Template revised January 10, 2019.

COMMISSION

AGENDA MEMORANDUM

Item No. 8e

ACTION ITEM Date of Meeting March 11, 2025

Amount of this request: $4,500,000

ACTION REQUESTED

Authorization for the executive director to authorize execution of two consulting contracts, one

with an amount not-to-exceed $3,000,000, and one with an amount not-to-exceed $1,500,000,

for financial consulting services for a period of up to five (5) years and a total of $4,500,000.

EXECUTIVE SUMMARY

The purpose of this request is to procure financial consulting services to conduct feasibility

studies in support of future Port bond issuances and to augment Port staff in assessing the

JUSTIFICATION

The airport’s 5-year capital plan is projected to exceed $4.6 billion, 80% of which is expected to

be funded with revenue bonds. In connection with the issuance of future revenue bonds, which

are likely to be issued on an annual basis, the consultant will provide a feasibility report that will,

among other things, describe historical and forecasted operating and financial results of the

airport, the Port’s financial structure, capital plan and funding sources, debt service obligations,

and debt service coverage forecasts. The report also typically includes robust discussion on the

general market conditions in which the airport operates, including economic and demographic

information for the region, as well as relevant airline traffic trends and forecasts. The feasibility

report is utilized heavily by investors, credit rating agencies, and other financial stakeholders

Template revised June 27, 2019 (Diversity in Contracting).

standard, and the Port has utilized them consistently (most recently in support of the 2024

Revenue Bonds).

Looking ahead, the Port will need assistance in preparing the funding plan to determine the

affordability of the Aviation capital program and incorporate the capital projects associated with

the Sustainable Airport Master Plan (SAMP). Having consultants with the knowledge of other

airport funding plans and experience with P3 and other alternative funding arrangements will be

helpful to guide financial discussions. Consultants that provide these services often experience

a high level of staff turnover. To ensure that a suitable consultant is available for this work, each

contract will be for an amount close to the total projected need. This contract would replace a

2. Financial benchmarking of other airports for measures such as current and future rate

and passenger airline cost per enplanement (CPE) comparisons;

3. Assess affordability of future capital projects and programs based on comparisons to

other ports and airports and other financial metrics;

4. Evaluate funding options and financial implications for SAMP projects including potential

P3 options;

5. Assist with future PFC application and FAA grant strategy;

6. Assist with airline lease agreement provisions, negotiation and strategy; and

7. Financial management consulting services.

for other projects.

Cost Implications: $1,000,000

Pros:

(1) Bond feasibility studies would be done by independent consultant. It is advantageous

(2) $1,800,000 saved could be used for other organizational priorities.

Template revised June 27, 2019 (Diversity in Contracting).

Cons:

(1) Some projects require significant resources at a time when staff is fully engaged in

This is not the recommended alternative.

(3) Consultants on contract gain familiarity with the Port and can often work more

Cons:

(1) Individual procurements take time. This can delay high priority projects.

This is not the recommended alternative.

Alternative 3 – Procure IDIQ contracts for up to 5 years.

Cost Implications: $4,500,000 (projected actuals $2,800,000)

(1) Potentially higher short-term cost of consultant compared to adding temporary or full-

This is the recommended alternative.

FINANCIAL IMPLICATIONS

Annual Budget Status and Source of Funds

The costs incurred by these contracts will be accounted for as operating costs (consulting work)

or a non-operating bond issuance cost (bond issue feasibility studies) and included in the annual

budget. As such, the funding source is the Airport Development Fund, the General Fund, or future

Template revised June 27, 2019 (Diversity in Contracting).

ATTACHMENTS TO THIS REQUEST

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS

None