the staff reports in advance of the Committee meeting, Trustee Hall indicated it may be more efficient and productive to eliminate the staff presentations and to consider the staff reports listed below as a whole.

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As in the past, staff will be prepared to address any questions the Trustees may have under this agenda item. The Committee agreed to this modified approach for the following reports:

1. Operating Results through August 2015 2. Budget Transfers - no transfers during this month 3. Contracts and Professional Service Agreements through September 2015 4. Legal Counsel Budget through August 2015 5. Board Budget through August 2015 6. Legislative Consultants Budget through August 2015 7. Hangar Lease Execution Status through September 2015 No questions were presented by the Committee in conjunction with the reports.

IV. ITEMS TO BE PRESENTED TO THE FINANCE AND BUSINESS

DEVELOPMENT COMMITTEE FOR REVIEW AND RECOMMENDATION TO THE BOARD:

A. #15(10)-37 AWARD OF BID #15/16-02 FOR THE PURCHASE OF ONE DUAL ENGINE FOUR-WHEEL STEER 5,000 TON PER HOUR SNOW BLOWER, TO J.A. LARUE, INCORPORATED, IN THE AMOUNT OF $499,948

Staff gave a presentation requesting authorization for the Award of Bid #15/16-02 for the purchase of one dual engine four-wheel steer 5,000 ton per hour snow blower, to J.A. Larue, Incorporated, in the amount of $499,948. Trustee Sferrazza asked for clarification on the wide range of pricing within the bid results. Staff stated that they were just as surprised in the price variance of the bids. However, the next lowest bid was only $16,000 higher than the successful submission. In order to make sure they are a reputable company, Trustee Sferrazza then asked if J.A. Larue supplies to other airports. Staff stated “yes”; they are a very reputable company and the Reno-Tahoe Airport Authority (RTAA) currently has another J.A. Larue machine on hand that has been trouble free. Trustee Rose asked for clarification as to whether all the machines in the bids have the same specifications (specs). Staff stated that while each submission included exceptions to the standard, ideal bid specifications, the equipment outlined in the lowest, responsive proposal will meet the needs of the RTAA. Trustee Murdock asked when the RTAA will take delivery of this machine. Staff stated 330 days from when the order is received by J.A. Larue.

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A motion was made by Trustee Gianoli; Seconded by Trustee Rose and the Committee unanimously recommended this item [#15(10)-37] to the Board for approval at the upcoming Board meeting.

B. #15(10)-38 AWARD OF BID 14/15-04 FOR THE PURCHASE OF ONE 3,000

GALLON PANTHER 6X6 HIGH REACH EXTENDABLE TURRET (HRET) AIRCRAFT RESCUE AND FIRE FIGHTING VEHICLE, TO ROSENBAUER MINNESOTA, LLC, IN THE AMOUNT OF $863,103

Staff gave a presentation requesting authorization for the Award of bid 14/15-04 for the Purchase of One 3,000 Gallon Panther 6x6 High Reach Extendable Turret (HRET) Aircraft Rescue and Fire Fighting (ARFF) Vehicle, to Rosenbauer Minnesota, LLC, in the Amount of $863,103. Trustee Gianoli asked if it is unusual to receive only two bids or is it because there are only a few vendors. Staff stated that there are only two known vendors. Trustee Gianoli further asked if there was any push back from Oshkosh regarding their nonresponsive bid. Staff stated that they did notify Oshkosh, and subsequently staff received an email notifying the RTAA that Oshkosh would be appealing the decision to the Federal Aviation Administration (FAA). Trustee Rose asked for clarification on why the additional command and control module for the Driver Enhanced Vision System (DEVS) system valued at $7,500 was removed from the contract award. In response, staff indicated that the FAA would only approve that module for one vehicle at Reno-Tahoe International Airport. Upon review, staff is recommending that the module would better serve the RTAA if it is included in the new Fire Ban Quick Response Vehicle to be acquired during the coming year. Trustee Hall asked for clarification as to whether the DEVS system is a piece of equipment to be installed on this equipment. Staff responded “yes”, the DEVS system will be installed; however, the additional command and control module that tracks the location of other equipment responding to an incident will be acquired in the future. Trustee Rose asked if in the meantime does the RTAA have a vehicle that is equipped with the Command and Control Center on it or are we working without one. Staff stated that the current Quick Response Vehicle (Fire 2), which will be replaced in the next year, does have this module installed. Therefore, the RTAA does have one system in place and therefore it is not needed on this new piece of equipment.

A motion was made by Trustee Rose; Seconded by Trustee Murdock and the Committee unanimously recommended this item [#15(10)-38] to the Board for approval at the upcoming Board meeting.

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C. #15(10)-39 AUTHORIZATION FOR THE PRESIDENT/CEO TO EXECUTE A ONE-YEAR CONTRACT FOR RENO-TAHOE AIRPORT AUTHORITY EMPLOYEE MEDICAL AND PRESCRIPTION INSURANCE WITH PROMINENCE HEALTH PLAN FOR CALENDAR YEAR 2016 IN THE AMOUNT OF $2,154,500; FUND EMPLOYEE HEALTH SAVINGS ACCOUNTS IN THE AMOUNT OF $38,000; AND CONTINUE TO SELF INSURE DENTAL AND VISION COVERAGE

Staff gave a presentation requesting Authorization for the President/CEO to execute a One-Year Contract for the Reno-Tahoe Airport Authority Employee Medical and Prescription Insurance with Prominence Health Plan for Calendar Year 2016 in the Amount of $2,154,500; Fund Employee Health Savings Accounts in the Amount of $38,000; and Continue to Self Insure Dental and Vision Coverage. Trustee Gianoli inquired about the maximum amount of money the RTAA and an employee can contribute to a Heath Savings account per year. Staff stated the maximum amount is $6,700 a year. Trustee Gianoli asked what the breakdown is of employees choosing the high deductible Preferred Provider Organization (PPO) plan verses the Hybrid PPO plan. Staff stated that about 185 employees are on the Hybrid PPO plan and about 40 employees are on the high deductible plan. Trustee Rose asked if LP Insurance, the RTAA’s insurance broker, is a locally owned and operated company. Staff stated “yes”; they are locally owned and operated. Trustee Rose then asked for clarification on whether employees get the choice between the two plans. Staff stated “yes”; employees get the choice during each open enrollment period. Trustee Rose then asked for clarification on how staff came up with the financial estimates in the Board memo since it is not known how many employees will choose each plan. Staff stated it is based on current enrollment. If additional employees choose to move to the high deductible plan, the proposed RTAA contribution to an employee’s Health Savings Account (HSA) will be more than offset by the lower medical insurance premiums. Trustee Sferrazza asked for clarification on the higher deductible plan and whether the RTAA has experienced any medical issues due to employees not using preventive health care services because of the out-of-pocket costs. Staff stated “no”; the high deductible plan includes all preventive services, as set forth in the Affordable Care Act, at no cost to employees. Trustee Sferrazza asked why the RTAA is not part of the Health Consortium like other local employers and why the RTAA is providing a medical insurance program on their own. Staff stated the Health Consortium group represents organizations that are self-insured. The RTAA is not of the size or risk profile to where it would reach the tipping point of wanting to become self-insured. Self-insurance is the approach

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where the employer pays health costs directly instead of buying insurance. To take this approach, an organization must be comfortable with a lot of volatility. Just one claim could cost the RTAA a million dollars and the RTAA is not comfortable in its ability to absorb that level of a claim. Therefore, staff recommends continuing use of medical insurance plans where the RTAA is fully insured by an outside party. Trustee Rose asked if the long term plan is to always allow employees to continue to choose their plan or will the RTAA make it mandatory for them to be on one plan. Staff stated there is no long term goal to establish one plan and the approach going forward will be driven by the cost of health insurance in the future.

A motion was made by Trustee Gianoli; Seconded by Trustee Murdock and the Committee unanimously recommended this item [#15(10)-39] to the Board for information, discussion, and possible action at the upcoming Board meeting.

D. #15(10)-40 AUTHORIZATION FOR THE PRESIDENT/CEO TO NEGOTIATE FINAL TERMS AND EXECUTE A NEW 5-YEAR AGREEMENT WITH AVIATION CLASSICS, LTD TO LEASE TWO RENO-TAHOE AIRPORT AUTHORITY OWNED COMMERCIAL BOX HANGARS, OUTSIDE STORAGE AREA, RAMP SPACE AND FUEL STORAGE TANKS FOR THE PURPOSE OF OPERATING A NON-EXCLUSIVE FIXED BASE OPERATION AT THE RENO-STEAD AIRPORT

Staff gave a presentation requesting Authorization for the President/CEO to Negotiate Final Terms and Execute a new 5-year agreement with Aviation Classics, Ltd. to lease two Reno-Tahoe Airport Authority Owned Commercial Box Hangars, Outside Storage Area, Ramp Space and Fuel Storage Tanks for the Purpose of Operating a Non-Exclusive Fixed Base Operation (FBO) at the Reno-Stead Airport (RTS).

Trustee Sferrazza inquired as to why staff is recommending a five-year extension with an existing tenant rather than going through a competitive process to determine if any other party might be interested in this business opportunity. Staff responded that the RTAA is currently going through a Request for Qualifications process for a master developer to bring aviation and commercial development to the Reno-Stead Airport. The RTAA has selected Dermody Properties, LLC to serve in this capacity, and staff is hopeful to receive a full business proposal by the end of the month and enter into negotiations for Board review and possible approval. If approved, any new development at RTS will likely take between three to four years before any vertical buildings are completed. In addition, the economic recovery associated with the Tesla and Switch announcements will likely provide a positive impact on the revenue generation from RTS. Therefore, staff is recommending that the RTAA continue providing good customer service to the general aviation community by extending Aviation Classics’ contract. During the five year term, the anticipated future growth and its

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impact on the real estate market will be known, and the next generation of FBO services can be competed for in this new environment.

Trustee Rose asked for clarification on why a new roof, estimated to cost $160,000, is needed in conjunction with this contract extension, and why the RTAA would invest in a new roof before the Board has selected a master developer and knows the level of future commercial development at RTS. In response, staff stated that the RTAA owns the hangar buildings being leased to Aviation Classics and the RTAA must continue to make capital investments in the facilities in order to ensure they remain an income producing asset. Even if Aviation Classics were to choose not to remain at RTS, the RTAA would still need to repair the roof in order to lease the hangar out on the market.

Trustee Rose asked if the roof is sustainable until the RTAA determines what the master development plan at RTS are going to be. Staff stated “no”; the roof is currently leaking and the repairs are needed immediately.

Trustee Mayberry inquired about the price difference between the two buildings per square foot. Staff stated that Building 7003 was part of the original agreement and the rent has never been brought to market. Building 8003 had an appraisal done and the market rent was adjusted to its market value. Trustee Mayberry proposed the idea of extending the leasing term beyond the proposed five (5) year period. Trustee Mayberry asked Mr. Redick to share his thoughts on this proposal contract and term. Mr. Redick stated that Aviation Classics would prefer to have a 10-year lease; however, the RTAA indicated the five (5) year term was recommended by General Counsel based on the length of the existing agreement and the market conditions outlined previously.

A motion was made by Trustee Sferrazza; Seconded by Trustee Gianoli and the Committee unanimously recommended this item [#15(10)-40] to the Board for information, discussion, and possible action at the upcoming Board meeting.

V. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT

COMMITTEE FOR APPROVAL

A. None

VI. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR DISCUSSION

A. None

VII. GENERAL MEMBER COMMENTS, QUESTIONS AND ITEMS FOR FUTURE COMMITTEE MEETINGS

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Trustee Hall expressed his appreciation of the Board members coming to the Committee meetings prepared and asking questions that need to be asked. In addition, he also expressed his appreciation of Marily Mora, President/CEO, for her revisions to the CEO Report. The changes include a trimming down of duplicate information and making the report much easier to read.

Trustee Mayberry asked if staff will be bringing to the Board any changes in ground

transportation policies associated with accommodating the Transportation Network Companies (TNCs) such as Uber and Lyft. Mrs. Mora stated that the RTAA intends to accommodate these new providers under current policies and agreements.

Trustee Rose requested additional information prior to the October 8, 2015 Board of Trustees meeting on the RTAA’s bid protest processes and procedures, specifically related to the proposed award of contract for the ARFF vehicle. Ms. Mora indicated this information will be provided to the entire Board prior to the Board meeting.

Additionally, Trustee Sferrazza requested a summary of benefits for both of the RTAA recommended medical and prescription plans. In particular, Trustee Sferrazza is interested in the list of the preventive care services covered at “no charge” to employees and their family members. Ms. Mora indicated that this information will be provided to the entire Board prior to the Board meeting.

VII. PUBLIC COMMENT None

IX. ADJOURNMENT

The meeting was called to order at 9:00 a.m. and was adjourned at 10:44 a.m. JH: RG/lg

*** 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: November 4, 2015 Administrative Report # 71-15 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: ANNUAL REVIEW OF THE RENO-TAHOE AIRPORT AUTHORITY

(RTAA) INVESTMENT POLICY PURPOSE The purpose of the investment policy is to ensure that RTAA staff invests funds in a prudent manner, which will provide a market rate of return while meeting the daily cash flow needs of the RTAA, and conforms to all Nevada Revised Statutes (NRS) and ordinances governing the investment of public funds. This action supports the Guiding Principle/Operating Practice of Financial Integrity by ensuring the financial stability of the RTAA and providing transparency in all financial transactions. BACKGROUND Per Section X of the Investment Policy, originally adopted in August 2008 and as amended in May 2009, August 2011, and April 2014, the investment policy is to be reviewed every year by the President/CEO and changes presented to the Finance and Business Development Committee. While no changes are recommended at this time, an annual review by the governing board responsible for the oversight of financial matters is recommended as a best practice by the Government Finance Officers Association. Under authority delegated by the Board of Trustees of the RTAA, in accordance with chapter 474, Statutes of Nevada, NRS 354.474 and 355.175, and Bond Resolution 459, the investment of RTAA funds is the responsibility of the President/CEO. All cash, including bond proceeds, received by the RTAA will be invested by the Chief Financial Officer (CFO). The President/CEO’s responsibilities include the authority to open accounts with financial institutions and broker/dealers, to arrange for the custody of securities, and to execute such documents as may be necessary to carry out these responsibilities. The CFO is responsible for furnishing authentic, timely instructions to the safekeeping bank(s) concerning settlement of investment transactions, and verifying accuracy of completed transactions. The existence of an approved investment policy demonstrates that the RTAA’s Board of Trustees and staff are meeting its fiduciary requirements, thereby promoting trust and confidence from the public that it serves. This annual review is done to ensure the

Investment Policy - Annual Review Administrative Report # 71-15 November 4, 2015 Page 2 of 3

Board’s continued oversight and approval of the policies, rules, and performance regarding the investment of RTAA funds. DISCUSSION The attached investment policy serves as the foundation of the RTAA’s investment goals and priorities. The Investment Policy compels the CFO to invest RTAA funds in a manner that will provide the highest security of funds while meeting the daily cash flow demands. The foremost stated objective is safety, with the requirement that all transactions are structured to avoid capital losses from issuer or broker/dealer default, or erosion of market value. The objective of return on investment is subordinate to the objectives of safety and liquidity. Therefore, the investment policy requires the RTAA to achieve a return on funds throughout all economic cycles, taking into consideration the RTAA’s investment risk constraints and cash flow requirements. RTAA staff managing investments and the overall portfolio are held to a “prudent person” standard. The "prudent person" standard states that, "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived." In addition, officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the RTAA. In accordance with the provisions of NRS 355.170, 355.180, the current bond resolutions, and the conditions outlined in the attached investment policy, the CFO is authorized to invest in: A. United States Treasury Bills, Notes, Bonds, and Debentures of the United States; B. United States Government Agency Securities; C. Demand Deposits, Time and Savings Deposits including Negotiable Order of

Withdrawal (NOW) accounts – Insurance from instrumentality of the United States or collateralized as required under the Nevada pooled collateral program (NRS 356);

D. Negotiable & Nonnegotiable Certificates of Deposit - subject to insurance by instrumentality of the United States;

E. Bankers' Acceptances (no more than 20% of portfolio); F. Commercial Paper (Maximum maturity of 270 Days and Rated A-1/P-1); G. Money Market Mutual Funds (Rating of “AA” or equivalent); H. Obligations of state and local governments (“A” Rated or higher); I. The Local Government Investment Pool (“LGIP”) as established under NRS

355.167;

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J. Washoe County Pooled Investment Fund. The Washoe County Treasurer is

authorized to pool, for purposes of investment, any money held for local governments within the county as identified under NRS 355.168; and

K. Securities which have been expressly authorized as investments for local governments by any provision of Nevada Revised Statutes or by any special law.

FISCAL IMPACT The annual review and confirmation of the Investment Policy will have no direct fiscal impact on the RTAA. MMM/lw/cj

Reno-Tahoe Airport Authority

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INVESTMENT POLICY PURPOSE The purpose of these investment guidelines is to formalize the framework for the Reno-Tahoe Airport Authority’s (RTAA) daily investment activities. It is the policy of the RTAA to invest funds in a manner which will provide market rate of return with the maximum security while meeting the daily cash flow demands of the RTAA and conforming to all Nevada Revised Statutes (NRS) and ordinances governing the investment of public funds. REFERENCES Reno-Tahoe Airport Authority Act, Chapter 474, Statutes of Nevada. Local Government Budget and Finance Act, NRS 354. Public Investments NRS 355. Bond Resolution Official Statement c-14. POLICY

I. Scope This investment policy applies to all financial assets of the RTAA. Should bond covenants be more restrictive than this policy, bond proceeds will be invested in full compliance with those restrictions. Additionally, all funds are accounted for in the RTAA’s Comprehensive Annual Financial Report. Unless prohibited by law or contract, the RTAA may pool cash from several different funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles. II. General Objectives The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield: Safety Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk. Credit Risk: The RTAA will minimize credit risk, the risk of loss due to the failure of the security issuer or backer, by: • Limiting investments to the safest types of securities


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• Pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisers with which the RTAA will do business

• Diversifying the investment portfolio so that potential losses on individual securities will be minimized.

Interest Rate Risk: The RTAA will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates, by:

• Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity

• Investing operating funds primarily in shorter-term securities, money market mutual funds, or similar investment pools.

Liquidity The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands. Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity). A portion of the portfolio also may be placed in money market mutual funds or local government investment pools which offer same-day liquidity for short-term funds. Yield The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. Securities shall not be sold prior to maturity with the following exceptions:

• A security with declining credit may be sold early to minimize loss of principal.

• A security swap would improve the quality, yield, or target duration in the portfolio.

• Liquidity needs of the portfolio require that the security be sold. III. Standards of Care Prudence The standard of prudence to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. The "prudent person" standard states that, "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for


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investment, considering the probable safety of their capital as well as the probable income to be derived." Ethics and Conflicts of Interest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the RTAA. Delegation of Authority Under authority delegated by the Board of Trustees of the RTAA, in accordance with chapter 474, Statutes of Nevada, NRS 354.474 and 355.175, and Bond Resolution 459, the investment of RTAA funds is the responsibility of the President/Chief Executive Officer (CEO). All cash, including bond proceeds, received by the RTAA will be invested by the Chief Financial Officer (CFO). The President/CEO’s responsibilities include the authority to open accounts with financial institutions and broker/dealers, to arrange for the custody of securities, and to execute such documents as may be necessary to carry out these responsibilities. The CFO is responsible for furnishing authentic, timely instructions to the safekeeping bank(s) concerning settlement of investment transactions, and verifying accuracy of completed transactions. IV. Authorized Financial Institutions, Depositories, and Broker/Dealers The CFO will maintain a list of approved broker/dealers and financial institutions which are authorized to provide investment services to the RTAA. Authorized broker/dealers will be limited to "primary" dealers or other dealers that qualify under SEC Rule 15C3-1, the Uniform Net Capital Rule. A. The CFO shall conduct periodic reviews to identify those firms which offer diverse approaches, access to markets, analysis, and interpretations needed to effectively manage the portfolio. All approved firms are expected to be familiar with the precautions appropriate to public sector investments while also being expected to familiarize themselves with the RTAA's investment objectives, policies, and constraints. B. The CFO will require that a current financial statement be on file for each broker/dealer and financial institution through which the RTAA invests. V. Safekeeping and Custody Securities purchased by the RTAA shall be delivered against payment (delivery vs. payment) and held in a custodial safekeeping account with the trust department of a third party bank insured by the Federal Deposit Insurance Corporation designated by the CFO


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for this purpose in accordance with NRS 355.172. A custody agreement between the bank and the RTAA is required before execution of any transactions. The CFO shall establish a system of internal controls, which shall be documented in writing. The internal controls shall be reviewed by the President/CEO, the Internal Auditor and with the independent auditor. The controls shall be designed to prevent the loss of funds arising from fraud, employee error, and misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the RTAA. VI. Suitable and Authorized Investments The CFO, in accordance with the provisions of Nevada Revised Statutes 355.170, 355.180, the current bond resolutions, and this investment policy, is authorized to invest in: A. United States Treasury Bills, Notes, Bonds, and Debentures of the United States

1. Maturity dates of which do not extend more than 10 years after the date of purchase;

B. United States Government Agency Securities; Maturities must not exceed 10 years

from the date of purchase. 1. Federal National Mortgage Association (FNMA - Fannie Mae) 2. Federal Home Loan Bank 3. Federal Farm Credit Bank 4. Federal Home Loan Mortgage Corporation (FHLMC - Freddie Mac) 5. Student Loan Marketing Association (SLMA - Sallie Mae) 6. Federal Agricultural Mortgage Association 7. Government National Mortgage Association

C. Demand Deposits, Time and Savings Deposits including Negotiable Order of Withdrawal (NOW) accounts

1. Issued by insured commercial banks, insured credit union or insured saving and loan associations, either within the limits of insurance provided by an instrumentality of the United Sates and/or collateralized as required under the Nevada pooled collateral program (NRS 356).

D. Negotiable & Nonnegotiable Certificates of Deposit;

1. Issued by insured commercial banks, insured credit unions or insured savings and loan associations, except certificates that are not within the limits of insurance provided by an instrumentality of the United States.

E. Bankers' Acceptances;

1. Maximum maturity of 180 days 2. Aggregate book value may not exceed 20% of the total book value of the

portfolio


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F. Commercial Paper; 1. Is purchased from a registered broker-dealer; 2. Maximum maturity of 270 days 3. Rating must be A-1, P-1, or its equivalent or better 4. Aggregate book value may not exceed 20% of the total book value of the

portfolio G. Money Market Mutual Funds;

1. Are registered with the Securities and Exchange Commission. 2. Rating must be AA or equivalent by nationally recognized rating service. 3. Invests only in securities issued by the Federal Government or its agencies or

in repurchase agreements fully collateralized by such securities. H. Obligations of state and local governments;

1. The interest on the obligation is exempt from gross income for federal income tax purposes.

2. The obligation has been rated “A” or higher by one or more nationally recognized bond credit rating agencies.

I. The Local Government Investment Pool (“LGIP”) as established by the Nevada State

Treasurer for the benefit of local agencies and identified under NRS 355.167

1. Aggregate book value may not exceed 20% of the total book value of the portfolio

J. Washoe County Pooled Investment Fund. The Washoe County Treasurer is

authorized to pool, for purposes of investment, any money held for local governments within the county as identified under NRS 355.168

K. Securities which have been expressly authorized as investments for local governments by any provision of Nevada Revised Statutes or by any special law.

VII. Investment Parameters Diversification Assets held in the investment portfolio shall be diversified to eliminate the risk of loss resulting from over-concentration of assets in a specific class of securities. Maximum Maturities To the extent possible, the RTAA shall attempt to match its investments with anticipated cash flow requirements. VIII. Reporting A quarterly investment report will be submitted to the Finance Committee. The report will summarize investment transactions that occurred during the reporting period, and


Page 6 of 6 3/31/2014

discuss the current portfolio in terms of maturity, rates of return and may include other features. IX. Internal Controls The investment portfolio is subject to periodic audits by the RTAA’s Internal Auditor, including unscheduled cash and securities counts. The investment portfolio will be audited annually by the RTAA’s independent auditor. X. Review of Investment Policy The investment policy shall be reviewed every year by the President/CEO and changes will be presented Finance Committee. SIGNATURE AUTHORITZATION LINE Marily M. Mora, A.A.E., President/CEO Date


Date: November 4, 2015 Administrative Report # 72-15 To: Chairman & Board Members Thru: Marily Mora, A.A.E., President/CEO From: Rick Gorman, Chief Financial Officer Leah Williams, Manager of Accounting Subject: INVESTMENT PORTFOLIO SUMMARY – QUARTER ENDED,

SEPTEMBER 30, 2015 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 Portfolio Summary for the third quarter of 2015 ending September 30, 2015. MMM/lw/cj

1


Date: November 4, 2015 Administrative Report # 73-15 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FINANCIAL REPORTING PACKAGE – SEPTEMBER 2015 EXECUTIVE SUMMARY Attached is the Fiscal Year 2015-16 Financial Reporting Package for the three months ending September 30, 2015. The budget amounts mentioned below assume one twelfth of the revenue budget is received and one twelfth of the operating expense budget is spent each month. This approach in the early months of the new fiscal year typically results in above budget operating revenues due to high summer passenger traffic in the months of July and August. These seasonal factors are typically offset within four months once summer is over and lower passenger traffic typical of the fall months of September and October are incorporated into the year-to-date results. Based on actual results through September 30, 2015, net available cash flow, after funding debt service, is approximately $3.113 million, an increase of approximately $2.618 million above the adopted FY 2015-16 Budget and $980,000 above actual results last year. A breakdown of the significant contributing factors is outlined as follows:

Y E A R T O D A T E as of September 30, 2015 (In Thousands)25.0% Of Fiscal Year

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

Operating Revenue Airline 4,164$ 3,875$ 289$ 7.5% 3,848$ 316$ 8.2% Non-Airline 8,637 8,249 388 4.7% 7,349 1,289 17.5%

Total Operating Revenue 12,802 12,124 677 5.6% 11,197 1,605 14.3%

Non-Operating Revenues 601 560 42 7.5% 408 194 47.6%

Total Revenue 13,403 12,684 719 5.7% 11,604 1,799 15.5%

Operating Expenses (9,328) (9,604) 275 -2.9% (10,193) 865 -8.5%

Net Revenue Available for Debt Service 4,075 3,080 995 32.3% 1,411 2,664 188.8%

Debt Service After PFCs (961) (946) (15) 1.6% (916) (46) 5.0%

Net Available Cashflow 3,113 2,134 980 45.9% 495 2,618 529.1%

September 2015 Financial Summary Administrative Report # 73-15 November 4, 2015 Page 2 of 8

2

TOTAL REVENUE The Authority’s total operating revenue of $12,802 million is approximately $1.605 million or 14.3% above budget due to higher airline revenues of approximately $316,000 and higher non-airline revenues of $1.289 million, which primarily reflects higher auto rental, public parking and gaming concession revenues. The chart below reflects actual operating revenues for the fiscal year as compared to the budget amount.

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.


3

Landing fees were budgeted and are currently being collected at $3.09 per 1,000 lbs. of landed weight. For the three month period ending September 30, 2015, landing fee revenues registered $2.011 million, which is approximately $155,000 or 8.4% above the adopted budget. This increase is due primarily to seasonal summer factors with landed weight being 7.0% above the adopted budget. The costs allocated to the Airfield Cost Center, or Net Requirement per the Airline Agreement, are 15.1% under budget based on actual results through September 30, 2015. 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 three month period ending September 30, 2015, airline terminal rental revenues registered $2.153 million, which is approximately $161,000 or 8.1% above budget. This increase is primarily due to the delay in the reduction of leased gates and other terminal space resulting from the merger of American Airlines and US Airways. The budgeted average signatory rental rate is $63.05 per sq. ft. per annum. The costs allocated to the Terminal Building Cost Center, or Net Requirement, are 6.9% below the adopted budget based on actual results through September 30, 2015. 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 Authority to meet other operating costs and to generate internal funds for equipment and capital projects that do not directly benefit the airlines. Non-airline operating revenues are primarily comprised of terminal and rental car concession revenues, public parking revenue, building/land rent, and reimbursement of Authority provided services. Overall, non-airline operating revenues registered $8.637 million, an increase of approximately $1.289 million or 17.5% over budget. The increase is primarily due to $666,000 or 42.5% in higher than budgeted revenue from auto rental. In addition, the Authority received $338,000 in higher revenues from public parking and $126,000 in higher gaming concession revenues. Enplaned passenger traffic for the first three months of FY 2015-16 is 488,425, an increase of 17.1% above the straight-line budget and 4.1% above last year’s results.


4

Further detail on passenger traffic results is provided in the Key Benchmarks section of this summary. NON-OPERATING REVENUE Non-Operating revenues of approximately $601,000, which are primarily comprised of interest income, aviation fuel tax, and rental car customer facility charges, are approximately $194,000 or 47.6% above budget. This increase is primarily due to higher Customer Facility Charge fees associated with higher than budgeted rental car activity. OPERATING EXPENSES Operating expenses of $9.328 million for the three month period ending September 30, 2015 are approximately $865,000 or 8.5% below budget and $275,000 or 2.9% lower than last year’s actual results. The savings as compared to budget include approximately $458,000 in lower Personnel costs, $6,000 in lower Utility costs, $285,000 in lower Purchased Services, $91,000 in lower Materials and Supplies expenses, and $25,000 in lower Administrative expenses. The chart below is based on the actual operating expenses for the three months ending September 30, 2015 as compared to the year-to-date budget amount.


5

DEBT SERVICE Net debt service payments, after the application of Passenger Facility Charges (PFC), of $961,000, are approximately $46,000 or 5.0% over the FY 2015-16 adopted budget. This reflects the higher debt service associated with the Series 2005 Bonds, which were refinanced on September 30, 2015. The lower debt service on the 2015 Bond over the remaining nine months of the fiscal year will offset this higher than budgeted result and ultimately will result in a lower than budgeted debt service. KEY BENCHMARKS The following are key benchmarks and ratios used to measure financial activities and monitor the financial health and condition of the Authority:

Enplaned Passengers

Passenger Activity is a significant factor driving non-airline revenues such as terminal concessions, public parking, and gaming. For the three months ending September 30, 2015, enplaned passengers were 488,425, a 17.1% increase compared to the budgeted annual passenger traffic of 1,669,027 divided by 12 months and a 4.1% increase from the passenger traffic levels posted last year for the same period. The significantly higher passenger traffic as compared to the straight line budget reflects high summer passenger traffic in the months of July and August. These seasonal factors are typically offset within four months once summer is over and lower passenger traffic typical of the fall months of September and October are incorporated into the year-to-date results. Allegiant, Alaska, American/US Airways, Delta, and Southwest reported 8,978 more passengers in the current fiscal year than the same period last year. In addition, the new

Y E A R T O D A T E (September 30, 2015 )25.0% Of Fiscal Year

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

Enplaned Passengers 488,425 469,212 19,213 4.1% 417,257 71,168 17.1% Airline Cost Per Enplaned Passenger 5.44$ 7.56$ (2.12)$ -28.0% 8.39$ (2.95) -35.1% Non-Airline Revenues per EPAX (a) 16.31$ 16.08$ 0.23$ 1.4% 16.14$ 0.18 1.1% Operating Ratio 72.9% 79.2% -6.3% -8.0% 91.0% -18.2% -20.0% Debt Service Coverage Ratio 3.19 2.45 0.74 30.1% 1.68 1.51 90.1% Days Cash On Hand 413.0 390.9 22.1 5.6% 360.5 52.5 14.6%

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


6

carriers of Volaris and JetBlue carried 13,474 passengers in July, August and September 2015. These increases in passenger traffic were offset by the lower results reported by United Airlines of 2,243 less passengers. The September 2015 Flight Schedule at the Reno-Tahoe International Airport provided 57 peak non-stop departures to 17 destinations with 177,762 total scheduled departing seats. In September 2015, the number of scheduled flights of 1,500 was down 2.5% compared to the September 2014 schedule. However, the monthly scheduled seat capacity of 177,762 is up 3.5% as compared to the same period. A table and chart enclosed in this package provides a comparison of enplaned passenger traffic and market share by airlines for the 2015-16 fiscal year as compared to the previous year’s results. 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 Authority targets to maintain a reasonable cost structure for the airlines to attract and maintain air service to our community. Due to operating expenses being 8.5% below budget and a significantly higher than anticipated revenue sharing credit, the airline cost per enplaned passenger is estimated to be $5.44 as compared to budgeted cost per enplaned passenger of $8.39. 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. Revenues under this calculation exclude cost recovery collected from the airlines for use of the baggage handling system. For the three month period ending September 30, 2015, non-airline revenue per enplaned passenger registered $16.31, an increase of 1.4% from the $16.08 registered in the prior year and 1.1% higher than the FY 2015-16 Budget of $16.14. 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


7

expense as a proportion of operating revenues are consistent and tracking with the approved expenditures and revenues adopted in the FY 2015-16 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. For the three month period ending September 30, 2015, the ratio favorably registered 72.9% as compared to the prior year actual ratio of 79.2% and the adopted budget ratio of 91.0%. This result as compared to budget reflects both significantly higher revenues and lower operating expenses for the first three months of 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 Authority’s cash and liquidity position remains very strong with 413 days of unrestricted cash on hand to meet the Authority’s budgeted operating and maintenance requirements. This compares favorably to the year-end budget target of 361 days. The 2013 median average for airports nationwide as complied by Fitch Ratings is 408. Per the rating agencies, a ratio lower than 300 days significantly increases the likelihood of a ratings downgrade. A chart enclosed in this package provides a comparison of liquidity balances and Days Cash on Hand as of September 30, 2015 compared to FY 2014-15 year-end actual results and forecasted year-end cash balances in the adopted FY 2015-16 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 Authority’s operations to generate sufficient funds to pay the annual debt service on both the senior lien bonds and the subordinate notes. The Authority targets to maintain net revenue after operating expenses equal to or greater than 1.5 times annual debt service. Under the bond indenture, the Authority is required to maintain at least a ratio of 1.25. The Authority’s debt service coverage ratio of 3.19X as of September 30, 2015 is strong with lender and bond holder protection higher than the FY 2015-16 Budget estimate of 1.68X and significantly above the minimum level of 1.25X established under the Authority’s Master Bond Indenture.


8

This ratio is significantly above budget due to significantly higher operating revenues by approximately $889,000 or 7.9% and lower operating expenses as compared to a straight-line budget allocation of approximately $458,500 or 4.7% as outlined above. 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 Bonds 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 September 2015 as compared to the same period last year and the adopted FY 2015-16 Budget.


Date: November 4, 2015 Administrative Report # 74-15 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 October 2015 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 service 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 service agreement (PSA) when the estimated amount to perform the work is $50,000 or less, and approve an amendment to a professional service 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 service 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 October 2015. MMM/jah/cj

OCTOBER 2015

#74-15

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

10/8/15 Metcalf Builders, Inc. $17,800 Purchase order 7101 issued for replacement of building expansion joints on both concourses of the terminal.

FY 2015-16 Capital Projects Budget

Facilities and Maintenance

10/12/15 Walker River Construction

$29,906 Change Order #1 to Central Disposal Facility Upgrade Project contract to lengthen temporary lavatory waste disposal; modify sewer connection and basin at pad inlet grate; pump existing sand/oil separator prior to removal; install steel protective bollards at corners of building; install concrete encasement in the communication duct bank; modifications to the existing storm drainage system; lower existing water line for clearance with new storm drain line; relocate temporary electrical power disconnect switch; relocate temporary communications junction panel; and modify drain line connection.

Passenger Facility Charge #11

Engineering and Construction

10/20/15 Gardner Engineering $13,995 PO 7105 issued for the installation of rain gutters on the Reno Air Race Hangar at Reno Stead Airport to prevent ponding on the exterior of the building creating icy patches that constitute a slip and fall hazard.


Reno Stead Airport

10/27/15 BJG Architecture $3,500 PSA for design fees for Phase 2 of the old Air Traffic Control Tower Base Building repurposing project.


Facilities and Maintenance

10/29/15 Thompson Garage Doors

$2,676 Contract for the removal of existing broken and deteriorated rubber and installation of new rubber at the top of the Hangar 8 bi-fold door at the Reno-Tahoe International Airport.

FY 2015-16 O&M Budget

Airport Economic Development

OCTOBER 2015

#74-15

Key to abbreviations: PO = Purchase Order CO = Change Order PSA = Professional Service Agreement O&M = FY 2015-16 Operations and Maintenance Budget PFC = Passenger Facility Charge Program AIP = Airport Improvement Project *Contract signed by authorized designee – Executive Vice President/COO


Date: November 4, 2015 Administrative Report # 75-15 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2015-2016 GENERAL COUNSEL’S BUDGET The following is a summary of the General Counsel’s budget for the 2015-2016 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While September represents 25% of the budget year, actual costs are 17.5% of the total budget.

Account Classification YTD Actual

YTD Budget

Over (Under) Budget

% Variance

2015-16 Annual Budget

% of Annual Budget

Purchased Services Fennemore Craig, PC $ 79,114 $ 81,250 $ (2,136) -2.6% $ 325,000 24.3%

Special Legal Issues 0 12,500 (12,500) -100.0% 50,000 0.0% Specialty Area, Legal 2,563 12,500 (9,937) -79.5% 50,000 5.1% Other Purchased Services 0 10,063 (10,063) -100.0% 40,250 0.0% Administrative Expense

Conference Registration 0 425 (425) -100.0% 1,700 0.0% Travel Expense

369 350 19 5.4% 1,400 26.4%

Total General Counsel $ 82,046 $117,088 $ (35,042) -29.9% $ 468,350 17.5% MMM/lw/cj


Date: November 4, 2015 Administrative Report # 76-15 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2015-2016 BOARD OF TRUSTEE’S BUDGET The following is a summary of the Board of Trustee’s budget for the 2015-2016 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While September represents 25% of the budget year, actual costs are 20.2% of the total budget.


YTD Budget

Over (Under) Budget

% Variance


% of Annual Budget

Personnel Services Trustee Stipend $ 15,120 $ 15,120 $ 0 0% $ 60,480 25.0% Personnel Services 10,264 11,450 (1,186) -10.4% 45,800 22.4% Purchased Services 864 900 (36) -4.0% 3,600 24.0% Materials and Supplies 468 600 (132) -22.0% 2,400 19.5% Administrative Expense Membership Dues 0 125 (125) -100.0% 500 0.0%

Conference Registration & Training 0 1,375 (1,375) -100.0% 5,500 0.0%

Meeting Expenses 512 1,350 (838) -62.1% 5,400 9.5% Travel and Reimbursed Expense 0 2,500 (2,500) -100.0% 10,000 0.0% Community Relations 0 250 (250) -100.0% 1,000 0.0%

Total Board $ 27,228 $ 33,670 $ (6,442) -19.1% $ 134,680 20.2%

MMM/lw/cj


Date: November 4, 2015 Administrative Report # 77-15 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: FY 2015-2016 LEGISLATIVE CONSULTANT’S BUDGET The following is a summary of the Legislative consultant’s budget for the 2015-2016 fiscal year. The summary shows the amounts “budgeted’’ compared to “actual” by the major account classifications. While September represents 25% of the budget year, actual costs are 22.9% of the total budget.


YTD Budget

Over (Under) Budget

% Variance


% of Annual Budget

State and Local Governmental Relations $ 18,000 $ 18,750 $ (750) -4.0% $ 75,000 24.0% Legislative Consultant Washington, D.C. 21,000 23,750 (2,750) -11.6% 95,000 22.1%

Total Governmental Relations $ 39,000

$ 42,500 $ (3,500) -8.2% $ 170,000 22.9%

MMM/lw/cj


Date: November, 4 2015 Administrative Report # 78-15 To: Chairman & Board Members From: Marily M. Mora, A.A.E., President/CEO Subject: HANGAR LEASE EXECUTION STATUS BACKGROUND Resolution No. 502 authorizes the President/CEO to approve and execute Reno-Tahoe Airport Authority (Authority) General Aviation (GA) aircraft hangar lease agreements where the estimated total revenue amount is $100,000 or less over the hangar lease term, including any extension year. This Resolution further requires that the President/CEO provide the Board of Trustees with an Administrative Report setting forth a list of hangar lease agreements executed as a result of this Resolution. This Administrative Report shall be given to the Board on a monthly basis. LEASING STATUS: T-HANGARS There are a total of 31 T-Hangars at GA West. Per Board direction, 8 T-Hangars at GA West pending release will not be made available until demand warrants release and the RTAA Board approves financing for required pavement improvements. Of the 23 leasable T-hangars, 18 are occupied and 5 are vacant. This represents no net change from last month; one tenant sold his aircraft and a new tenant signed a one-year lease. There are a total of 57 T-Hangars at GA East. Of the 57 T-hangars, 54 are occupied and 3 are vacant. This represents an increase of one new tenant in the past month. In summary, there are a total of 88 T-Hangars owned by the Authority of which only 80 are leasable. Of the 80 leasable T-Hangars, 72 are occupied and 8 are vacant. The T-Hangar occupancy rate for available T-Hangars is 90%. T-Hangar leasing and vacancy status as of November 1, 2015:

Airport Location Occupied Vacant Un-Available

Pending Board Directive

Total T-Hangars (East

& West) General Aviation

West 18 5 8 31

General Aviation East 54 3 n/a 57

Total T-Hangars 72 8 8 88

Hangar Lease Execution Status October 2015 # 78-15 Page 2 of 4

LEASING STATUS: COMMERCIAL AND NON-COMMERCIAL BOX HANGARS Authority staff continues to administer commercial and non-commercial box hangar leases. GA West inventory consists of 5 commercial/non-commercial hangars and 1 Fixed Base Operator (FBO) office. Whisper Jet, Inc. leased Hangars 7 and 8 in addition to their current facility, FBO Office/Hangar 2. Western Jet Aviation terminated its lease for Hangar 9 (24,500 square feet) effective October 31, 2015. Due to multiple inquiries, staff will solicit proposals for Hangar 9 through a public competitive process. All other commercial/non-commercial hangars at GA West are leased. GA East box hangar inventory consists of 1 FBO office and 6 commercial/non-commercial box hangars. All commercial/non-commercial box hangars are currently leased at GA East. HANGAR MARKETING PROGRAMS GA West Hangar 9 will be marketed through a public competitive process with the goal of having a new, permanent tenant by April 2016. Hangar 9 has distinctive features, including overall size, 26’ door height, commercial power, as well as both airside and landside access that includes onsite customer landside parking. These distinctive amenities are limited at the Reno-Tahoe International Airport. Based on these features, the “Highest and Best Use” of Hangar 9 is business aviation. The solicitation will give preference to a commercial operator that demonstrates the desire for these features. In an effort to minimize revenue loss to the Authority during the public competitive process, the Authority may allow entities to rent Hangar 9 on a weekly/monthly basis. Atlantic Aviation and Authority staff continue to market and show vacant T-Hangars and box hangars to prospective GA tenants. Staff is managing an on-going marketing program for the current T-Hangar inventory. Vacant RNO T-Hangars are listed on hangartrader.com and hangarnetwork.com. Staff has an advertisement listed in General Aviation News and a listing on its companion website, generalaviationnews.com. Staff will continue to monitor results from its advertising and marketing efforts. HANGAR AND FACILITIES MAINTENANCE AND REPAIR Staff is soliciting quotes for gutter repair work at GA East and the replacement of 600 linear feet of gutter at GA West (T-Hangars W9-W17).

MMM/km/cj


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Board Memorandum Reno-Tahoe Airport Authority

Date: November 4, 2015 Memo: #15(11)-42 To: Chairman & Board Members For: November 12, 2015 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: AUTHORIZE THE PRESIDENT/CEO TO AWARD A CONTRACT FOR

SYSTEM DESIGN AND CONSTRUCTION MANAGEMENT SERVICES, FOR THE REPLACEMENT OF THE FLIGHT INFORMATION DISPLAY AND OVERHEAD PAGING SYSTEMS AT THE RENO-TAHOE INTERNATIONAL AIRPORT, WITH FAITH GROUP LLC, IN THE AMOUNT OF $207,600

STAFF RECOMMENDATION Staff recommends the Board authorize the President/CEO to award a contract for system design and construction management services for the replacement of the Flight Information Display and overhead paging systems at the Reno-Tahoe International Airport, with Faith Group LLC, in the amount of $207,600. PURPOSE The Reno-Tahoe Airport Authority (RTAA) currently owns, operates, and maintains a Flight Information Display System (FIDS), and a Terminal Public Address (Paging) System and Fire Emergency Annunciation System. These systems are past end-of-life and need to be replaced. The intent of this project is to evaluate the current systems and provide a design to upgrade/replace the necessary components, bring the systems up to current standards, and make the system American Disability Act (ADA) Compliant for Visual Paging. The scope of this work will include planning, design and construction management services. This action is in support of the RTAA Strategic Priority # 5 – Provide a Positive Environment and Experience for All, and the Guiding Principles of Safety and Security and Customer Service, as adopted in the RTAA Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan. BACKGROUND The current FIDS system was provided by ComNet Systems, and was installed in 2004. When installed, the anticipated system life was seven (7) years. The system consists of a centralized control system, 116 displays, and 23 data entry workstations, which are used to enter and display airline flight schedules throughout the Airport terminal. The current Paging system was provided by Innovative Electronic Designs, and was installed in 2008, and the anticipated system life was seven (7) years. The system consists of a centralized control system, 98 microphone stations, and 87 speaker zones, which are used to make public audio announcements within the terminal building. This system is also responsible for providing verbal instructions during emergencies. In 2009, a Disability Compliance Review was performed by the Federal Aviation Administration (FAA) Office of Civil Rights, in order to evaluate the availability and condition of systems and amenities to assist those with disabilities. A subsequent report was issued with a finding

FIDS System Design and Construction Management Services #15(11)-42 November 12, 2015, Board Meeting Page 2 of 3 requesting that visual paging technology be installed and provided for passengers with hearing disabilities. Current practice in the airline industry is to utilize a consolidated system to provide FIDS, audio paging, and visual paging to the travelling public. Staff prepared a project proposal for the acquisition of such a system, and funding was requested as part of Passenger Facility Charge (PFC) application # 12. An amount of $1,266,750 was subsequently approved by the FAA for this purpose on April 24, 2015. DISCUSSION This project has been divided into three phases. The first phase involves the upgrade of our data communications network that will be used to support the new FIDS and Paging systems. This phase was approved by the Board of Trustees in June of this year and is currently nearing completion. The cost for the first phase is $449,769. This board action item will approve the second phase, which includes securing a design consultant to assist with project planning, vendor selection, and construction management activities. The work for this phase will commence upon board approval. Completion is expected in April 2016. The scope for the second phase includes the following main components:

• Needs Analysis Development - which will include project management, project data collection, and needs analysis. Deliverables will include: FIDS and Public Address Function Matrix, Preliminary Construction Schedule, Preliminary Cost Estimate, Preliminary Floor Plans and a Basis of Design Report.

• Vendor Selection – which will include docment preparation and vendor screening and evaluation. Deliverables include project performance specification, vendor demonstrations, and pre-bid conference.

• Construction Documents - which will include finalized design drawings for FIDS monitors and Public Address (PA) equipment, equipment location and associated specifications. Deliverables will include: Construction Drawings, Functional Specifications, Construction Cost Estimates and Project Schedule.

• Construction Management - which will include Construction Administration and Quality Assurance activities, ensuring that the selected product is designed and installed to RTAA requirements and specifications.

Phase three, the final phase of the project, provides for the construction/installation of the FIDS, Paging, and Visual Paging systems. Subject to Board approval, it is anticipated that this work will begin in May 2016 and be concluded by August 2016. Initial estimates place the construction cost at approximately $600,000. Phase 2 Vendor Selection Process A Request for Proposal (RFP) was advertised in June 2015 for planning, design, and construction management services. On July 10, 2015, a total of four firms responded to the RFP. The RTAA

FIDS System Design and Construction Management Services #15(11)-42 November 12, 2015, Board Meeting Page 3 of 3 Selection Committee reviewed the submittals and ranked the firms based on qualifications, applicable experience, strength of references, proposed fees, and financial stability. The committee consisted of Trustee Adam Mayberry, Trustee Jessica Sferrazza, and RTAA management and technical staff. The Selection Committee determined Faith Group LLC to have the strongest offering, based on their extensive aviation experience, available resources, and their past performance on similar projects at Reno-Tahoe International Airport. RTAA staff subsequently negotiated a scope of work and associated fees. COMPANY BACKGROUND Faith Group, LLC was established in 2004 as a full service consulting and engineering firm specializing in the planning and design of security, safety, operational, M/E/P and information technology systems for aviation, transportation, healthcare, higher education, corporate enterprise, and public safety & service clients. The firm provides a full-range of services that include developing security and IT master plans, system design documents, requests for proposals, system testing, and construction phase services. Since its inception, Faith Group has provided these services at more than 75 facilities across North America and internationally. In addition to providing quality systems engineering, Faith Group focuses on planning for the operational and business processes that must be identified prior to designing and applying security and technology to a facility’s environment. Faith Group is comprised of highly-skilled professionals, each with more than 20 years of hands-on experience ranging from all aspects of operations to airport security, information technology, safety and command control systems planning and design. Faith Group is headquartered in St. Louis, MO with regional offices in Minneapolis, MN, Philadelphia, PA and Gaithersburg, MD. FISCAL IMPACT Funding for this proposed work has been provided as a part of FAA PFC Application # 12, which was approved on April 24, 2015. The cost for this portion of the work will be $207,600. COMMITTEE COORDINATION This item is scheduled to be presented at the November 10, 2015 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 authorize the President/CEO to Award a Contract for System Design and Construction Management Services, for the Replacement of the Flight Information Display and Overheld Paging Systems at the Reno-Tahoe International Airport, with Faith Group LLC, in the Amount of $207,600, and authorize the President/CEO or her designee to sign.” MMM/mm/cj

Board Memorandum Reno-Tahoe Airport Authority

Date: November 4, 2015 Memo: #15(11)-45 To: Chairman & Board Members For: November 12, 2015 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO EXECUTE

AMENDMENT NO. 2 TO THE PROFESSIONAL SERVICES AGREEMENT WITH THE PORTER GROUP LLC, FOR A THREE-YEAR EXTENSION TO JANUARY 31, 2019, FOR FEDERAL GOVERNMENT AFFAIRS SERVICES

STAFF RECOMMENDATION Staff recommends that the Board authorize the President/CEO to execute Amendment No. 2 to the Professional Services Agreement with the Porter Group LLC, for a three-year extension to January 31, 2019, for federal government affairs services. PURPOSE The purpose of this action is to authorize the President/CEO to execute Amendment No. 2 to the Professional Services Agreement (PSA) between the Porter Group LLC and the Reno-Tahoe Airport Authority (RTAA) to extend the current contract from its ending date of January 31, 2016 for an additional three years to January 31, 2019. This action is in support of the RTAA Strategic Priority # 1 – Increase Air Service, and the Guiding Principles of Air Service Development, Safety and Security, and Financial Integrity, as adopted in the RTAA Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan. BACKGROUND Congressman Jon Porter, Retired, has provided federal government affairs services to the RTAA since January 21, 2010. The original monthly retainer, under an agreement with Akerman Senterfitt, Attorneys at Law, was $5,000 plus reasonable out-of-pocket expenses and was limited to a one-year trial period. During 2010, Congressman Porter represented the RTAA’s interests well. As a result, the RTAA Board of Trustees approved the award of a PSA on January 20, 2011, for federal government affairs services with Akerman Senterfitt, Attorneys at Law. The agreement included a monthly retainer of $7,000 plus reasonable out-of-pocket expenses. As of February 1, 2011, Congressman Porter has provided government affairs services to the RTAA via his newly formed firm, Porter Gordon Silver Communications, LLC. Amendment No. 1 to the Professional Services Agreement with Porter Gordon Silver was approved by the Board of Trustees on April 12, 2012 for a term of February 1, 2011 through January 31, 2016. As of June 1, 2015, Congressman Porter severed his association with Porter Gordon Silver and began representing the RTAA as the Porter Group LLC. The agreement allowed for this immediate transfer to keep the RTAA representation with Congressman Porter. On May 17, 2012, the Board of Trustees adopted Guidelines to Professional Service Agreements. The guidelines allow for an initial agreement for a period of five years with an option to extend the agreement for up to another five years. If the Board of Trustees approves the second

PSA The Porter Group #15(11)-45 November 12, 2015 Board Meeting Page 2 of 2 amendment to the agreement, the total term of the agreement with Congressman Jon Porter will be nine years. DISCUSSION The proposed three year agreement for February 1, 2016 through January 31, 2019 will be at the same terms of a monthly retainer of $7000 plus reasonable out-of-pocket expenses. These are the same terms established in 2011. The agreement with the Porter Group LLC includes a clause that the agreement may be terminated for any reason by either party on thirty (30) days written notice with any amounts due upon termination adjusted on a pro rata basis. The Porter Group services are provided in the capacity of an independent contractor and none of its employees are employees of the RTAA. Since 2010, Congressman Porter has demonstrated and provided excellent access to the north and south Nevada delegation members, to other key members of Congress including Congressman John Mica, Chairman of the Transportation and Infrastructure Committee, to the Federal Aviation Administration (FAA), the Transportation Security Administration (TSA), and the U.S. Customs and Border Protection (CBP) staff. He has particularly formed a unified approach with the Nevada Congressional delegation for issues with CBP. As a result, staff is very satisfied with the results of Congressman Porter’s federal lobbying efforts. Staff intends to conduct a Request for Qualifications (RFQ) Proposal prior to February 1, 2019 for future federal government affairs representation. COMPANY BACKGROUND Jonathan Christopher “Jon” Porter was a member of the Nevada State Legislature from 1994 to 2002, representing Clark County’s 1st District. From January 3, 2003 to January 3, 2009, Congressman Porter served in the U.S. House of Representatives, representing Nevada’s 3rd District. During his three consecutive terms in the U.S. House of Representatives, Congressman Porter served on the Ways and Means Committee and the Budget Committee. Congressman Jon Porter is president of the Porter Group LLC and a registered lobbyist on behalf of the RTAA. FISCAL IMPACT The second amendment does not change the financial terms of the agreement. COMMITTEE COORDINATION This item is scheduled to be presented at the November 10, 2015 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 authorize the President/CEO to execute Amendment No. 2 to the Professional Services Agreement with the Porter Group LLC, for a three-Year Extension to February 1, 2019, for Federal Government Affairs Services.” MMM/cj

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