TO: Board of Supervisors
FROM: Steven Lederer, Director of Public Works
REPORT BY: Mark Witsoe, Airport Manager
SUBJECT: Amendment No. 2 to Napa County Agreement No. 180269B with REACH Air Medical Services, LLC
RECOMMENDATION
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Director of Public Works requests approval of and authorization for the Chair to sign Amendment No. 2 to Agreement No. 180269B with REACH Air Medical Services, LLC to extend the term of lease of 1950 Airport Road at the Napa County Airport to February 29, 2024 with two (2) one-year options periods, for a new monthly rate of $10,143, in order for the tenant to continue to provide essential medical services.
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EXECUTIVE SUMMARY
Napa County Agreement No. 18062B with REACH Air Medical Services, LLC (REACH) dated February 27, 2018, for occupancy of 1950 Airport Road at the Napa County Airport, expired on February 28, 2023, after the lessee exercised the agreement’s two (2) one-year options to extend the term of lease. REACH continued to occupy the premises on a month-to-month holdover while negotiating in good faith with Airport staff for continued use of the premises at the Airport.
Approval of Amendment No. 2 extends the term of the agreement to February 29, 2024, adds two (2) one-year option periods, more specifically defines and slightly reduces the premises within the aircraft storage hangar, adds a helicopter parking space on the general aviation (GA) apron, and adjusts the rental rate. The rental rate is adjusted upward by the change in the Consumer Price Index (CPI) and downward by the slight change in the size of the hangar space. The associated utility costs are adjusted upward. All of the other terms of the lease remain in full force and effect.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
Yes |
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Where is it budgeted? |
Revenue is budgeted in Airport Enterprise Fund (Fund 5010; Subdivision 5010000) |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
Tenant is a valued operator at the Airport providing emergency services on a commercial basis. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
Revenues will continue to be budgeted in future fiscal years. Negligible impact in comparison to current revenue. |
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Consequences if not approved: |
If not approved, airport staff will have to enter into negotiations for a new lease that is mutually beneficial. |
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County Strategic Plan pillar addressed: |
Collaborative and Engaged Community |
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ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.
BACKGROUND AND DISCUSSION
On February 27, 2018, the County entered into Agreement No. 180269B with REACH Air Medical Services, LLC (REACH) to lease the hangar and office facility located at 1950 Airport Road. This 11,600 square foot facility consists of hangar space, maintenance shop, crew rest areas, and administrative offices for helicopter crews. Since leasing and establishing the REACH helicopter base at the Napa County Airport, REACH has made improvements to the facility in order to accommodate its operations. Amendment No.1 to Agreement No. 180269B provided for REACH to install an automatic backup generator to provide electrical backup power to the facility. All costs associated with the generator, including permitting, installation, maintenance, and use was paid by REACH.
This Amendment No. 2 provides an added lease term running retroactively from the end of the existing term on February 28, 2023, through February 29, 2024, with two (2) one-year options to extend the term again. The amendment identifies an appropriate rental rate adjustment framework and clarifies where the helicopter will be parked on the north GA ramp. The new monthly rental rate is $9,143, down from $9,200, with an additional $1,000 flat rate for utility cost recovery, up from currently $850 monthly. Upon exercising the included options, the rental rate will adjust upward on the anniversary date by the change in CPI (San Francisco-Oakland-Hayward) for the published preceding Jan-Dec period. The stated new utility rate will also be adjusted on the anniversary date by the same change in CPI. The size of the provided aircraft storage space is reduced slightly to make way for an adjoining tenant use.
The REACH air operations unit specializes in neonatal care and is vital to the local hospitals, being one of the few emergency evacuation vehicles for critical patients.
Aside from the requested amended terms for tenancy at 1950 Airport Road, all other terms, and conditions of Agreement No. 180269B remain in full force and effect.