HomeMy WebLinkAboutAirport Use & Lease Agreement with Allegiant Air LLC a Nevada Limited Liability Company 6.23.22DocuSign Envelope ID: B2E79F1F-2D81-4494-B887-9A65135~1A07
FRESNO YOSEMITE
International Airport
AIRPORT USE AND LEASE AGREEMENT
WITH
ALLEGIANT AIR, LLC.
a Nevada Limited Liability Company
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ARTICLE 6 -SECURITY DEPOSIT ............................................................................. 36
Section 6.01 Due Date , Type, Form and Amount of Surety ..................................... 36
Section 6.02 Drawdowns by City ............................................................................. 36
Section 6.03 Return/Surrender/Release of Surety by City ....................................... 36
ARTICLE 7: INDENTURE OF TRUST ......................................................................... 37
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Section 7.01 Subordination to Indenture of Trust
Section 7 .02 Flow of Funds
ARTICLE 8: MAINTENANCE AND OPERATION OF AIRPORT
Section 8.01 City's Responsibilities
Section 8.02 Airlines Responsibilities ...................................................................... 38
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Section 8.03 City's Right to Inspect and Make Repairs
Section 8.04 Alterations and Improvements
Section 8.05 Payment Bond
Section 8.06 Leasehold Improvements
Section 8.07 Debts, Liens, Mortgages
ARTICLE 9: DAMAGE OR DESTRUCTION OF PREMISES ....................................... 41
Section 9.01 Damage or Destruction ....................................................................... 41
ARTICLE 10: INDEMNIFICATION, INSURANCE AND RELEASE .............................. 41
Section 10.1 Indemnification ................................................................................... 42
Section 10.2 Insurance ............................................................................................ 43
Section 10.3 Non-liability of City .............................................................................. 46
ARTICLE 11: ASSIGNMENT AND SUBLETTING ....................................................... 46
Section 11.01 Merger, Assignment and Subletting ................................................... 46
Section 11.02 Relinquishment of Space ................................................................... 46
Section 11.03 Bankruptcy ......................................................................................... 47
Section 11.04 Consent ............................................................................................. 47
ARTICLE 12: DEFAULTS ............................................................................................ 47
Section 12.01 Default ............................................................................................... 47
ARTICLE 13: TERMINATION ...................................................................................... 48
Section 13.01 Conditions of Leased Premises at Termination ................................. 48
Section 13.02 Events Permitting Termination by City ............................................... 48
ARTICLE 14: GENERAL PROVISIONS ...................................................................... .49
Section 14.01 Compliance with Law ......................................................................... 49
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Section 14.02 Notices
Section 14.03 Successors and Assigns Bound
Section 14.04 Governing Law, Venue and Attorney's Fees
Section 14.05 Subordination to Agreements with U.S. Government
Section 14.06 Nonwaiver of Rights
Section 14.07 Federal Aviation Act, Section 308
Section 14.08 Severability
Section 14.09 Headings
Section 14.10 Bad Checks
Section 14.11 Assignment by City or Other Successor in Interest
Section 14.12 Authorization
Section 14.13 Removal of Disabled Aircraft
Section 14 .14 Quiet Enjoyment
Section 14.15 Force Majeure
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This Airport Use and Lease Agreement (Agreement) is made and entered into this
3 ___ day of June , 2022, by and between the City of Fresno, a municipal
corporation, (City or Airport) and, Allegiant Air, LLC., a Nevada Limited Liability Company
admitted in good standing to do business in California, (Airline) and collectively referred
to as the "Parties".
RECITALS
WHEREAS, City is the owner and operator of Fresno Yosemite International Airport
located in the City of Fresno, County of Fresno, State of California, (Airport); and
WHEREAS, Airline is engaged in the business of commercial air transportation of persons,
property, cargo and mail as a scheduled air carrier and is certified or otherwise authorized by
the United States Government to engage in such business; and
WHEREAS, Airline wishes to provide commercial air transportation at the Airport on
a non-exclusive basis and in competition with other passenger carriers engaged in similar
businesses and, desires to enter into this Agreement, negotiated in common with all
similar incumbent passenger carriers for the use of the Airport and its facilities; and
WHEREAS, This Agreement shall supersede all previously executed agreements; and
WHEREAS, The City has the right to lease property at the Airport and to grant the use of
the Airport to Airline for the operation of Airline's passenger carrier service.
AGREEMENT
The Parties agree this Agreement is subject to the terms, covenants, conditions,
agreements, warranties, and provisions herein contained and Airline expressly covenants
and agrees, as a material part of the consideration for the Agreement, that Airline shall
fully and faithfully comply with, keep, perform and/or observe each and every term,
covenant, condition, agreement, warranty, and/or provision hereof to be complied with,
kept performed, and/or observed by Airline.
ARTICLE 1 -DEFINITIONS
Section 1.01 Meanings and Construction.
Except as otherwise clearly indicated by the context, the words and phrases defined in
this Section shall have the following meanings when used elsewhere in this Agreement.
Affili ate shall mean a passenger carrier that is designated by a Signatory Passenger
Carrier on forms in Exhibit J, which is (i) controlled by, controlling, or under common
control with a Signatory Passenger Carrier; or (ii) shares an International Air Transport
Association (IATA) flight designator code with a Signatory Passenger Carrier at the
Airport (code sharing partner); or (iii) otherwise operates under essentially the same trade
name as a Signatory Passenger Carrier at the Airport or uses essentially the same livery
as Airline at the Airport. A Passenger Carrier shall only be deemed an Affiliate of a
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Amortization Charge shall mean, with respect to a capital project to be paid or financed
with airport cash (as opposed to Bonds), an amount based on the useful life of the project
and calculated using an interest rate of 3.45%. Amortization Charge shall be calculated
starting from the first full Fiscal Year after the D8O of the project. For projects put in
service prior to July 1, 2022, the interest rate shall be zero percent.
Ann u a l T rue-up shall mean the recalculation of Airline Rates and Charges of a Fiscal
Year after the end of such Fiscal Year based on actual results pursuant to Article 5.
Bond(s) shall mean all bonds, notes, or other obligations issued by the City pursuant to
the Indenture of Trust.
Capita l Allowance shall mean an annual allowance for capital projects of four million
dollars
($4,000,000). The Capital Allowance may be adjusted if the Agreement is extended
beyond the initial five (5) year term.
City shall mean the City of Fresno California, a municipal corporation.
City A i rports shall mean the airport known as the Fresno Yosemite International Airport,
located within the City, and the airport known as the Fresno Chandler Executive Airport,
located within the City, each as it now exists, including, without limitation, runways,
taxiways, landing pads, aprons, beacon sites, obstruction lights, navigational and landing
aids, control towers, facilities for storage of aircraft and for parking of automobiles,
roadways, passenger and freight terminals, land, easements and rights in land for clear
zone and approach purposes, maintenance hangars and related facilities and all
equipment, buildings, grounds, facilities, utilities and structures owned, leased or
operated in connection with or for the promotion or the accommodation of air commerce
and air navigation and services in connection therewith, together with all additions,
betterments, extensions, replacements, renewals and improvements thereto which may
hereafter be undertaken, and any future airport or aviation facilities, or any interest
therein, from time to time hereafter owned, operated or controlled in whole or in part by
the City and determined by the City to be a part of the City Airports.
Collecting Carrier means an issuing carrier or other carrier collecting a PFC, whether or
not such carrier issues the air travel ticket.
Common Use Faci lities Po li cy and Procedu res Manual (Commo n Use Policy) shall mean
the policy and procedures manual provided by Director of Aviation, which describes the
procedures lawful, reasonable, and impartial rules and regulations, including ordinances
and operating directives, promulgated by the Director of Aviation or the City from time
to time for the orderly operation of the Airport.
Common Use Formula shall mean the formula for apportionment of the total monthly
rental for Common Use Space, net of Non-Signatory Charter Carrier Terminal Use Fee
payments if any, among the Signatory and Non-Signatory Passenger Carriers using the
Common Use Space on the basis of: (a) twenty percent (20%) of the total monthly rental
apportioned evenly among all Signatory and Non-Signatory Passenger Carriers using
such space for the month; and (b) the remaining eighty percent (80%) of the total monthly
rental prorated among all Signatory and Non-Signatory Passenger Carriers using such
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Environmental Laws shall mean all applicable federal, state, and local statutes,
ordinances, regulations, rules, laws, permits, and orders relating to the generation, use,
storage, transportation, or disposal of Hazardous Materials, including, without limitation,
the Clean Air Act, 442 U.S.C. §7401 et seq.; the Clean Water Act, 33 U.S.C. §1251
et seq., as amended by the Water Quality Act of 1987; the Federal Insecticide,
Fungicide, and Rodenticide Act, 7 U.S.C. §136 et seq.; the Marine Protection, Research,
and Sanctuaries Act, 33 U.S.C. §1401 et seq.; the Noise Control Act, 42 U.S.C. §4901
et seq.; the Occupational Safety and Health Act, 29 U.S.C. §651 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. §6901 et seq., as amended by the
Hazardous and Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42
U.S.C. §300f et seq.; the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C §9601 et seq., as amended by the Superfund
Amendments and Reauthorization Act, the Emergency Planning and Community Right
to Know Act, and the Radon Gas and Indoor Air Quality Research Act; the Hazardous
Material Transportation Act, 49 U.S.C. §5101 et seq.; and the Toxic Substance Control
Act, 15 U.S.C. §2601 et seq.; the Atomic Energy Act, 42 U.S.C. 2011 et seq.; and the
Nuclear Waste Policy Act of 1982, U.S.C. §1010 et seq.
Environment al Permits shall mean any and all permits, licenses, approvals,
authorizations, consents, or registrations required by Environmental Laws, whether
federal, state or local, which pertain to the production, use, treatment, generation,
transportation, processing, handling, disposal, or storage of Hazardous Materials.
Event of Default shall mean an Event of Default as referred to in Article 7 and as defined
in Section 9.01 of the Indenture of Trust.
Exclusive Use Space shall mean the areas within the Terminal Building, as depicted
on Exhibit B, in which Airline has the exclusive right of use in accordance with this
Agreement.
Federal Aviation Administration or FAA shall mean the Federal Aviation Administration
or any successor agency thereto.
FIS Facility or FIS shall mean federal inspection services facilities as shown on Exhibit
A, as may be modified, renovated and enlarged.
FIS Fee Rate shall mean the rate for each FIS User established pursuant to Section 5.04.
FIS Facil ity Cost Cen t er shall mean and refers to FIS Facility and includes meeters and
greeters area.
FIS Facility Project shall mean the renovation and expansion of the FIS Facilities, as
depicted by the City in the 2019 Master Plan for the Airport.
FIS User(s) shall mean a passenger arriving on international flights using the FIS Facility
at the Airport.
Fiscal Year or FY refers to the City's fiscal year and shall mean the twelve-month
period commencing July 1 and extending through June 30 of the following calendar
year, or such other fiscal year as the City may establish by ordinance.
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and Terminal Building Rental Rate divided by Enplaned Passengers of all Passenger
Carriers using the Terminal Building Common Use Space and multiplied by One Hundred
and Twenty-five Percent (125%).
Notice shall mean a communication between the Parties to this Agreement performed
in accordance with the requirements of Section 14.02.
Operating Expenses shall mean the reasonable and necessary costs of operating,
maintaining and administering the City Airports, as defined in the Indenture of Trust.
Operating Reserve Fund shall mean Operating Reserve Fund as defined in the Indenture
of Trust.
Other Buildings and Areas shall mean buildings and areas at the Airport that are not part
of the Airfield Area, Terminal Building or FIS Facility.
Passenger Carriers shall include Signatory Passenger Carriers, Non-Signatory
Passenger Carriers, and Non-Signatory Charter Carriers.
Passenger Facility Charge or PFC shall mean charges imposed by the City pursuant
to 49 U.S.C. § 4011 ?and 14 C.F .R. Part 158, as amended or supplemented from time to
time.
Preferential Use Positions shall mean means those Gates, Aircraft Parking Positions
and Common Use Ticket Counter Position within the Terminal Building, as depicted on
Exhibit B.
Rate Covenant shall mean Section 8.11 of the Indenture of Trust as hereafter may be
amended.
Rentable Space shall mean the number of square feet of space in the Terminal Building
that is rentable to tenants, excluding public space, FIS Facility space, space used by City
or the City's contractor and other space used by federal agencies for which City receives
no rent, as may be determined by the Director of Aviation.
Rents, Fees, and Charges shall mean for any Fiscal Year, all rents, fees, and charges
payable by Airline pursuant to Article 5. The definition of Rents, Fees, and Charges
excludes Passenger Facility Charge.
Rolling Debt Service Coverage shall go into effect at 080, and shall amount to 25 percent
(25%) of the Debt Service for the Fiscal Year being calculated less 25 percent (25%) of
the Debt Service for the prior Fiscal Year, plus similar coverage requirement for the
Subordinated Indebtedness if any.
Security Deposit shall mean an irrevocable letter of credit or another instrument
acceptable to the City provided pursuant to Article 6.
Security Fee shall mean the fee imposed on each Enplaned Passenger by the City to
recover security related expenses, pursuant to Section 5.06. A Consumer Price Index
adjustment may be applied to the Security Fee if the Agreement is extended beyond the
initial five (5) year term.
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B. The terms "hereby," "herein," "hereof," "hereto," "hereunder," and any similar
terms used in this Agreement refer to this Agreement.
C. Words importing persons shall include firms, associations, partnerships, trusts,
corporations, and other legal entities, including public bodies, as well as natural
persons.
D. Any headings preceding the text of the articles and sections of this Agreement,
and any table of contents or marginal notes appended to copies hereof, shall
be solely for convenience of reference and shall not constitute a part of this
Agreement, nor shall they affect its meaning, construction, or effect.
E. Words importing the singular shall include the plural and vice versa. Words of any
gender shall be deemed to include correlative words of the other gender.
F. The term "including" shall be construed to mean "including without limitation,"
unless otherwise expressly indicated.
G. All references to number of days shall mean calendar days.
H. Words used in the present tense include the future.
ARTICLE 2 -TERM OF THE AGREEMENT
Section 2.01 Term
The term of this Agreement shall commence on July 1, 2022, and shall expire at
midnight on June 30, 2027, unless sooner terminated pursuant to the provisions hereof.
Section 2.02 Condition Under Which the Agreement Becomes Effective
The Agreement becomes effective if executed by Airlines accounting for at least 75% of
Signatory Passenger Carriers' and Signatory Cargo Carriers' total Landed Weight from
May 2021 -August 2021.
Section 2.03 Options to Extend
A. First Option: The first option to extend the term of this Agreement will be for an
additional period of five (5) years, thereby ending June 30, 2032, upon the mutual
agreement, in writing by side letter, of the City and the Signatory Passenger
Carriers. The Signatory Passenger Carriers' and Signatory Cargo Carriers
accounting for a combined total Landed Weight of no less than 67% for the
calendar year 2025, must agree to the option, and written Notice must be given
to the City prior to October 1, 2026. Upon receipt of this Notice, the City must
notify the Signatory Passenger Carriers of its mutual agreement to extend the term
of this Agreement prior to January 1, 2027. Signatory Passenger Carriers will be
allowed to evaluate and adjust their space needs following the initial five (5) year
term, and by no later than April 30, 2027, provide the City their adjusted space
needs, if any.
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B. Use in Common of Termina l Bu ilding. Airline shall have the right to use, in common
with, and subject to the rights of others so authorized, the public areas and public
facilities of the Terminal Building.
C. Use in Common of Airfield Area. Airline shall have the right to use the Airfield
Area, in common with others so authorized, to land, takeoff, fly over, taxi, tow,
park, and condition Airline's aircraft. Airline shall have the right to park, service,
deice, load, unload, and maintain Airline's aircraft and support equipment in areas
designated by the City, subject to the availability of space. Airline shall not
knowingly permit, without the consent of the City, the use of the Airfield Area
or any portion thereof by any aircraft operated or controlled by Airline that exceeds
the design strength or capability of such area as described in the then-current
FM-approved Airport Layout Plan (ALP) or other engineering evaluations
performed subsequent to the then-current ALP, including the then-current Airport
Certification Manual, a copy of which shall be provided, upon request, by the City
to Airline.
D. Airline Operations. Airline shall have the right to handle reservations, sell tickets;
document shipments; and load and unload (i) persons through passenger
loading bridges affixed to the terminal structure, (ii) property, (iii) cargo, and (iv)
mail, including interlining with other airlines. Airline shall also be permitted to
engage in the following activities at the Airport:
1. The operation of an air transportation system by aircraft for the carriage of
persons, property, and mail, for compensation or hire, on a reasonable and
not unjustly discriminatory basis, including all activities reasonably
necessary to such operation including advertising and marketing associated
with services offered by Airline and/or its partners.
2. The landing, taking off, flying over, taxiing, pushing, towing, loading,
unloading, fueling, repairing, maintaining, conditioning, servicing, parking,
storing, and testing of aircraft or other equipment of or operated by Airline,
or other certificated air transportation company with which City has an
applicable agreement, including the right to provide or handle all or part of
the operations or services of such other company, all of which are subject
to this Agreement.
3. The sale of tickets, documentation of shipments, handling of reservations,
and the loading and unloading of persons, property, cargo, and mail at the
Airport by such motor vehicles or other means of conveyance as Airline may
desire to use in the operation of its air transportation system. However, City
reserves the right to require any ground transportation commercial carrier
(including Airline) regularly transporting persons to and from the Airport to
first secure and thereafter hold a valid lease, license, permit, or other
agreement with City for the right to carry persons to and from the Airport
and shall pay City such rentals, fees, charges, and/or percentages of the
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10.
11.
12 .
13 .
The installation, maintenance, and operation, at no cost to City, of such
radio, communication, meteorological, and aerial navigation equipment and
facilities at suitable locations on the Airport. The location of such equipment
and facilities, method of installation, and type of equipment shall be subject
to the prior written approval of City, and shall conform with all applicable
federal, state, and local requirements. Airline is required to input and
maintain flight information in the Multi-User Flight Information Display
System (MUFIDS) installed by City to display flight information. Airline may
use its own FIDS in its Leased Premises subject to the prior written consent
of Director of Aviation and subject to such reasonable conditions as Director
of Aviation may require.
In order to maximize the utilization of hold room check-in podiums, hold room
areas and other passenger facilities in the Terminal Building, City reserves
the right, but is not hereby obligated, to install and require Airline to use
common use gate information display technology and/or equipment (not to
include Airlines customer service automation equipment). Until such time
as City installs such equipment, Airline may install, at Airline's cost,
identifying signs and/or gate information displays ("signage") at the podium
in the holdroom of the Gate(s) assigned to Airline and/or other locations
approved by City. City shall reasonably establish standards and/or
guidelines regarding the dimensions, materials, and content of such signs,
and the method of attaching the sign to the designated location. Any
signage installed by Airline shall be at the risk of Airline. In the event that
Airline shall be no longer assigned the use of the Gate(s), then, upon the
request of City, Airline shall promptly remove such signage at Airline's
expense.
The provision of baggage porter skycap service, curbside airline baggage
check-in services in the public areas of the Terminal Building. Airline may
arrange with other airline to provide such services or may provide such
services on its own behalf. Airline shall notify the City in writing as to what
company is providing such services at the Airport. City reserves the right to
require third party companies to enter into a lease or permit with the City for
such services provided to Airline.
The rights and privileges granted Airline under this Agreement with respect
to the performance of ground services and activities in connection with its
Air Transportation Business at the Airport may be exercised by Airline only
for and on behalf of Airline for its regularly scheduled or unscheduled
service and that of its affiliates, subsidiaries, and code share partners
identified in this Agreement. Airline may, subject to the prior written
approval by City, perform ground services for any Air Transportation
Business using the Airport provided said company has executed an
operating agreement or permit with the City and further provided that said
company agrees to report its activity or arranges to have Airline report its
activity in the manner described in this Agreement.
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B .
C .
D .
E .
F .
Shall not do or permit to be done anything, either by act or failure to act, that shall
cause the cancellation or violation of the provisions, or any part thereof, of any
policy of insurance for the Airport, or that shall cause a hazardous condition so as
to increase the risks normally attendant upon operations permitted by this
Agreement. If Airline shall do or permit to be done any act not permitted under this
Agreement, or fail to do any act required under this Agreement, which act or failure,
in and of itself, causes an increase in City's insurance premiums, Airline shall
immediately remedy such actions and/or pay the increase in premiums.
Shall not dispose of or permit any employee, agent or contractor of Airline to
dispose of any waste material, including but not limited to deicing materials, toxic
waste, hazardous substance, hazardous waste, and Hazardous Materials
(including hazardous materials as defined by federal and State of California
regulations) except in accordance with controlling laws.
Shall not keep or store any Hazardous Materials such as flammable liquids and
solids, corrosive liquids, compressed gases, or magnetized or radioactive
materials on the Airport except when all the following conditions are met: (1) such
Hazardous Materials are stored in accordance with applicable standards
established by National Fire Protection Association, any liquids having a flash point
of less than one hundred degrees (100°) Fahrenheit shall be kept and stored as
specified by NFPA #30; (2) said Hazardous Materials are under the control and
care of designated and properly trained Airline personnel; (3) said Hazardous
Materials are packaged, handled and stored in compliance with applicable
Environmental Law including but not limited to: U.S. Department of Transportation,
Environmental Protection Agency, and other applicable regulations for transport,
pre-transport and storage of hazardous articles and materials; and (4) said
materials shall be only stored in such storage areas as are designated and
approved by Director of Aviation.
Shall not install fuel storage tanks and pumping facilities for use in fueling any
aircraft at the Airport without prior written approval of City. The granting of the right
to store aviation fuels shall be subject to the execution of a separate agreement
between Airline and City.
Shall not maintain or operate in the Terminal Building or elsewhere at the Airport
a cafeteria, restaurant, bar or cocktail lounge for the purpose of selling or
dispensing food or beverages to the public or passengers; nor shall Airline in any
manner otherwise provide for the sale or dispensing of food and beverages at the
Airport except that the Airline may provide vending machines solely for the sale of
hot and cold beverages, food and confections to Airline employees in areas not
accessible to the general public. Airline may dispense snacks, drinks, and/or in
flight meals at the Gate to only those persons traveling on such flight. Airline may,
by separate agreement with the City and to the extent it does not conflict with any
terminal concession agreements, engage in the provision or sale of food or
beverages at any Airline clubroom or similar private facility at the Airport. These
provisions shall not apply to snacks or drinks provided to passengers by the Airline
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Section 3.05 Airport Security
A. Airline shall not do or permit its agents, employees, and its contractors or
suppliers, while such contractors or suppliers are providing services to Airline, to
do anything at the Airport that would be in conflict with or violate the
requirements of any federal, state, or local law, regulation or security directive
regarding airport security, as they may be amended from time to time, or the
Airport's security program.
B. Airline shall be responsible for obtaining and coordinating any security badging,
vehicle decals, and/or any other actions required to ensure that Airline's agents,
employees, contractors, or suppliers are in compliance with the City's approved
security plan, and any federal regulation and security directive regarding airport
security, as they may be amended from time to time. Airline shall be responsible
for all costs associated with obtaining such badge and/or access privileges.
Section 3.06 Reassignment, Reallocation, Redesignation, Relocation and/or
Recapture of Leased Prem ises
City may reassign, reallocate, re-designate and/or relocate Airline's Leased Premises as
City, in its reasonable discretion, determines is necessary, after sixty (60 days) written
notice to the Airline, under the operational needs of the Airport. The reasonable costs of
any such reassignment, re-designation, reallocation or relocation shall be paid by the City.
ARTICLE 4 • PREMISES
Section 4.01 General
The City intends to maximize the utilization and flexibility of current Airport facilities to
meet changing air service demands.
Section 4.02 Leased Premises
A. Common Use Space: The City hereby leases to Airline, subject to the provisions
of this Agreement, the Common Use Space as shown on Exhibit A. Airline
accepts the Common Use Space in "As Is" condition, with no warranties or
representations, expressed or implied, oral or written, made by the City or any
of its agents or representatives; provided, however, that this Subsection 4.02A
shall in no way diminish the City's obligations as otherwise provided for in this
Agreement.
B. Exclusive Use Space: The City hereby leases to Airline, subject to the provisions
of this Agreement, the Exclusive Use Space as shown on Exhibit B. Airline
accepts the Exclusive Use Space in "As Is" condition, with no warranties or
representations, expressed or implied, oral or written, made by the City or any
of its agents or representatives; provided, however, that this Subsection 4.028
shall in no way diminish the City's obligations as otherwise provided for in this
Agreement.
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B. All Gates shall remain as Common Use Space as defined in and as further
explained in the Common Use Policy provided that such the Common Use Space
designation shall not contravene the Airlines rights of its Preferential Use Position
for its "operations as scheduled".
Section 4.04 Use of Loadi ng Bridges
A. Any loading bridges financed and maintained by City shall be made available to all
airlines serving the Airport on a Common Use basis unless assigned for
Preferential Use Position.
B. The use of City-owned loading bridges shall be subject to the following terms and
conditions:
1. The bridges shall be operated only by employees or agents of Airline, but
no such employees or agents shall be permitted to operate the bridges until
they have satisfactorily completed a course of instruction conducted by City
or City's designee in the proper use and operation of the bridges, and have
received a certificate or written notice from City or City's designee qualifying
them to operate the bridges.
· 2. City and Airline each shall be solely responsible for any and all damages,
claims, or injuries which may be caused by the negligent use of the bridges
by their respective employees, agents, or servants, and each shall
indemnify, defend and hold harmless the other and their respective officers,
agents, and employees from any and all demands, losses, liabilities, or
judgments and all claims of every kind and character, together with costs
and expenses incident thereto, arising from or as a result of negligent acts
or omissions thereof in connection with or arising from use of the loading
bridges, provided that City's liability shall not exceed the lesser of proceeds
payable from its self-insurance retention or $1,000,000. Each party shall
notify the other, in writing, of any claims, damages, or injuries promptly after
discovery of same by the party charged with giving notice.
3. Airline shall be solely responsible for any damage to bridges caused by the
action of its employees or agents.
4. City, during the term of this Agreement, shall maintain and keep in good
repair the loading bridges.
Section 4.05 Accommodati on in City-Controlled Facilities
The City may retain under its exclusive control and possession certain facilities in the
Terminal Building, including, initially, the facilities described and shown on Exhibit A.
It is the intent of the City to use, at its discretion, any of the City-controlled facilities to
accommodate: (i) airlines not requiring permanent facilities or airlines requiring
temporary accommodation pending allocation of permanent facilities, and (ii) the needs
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parts. Airline agrees to reimburse City for any net costs incurred by City if City
elects to remove or dispose of Airline's property after such thirty (30) day period.
C. Ownership of any and all property not removed by Airline within the said thirty (30)
day period shall, at the option of City, vest in City.
Section 4.09 Access
A . Subject to the provisions hereof and such restrictions as City may impose with
respect to Airline's use of the Leased Premises pursuant hereto, City hereby grants
to Airline, its agents, suppliers, employees, contractors, passengers, guests, and
invitees, the right and privilege of free and unrestricted access, ingress, and egress
to the Leased Premises and to public areas and public facilities of the Terminal
Building.
B. The ingress and egress provided for in Section 4.09(A) shall not be used, enjoyed,
or extended to any person engaging in any activity or performing any act or
furnishing any service for or on behalf of Airline that Airline is not authorized to
engage in or perform under the provisions hereof unless expressly authorized in
writin_g by City.
C. City shall have the right at any time to close, relocate, reconstruct, change, alter,
or modify any such means of access provided for Airline's use pursuant to this
Agreement or otherwise, either temporarily or permanently, provided that
reasonable notice to Airline and a reasonably convenient and comparable means
of access, ingress, and egress shall exist or be provided in lieu thereof. City shall
suffer no liability by reason thereof and such action shall in no way alter or affect
any of Airline's obligations under this Agreement.
ARTICLE 5 -CALCULATIONS OF RENTS, FEES AND CHARGES
Section 5.01 Coo rd ination Process
Effective July 1, 2022, and for each Fiscal Year thereafter for the term of this Agreement,
Airline Rates and Charges shall be calculated based on the principles and procedures
set forth in this Article. The methodology for the calculation of Airline Rates and
Charges described in this Article is illustrated in Exhibit D, Exhibit F, and Exhibit
G.
A. On or about February 15 of each year, the City shall provide Airline's properties
representative with a calculation of the Signatory Credit, as illustrated in Exhibit
H.
B. On or about April 1 of each year, the Signatory and Non-Signatory Passenger
Carriers, including Airline, shall provide the City with an estimate of their Landed
Weights of all aircraft expected to be landed at the Airport during the ensuing Fiscal
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3. Amortization Charges; plus
4. Operating Expenses; plus
5. Required deposit to the Operating Reserve Fund, if any; minus
6. Airfield Area Credit; plus or minus
7. Result of Annual True-up of the applicable prior Fiscal Year; equals
8. Airline Airfield Area Net Requirements , divided by
9. Landed Weight of Passenger Carriers and Cargo Carriers, equals
10. Landing Fee Rate
B. The Airfield Area Credit is made up of the following annual amounts:
1. Military use fees;
2. Fuel flowage fees;
3. Tower area rentals;
4 . Government land rentals;
5. U.S. Forest Service landing fees;
6. COVID-19 Federal Operating Grants
C. Activities in Section 5.03, 5.04, 5.05, 5.06 , 5.09, 5.10 and 5.11 shall include the
activities of each Signatory Passenger Carrier's Affiliates.
Section 5.04 FIS Fee Rate
A. FIS Fee Rate shall be calculated by adding and subtracting the following amounts
allocable to the FIS Facility Cost Center, as listed below:
1. Debt Service (net of PFC revenues applied to eligible debt service, if any);
plus
2. Rolling Debt Service Coverage; plus
3. Amortization Charges; plus
4. Operating Expenses; plus
5. Required deposit to the Operating Reserve Fund, if any; minus
6. Applicable credits including COVID-19 Federal Operating Grants; plus or
minus
7. Result of Annual True-up of the applicable prior Fiscal Year; equals
8. Airline FIS Net Requirements, divided by
9. FIS Users, equals
10. FIS Fee Rate
A . The maximum FIS Fee Rate shall not exceed $12.00 per FIS User through the
D!3O of the FIS Facility Project, or $15.00 thereafter for the remaining term of this
Agreement.
B. The City will use its best efforts to obtain the Port of Entry status, which would
transfer the staffing of the FIS Facility to the CBP, resulting in a decline of the
calculated FIS Fee Rate.
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B. For the use of FIS Facility, the product of (a) FIS Users of the Non-Signatory
Passenger Carrier and (b) One Hundred and Twenty-five Percent (125%) of FIS
Fee Rate.
C. Other charges that may be established by the City pursuant to Section 5.06.
Section 5.08 C harges for Non -Signat o ry Charter Carrier
The City shall charge Non-Signatory Charter Carriers fees and charges published in the
Master Fee Schedule.
Section 5.09 Passenger Facility Charge (PFC)
A. City shall have the right to assess passengers a PFC for the use of the Airport in
accordance with the requirements of 14 CFR Part 158 ("PFC Regulations") and
any other relevant governmental directives, statutes, orders or provisions. In
accordance therewith and to the extent required by 14 CFR Part 158, the
Collecting Carrier shall collect on behalf of and remit to City any such PFC charges.
Any charges so collected shall, pending remittance to City, be held in trust in
accordance with federal law. City shall have the right to use all such passenger
facility charges collected in any lawful manner.
B . Collecting Carrier and City shall be bound by and shall observe all of the provisions
of 14 CFR Part 158 and any other relevant governmental directives, statutes,
orders or provisions, as they apply to either or both parties.
C. If Collecting Carrier fail(s) to collect, maintain in trust and remit PFC revenue to the
City within the time limits and in the manner established by federal regulation,
Collecting Carrier shall be deemed to be in default of this Agreement. Any late
payment of PFCs shall be subject to interest compounded in accordance with
Section 5.14, to the extent allowed by law.
D. PFCs to be Held in Trust for the City
1. In the event that Collecting Carrier fails to make payments of PFCs to City in
accordance with the PFC Regulations and within ten (10) calendar days after
receipt of a written notice of non-payment from City, City may require Collecting
Carrier to establish a PFC trust account pursuant to this section 5.09. In the
event City requires Collecting Carrier to establish a PFC trust account, and
notwithstanding Section 158.49 of the PFC Regulations, upon receipt of PFCs
that are collected by Collecting Carrier, Collecting Carrier shall at its own cost
establish and shall deposit the net principal amount of such PFCs in a trust
account for City's benefit (the "Trust Account"). City and Collecting Carrier
agree that the Trust Account shall be held in the name of Collecting Carrier as
trustee for City provided that City and Collecting Carrier mutually agree to terms
upon which amounts may be withdrawn from such account upon the joint
direction of City and Collecting Carrier. If City and Collecting Carrier do not so
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Section 5.10 Rate Adjustment
If, at any time during any Fiscal Year, the City estimates that the total costs attributable
to the Terminal Building and Airfield Area Cost Centers, or the aggregate Landed Weight
for Passenger Carriers and Cargo Carriers, or the enplanement forecast, will vary 10%
or more from the estimates used in setting Airline Rates and Charges in accordance with
the provisions of Article 5, such rates may be adjusted based on the new estimates and
in accordance with the principles and procedures set forth in this Article. The City shall
notify Airline of any such rate adjustment, along with a written explanation of the basis for
such rate adjustment, 30 days prior to the effective date of the new rates. Unless
extraordinary circumstances warrant additional adjustments, the City shall limit any such
rate adjustments to no more than once during each Fiscal Year.
During any Fiscal Year, if the City anticipates that the minimum annual debt service
coverage ratio of 1.25 times may not be met, as required by the Rate Covenant, the City
will adjust Airlines Rates and Charges as necessary, including using Rentable Space
instead of Usable Space in Section 5.02 Item A.8, and modifying Airfield Area Credits in
Section 5.03 item B.
Section 5. 11 Annual True-up
A. As soon as possible following the completion of the annual audit for a Fiscal
Year, the City shall recalculate Airline Airfield Area Net Requirement, Airline FIS
Net Requirement, and Airline Terminal Building Net Requirement based on actual
audited data, and compare actual requirements to collected requirements.
Variances shall be addressed as detailed below:
1. If the actual Airline Airfield Area Net Requirement exceeds the collected
Airline Airfield Area Net Requirement, the underpayment shall be added to
the Airline Airfield Area Net Requirement in the ensuing Fiscal Year.
2. If the actual Airline FIS Net Requirement exceeds the collected Airline FIS
Net Requirement, the underpayment shall be added to the Airline FIS Net
Requirement in the ensuing Fiscal Year.
3. If the actual Airline Terminal Building Net Requirement exceeds the
collected Airline Terminal Building Net Requirement, the underpayment
shall be divided by the Leased Premises of Passenger Carriers and add to
the calculation of Terminal Building Rental Rate in the ensuing Fiscal Year.
4. If the actual Airline Airfield Area Net Requirement is less than collected
Airline Airfield Area Net Requirement, the overpayment shall be subtracted
from the Airfield Area Net Requirement in the ensuing Fiscal Year.
5. If the actual Airline FIS Net Requirement is less than collected Airline FIS
Net Requirement, the overpayment shall be subtracted from the Airline FIS
Net Requirement in the ensuing Fiscal Year.
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B. All or a portion of the Signatory Credit, if any, shall be prorated over the remaining
months of the then-current Fiscal Year, and shall be applied as a monthly credit to
the Airline Rates and Charges invoiced to the Signatory Passenger Carriers and
Signatory Cargo Carriers, subject to annual maximum amount of two million dollars
($2,000,000). The unused amount of the Signatory Credit, if any, shall continue to
be applied in the ensuing Fiscal Year.
C. The cumulative amount of the Signatory Credit earned during the initial term of this
Agreement shall not exceed seven million and five hundred thousand dollars
($7,500,000).
D. If Airline ceases operation at the Airport, resulting in Signatory Credit exceeding
the remaining invoice amount, the difference shall be kept by the City and used for
any lawful purposes.
E. To the extent that Rate Covenant is not projected to be met in a given Fiscal Year,
the City shall have the right to postpone the Signatory Credit.
Section 5.13 Monthly Activity Report
A . Airline shall furnish to Director of Aviation on or before the fifteenth (15th) day of
each month, an accurate written report of Airline's operations at the Airport during
the preceding month, setting forth all data necessary to calculate the rentals, fees,
and charges due under this Agreement. The report form shall be provided by the
Director of Aviation and shall include, but shall not necessarily be limited to (a copy
of the report is attached hereto and incorporated herein as Exhibit K:
1. Airline's total number of aircraft arrivals for the month by type of aircraft, the
maximum certificated gross landing weight of each aircraft, and the total
airline landed weight for the month to include any non-scheduled and
charter operations;
2 . Total number of enplaning and deplaning passengers of Airline and aircraft
of other airlines handled by Airline (so long as those handled airlines are
not otherwise required to report on those same aircraft);
3 . Weight of cargo freight, mail, and express for the month; and
4. Other such information that City may reasonably request from Airline to
prepare airline invoices and establish and assess rates and charges.
B. If Airline fails to furnish Director of Aviation with the report required by Section 5.13
(A) by the date specified within Section 5.13(A), then Airline's rentals, fees, and
charges, as provided for the month thereafter, shall be determined by assuming
that Airline's Total Airline Landed Weight and Enplaned Passengers for such
month was one hundred twenty-five percent (125%) of its Total Airline Landed
Weight and Enplaned Passengers during the most recent month(s) for which such
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City of Fresno -Airports
Fresno Yosemite International Airport
Attn.: Airport Accounting
4995 East Clinton Way
Fresno, CA 93727-1504
Section 5.15 Taxes
Airline shall pay all taxes of whatever character that may be lawfully levied, assessed, or
charged upon the property, real and personal, occupied, used, or owned by Airline, or
upon the rights of Airline to occupy and use the premises and emolument received
thereby, or upon Airline's rights or operations hereunder or services provided by Airline
at the Airport. Airline shall have the right, at its sole cost and expense, to contest the
amount or validity of any tax. 1
Section 5.16 Records of A i rli ne
Airline shall make available to City, upon the written request of the City, at the offices of
the Airline at the Airport such books, records and accounts, or photocopies thereof, that
are relevant to payment of rentals, fees and charges required under this Agreement for
the current year and the preceding calendar year, and shall make such records, or
photocopies thereof, available for inspection and audit by City or its authorized
representative at reasonable and mutually agreed upon hours and times during the entire
term of this Agreement and for two (2) years thereafter.
Section 5. 17 Right of Set Off
The City shall have the right to set off any past due amount(s) by applying all or a portion
of current payments to such past due amount(s). In the event a disputed charge becomes
past due, if resolved in favor of Airline, said overpaid amounts shall be credited to the
next amount due under this Agreement. If the Agreement is terminated, it shall be
credited to amounts due by or to Airline. Past due amounts may include sums due on
prior agreements, this Agreement or for usage of the Airport as a Non-Signatory Airline.
In the event the City exercises the right, it shall notify Airline. Airline shall be responsible
for promptly submitting such a sum as will reflect the total amount needed to satisfy
current amounts due . Regardless of the foregoing, City shall not have the right to offset
past due amounts which Airline has notified the City, in writing, are disputed by Airline,
provided that such written notice shall not prevent or limit the right of City to exercise any
other right or remedy available to City under this Agreement or at law or in equity as a
result of the non-payment of the amount in dispute by Airline.
1 Any interest in real property which exists as a result of possession, exclusive use, or a right to possession or exclusive use of any
real property (land and/or improvements localed therein or thereon) which is owned by the City of Fresno (City) is a taxable possessory
interest unless the possessor of interest in such property is exempt from taxation. W ith regard to any possessory interest to be
acquired by Airline under this Agreement, Airline, by its signatures hereunto affixed, warrants, stipulates, confirms , acknowledges and
agrees that, prior to executing this Agreement, Airline either took a copy of this Agreement to the office of the Fresno County Tax
Assessors or by some other appropriate means independent of City or any employee, agent, or representative of City determined , to
A irline's full and complete satisfaction , how much Airline will be ta xed , if at all.
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Section 6.03 Return/Surrende r/R elease of Surety by City
The surety instrument shall be returned to Airline not later than sixty (60) days after
termination of this Agreement, provided there are no outstanding claims against the
Airline by City.
ARTICLE 7: INDENTURE OF TRUST
Section 7 .01 Subordination to Indenture of Trust
This Agreement and all rights of Airline hereunder are expressly subordinated and subject
to the lien and provisions of any pledge, transfer, hypothecation, or assignment made at
any time by City pursuant to the terms, covenants (including the Rate Covenant), and
conditions of the Indenture of Trust, Supplemental Indentures, and future indentures. In
conflicts between this Agreement and the Indenture of Trust, the Indenture of Trust shall
govern. All definitional terms that are not specifically defined herein are to have the
meanings set forth in the Indenture of Trust.
Section 7.02 Flow of Funds
Subject to the terms and provisions of the Indenture of Trust and other related
instruments, it is mutually understood and agreed that, as long as any Bonds secured by
the Indenture of Trust are outstanding, bond proceeds and all Airport revenues shall be
deposited, maintained, and paid as set forth in the Indenture of Trust.
ARTICLE 8: MAINTENANCE AND OPERATION OF AIRPORT
Section 8.01 City's Responsibilities
In accordance with Exhibit I, attached hereto and incorporated herein, and except to any
extent otherwise expressly provided in this Agreement:
A. City agrees that it will, with reasonable diligence, keep the Airport and its aerial
approaches reasonably free from obstruction and interference for the safe and
proper use thereof by Airline; and will develop, maintain, and operate the Airport
in all respects in a manner at least equal to the standards or rating established by
the FAA and any other governmental agency having jurisdiction thereof, except for
conditions beyond the reasonable control of City. City shall not be liable to Airline
for temporary failure to so perform, whether due to mechanical breakdown or for
any other causes beyond the reasonable control of City.
B . City, with its own forces or by contract, shall operate and maintain and keep in
good condition the Terminal Building and all additions, improvements, facilities,
and equipment now or hereafter provided by City at or in connection with the
Terminal Building, except any improvements, facilities, and equipment constructed
or installed by Airline and any Exclusive Use Space hereunder. City shall keep the
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D. Airline shall immediately repair any damage in any other space at the Airport
occasioned by the activities, fault or negligence of Airline, its servants, agents,
employees, licensees, passengers, and invitees at its sole expense.
E. Airline shall not erect, maintain, or display on its Leased Premises or anywhere in
the Terminal Building in the public view any billboards, banners, advertising,
promotional signs, or materials without the prior written approval of Director of
Aviation.
F. Airline expressly agrees that City shall not be liable to Airline, for bodily injury or
for any loss or damage to real or personal property occasioned by flood, fire,
earthquake, lightning, windstorm, hail, explosion, riot, strike, civil commotion,
smoke, vandalism, malicious mischief, or acts of civil authority.
G. Airline shall provide and maintain hand fire extinguishers for the interior of its
Exclusive Use Space in accordance with applicable safety codes.
H. Airline shall, in conducting any activity or business at the Airport, including
environmental responses or remedial activities, comply with all applicable
Environmental Laws, as discussed in detail in Section 14.19.
Section 8.03 City's Right to Inspect and Make Repairs
City, by its Director of Aviation or authorized officers, employees, agents, contractors,
subcontractors, and other representatives, shall have the right at any time in the case of
emergencies or upon request of the Airline, otherwise during normal business hours upon
reasonable notice to Airline, and in any event in a manner as to not unreasonably interfere
with Airline's normal operations, to enter upon Airline's Exclusive Use Space,
accompanied by an authorized Airline representative, if practicable, for the following
purposes:
A. To inspect such space to determine whether Airline has complied and is in
compliance with the terms and conditions of this Agreement.
8. Upon reasonable notice and opportunity to perform, except in emergencies, to
perform such maintenance, cleaning, or repair as City reasonably deems
necessary, if Airline fails to perform its obligations under Section 8.02, and to
recover the actual cost of such maintenance, cleaning, or repair from Airline, plus
a fifteen percent (15%) administrative charge from Airline upon invoice.
C . Upon reasonable notice, except in eme'rgencies, to perform such maintenance,
cleaning, or repair as City reasonably deems necessary, and which is the
responsibility of the City under this Agreement.
Ill
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Section 8.07 Debts, Liens , Mortgages
Airline shall pay promptly when due and owing, all bills, debts and obligations incurred by
Airline in connection with its operations or activities on Leased Premises at the Airport,
and shall not permit the same to become delinquent. Except as expressly approved by
City in writing, Airline shall not permit any mechanics' or material men or any other lien to
be attached to or be foreclosed upon Leased Premises at the Airport or improvements
thereto. Airline shall suffer no lien, mortgage, judgment, or execution to be filed against
the Leased Premises at the Airport or improvements thereon. If any lien shall be filed
against the Leased Premises, Airline shall take action, including the payment of and/or
bonding against the amount of the lien, to cause such lien to be removed within twenty
(20) business days of recordation of the lien.
ARTICLE 9: DAMAGE OR DESTRUCTION OF PREMISES
Section 9.01 Damage or Destruction
A. If the Airline Leased Premises or any portions thereof, or buildings or structures of
which space may be a part, are damaged by fire or other casualty not caused by
Airline, Director of Aviation shall notify Airline within sixty (60) days whether the
space will be repaired. If the space is to be repaired, it shall be repaired with due
diligence by City, and the rent allocable to the particular building, rooms, or other
portion of the space rendered untenantable shall be abated for the period from the
occurrence of the damage to the completion of the repairs, provided that City shall
exert its best effort to provide Airline with temporary substitute space, if available,
at such rent as deemed necessary and reasonable by City, until such time as the
repairs are completed. City ' shall provide a credit to the Airline's account for any
amounts deemed to be paid in advance for all or the portion of the Leased
Premises rendered untenatable.
B . For damage, not caused by Airline, Airline shall notify Director of Aviation in writing
within 30 days, if Airline will not be able to operate to its reasonable satisfaction
without repair of the damaged space.
C. If the Director of Aviation shall fail to notify Airline of its decision within sixty (60)
days after destruction, City shall be deemed to have elected to terminate the
provision of this Agreement as to only the space damaged and destroyed. The
specific location, and the Agreement shall automatically terminate as to such
space as of the date of the damage or the entire Agreement if Airline is not able to
operate to its reasonable satisfaction as a result of the damage, provided Airline
gave timely notice as required in 9.01 B above. In such case, any amounts due
under this Agreement shall be proportionately abated from the time of such
damage, and City shall reimburse Airline for any amounts paid in advance for all
or the portion of the Leased Premises rendered untenantable, provided there are
no past due amounts on the account.
Ill
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not be liable to Airline and its insurer(s) for, and Airline and its insurer(s) hereby
waive and release City from, any and all loss, liability, fines, penalties, forfeitures,
costs or damages resulting from or attributable to an occurrence on or about the
Leased Premises, or all or any part of the Airport, including, but not limited to, use
of any Common Use Space and/or Exclusive Use Space, upon which the Leased
Premises is located, in any way related to the Airline's operations and
activities. This waiver shall not extend to any and all loss, liability, fines, penalties,
forfeitures, costs, or damages caused solely by the gross negligence, or by the
willful misconduct of City.
D . Airline shall immediately notify City of any occurrence arising from Airline's use of
any Common Use Space and Exclusive Use Space, upon which the Leased
Premises is located, resulting in injury or death to any person or damage to
property of any person.
E . If Airline should contract any work on the Leased Premises or subcontract any of
its obligations under this Agreement, Airline shall require each consultant,
subconsultant, contractor and subcontractor to indemnify, hold harmless and
defend City and its officers, officials, employees, agents and volunteers in
accordance with the terms of this Section.
F. The provisions of this Section shall survive the termination or expiration of this
Agreement.
Section 10.2 Insurance
A. Throughout the life of this Agreement, Airline shall pay for and maintain in full force
and effect all policies of insurance required hereunder with an insurance
company(ies) either (i) admitted by the California Insurance Commissioner to do
business in the State of California and rated not less than "A-VII" in Best's
Insurance Rating Guide, or (ii) authorized in writing by City's Risk Manager or
his/her designee. The following policies of insurance are required:
(i) COMMERCIAL GENERAL LIABILITY insurance which shall be at least
as broad as Insurance Services Office (ISO) form CG 00 01 and shall
include coverage for "bodily injury", "property damage" and "personal and
advertising injury", including premises and operation, products and
completed operations, and contractual liability with limits of liability of not
less than $5,000,000 per occurrence for bodily injury and property damage,
$1,000,000 per occurrence for personal and advertising injury, $5,000,000
aggregate for products and completed operations and $10,000,000 general
aggregate. Airline may substitute Airport Liability insurance for this
insurance provided the coverage is as broad as required and the limits of
liability are not less than required.
(ii) AIRCRAFT LIABILITY insurance shall include coverage for bodily injury
to passengers and non-passengers, property damage and cargo legal
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E.
F.
G.
H.
I.
broker, or agent of a notice of cancellation, non-renewal, or reduction in coverage
or in limits, Airline shall furnish City with a new certificate and applicable
endorsements for such policy(ies). In the event any policy is due to expire during
this Agreement, Airline shall provide a new certificate, and applicable
endorsements, evidencing renewal of such policy prior to the expiration date of the
expiring policy.
The General Liability (or Airport Liability, if applicable), Aircraft Liability, Pollution
and Automobile Liability insurance policies shall be written on an occurrence form
and shall name City, its officers, officials, agents, employees and volunteers as an
additional insured. Such policy(ies) of insurance shall be endorsed so Airline's
insurance shall be primary and no contribution shall be required of City. The
coverage shall contain no special limitations on the scope of protection afforded to
City, its officers, officials, employees, agents, and volunteers. All policies of
insurance including the Workers' Compensation insurance policy shall contain a
waiver of subrogation as to City, its officers, officials, agents, employees, and
volunteers.
Airline shall furnish City with all certificate(s) and applicable endorsements
effecting coverage required hereunder. All certificates and applicable
endorsements are to be received and approved by the City's Risk Manager or
his/her designee prior to City's execution of the Agreement. Such evidence of
insurance shall be provided City at the following address:
City of Fresno -Airports Department
Properties Division
4995 E. Clinton Way
Fresno, CA 93727
Or via email at FYI.Properties@fresno.gov
Any failure to maintain the required insurance shall be sufficient cause for City to
terminate this Agreement. No action taken by City hereunder shall in any way
relieve Airline of its responsibilities under this Agreement.
The fact that insurance is obtained by Airline shall not be deemed to release or
diminish the liability of Airline, including, without limitation, liability under the
indemnity provisions of this Agreement. The duty to indemnify City and its officers,
officials, employees, agents and volunteers shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do
not act as a limitati6n upon the amount of indemnification to be provided by Airline.
Approval or purchase of any insurance contracts or policies shall in no way relieve
from liability nor limit the liability of Airline.
Airline and its insurers hereby waive all rights of recovery against City and its
officers, officials, employees, agents and volunteers, on account of injury, loss by
or damage to the Airline or its officers, officials, employees, agents, volunteers,
invitees, consultants, subconsultants, contractors and subcontractors, or its
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Section 11.02 Re linqu ishment of Space
If Airline desires to relinquish any of its Exclusive Use Space, Airline will notify Director of
Aviation in writing of the space available, and City or Director of Aviation shall use
reasonable efforts to reassign the space to another airline. No such reassignment,
vacation, transference, conveyance, or sublease shall release Airline from its obligations
under this Agreement including responsibility for payment of rent, utilities, fees and other
charges, without specific written consent by City to such release. Airline shall be
responsible for returning all relinquished space to the condition upon it was given, normal
wear and tear accepted.
Section 11.03 Bankruptcy
Section 11.01 shall not apply to any valid assumption and/or assignment of this
Agreement, the leased space, or any part thereof, by a trustee, or by Airline as a debtor
in possession under the Bankruptcy Code of 1978, as amended, including the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005 (collectively the "U. S.
Bankruptcy Code"), provided that adequate assurance of future performance as provided
by the U. S. Bankruptcy Code is to be provided, in writing, as a condition of the
assumption and/or assignment of this Agreement. Such assurance shall include but shall
not be limited to:
A. Adequate assurance of the reliability of the proposed source for the rental, utilities,
fees or other charges due under this Agreement upon the assumption and/or
assignment of this Agreement;
' B . Adequate assurance that all other consideration due under this Agreement shall
be forthcoming after the assumption or assignment of this Agreement and that any
defaults thereunder shall be cured; and
C. The procurement of a bond from a financially reputable surety covering any costs
or damages which the City reasonably estimated the City would incur in the event
that City, within three (3) years following the assumption and/or assignment of this
Agreement, becomes entitled to and exercises any right to reassign the lease
covered by this Agreement under this Agreement.
Section 11.04 Consent
Consent by City to any type of transfer provided for by this Article 11 shall not in any way
be construed to relieve Airline from obtaining further consent for any subsequent transfer,
assignment, and/or assumption of any nature whatsoever.
ARTICLE 12: DEFAULTS
Section 12.01 Default
If Airline and/or its Affiliates, and/or subsidiaries (1) fails to pay rent or any other payment
past due hereunder within ten (10) calendar days after receipt of written notice of a past
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4. Airline voluntarily abandons the Leased Premises for a period exceeding
sixty (60) days;
5. Airline defaults in the performance of any of the covenants and conditions
required herein (except rental payments) to be kept and performed by
Airline, and such default continues for a period of thirty (30) days after
receipt of written notice from Director of Aviation to cure such default;
6. Airline is adjudged a bankrupt in involuntary bankruptcy procedures;
7. Airline is made a party to any receivership proceeding in which a receiver is
appointed for the property or affairs of Airline where such receivership is not
vacated within sixty (60) days after the appointment of such receiver;
8. The abolition, limitation, or restriction by any act of federal, state or local
authority under which these Premises are being leased, except with respect
to legislation that grants authority to a successor.
9. Airline and/or its affiliates, and/or subsidiaries fails to comply with PFC
requirements including those requirements set forth in this Agreement and
such failure continues for ten (10) days after written notice from the Director
of Aviation.
10. Redevelopment of the Airport that necessitates relocation of Airline from
Leased Premises.
B. In any of the aforesaid events, City may take immediate possession of the Leased
Premises in any lawful manner including any and all improvements thereon and
remove Airline's effects.
C . Failure of City to declare this Agreement terminated upon the default of Airline for
any of the reasons set out shall not operate to bar or destroy the right of City to
terminate this Agreement by reason of any subsequent violation of the terms of
this Agreement.
D. No receipt or acceptance of money by City from Airline after the expiration or
termination of this Agreement, or after the service of any notice, or after the
commencement of any suit, or after final judgment for possession of the Leased
Premises, shall reinstate, continue, or extend the terms of this Agreement, or affect
any such notice, demand or suit or imply consent for any action for which City's
consent is required or operate as a waiver of any right or remedy of City including
any right to lawfully retake and resume possession of the Leased Premises.
ARTICLE 14: GENERAL PROVISIONS
Section 14.01 Compliance with Law
A. Airline shall not use the Leased Premises or any part thereof, or knowingly permit
the same to be used by any of its employees, officers, agents, subtenants, invitees,
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A party may change it notice address of record by written notice thereof given in
the manner provided herein.
B. If notice is given in any other manner or at any other place, it will also be given at
the place and in the manner specified above.
Section 14.03 Successors and Assigns Bound
This Agreement shall be binding upon and inure to the benefit of the successors and
assigns oJ the parties hereto.
Section 14.04 Governing Law, Venue and Attorney's Fees
A. This Agreement and all disputes arising hereunder shall be governed by the laws
of the State of California, and exclusive venue in any and all actions arising under
this Agreement shall be laid in a state or Federal court located in the Judicial
District of Fresno County, California.
B. In any action or proceeding which City or Airline may be required to prosecute to
enforce its respective rights under this Agreement, the unsuccessful party therein
agrees to pay all costs incurred by the prevailing party therein, including
reasonable interest and attorneys' fees, to be fixed by the court, and said costs,
interest, and attorneys' fees shall be made a part of the judgment in said action.
Section 14.05 Subordination to Agreements with U.S. Government
This Agreement is subject and subordinate to the provisions of any agreements
heretofore or hereinafter made between the City and the United States, relative to the
operation or maintenance of the Airport, the execution of which has been required as a
condition precedent to the transfer of federal rights or property to City for Airport purposes,
or to the expenditure of federal funds for the improvement or development of the Airport,
including the expenditure of federal funds for the development of the Airport in
accordance with the provisions of the Federal Aviation Act of 1958, as it has been
amended from time to time. City covenants that it has no existing agreements with the
United States in conflict with the express provisions hereof.
Section 14.06 Nonwaiver of Rights
The non-enforcement by either party of the breach of any term, covenant or condition
herein stipulated, shall never be construed to be a waiver of any other or succeeding
breach of any term, covenant or condition herein imposed upon the other party. The
acceptance of payments of any amounts due or to become due hereunder in any other
way or manner, or at any other time than herein provided, shall never be construed as a
waiver of the right of City of any of the provisions herein imposed upon Airline.
Section 14.07 Federal Aviation Act, Section 308
Nothing herein contained shall be deemed to grant to Airline any exclusive right or
privilege within the meaning of Section 308 of the Federal Aviation Act, as amended or
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storage of such disabled aircraft, provided, however, the obligation to remove or store
such disabled aircraft shall be consistent with federal laws and regulations, including
those of the FAA and the National Transportation Safety Board (NTSB). Airline agrees to
reimburse City for all reasonable costs of such removal and storage; and Airline,
furthermore, hereby releases City from any and all claims for damage to the disabled
aircraft or otherwise arising from or in any connected with such removal by City, except
to the extent caused by the active negligence or willful misconduct of City, its agents, or
its employees.
Section 14.14 Quiet En joy me nt
Except to any extent otherwise expressly provided in this Agreement, City covenants and
agrees that Airline on paying the rent (and other charges herein provided for) and
observing and keeping the covenants, conditions, and terms of this Agreement, shall
lawfully and quietly hold, occupy and enjoy the Leased Premises during the term of this
Agreement without hindrance or molestation by City or any person claiming under City.
Section 14.15 Force Majeure
No party to this Agreement is responsible to the other party for nonperformance or delay
in performance of the terms and conditions herein due to acts of God, acts of government,
wars, riots, strikes, acts of terrorism, accidents in transportation, fuel or material
shortages, or other causes beyond the control of a party.
Section 14.16 Independe nt Contractor
Airline is and throughout this Agreement shall be an independent contractor and not an
employee, partner or agent of the City. Neither party shall have any right to control,
supervise or direct the manner or method or choice by which the other party or its
contractors shall perform its or their work or function. However, each party shall retain
the right to verify that the other is performing its respective obligations in accordance with
the terms hereof.
Neither the Airline, nor any of its officers, associates, agents, or employees shall be
deemed an employee of the City for any purpose. Airline shall not be entitled to nor shall
it receive any benefit normally provided to employees of the City such as, but not limited
to , vacation payment, retirement, health care, or sick pay. The City shall not be
responsible for withholding income or other taxes from the payments made to Airline.
Airline shall be solely responsible for filing all returns and paying any income, social
security or other tax levied upon or determined with respect to the payments made to
Airline pursuant to this Agreement.
Section 14.17 Partn ers hi p/Jo int Ve nture
This Agreement does not evidence a partnership or joint venture between Airline and City.
Except to any extent expressly provided for in this Agreement, (i) the City does not grant,
convey, or delegate to Airline any tangible or intangible property interest or express or
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8.
C.
D.
E.
agency pursuant to any Environmental Law; provided , that such documents and
materials are not protected from disclosure by a court order, any available self
audit privilege, attorney work product doctrine or attorney client privilege and are
pertinent to Airline's rights and obligations under this Agreement at the Airport or
to the Leased Premises. Such documents and materials released to the City shall
be kept confidential to the fullest extent allowed by law. If any applicable
Environmental Law requires Airline to file any notice or report of a release or
threatened release of Hazardous Materials on, under or about the Leased
Premises or the Airport, Airline shall provide a draft copy of such report or notice
to the City to the extent practical given time constraints imposed by applicable
Environmental Laws and Airline shall consult with City and give due consideration
to the City's comments and concerns prior to submitting such notice or report to
the appropriate governmental agency.
A c cess of Environmental Inspection. On reasonable written notice and at a
reasonable time, such to not disturb Airline's operations, City shall have access to
the Leased Premises to inspect the same, with a representative of Airline to be
present during such access and inspection, in order to confirm that the Airline is
using the Leased Premises in accordance with applicable Environmental Laws.
Airline, at the request of City and at City's expense, shall conduct such testing and
analysis as is reasonable and necessary to ascertain whether Airline is using the
Leased Premises in compliance with applicable Environmental Laws; provided that
if the testing and analysis determines that Airline's use is not in compliance with
applicable Environmental Laws , then Airline shall bear the reasonable cost of such
testing and analysis. Any such tests shall be conducted by qualified independent
experts chosen by Airline and subject to City's approval which approval will not be
unreasonably withheld. Copies of reports from any such testing shall be provided
to City upon receipt by Airline.
Environmental Non-compliance. If, after reasonable notice to Airline and
opportunity for Airline to commence measures to address compliance, Airline fails
to comply with any applicable Environmental Laws, City, in addition to its rights
and remedies provided at law or in equity, may lawfully enter the Leased Premises
and take all reasonable and necessary measures, at Airline's expense, to insure
compliance with applicable Environmental Laws.
Duty t o Not ify City . In the event of a release or threatened release of Hazardous
Material into the environment in violation of applicable Environmental Laws relating
to or arising out of Airline's use or occupancy of the Leased Premises or in the
event any claim, demand, action or notice is made against Airline regarding
Airline's failure or alleged failure to comply with any applicable Environmental Laws
at the Leased Premises, Airline promptly shall notify City by in writing within five
(5) business days, followed by written notice and shall provide City with copies of
any written claims, demands, notices, or actions so made.
Environmental Remediation. Airline shall undertake such steps to remedy and
remove releases of any Hazardous Materials resulting from the acts or omissions
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Section 14.24 Non-Solicitation
Airline represents and warrants that it has not paid or agreed to pay any compensation,
contingent or otherwise, to solicit or procure this Agreement or any rights/benefits
hereunder.
Section 14.25 Precedence of Documents
In the event of any conflict between the body of this Agreement and any exhibit or
attachment hereto, the terms and conditions of the body of this Agreement shall control
and take precedence over the terms and conditions expressed within the exhibit or
attachment. Furthermore, any terms or conditions contained within any exhibit or
attachment hereto which purport to modify the allocation of risk between the parties,
provided for within the body of this Agreement, shall be null and void.
Section 14.26 Entire Agreement
This Agreement, together with all exhibits, documents and instruments attached hereto
and incorporated herein, constitutes the entire agreement between the parties hereto,
and all other representations or statements heretofore made, verbal or written, are
merged herein, and this Agreement may be amended only in writing, and executed by
duly authorized representatives of the parties hereto.
[Signatures on the following page]
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Exhibit J: Affiliates, Subsidiaries and Code Share Partners
Exhibit K: Monthly Operations Report
Exhibit L: Conflict of Interest Form
Exhibit M : FM Grant Assurances
Exhibit N: Federal Provision Applicable to All Agreements
59 of 59
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FUND NOAIRPORTS REF NO.FRESNO YOSEMITE INTERNATIONAL AIRPORT ORG NO.·~-DEPARTMENT
DIRECTOR OF AVIATION ACTIVllYI I IKEVIN R. MEIKLE, ARCHITECT PROJECTI.D APPROVED
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DocuSign Envelope ID: B2E79F1 F-2D81-4494-B887-9A6513591A07
Exhibit D
Illustration of Annual Terminal Building Rental Rate Calculation
Fresno Yosemite International Airport
Amounts Allocable to Terminal Building Cost Center
Debt Service
Rolling Debt Service Coverage
Amortization Charges
Operating Expenses
Deposit to the Operating Reserve Fund
Terminal Building Credit
Terminal Building Net Requirement
Usable Space
Rate Before Adjustment
Rate Adjustment due to Annual True-up
Terminal Building Rental Rate
Leased Premises
Airline Terminal Building Net Requirement
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FY 2023
Illustration
$ 765,486
256,468
13,747,485
130,928
(4,488,286)
$10,412,082
140,704
$ 74.00
$ 74.00
53,564
$ 3,963,721
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Exhibit F
Illustration of Annual Landing Fee Rate Calculation
Fresno Yosemite International Airport
Amounts Allocable to Airfield Cost Center
Debt Service
Rolling Debt Service Coverage
Amortization Charges
Operating Expenses
Deposit to the Operating Reserve Fund
Airfield Area Credit
Annual True-up
Airline Airfield Area Net Requirement
Landed Weight
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Illustration
$ 9,856
75,000
6,921,484
65,919
(2 ,712,502)
164,704
$4,524,461
1 ,657,757
$ 2.73
DocuSign Envelope ID: B2E79F1F-2D81-4494-B887-9A6513591A07
Exhibit G
Illustration of FIS Fee Rate Calculation
Fresno Yosemite International Airport
Amounts Allocable to FIS Cost Center
Debt Service
Rolling Debt Service Coverage
Amortization Charges
Operating Expenses
Deposit to the Operating Reserve Fund
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Airline FIS Net Requirement
FIS Users
FIS Fee Rate
Maximum FIS Fee Rate
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$ 120,911
2,226,760
21,207
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$ 1,746,991
179,743
$ 9.72
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