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Draft

Lee’s Summit Municipal AirportDraft Business Plan June, 2008

Clough Harbour & Associates, LLP., in association withR.A. Wiedemann & Associates, Inc. 1

DRAFT TECHNICAL REPORTLee’s Summit Municipal Airport Business Plan

1. INTRODUCTION

THE PURPOSE OF THIS BUSINESS PLAN FOR Lee’s Summit Municipal Airport is to assess potentialmeans to improve the Airport’s financial performance, economic development, and operation.To do this, the business plan will evaluate potential development and optimal operations

associated with the implementation of the existing Airport Master Plan. Our understanding of thecurrent situation involves several components, including the Airport’s competitive setting, thehighest and best use of Airport property, the benefits and costs of attracting corporate aviation,safety and noise issues in the vicinity of the Airport, the potential for hangar development as wellas the high growth of the City of Lee’s Summit, the desire of the Sponsor to examine the Airportgovernance structure, and a number of other facility-related issues.

1.1 Vision Statement

The Lee’s Summit Department of Public Works (DPW) operates the municipal Airport andhas adopted the following Vision Statement for its facilities:

“Public Works will strive to meet or exceed citizen needs through accountability, fairness,consistency and increased communication. We will maintain and improve existinginfrastructure in an effective and efficient manner. New growth will be accommodatedthrough proactive planning and implementation. We are committed to supporting a positivework environment in which employees can share in the overall health, safety and welfare ofthe community.”

The work on this business plan is an example of proactive planning to ensure that the Airport isimproved in an effective and efficient manner.

1.2 Airport Mission

Lee’s Summit Municipal Airport’s role is that of a general aviation facility, providinggeneral aviation services for regional air transportation. Lee’s Summit Municipal Airport’saccommodates general aviation activity including all types of propellor aircraft and some smallbusiness jets. The Airport is operated by the Lee’s Summit Public Works Department (PWD), butis subject to administrative and legislative control by other municipal divisions and the City Council.There is no specific mission statement for the Airport, but there is a mission statement for the Lee’sSummit PWD:

“The Lee’s Summit Public Works Department is dedicated to maintaining and improving thequality of the community through environmentally and economically sound infrastructurepreservation and growth while providing outstanding service to our customers.”

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This general statement can be applied to the Airport. One purpose of the business plan is todetermine if the Airport Master Plan recommendations are economically sound and if theirimplementation will be perceived by the community and its leaders as improving the quality of thecommunity.

The Airport is an asset to the community, providing air transportation infrastructure neededfor both business and personal travel. Airport operational objectives that support the overall DPWmission statement could include the following:

! Strive to provide safe, excellent airport facilities and services to its based aircraftowners and the flying public, while operating compatibly with its neighbors andproviding a base for economic development.

! Continue to operate the Airport safely, efficiently, and in a manner that conservesCity resources of time and money.

! Strive to reduce expenditures and increase revenues at the Airport, withoutsacrificing needed services.

! Encourage private sector investment in the utilization of the Airport’s facilities.! Supplement economic development goals of Lee’s Summit as opportunities arise at

the Airport.! Encourage compatible public use of Airport facilities or property, where possible and

appropriate.

The final result is to help the Airport achieve greater financial and operational performance insupport of the community’s overall goals and vision.

1.3 Airport Issues

Lee’s Summit Municipal Airport features two runways: Runway 18-36 is 4,016 feet by 75feet and Runway 11-19 is 3,800 feet by 75 feet. The adopted Airport Master Plan recommends thelengthening of Runway 18-36 to 5,500 feet - 1,484-foot extension. This action would upgrade theAirport to accommodate more business and corporate aircraft. The business plan presents an overallstrategic direction and plan for the Airport, given its existing setting and market niche. A numberof preliminary issues have been identified and addressed, including:

! Highest and Best Use of the Airport Property: There is some dispute concerning thehighest and best use of Airport property. With industrial land at a premium,development around the Airport has raised questions about economic trade-offsbetween Airport land use and industrial land use. In particular, what taxes are beingforfeited with the Airport use versus industrial use? (See Section 5.3 on page 43 andSection 6.2 on page 59).

! Implementation of the Airport Master Plan: The airport master plan calls for theexpansion of the primary runway from 4,000 feet to 5,500 feet. Money has beenallocated for this process, but political support is divided. Some of the decision

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process will rely on a credible estimate of the Airport’s value to the community. (SeeSection 5.4 on page 44 and Section 6.2 on page 49).

! Attraction of Corporate Aviation: The attraction of corporate aviation to Lee’sSummit will depend, in part on the expansion of the primary runway to a lengthgreater than 5,000 feet. Stage lengths for corporate aircraft are hindered by shorterrunways and thus to maximize efficiencies for these operators, longer runway lengthis needed. Without that expansion, many insurance companies will either chargesignificant premiums or will not cover operations at shorter runway lengths. (SeeSection 5.4 on page 45 and Section 6.2 on page 50).

! Safety/Noise Around Airport: An Air Traffic Control Tower (ATCT) feasibilitystudy was undertaken to determine whether the use of an ATCT could provide saferaircraft operations, while at the same time possibly mitigating some noise impactsto residential areas. (See Section 5.1 on page 35).

! Use of Local Matching Funds: The City was reimbursed for over $2 million by theFederal Aviation Administration (FAA) for the purchase of land abutting the Airport,providing a significant matching fund resource for the future. A significant portionof the master plan can be implemented using these monies as the local share match.

! High Growth of the City: As a popular suburb of Kansas City, residentialdevelopment in Lee’s Summit has taken on the characteristics of a “boom town.”Lee’s Summit began to experience high growth in the mid-to-late 1980s. Thisresidential growth, coupled with the associated services sector growth has createdsignificant demand for developable property in the area. (See Section 5.2 on page37).

! Expectations of Revenue Production: When the City purchased the Airport in1970s, there was an implied understanding from the previous owners that the Airportwould be self-sustaining. These expectations have not been fully met, and as such,have negatively influenced support for the Airport. (See Section 5.3 on page 42).

! The Question of Mission and Vision: In many public projects, different valuesgenerate a variety of viewpoints. Lee’s Summit Municipal Airport is no exception.While the operational mission of the Airport can be defined using acceptableindustry standards, the vision for the Airport’s future is more difficult to capture.This business plan should contribute to the formation of consensus about long termdevelopment at the Airport. (See Section 1.2 on pages 1 and 2).

! Airport Governance Structure: Questions have been raised concerning the mosteffective governance structure for the Airport. Currently, the City Council, theBoard Of Aeronautic Commissioners (BOAC), the Department of Public Works, theFinance Department, and the Purchasing Department all have a hand in the Airport’s

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governance. The business plan will examine this structure to see if it can besimplified and/or strengthened. (See Section 2.1 on pages 5 and 6, and Section 6.1on page 48).

! Airport Zoning & Special Use Permits: Once all of the land has been purchased, theCity is interested in including recommendations for revised zoning at the Airport.At most municipal airports, airport projects do not require individual zoning approvalif they meet definitions of conforming uses. Similarly, the business plan canexamine the language concerning special use permits that keep the Airportdevelopment in accordance with its master plan. (See Section 6.2 on pages57through 59).

1.4 Desired End Products

The end products that are produced as a result of this analysis include the following:

! A well-defined mission statement for the Airport.! An evaluation of current Airport business operating practices.! An identification and evaluation of needs, opportunities, and challenges facing the

Airport.! A five-year projection of revenues and expenses at the Airport for the baseline case

and alternative scenarios.! Strategic planning recommendations for the Airport, including those for capital

development, leases, operations, marketing, zoning, and management. ! Executive summaries and technical reports for the Airport and City use.

1.5 Report Outline

In order to address the issues described above and to produce the desired end products, thisreport has been organized to include the following sections:

! Section 1 - Introduction! Section 2 - Background and Management Structure! Section 3 - Existing Airport Characteristics ! Section 4 - Baseline Financial and Economic Outlook! Section 5 - Business Plan Alternatives! Section 6 - Recommended Plan! Appendix A - Airport Facility Directory - LXT! Appendix B - Economic Development Incentives! Appendix C - Corporate Aviation Interest Letter! Appendix D - Revenue & Expense Pro Formas

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2. BACKGROUND AND MANAGEMENT STRUCTURE

UNDERSTANDING THE BACKGROUND AND MANAGEMENT STRUCTURE OF Lee’s SummitMunicipal Airport helps to identify challenges and opportunities facing the Airport.Management structure is one component of the Airport’s ability to reach its potential. As

such, this section is organized to include the following:

! Airport Management Structure! Airport Staffing

2.1 Airport Management Structure

Lee’s Summit Municipal Airport is owned and operated by the City of Lee’s Summit. Thecurrent formal organizational chart is shown in Figure 1. As shown, the chain of command movesfrom the Lee’s Summit Mayor and City Council down through the City Manager, to the DeputyDirector of Public Works, to the Airport Manager. The Airport Manager is responsible for themembers of his staff - four full time personnel - the assistant manager, two attendants, and onemaintenance technician. There are an additional 2.7 full-time equivalent airport attendants to cover

for all the hours of operation.

Although the direct line of authority shows onlythe Public Works Department, there are other Citydepartments and committees involved in themanagement and operation of the Airport. The Financeand Purchasing Departments are involved in the processof writing checks and invoicing customers at theAirport. The City Council approves the official Airportrates and charges each year. The Board Of AeronauticCommissioners (BOAC) is made up of 8 membersappointed by the City Council. This Board is chargedwith reviewing issues pertaining to the Airport andreporting back to the City Council. In addition to theBOAC, three other City Council committees considerairport issues, including:

! Finance & Personnel! Public Works

These additional groups change the formalorganizational chart by adding advisory functions to thetree. The functional or “informal” organizational chartis shown in Figure 2.

Figure 1 - Formal Organization Chart

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The value of an Airport’s advisory committee (in this case the BOAC) is typically based onthe make-up of the committee. If all sectors of the airport user community are not represented,

recommendations coming from the committee canbe skewed toward a limited number of specialinterest groups. Typically, these groups work bestwhen representatives of different segments ofAirport stakeholders are included. This ofteninvolves representatives from the political structure(e.g. City Council), pilots groups, corporateaviation, economic development/chamber ofcommerce, and city planning.

2.2 Airport Staffing

The day-to-day operation of the Airport isthe responsibility of the Airport Manager. TheAirport Manager’s position incorporates all facetsof Airport administration along with responsibilityfor the equipment and maintenance of grounds atthe Airport. The Airport Manager must have aworking knowledge of Federal, State, and locallaws and regulations relating to aviation. From anadministrative standpoint, the Airport Managersupervises Airport staff, administers Airportsecurity and emergencies, coordinates all long-range capital development, and coordinates thefinancial responsibilities of the Airport with theFinance and Purchasing Departments. Currently,the Airport Manager is also responsible forparticipating in the planning and environmentalprocesses at the Airport. The Assistant to theAirport Manager performs the duties of theManager when he is absent. The maintenance

technician performs maintenance on the Airport, mowing, repairs to equipment, buildings etc.Anything beyond the City’s capabilities is given to contractors to perform. Airport attendants areneeded to staff the Airport during its working hours.

The Airport is open 24 hours per day, seven days per week. However, it is only staffed from5:30 am to one hour after dusk, resulting in different hours for winter and summer. An approximatestaffing time table is presented in Figure 3 below. The first full time employee performs tasks suchas the inspection of the Airport, testing the fuel tanks, daily inventory, cleaning bathrooms if needed,and recording information in the inspection book. At the end of the day, the part-time employeeleaves after the airport inspection is completed, the building is cleaned, and equipment is put away.

Figure 2 - Functional Organization Chart

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The Assistant to the Manager provides coverage with the attendants during busy times andcompletes the weekly and monthly reports, required safety training and meetings per City policy,and insurance requirements. If the Airport remains open for an average of 14 hours per day, it mustbe staffed roughly 100 hours per week. Given that there are normally two personnel at the Airportat any one time, about 200 hours of staffing is needed each week. This translates into 5 full timeequivalent employees.

Figure 3 - Approximate Staffing Timetable for Lee’s Summit Municipal Airport

Recommendations concerning the management structure and operation of the Airport arepresented later in the report in Section 6 - Recommended Plan.

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3. EXISTING AIRPORT CHARACTERISTICS

AIRPORT FACILITIES ARE OFTEN DESCRIBED AS AIRSIDE or landside. Airside (or airfield)facilities include those directly used by aircraft during takeoff and landing, such as runways,taxiways, lighting, and instrumentation. Landside facilities include support buildings and

structures, such as aircraft hangars and parking (tie-down) aprons, automobile parking lots, andaccess roads. For this report, several previous studies that were adopted by the City are referenced.These include: the 1996 Adopted Airport Master Plan, the 1999 Airport Layout Plan (ALP) UpdateAdopted in 2000, and the 2005 Adopted CMT 14-year Airport Capital Improvement Plan (ACIP).

3.1 Airside Facilities

Lee’s Summit Municipal Airport is at an elevation of 1,004 feet above mean sea level (MSL)and has two intersecting concrete runways (see Figure 4). Runway 18-36 is 4,016 feet long and 75feet wide and extends in a north-south direction. Runway 11-29 is 3,800 feet long and 75 feet wideand extends in a northwest-southeast direction. Both runways are in good condition and have non-precision approach (NPI) markings, medium intensity runway lights (MIRL) and a full lengthparallel taxiway. All taxiways are 35 feet wide. Runway 18-36 is equipped with a Visual ApproachSlope Indicator (VASI) at both runway ends and Runway 11-29 with a Precision Approach PathIndicator (PAPI) at both runway ends. Table 1 summarizes the runway data for both runways. TheAirport is further equipped with a rotating beacon, segmented circle with a lighted wind indicator,and an Automated Surface Observing System (ASOS). A Non-Directional Beacon (NDB) is locatedon the field, but was decommissioned in 2007.

Table 1 - Runway Data Summary

ITEM Runway 18-36 Runway 11-2918 36 11 29

Length 4,016 3,800Width 75 75Pavement Concrete ConcreteWeight Bearing Capacity 30,000 lbs 30,000 lbsMarkings NPI NPIRunway End Identifier Lights Yes Yes Pavement Edge Lighting Medium Intensity Medium IntensityVisual Aid VASI PAPITraffic Pattern Left Right Right LeftApproaches RNAV RNAV RNAV RNAV

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LEE'S SUMMIT MUNICIPAL AIRPORT

Drawing Copyright © 2008 Clough Harbour & Associates LLP

III Winners Circle, PO Box 5269 Albany, NY 12205-0269www.cloughharbour.comMain: (518) 453-4500 www.cloughharbour.com

FIGURE4

EXISTING CONDITIONS

DATE: MAY 2008

CLOUGH HARBOUR & ASSOCIATES LLP

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Figure 5 - Normal Flight Track Patterns

Pilots at airports without an Air Traffic Control Tower (ATCT) typically followpredetermined “left” traffic patterns to ensure orderly flow and operation and communicate witheach other on the Common Traffic Advisory Frequency (CTAF). Visual, or VFR flight procedures,at Lee’s Summit Municipal Airport do not follow the FAA standard traffic patterns in order to avoidnoise sensitive residential development (see Figure 5). To reduce air traffic over residentialdevelopment, the traffic patternswere published to concentrate airtraffic operations to the south andeast of the airport, and minimizeflights to the north and west. Whennecessary, pilots departing to thewest or north (i.e., on Runways 29or 36) are required to climb to atleast 2,500 feet MSL beforeturning, in an effort to reduce noiseover homes. Whenever windspermit, departures to the south (onRunway 18) are recommended.Appendix A presents the publishedairport traffic pattern for Lee’sSummit Municipal.

Pilots operating to and fromthe Airport under Instrument FlightRules (IFR) contact the ColumbiaFlight Service Station (FSS) andKansas City Air Route TrafficControl Center (ARTCC) for themost up-to-date information andguidance. A remote transmitterreceiver (RTR) operated by theFAA is located on the field andprovides the communications linkto the Kansas City ARTCC.

There are five non-precision approaches available at Lee’s Summit Municipal Airport. Eachrunway end is equipped with a straight-in RNAV or GPS approach which uses satellite navigation.For all runway ends at LXT, these RNAV approaches are the best available type of non-precisioninstrument approach, and are call LPV procedures (Localizer Performance with Vertical guidanceprocedures). An LPV approach is nearly as accurate as a full precision approach using ground-basedradio navigational aids (i.e., an Instrument Landing System - ILS), but without any of the capital ormaintenance costs. The current approach minimums at LXT are as low as 1-mile visibility, with a250-foot cloud ceiling. This is also the lowest minimums possible without an ILS and an approachlighting system. Thus, the Airport currently has significant capability to accommodate instrument,

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1 VOR – Very High Frequency Omni directional Range


or IFR flight procedures. In addition, a traditional radio-based VOR[1]/DME approach is alsoavailable using the Napoleon VOR to fly an angled approach toward Runway 18. Aircraft then circleto land on the preferred runway end based on the current wind conditions. This allows aircraft notequipped with GPS to fly instrument approaches into the Airport.

In summary, the airfield facilities currently available at Lee’s Summit Municipal Airport arequite comprehensive. Although, a full ILS (with an approach lighting system) and an ATCT wouldbe beneficial, these systems required significant capital investments, annual maintenance, andstaffing (for the ATCT). In the near term, the single most important airfield improvement would bea runway extension. At about 4,000 feet in length, the current primary runway is insufficient toattract business users and corporate jets. From a financial standpoint, general aviation airportsgenerate significantly higher revenues from corporate aircraft, than from light personal aircraft.

3.2 Landside Facilities

Lee’s Summit Municipal Airport’s landside facilities include an administration/terminalbuilding, fuel storage tanks and pumps, aircraft storage hangars, an airport maintenance facility, anda fixed base operator (FBO) hangar. Lee’s Summit has two underground storage tanks capable ofholding 2,500 gallons of automotive gasoline and 10,000 gallons of 100 Low-Lead (LL) aviationfuel. An above ground storage tank holds 10,000 gallons of Jet-A. There are 138 T-hangar bays witha total storage capacity of approximately 137,000 square feet. The paved aircraft parking apron has66 tie-downs for itinerant and based aircraft and is approximately 27,500 square yards.

The City provides traditional aviation services including full and self serve fueling, groundpower units (GPU) for external power, and line service. Air Charter and Midwest Executive Aircraftare two FBOs that provide other services including aircraft rental, flight training, charter, aircraftsales, and aircraft maintenance.

A local chapter of Experimental Aviation Association leases approximately half an acre ofland on the northeast portion of the airfield for their executive hangar. There are other smaller flyingclubs which base aircraft and operate out of Lee’s Summit Municipal Airport including Mitchell’sFlying, the Wings Flying Club, and Kansas City Flying Club. While the first two clubs advertise toexperienced pilots, the Kansas City Flying Club markets to student pilots and offers introductoryflights.

In summary, the landside facilities currently available at Lee’s Summit Municipal Airportare quite comprehensive, and improvements are continuing. From a financial standpoint, developingnew hangars or providing “shovel-ready” hangar sites to accommodate business-use aircraft havethe potential to general additional revenues for the Airport. Projects that construct or foster thedevelopment of hangars (e.g., property acquisition, access roads, taxilanes, etc.) will best stimulatefuture revenues for the Airport. When new hangars attract new tenants, revenues from fuel sales,maintenance, and support services all increase.

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3.3 Forecasts

Forecasts of aviation demand for Lee’s Summit Municipal Airport are a key element infuture planning considerations. Aircraft demand forecasts, based upon the desires and needs of theservice area, provide a basis for determining the type, size, and timing of aviation facilitydevelopment. The most recent update to the Lee’s Summit Municipal Airport Master Plan was in2000 in the form of an Airport Layout Plan Update Narrative Report, which updated the basedaircraft and operations forecasts. Table 2 and 3 show the comparison among the 1996 Master Plan,2000 Airport Layout Plan (ALP) Narrative Report, and FAA’s Terminal Area Forecasts (TAF) forbased aircraft and annual operations.

Table 2 - Based Aircraft Projections1998 2000 2005 2015 2020 2025

1996 Master Plan 168 185* 210* 250* - -2000 ALP Narrative 168 190* 225* 310* - -

Terminal Area Forecast - 170 169 185* 191* 201** Forecast number

Table 3 - Annual Operations Projections

Year2000 ALP Narrative Terminal Area Forecasts

Local Ops Itinerant Ops Total Ops Local Ops Itinerant Ops Total Ops1998 53,600 38,800 92,400 - - -2000 60,000* 44,000* 104,000* 53,640 38,360 92,0002005 68,000* 56,000* 124,000* 62,332 30,618 92,9502015 88,000* 82,000* 170,000* 61,628* 30,412* 92,040*2020 - - - 61,628* 30,412* 92,040*2025 - - - 61,628* 30,412* 92,040*

* Forecast number

The TAF for 2000 and 2005 are actual based aircraft, and estimated operations at that time,and thus are more accurate than the earlier forecasts from 1996 or 2000. It can be seen that theprevious forecasts of based aircraft and operations were overestimated. However, it should be notedthat the previous forecasts assumed significant development of hangars and other facilities to attracttenants from other locations. Another reason for the limited growth is a general contraction of theindustry as a whole, which further enhances the need for expanding revenue opportunities. Incontrast, the TAF is primarily an extrapolation of recent trends into the future.

The future growth of activity at Lee’s Summit Municipal Airport is somewhat dependent onthe growth in the region, but also on the facility development at other nearby airports. The effectsof other local airports on Lee’s Summit will be further discussed in the Market Analysis (Section3.5).

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1 The ARC has two components. The first component, depicted by a letter, is the Aircraft Approach Category (anoperational characteristic), and refers to the aircraft approach speed during landing. The second component, depictedby a Roman numeral, is the Airplane Design Group, and refers to the aircraft wingspan (a physical characteristic).


3.4 Airport Development Plan

The most recent recommended development plan – the Airport Capital ImprovementProgram (ACIP) for Lee’s Summit Municipal Airport is shown in Figure 6. One of the tasks of thisbusiness plan is to suggest revisions to the ACIP to suit the current needs of the Airport, with a focuson revenue generation. Overall, an airport development plan must first address safety, throughimplementation of FAA design standards as the primary consideration. Secondly, it should suggestnew or improved facilities to better serve users and support financial sustainability.

The existing airport development plan and ACIP include a comprehensive set of upgradesto the Airport, with a mixture of airfield and landside facilities, land acquisition, and other airportmodernizations. In general, the implementation of the 2005 CMT 14-year ACIP would provide foran excellent business-class airport, satisfying all potential requirements. However, the feasibility offunding the full set of projects is low, particularly within the time frame provided. As such, thissection of the business plan provides a refined priority of projects for consideration by the City.While it is felt that all the identified projects are worthwhile, the suggested revisions are intendedto foster additional airport business use and financial sustainability.

Airport Design Standards

FAA Airport design standards are based on the Airport’s Reference Code (ARC)1. The ARCof any airport is based on the largest aircraft category that conducts at least 500 annual operations.While Lee’s Summit Municipal Airport is classified as a B-II airport (accommodating turbopropsand light jets), it is planning to become C-II. ARC C-II aircraft include medium to large cabinbusiness jets. The FAA design standards change significantly when an airport upgrades from a B-IIto a C-II airport; offsets between runways and taxiways become larger and the Runway Safety Areasand Runway Object Free Areas increase in size.

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The 1999 ALP Narrative Report had forecast the design aircraft at Lee’s Summit MunicipalAirport to be C-II by 2015, as shown in Table 4. As of 2008, the Airport is not meeting these jetaircraft forecasts, which may be related to the limited length of the airport runways. As can be seenin Table 5, Lee’s Summit Municipal Airport had less than 150 C-II jet operations in 2007, based onFAA flight plan data, even though the number of jet operations has increased since 2000.

As such, it may be in the best interest of the Airport to defer projects that would not directlyincrease the business use and financial potential of the Airport. This section of the Business Plansuggests these revisions, which are summarized below. The most important revision to the ACIPis moving the runway extension into the short-term planning period in an effort to foster use by ARCC-II aircraft.

Table 4 -ARC C-II Operations ForecastsYear Operations2000 2002005 4002015 800

Source: 1998 ALP Narrative

Table 5 -Total Jet Operations by Airport Reference Code

Lee's SummitYear B C D2000 198 35 02007 330 144 0

% Change 66.7% 311.4% -Source: FAA ETMSC (Flight Plan Data)

Runway Extension

A runway extension may increase the financial position of the Airport as more businessesand corporate jets would be able to operate on the longer runway. Thus, the extension of Runway18-36 should take priority in the ACIP to increase total operations as well as attract corporate jets.The current ALP depicts the two runway extensions; a 1,284 foot extension to the south and a 200-foot extension to the north. The runway cannot be extended more than 1,284 feet to the south dueto impending obstructions from buildings. It is recommended for the Airport to complete the fullrunway extension to the runway south in the short term, for a runway length of 5,300 feet. The 200-foot extension to the north may be conducted later, after a relocation of Strother Road is completed.

Although it is not possible to predetermine the increase in jet aircraft use encouraged by alonger runway, there is a clear correlation between runway length and jet activity. For example, NewCentury and Downtown Wheeler have the longest general aviation runways in the region and as well

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as the most jet operations. Although there are other related factors to the high level of jet activity,a longer runway is clearly needed to better accommodate business jet aircraft and relateddevelopment at Lee’s Summit.

Table 6 - Total Jet Operations by Airport Reference Code

Year

New Century Downtown WheelerB C D B C D

2000 1540 1526 108 8355 7412 31112007 1769 2948 115 7616 8357 3553

% Change 14.9% 93.2% 6.5% -8.8% 12.7% 14.2% Source: FAA ETMSC

Parallel Taxiway Relocation

For Lee’s Summit Municipal Airport, the current FAA standard parallel taxiway offset(measured from the runway centerline to the parallel taxiway centerline) is 240 feet for ARC B-II.The existing offset of Taxiway “A” is 225 feet, thus it does not quite meet standards. Long term, theALP Report recommends providing a full precision instrument approach, with approach lights, andARC C-II standards. This recommendation increases to required parallel taxiway offset to 400 feet.While the 400-foot offset is ideal, it is not required until a full approach lighting system (e.g.,Medium Intensity Approach Lighting System with Runway Alignment Indicator Lights – MALSR)is in place on Runway 36. Until that time, other runway-taxiway offsets may be adequate, per FAAcriteria as listed in Table 7.

Table 7 - Runway-Taxiway Offsets RequirementsFacility (Design Aircraft) ARC B-II ARC C-II

LPV Approaches (any wingspan) 240’ 300’LPV Approaches (wingspans <55’)* 227’LPV Approaches (wingspan <65’)* 233’

Potential Facility (Design Aircraft) ARC B-II ARC C-IIILS with MALSR (any wingspan) 300’ 400’ILS with MALSR (wingspans <55’)* 280’ILS with MALSR (wingspans <65’)* 285’*With an approved FAA Modification-to-Design-Standards

As shown in the Table, with the current LPV approaches and based aircraft (wingspans under55’) at Lee’s Summit, there may not be an immediate need to relocate Taxiway A. Based on theexisting taxiway offset of 225 feet, FAA should be consulted to discuss the potential for a temporary

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modification-to-design-standards for the runway-taxiway offset. This short-term modification wouldenable the City to pursue the runway extension, prior to the implementation of the taxiwayrelocation project.

Combined with the runway extension project, Runway 18-36 should be rehabilitated andwidened to 100 feet (in anticipation of the ultimate ARC C-II design standards). This will ensurethat the new longer runway contains a consistent pavement design and condition for its entire length,and the entire runway can equally accommodate the weight of larger corporate aircraft. ParallelTaxiway A would also be extended at that time, with the standard runway-taxiway offset, and tieinto the extended end of Runway 36. The existing portions of parallel Taxiway A may be retainedat the current runway-taxiway offset until C-II itinerant operations reach 500. As discussed above,the ultimate parallel taxiway offset (e.g., 300 feet, 400 feet) should be evaluated with the FAA, aspart of an ALP Update effort. For Taxiway A, this smaller offset would retain more of the existingapron and hangar areas on the west side of the main Runway. This change does not need to beaddressed currently and would require an ALP update; however, from a business planningstandpoint, retaining existing hangar and apron areas provides more revenue generation potential.

Other Development Plan Factors

As of May 2008, the City of Lee’s Summit has completed 55 percent (14 parcels) of anairport land acquisition program. The land acquisition is required in order to provide the standardRunway Protection Zones (RPZs), the extension to Runway 18-36, and development area for a newterminal building and hangars on the east side of Runway 18-36. Currently, the appraisals for theremaining parcels are being reviewed with the Missouri Department of Transportation (MoDOT)and funding is in place to complete the acquisitions.

Lee’s Summit is current pursuing construction of a new apron and taxiway on the east sideof the airfield, which will provide a new terminal development area. The future terminal anddevelopment area is being moved from the west to the east side of the airfield due to setbackrequirements the terminal building and runway. A new exit will be provided, connecting to StrotherRoad, and is expected to increase traffic through the area significantly. Transferring the mainservices of the Airport near this new high traffic area should provide potential businesses incentivesfor development at Lee’s Summit Municipal Airport. Strother Road is expected to be improved inaccordance with the Thoroughfare Master Plan. The design process should include adequateseparation from the Runway 18 end to satisfy FAA requirements. The new east side terminal areaof the Airport will provide additional developable property for both general and corporate aviationfacilities.

There are several areas on the airfield that may be utilized for non-aviation development.Such development may be related to aviation, but does not need a direct connection to the airfieldfor aviation access. Businesses may include those typically found in an office park or a flightschool, flight department, or corporation that park their aircraft on the main apron. East of the accessroad for the new terminal area is currently reserved for this type of commercial development.Additional sites could include to the west and east of the Runway 36 RPZ. These sites include

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multiple acres for development and roadway access once Strother Road is realigned. They are lowerin elevation then the runway and would not impact the airspace. An additional site includes theparcel scheduled for acquisition in the southeast corner of the airfield. The parcel is large enoughfor office or light industrial facilities with an extension of the existing roadway network. Cityofficials should ensure that all non-aviation development is compatible to the Airport per the FAALand Use Compatibility Guidelines.

The current east side apron project does not include road access or buildings. A Site Plan isrequired by the City before all roadway access and buildings are constructed. The Site Plan shouldbe completed as soon as possible in order to market hangar sites and attract businesses to the newapron area. It is also recommended that the Site Plan contain minimum standards for developmentof buildings rather than specifications for any individual development. This will allow developersor new tenants to construct buildings most suited to their needs, reduce the processing time, but stillsatisfy City requirements.

It is also recommended to amend the phasing and construction of the new hangars asdepicted in the ALP. The old T-hangars to the west of Runway 16-36 have an approximate lifespanof five additional years. It is recommended that replacement T-hangars be built within the next fiveyears in the northeast quadrant of the airfield. Once new T-hangars are completed, the first, andpossibly second, row of old T-hangars on the west side may be demolished, and would then enablethe relocation of Taxiway A (See Figure 7). The demolition of the old T-hangars and relocation ofTaxiway A would be deferred until after the extension of Runway 36 and the development of newreplacement T-Hangars.

It is also recommended that conventional hangars to be built to the west of the runway (seeFigure 7). Conventional hangars are typically occupied by corporate aircraft, which correspondswith the business goal of Lee’s Summit. To foster the growth of corporate airport activity, properaircraft storage must be supplied in conjunction with the new terminal apron and building. Therunway extension is an important component to the growth of corporate aviation. The suggestedrevisions to the ACIP phasing are summarized below in Table 8.

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LEGENDEXISTING ULTIMATE DESCRIPTION



EXISTING & ULTIMATE AIRPORT PROPERTY LINE

AVIATION DEVELOPMENT

0

Scale in feet

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1,285' ExtensionUltimate 5,500' x 100' Runway

Ultimate Service Road

Ult. Service Rd.

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FIGURE7

PERFORMANCE ALTERNATIVE

DATE: MAY 2008


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Table 8 - Potential Revision to the Airport Capital Improvement ProgramCurrently in Progress Eng. Implementation Plan*

Runway RPZ Land Acquisition -- -Land Acquisition for Terminal Development ---Phase I of Terminal Ramp BC5Construction of Taxiway C BC4, C2, B4Construct Fuel Facility and Vault BC9, BC15Relocation of Rotating Beacon BC9Install Perimeter Fence BC14

Short Term Projects (2008-2013)Site Plan for New Terminal Area ---Construct New Terminal Access Road BC6Construct New Terminal Building and Parking Lot BC8, BC7Extend Runway 36 to 5,300’ A2Widen Runway 18-36 to 100’ and Rehabilitate A1, BC11, BC13Extend Taxiway A B1Phase I of T-hangars in N.E. Quadrant BC2Phase I of West Hangars D1Realign Strother Road as City Public Works project E1

Intermediate Term Projects (2014-2019)Demolish T-Hangars BC3Relocate Taxiway A to an offset of 400’ BC10Phase II of T-hangars in N.E. Quadrant D4Construct Phase II of Terminal Ramp C1Construct Taxiway B B6

Long Term Projects (2020 and beyond)Construct Northeast Holding Apron C2Construct Taxiway E B3Install MALSR and ILS on Runway 36 A4Construct Perimeter Roads E3, E4Extend Runway 18 North 200’ to 5,500’ A4Construct Taxiways A1 and Northwest Hold Apron B7, C3Install Approach Lights on Runway 18 A5Air Traffic Control Tower BC16Extend Taxiway B2 and E B5Construct Taxiway A5 B2Construct New West Entrance Road E2Phase II of West T-hangars D2Phase III of West T-hangars D3*Number corresponds with Airport Master Plan Implementation Engineering Investigation

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3.5 Market Analysis

To understand the revenue-producing potential of Lee’s Summit Municipal Airport, it isimportant to evaluate the economic forces at play in the existing market. The interaction ofcustomers in the market with existing offerings of aviation products and services determines prices,and can guide the Airport in finding a unique position in the market that can produce revenue. Inaddition to assessing the condition of the existing market in the suburbs of Kansas City, there is alsosome undetermined amount of non-customers that may be converted to customers, should theAirport find the right balance of product/service, price, and value to offer the market. The ultimategoal of the Airport is to capture an increased share of both the existing customer market and a shareof the natural regional growth of general aviation demand in the Kansas City market.

Airport Market Area

For the purpose of this Business Plan, the existing geographic market of Lee’s SummitMunicipal Airport is defined to include the suburban areas to the east and south of Kansas CityInternational, and west to Miami County Airport in Paola. While transient activity originates inmany other regions of the country, this geographic area represents the market from which theAirport is likely to draw new users and activity that will assist in driving revenue growth. Figure 8illustrates the general market area of the Airport and includes nine other nearby public-use airports.

Market Area Airport Facilities

Within the geographic service area for Lee’s Summit Municipal Airport, there are a numberof other public-use airports, which provide a range of general aviation services, and likely competewith Lee’s Summit Municipal Airport for activity and users. For this Business Plan, the airportsconsidered as competing facilities include:

! Johnson County Executive (OJC)! Charles B. Wheeler Downtown (MKC)! New Century AirCenter (IXD)! East Kansas City (3GV)! Midwest National Air Center (GPH)! Lawrence Smith Memorial-Harrisonville (LRY)! Skyhaven (RCM)! Miami County (K81)! Higginsville Industrial Municipal (HIG)

These airports and the facilities and services they offer represent the competition in theexisting market for general aviation products and services in the eastern and southeastern suburbsof the Greater Kansas City region.

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Figure 8 - Lee’s Summit Airport Market Area

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Table 9 presents information regarding the facilities offered by these airports for comparisonpurposes.

As indicated, airports within Lee’s Summit’s market area offer a range of options to generalaviation users. The largest airfield in the area is New Century AirCenter, which consists of 2,600acres, and boasts the longest runway (7,339 feet.) Johnson County has the most based aircraft (228)and matches New Century in number of based jets (15). Wheeler Downtown offers the secondlongest runway of all nine airports (7,002'), and the most based multi-engine aircraft (85). MiamiCounty Airport in Paola, Kansas has the least number of based aircraft (22).

There are certain anomalies within the region that need to be considered when developinga plan for Lee’s Summit. East Kansas City (privately owned) is the smallest of facilities in termsof land area, with just 120 acres and 4,501 feet of paved runway; however, there are 200 basedaircraft on the airfield, a total second only to Johnson County Executive.

Lee’s Summit Municipal Airport facilities are within averages for the region. In terms ofairfield size and based aircraft, Lee’s Summit is larger and more active than five of the other nineairports. However, Johnson County Executive, with nearly identical runway length and approachcapability, and no crosswind runway, has attracted 15 based jets. One interesting difference betweenJohnson County Executive (OJC) and Lee’s Summit is the fact that OJC offers the benefits of an AirTraffic Control Tower to users.

Wheeler Downtown Airport is the busiest general aviation airport in the region, with recentannual operations estimates approaching 100,000. The only airports that come close to this levelof activity are New Century and Johnson County Executive, which have estimated annual operationsnear 60,000 and 70,000, respectively. Wheeler Downtown’s location in Kansas City suggests thatit serves general aviation desiring to access the Central Business District (CBD). As such, much ofthe demand may be immune to lower prices or equivalent services at other regional airports.However, there may be a small portion of based aircraft that are sensitive to these market factors thatLee’s Summit may be able to capture.

Market Area General Aviation Services

General aviation services available at area airports include airframe repairs, powerplantrepairs, and avionics and are shown in Table 10. Additional anomalies are apparent when comparingthe three tables with regard to the services provided, rates charged, and storage availability.

For instance, Midwest National (GPH) offers the fewest services, with just minor airframeand power plant repairs and no additional services such as flight instruction, charter service,avionics, or aircraft sales/rental. GPH also offers the lowest price for Jet A in the area, but chargesa higher than average storage rate, but still has an active waiting list for hangar storage. While Lee’sSummit Municipal Airport offers most of the services provided at the other nine airports, there isno waiting list for hangar storage.

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Market Area Rates and Charges

As indicated in Table 11 below, prices for Avgas in May of 2008 were found to be as lowas $3.83 per gallon at Miami County in Paola, and as high as $5.90 per gallon at WheelerDowntown, while Jet A was $3.49 at Midwest National Air Center, and $5.90 at WheelerDowntown. Only New Century and Johnson County airports report a fuel flowage fee. None of theairports considered reported the collection of a landing fee.

In terms of aircraft storage, rates for daily tie-downs range from $3.00 at Skyhaven andMiami County, to $5.00 at Smith Memorial and East Kansas City. Higginsville Industrial Municipaland Wheeler Downtown charge multiple rates based on the type of aircraft. Midwest National andWheeler Downtown have the highest daily tie-down fees. Monthly tie-down rates begin at $25 atSkyhaven, and increase by increments of $10 until they reach $55, the highest amount reported, atMidwest National. Monthly rates at Wheeler Downtown vary based upon the size of the aircraft.

Hangar storage at these regional airports varies, depending mostly on type (box/conventionalor T-hangar). Rates begin as low as $65 per month for a T-hangar at Skyhaven, to a high of $2,500per month for an 80'X70' conventional hangar Midwest National, and at many price points inbetween. On a square foot basis, T-hangar storage ranges from a rate of $0.08 to $0.19 per squarefoot. Box or conventional hangar storage can be leased for approximately $0.40 to $0.50 per squarefoot.

Considering the availability of hangar storage among all of these airports, of particularinterest is a T-hangar construction project that is currently underway at Wheeler Downtown Airport.When completed, the project will include seven new buildings containing 96 individual hangars, a100LL self-serve fueling facility, and wash area and a connecting taxiway. The first phase ofconstruction is expected to finish three buildings, with 44 hangar units, the self-serve fuel facility,wash area, taxiways, and apron areas, while not displacing current T-hangar tenants. This projectwill add 49 T-hangar units to the regional market. With approximately 1,175 aircraft based at theairports considered here, and waiting lists that total 85 parties seeking storage at a number of theseairports, this additional hangar capacity will likely be absorbed in a relatively short timeframe.

Lee’s Summit Municipal Airport rates and charges are within the upper ranges of those fromother airports in the region, for fuel prices, tie-down fees, and hangar storage.

Summary of Market Area Analysis

Considering facilities, services, and rates and charges between Lee’s Summit MunicipalAirport and the nine airports discussed here, it appears that in many ways Lee’s Summit MunicipalAirport does not differentiate itself from the market. While only three facilities have more basedaircraft than Lee’s Summit, the Airport is similar regarding land envelope, primary runway length,and approach capability. Likewise, general aviation services currently provided do very little tomake the Airport unique in the market.

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Another facet of the facility comparison in this market assessment is landside facilities thatare offered as a value to the market, such as hangar storage. The Wheeler Downtown T-Hangardevelopment project will likely attract additional tenants to that airport. It will be critical for Lee’sSummit to offer a competitive alternative to Wheeler Downtown, if the Airport endeavors to retainexisting tenants or attract new owners and operators seeking hangar storage.

From a rates and charges standpoint, Lee’s Summit Municipal Airport employs a pricingstrategy that places it at the upper end of the airport facilities discussed here. In terms of fuel prices,Lee’s Summit is 1.5 percent higher than average for full service AvGas, while matching the average($4.57 for self-serve AvGas). The price for Jet A is $0.35 per gallon more than average price. Whenoperators consider fuel for their aircraft in the Kansas City region, they will be able to utilize sixother airports with lower AvGas prices and five other airports with lower Jet-A prices. Only WheelerDowntown, which is located closest to the CBD, charges a higher Jet-A fuel price.

For daily tie-down storage, Lee’s Summit Municipal maintains a fee schedule, which variesbased on type of aircraft. This range of fees averages-out to $25 per day, which is $9.00, or 55percent, higher than the average for all airports ($15.94). Lee’s Summit charges $90 or 40 percentper month more than the average ($215) for T-hangar bay. While conventional hangar storage is notwidely available at Lee’s Summit, the rate for the 60' x 60' box hangar is $1,147 per a month, whichis approximately 30 percent lower than the average of $1,612 per month. This difference could bethe result of different amenities associated with hangars at other airports (heat, water, sewer, etc.).

Because Lee’s Summit Airport’s pricing is in the upper range, it is not in a position tocapture a greater portion of activity than any other airport in the area. Finally, of all airportsconsidered, only Johnson County Executive and Lee’s Summit Municipal do not have active waitinglists for aircraft hangar facilities.

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26

Table 9 - Airport Facility Comparison

Owned Acres Based Aircraft Runway NAVAIDS

AirportJet Multi Single Heli Glider Total First

L x WSecondL x W

(Highest) Tower

Lee’s Summit (LXT) Public 433 3 14 158 2 0 177 4,016' x 75 3,800' x 75 GPS No

Johnson County (OJC) Public 568 15 24 189 6 0 228 4,098' x 75 100' x 75' H GPS Yes

Wheeler Downtown(MKC)

Public 700 5 85 96 6 0 186 7,002' x 150' 5,050' x 150' ILS/GPS Yes

New Century (IXD) Public 2600 15 34 128 0 0 177 7,339' x 150' 5,130' x 100' ILS/GPS Yes

East Kansas City (3GV) Private 120 0 10 190 0 0 200 2,200' x 20' - GPS No

Midwest National(GPH)

Public 573 0 13 67 0 0 80 5,504' x 100' - ILS/GPS No

Smith Memorial (LRY) Public 126 0 4 43 1 0 47 4,000' x 75' - GPS No

Skyhaven (RCM) Public 402 0 6 37 0 3 43 4,206' x 75' 2,801 x 60' GPS No

Miami County (K81) Public 230 0 0 22 0 0 22 3,400' x 60' 1,550' x 60' GPS No

Higginsville Industrial(HIG)

Public 200 0 2 13 0 0 15 4,400' x 75' - GPS No

Source: Airport Master Record, retrieved May 7, 2008 (www.airnav.com, www.gcr1.com/5010web/)

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27

Table 10 - Airport Service Comparison

AirportFrame

RepairsPower

RepairsFlight

InstructionCharterService Avionics

AircraftSales

AircraftRentals Other

Lee’s Summit (LXT) Major Major Yes Yes No Yes Yes Survey

Johnson County (OJC) Major Major Yes Yes Yes Yes Yes Ambulance, Survey

Wheeler Downtown (MKC) Major Major Yes Yes Yes Yes Yes Survey, Air Freight

New Century(IXD) Major Major Yes Yes Yes Yes Yes Survey

East Kansas City (3GV) Minor Minor Yes No No No Yes -

Midwest National (GPH) Minor Minor No No No No No -

Smith Memorial (LRY) No No Yes Yes No Yes Yes Ambulance, Agriculture

Skyhaven (RCM) Minor Minor Yes Yes No No Yes Glider, Towing

Miami County (K81) Major Major Yes No No No No -

Higginsville Industrial (HIG) Major Major No No Yes Yes No -

Source: Airport Master Record, retrieved May 7, 2008 (www.gcr1.com/5010web/)

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2Price begins at $10 for single engine piston aircraft, and increases nominally for piston helicopters, piston twin, jet helicopters, turbine, and jet aircraft. First nightfee waived if fuel purchase meets or exceeds these fees.3T-hangar rental fees vary based on 10 different t-hangar space configurations, and range from $95 per month for a 36' x 32' open T-hangar to $522 for a 53.5' x 48'T-hangar with electric doors.4 Includes heat; planned construction5 With partition

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Table 11 - Airport Rates and Charges Price Comparison

Fuel ($/gallon) Tie-Down Hangars

Airport Avgas/ Self-Serve Jet A Flowage Daily MonthlyWaiting

List T-Hangar Box

Lee’s Summit (LXT) $4.72/4.57 $5.10 - $10/15/20/25/30/502

- - $95/300/5223 $1,147

Johnson County (OJC) $5.00/4.80 $5.00 $0.08 $10 $45 2 years - $1,300/$1,5004

Wheeler Downtown (MKC) $5.90 $5.90 - $15/20/25 Call forquote.

6 BAC $275 -

New Century (IXD) $5.20/4.90 $4.90 $0.08 - - 5 years $235/305 -

East Kansas City (3GV) $4.35 $4.41 - $5 - - Private Private

Midwest National (GPH) $4.24/3.99 $3.49 - $20 $55 8 BAC $260/290 $2,500

Smith Memorial (LRY) $3.95 N/A - $5 $30 30 BAC $120/1505/250 -

Skyhaven (RCM) $4.65 $4.45 - $3 $25 10 BAC $65 -

Miami County (K81) $3.83 N/A - $3 $35 25 BAC $135/150 -

Higginsville Industrial (HIG) $4.65 N/A N/A $5/10 $30/50 6 BAC $135/160 -

Source: Telephone survey, performed by LXT Airport Management, January 2008

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4. BASELINE FINANCIAL AND ECONOMIC OUTLOOK

THIS SECTION IDENTIFIES HISTORICAL REVENUES AND EXPENSES attributable to Lee’s SummitMunicipal Airport and projects those revenues and expenses to the year 2013. This projectiononly considers a baseline scenario with no revenue enhancement projects included. In other

words, what are the financial implications of continuing the Airport’s operation as it is today? Ina later section alternative projections of financial performance are developed based upon master planimprovements and marketing pro-formas. To properly frame these financial statements, this sectionis organized to present the following:

! Historical Revenues and Expenses! Baseline Forecast of Revenues and Expenses

4.1 Historical Revenues and Expenses

Information concerning historical revenues was taken from the year 2004 through 2007.This data gave an indication of the direction of growth of the revenue base. Table 12 shows thehistorical revenues and expenses as shown from Lee’s Summit’s statement of revenues and expensesand changes in retained earnings. This table is presented using the same format as the City’s financedepartment uses.

As shown, the revenue and expense statement includes non-operating costs and grantreimbursements as a part of the income statement. For purposes of the business plan, the ability ofthe Airport to generate revenues and cover operating costs is the primary concern. Thus, GrantReimbursement revenues and Depreciation and Amortization expenses are not included in ourbaseline forecast of revenues and expenses.

From the data in Table 12, Operating Revenues have only three categories. These categoriesare combinations of a number of revenue subcategories. To better manage and control revenues andcosts, it is often preferable to include functional descriptions of revenue and expense sources. Thus,the information in Table 12 was expanded in Table 13 to include various sources of revenues andexpenses. For example, Fuels Sales was broken down to show fuel sales by type, Charges forServices was broken into the hangar rents, tie down fees, and ground lease revenues, and OtherRevenues was broken down into Misc. Airport Services, Sectional Maps and Other Revenues. Theannual contributions to the Airport from the City for capital development grants were removed fromOther Revenues. Those contributions are not considered revenues from operations by this analysis.Rather, this analysis is geared to identify the actual revenue producing ability of the Airport, alongwith its actual operating costs. From these changes, the baseline operating revenues were createdas shown in Table 13.

Operating expenses have grown by roughly 6.8 percent per year over the 4-year history. In2006, Other expenses increased by $321,725 due to expenditures related to repair of storm damage.In 2007, expenses declined, but not to their 2005 levels. Fuels and lubricants continue to increase

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Table 12 - Original Income/Expense Information

Operating revenue: 2004 2005 2006 2007

Fuel sales $426,036 $452,048 $639,698 $549,231

Charges for services 452,261 450,362 445,348 452,397

Other 99,551 111,551 351,598 526,023

Total operating revenues $977,848 $1,013,961 $1,436,644 $1,527,651

Operating expenses: 2004 2005 2006 2007

Salaries, wages and benefits $320,180 $337,388 $311,691 $360,689

Maintenance and repairs 116,740 90,341 74,794 95,023

Utilities 29,193 30,730 30,620 32,654

Fuels and lubricants 311,425 349,427 522,829 449,732

Depreciation and amortization 270,050 271,399 265,179 268,094

Other 118,278 109,674 431,399 154,836

Total operating expenses $1,165,866 $1,188,959 $1,636,512 $1,361,028

Nonoperating revenues (expenses): 2004 2005 2006 2007

Interest income $17,608 $4,245 $24,752 $113,136

Interest expense (68,679) (73,397) (66,140) (61,422)

Grant reimbursements 435,432 411,467 5,026,368 9,653,004

Gain on disposal of fixed assets 0 0 0 (4,450)

Total nonoperating revenues(expenses)

$384,361 $342,315 $4,984,980 $9,700,268

Total Revenues (operating andnonoperating)

$196,343 $167,317 $4,785,112 $9,866,891

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as wholesale prices continue to rise. Overall fuel sales in gallons has decreased in 2007 and early2008 and will likely continue to fall as prices escalate.

It is against this historical data that the baseline forecast of revenues for Lee’s SummitMunicipal Airport is calculated. It should be noted that most public-use general aviation airportsin the United States do not cover expenses with revenues and must be subsidized by theirowners/sponsors.

Table 13 - Baseline Historical Operating Revenues and Expenses

REVENUES 2004 2005 2006 2007

Unleaded Fuel Sales $12,747 $8,261 $11,292 $11,608

Turbine Fuel Sales 84,027 98,044 193,604 116,954

100LL Fuel Sales 329,262 345,743 434,801 420,669

Hangar Rental 443,036 443,471 436,417 437,137

Overnight Tie-down Fees 8,144 5,811 6,558 11,039

Ground Lease Revenue 1,080 1,080 2,373 4,222

Misc Airport Services 8,572 8,988 11,663 7,932

Sectional Maps 12,802 10,696 11,749 9,481

Other Revenues 17,603 24,283 30,396 12,242

Total Operating Revenues $917,273 $946,377 $1,138,853 $1,031,284

Operating expenses: 2004 2005 2006 2007

Salaries, wages and benefits $320,180 $337,388 $311,691 $360,689

Maintenance and repairs 116,740 90,341 74,794 95,023

Utilities 29,193 30,730 30,620 32,654

Fuels and lubricants 311,425 349,427 522,829 449,732

Other 118,278 109,674 431,399 154,836

Total Operating Expenses $895,816 $917,560 $1,371,333 $1,092,934

Net Revenues: Surplus/(Deficit) $21,457 $28,817 ($232,480) ($61,650)

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4.2 Baseline Forecast of Revenues and Expenses

This baseline forecast presents a status quo look at revenues and expenses, influencedprimary by historical activity. It does not consider all of the potential changes at the Airport thatmight occur through the implementation of the master plan or in the Kansas City metropolitan areaeconomy that might change the historical trend. To determine the historical trend, the percentincrease from the year 2004 to the year 2007 was examined to find the average percent change inrevenues and expenses. Thus, any major fluctuation during 2006 caused by storm damage did notunduly affect the overall trend. Over the four-year period the following notable trends wereidentified:

! Unleaded fuel sales revenue decreased by an average of 3.0 percent per year! Turbine Fuel (Jet A) Sales revenue increased by an average of 11.8 percent per year! 100LL Fuel Sales revenue increased an average of 8.5 percent per year! Overnight Tie-down Fees increased an average of 10.7 percent per year

It should be noted that there has been a recent drop in the fuel sales due to spiraling prices. Thus,in order to be conservative in the baseline forecasts some assumptions were used.

! Unleaded fuel sales was assumed to continue to decrease at a rate of 3 percent dueto market demand and higher fuel prices.

! Turbine Fuel Sales was assumed to increase at 6 percent - roughly half of thehistorical rate - dampened spiraling prices.

! Overnight Tie-down Fees was assumed to increase by 5 percent in keeping withhistorical growth.

! Hangar revenues have not increased with the Consumer Price Index (CPI), due inpart to existing vacancies in the open-T hangars. For the post-2008 future, it wasassumed that rents for all but the open-T hangars would be increased byapproximately 3 percent (1 percent for 2008).

! The rest of the revenues and the operating expenses were assumed to increase at therate of the CPI.

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Table 14 - Baseline Forecast of Operating Revenues and Expenses

ITEM 2008 2009 2010 2011 2012 2013

REVENUES

Unleaded Fuel Sales $11,260 $10,922 $10,595 $10,277 $9,969 $9,669

Turbine Fuel Sales 123,971 131,409 139,294 147,651 156,511 165,901

100LL Fuel Sales 437,496 454,996 473,196 492,123 511,808 532,281

Hangar Rental 439,140 447,193 459,515 472,206 485,277 498,741

Overnight Tie-down Fees 11,591 12,170 12,779 13,418 14,089 14,793

Ground Lease Revenue 4,390 4,566 4,749 4,939 5,136 5,342

Sectional Maps 9,861 10,255 10,665 11,092 11,536 11,997

Other Revenues 20,981 21,820 22,693 23,601 24,545 25,526

Total Operating Revenues $1,058,690 $1,093,331 $1,133,486 $1,175,307 $1,218,871 $1,264,250

EXPENSES

Salaries, wages and benefits $375,117 $390,121 $405,726 $421,955 $438,833 $456,387

Maintenance and repairs 98,824 102,777 106,888 111,163 115,610 120,234

Utilities 33,960 35,319 36,731 38,201 39,729 41,318

Fuels and lubricants 467,721 486,430 505,887 526,123 547,168 569,054

Other 161,029 167,471 174,169 181,136 188,382 195,917

Total Operating Expenses $1,136,651 $1,182,118 $1,229,401 $1,278,578 $1,329,722 $1,382,910

Net Revenues ($77,961) ($88,787) ($95,915) ($103,271) ($110,851) ($118,660)

As shown, baseline revenues are anticipated to grow from $1,058,700 in 2008 to $1,264,300 by theyear 2013 - a 19.4 percent increase. Baseline operating expenses are expected to increase from$1,136,651 in 2008 to $1,382,910 by the year 2013 - a 21.6 percent increase. Net operating costsare expected to grow from roughly -$78,000 to -$118,700, or almost double the current contributionof City to airport revenues. Thus, under the status quo or baseline scenario, financial performanceof the Airport will see continued operating deficits through the next five years.

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5. BUSINESS PLAN ALTERNATIVES

Several business plan alternatives were identified, analyzed, and compared based on their abilityto improve the financial performance of Lee’s Summit Municipal Airport. The ultimate goalof the alternatives analysis for the Airport is to provide the City with sufficient information

to make informed decisions concerning airport capital improvement spending. In addition, the long-term financial viability of the Airport is in view as a part of this analysis. Thus, any increases inoperating revenues that result from a selected plan can then be used to cover airport operatingexpenses, pay for portions of the local share of capital development projects, additional terminalservices, or provide for other needs at the Airport. The alternatives assessed in this Business Planinclude:

! Baseline: The Baseline alternative is essentially a “Status Quo” alternative, whichsimply estimates future financial conditions based on the continued operation of theAirport under current practices and without significant capital improvement projects(see Figure 4 and Table 14).

! Full Build-Out: The Full Build-Out alternative evaluates the future financialperformance of the Airport assuming that the projects recommended in the 1996Airport Master Plan and 1998 ALP Narrative Report are implemented in full (seeFigure 6). Most notably is the expansion of the airfield from ARC B-II to ARC C-IIdesign standards.

! Performance Build-Out: The Performance Build-Out alternative is a scaled-backversion of the Full Build-Out alternative, which combines a strategic set ofrecommendations from the 1996 Master Plan and 1998 ALP (see Figure 7). Therecommendations included are those that are expected to have the greatest financialimpact on the Airport over the first five-year period such as the extension of Runway18-36 and the construction of new aircraft hangar storage facilities.

As shown in Section 6, the financial implications of each of these scenarios rest, to a large degree,on the hangar revenues and how hangar development is impacted in each. In order to present thesealternatives, this section is organized to include the following:

! Industry Trends Impacting Lee’s Summit Municipal Airport Analysis! Area-wide Factors Supporting Growth and Development of the Airport! Obstacles to Airport Performance and Goal Attainment! Revenue Enhancement

The final section, Revenue Enhancement, includes a discussion of anticipated benefits of revenueenhancement strategies under each of the business plan alternatives listed above.

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5.1 Industry Trends Impacting Lee’s Summit Municipal Airport Analysis

There are at least three trends that impact the analysis and recommendations of this businessplan:

! Airport Operational Count Estimates! Lower Based Aircraft Forecasts! Cost of New Hangar Development

Airport Operational Count Estimates

Estimates of annual aircraft operations provided to the Airport by a coordinated effortbetween Mid-America Regional Council (MARC), MoDOT, and the FAA since the year 2000 havebeen greater than 92,000. Recent surveys of actual operations, combined with estimating techniquesfor annualizing the numbers have resulted in operational estimates much lower than previouslythought. Currently, it is believed that annual airport operations are closer to 34,000 than to 92,000.This dramatic difference could be the result of faulty estimating technics in the past, combined withactual declines in aircraft usage. The recent price increases for fuel have served to decreasediscretionary use of aircraft. Thus, recreational flying has been the most severely impacted, whilebusiness flying has suffered the least decline.

Impacts to this plan are significant in that the business strategies must be adapted to this newreality. New thinking spurred by the lower operational estimates includes the following strategicconsiderations:

! With operations in the 30,000 to 40,000 range, consideration of an air traffic controltower is no longer feasible. Significantly higher operations or different types ofactivity are needed to justify such a facility.

! Concentration on personal use general aviation activity as the primary means offunding airport operations must shift toward a focus on business and corporateaviation.

Because higher fuel prices are assumed to be a major reason for declines in aircraft activity, thereare other possible impacts associated with grounded aircraft. That is, owners may also seek the leastexpensive aircraft storage option. This factor works opposite to the most recent trend in aircrafthangar construction costs.

Lower Based Aircraft Forecasts

In addition to operational count differences, the Master Plan forecast of based aircraft forLee’s Summit Municipal Airport, made in 1998, has not tracked with recent history. That is, MasterPlan forecasts predicted that based aircraft would grow from 168 in 1998 to 225 by 2005 and to 310by 2015 (See Table 2 in Chapter 3). For a variety of economic reasons, those forecasts have not

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been realized. In fact, the current number of based aircraft (177) is 74 below the interpolatedprojection of 251 from the 1998 study.

Impacts of this forecast discrepancy involve the potential to overbuild the apron and hangarareas on the Airport prior to the actual demand for them. General aviation aircraft ownership hasbeen challenged by the high cost of acquisition and operation, particularly with regard to fuel prices.While the business segment of general aviation continues to grow, the personal use sector has not.Because of this, forecasts that rely on personal use aircraft should be revisited and revised asnecessary. The business plan developed a benchmark forecast for Lee’s Summit which reduced thenumber of projected based aircraft to mirror the FAA’s Terminal Area Forecasts (TAF). The TAFpredicts a total of 185 based aircraft by the year 2015. While it is possible to improve on thatbaseline number with proactive strategies, the improvement will not approach the original forecastsof 310 based aircraft by the year 2015.

Cost of New Hangar Development

Experience at Lee’s Summit Municipal Airport has reflected the national trend of escalatinghangar development costs. In the year 2000, 21 hangar units were constructed for $550,000. Thesebuildings cost less than $50 per square foot to construct. In 2006, a single 80 foot by 80 foot hangarwas constructed for $587,000, approximately $92 per square foot. These price increases are similarto those occurring across the nation. In 2008, hangar prices have soared with the price of steel andenergy costs. Reports of T-hangars costing as much as $100,000 per individual unit (including sitepreparation) are becoming common. When these costs are translated into 25-year payoffs towarddebt service, monthly rentals of near $600 must be charged. Such rents are approaching the marketceiling for hangar rentals - particularly when aircraft owners have reduced their discretionary flyingbecause of $4 and $5 per gallon fuel costs.

At Lee’s Summit, our cost estimates for construction of new T-hangars on the NortheastQuadrant of the Airport are $5.34 million, if undertaken by municipal government. This includesthe use of independent engineers, the payment of prevailing wages, etc. If no return on investmentwas desired over a 25-year payback period, the rental rates for each unit would have to average $365to $375 per month. Thus, the old hangars that are demolished because of setback requirements ofthe extended runway and parallel taxiway are not feasible to replace with traditional financingmethods.

As mentioned later in this plan, the financial feasibility of hangar construction will likelyrequire the use of grant money in the public sector or private developers using land leases and pre-engineered buildings. Options for these development possibilities are outlined in the pro formas.

5.2 Area-wide Factors Supporting Growth and Development of the Airport

There are a number of factors that now support the potential growth and development ofLee’s Summit Municipal Airport. These factors are briefly described below.

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1 Source: Think KC, the Kansas City Area Development Council


Airport Location

Lee’s Summit Municipal Airport is located on the southeast of Kansas City’s central businessdistrict and just inside Interstate 470, the highway loop on the south side of the Metro area. SeeFigure 8. Lee’s Summit is less than 20 minutes to almost anywhere in eastern and southern JacksonCounty. Truman Sports Complex, home of the Kansas City Chiefs and Royals is approximately 15minutes away.

Of particular note is the location of Kansas City International Airport (MCI) and Charles B.Wheeler Downtown Airport (MKC). MCI is located on the opposite side of the Metro area fromLee’s Summit, in proximity to Interstates 435 and 29 interchange in Missouri. MKC is situated atthe confluence of the Missouri and Kansas Rivers, just across the Missouri River and north ofdowntown Kansas City, in Missouri. There are a number of other airports located on the east andsouthern suburbs of Kansas City, which were discussed in more detail in the Market Analysispresented in Chapter 3.

Profile of the Kansas City Region

Home to approximately 2.4 million people, the bi-state region of Kansas City is one of thefastest growing major job markets in the Midwest, boasting employment increases of nearly 10percent during the past decade1. Major employers include a who’s who listing of recognizablecorporations serving both national and international markets in a variety of industries, includingconsumer products, professional services, technology, and energy sectors. In addition, more than30 companies have made recent announcements regarding the location of new or expandedoperations to the area, such as The Procter & Gamble Company, Bayer Corporation, CitiCards,General Motors, DHL, FedEx, John Deere, Liberty Mutual, and Target. In fact, according toEntrepreneur Magazine, Kansas City ranked atop all other large Midwest cities and 11th in theNation for growth in young companies and rapid growth.

In addition to this economic development and new business activity, the Kansas City MetroArea has enjoyed population growth of just more than 12 percent between 1996 and 2006. Thisincrease in population is just behind the Nation’s population growth of approximately 13 percentduring the same period.

Growth Trends in City of Lee’s Summit

Over the course of the last 10 years, a time when Kansas City has experienced positivegrowth in a number of demographic and economic areas, the City of Lee’s Summit has alsobenefitted from significant gains. In 1990, the U.S. Census counted a population of 46,418;however, by 2000 total population jumped to 70,700, representing a total increase of more than 50

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percent. Similarly, population growth since 2000 has continued at a very rapid rate, approximately3.8 percent annually, for an estimated 91,586 residents by 2008.

Employment in Lee’s Summit has also steadily increased over the past decade. Excludinggovernment workers, employment was estimated at 29,700, according to Lee’s Summit Advantage(Advantage), a report published by Lee’s Summit Economic Development Council. The City’semployment accounts for more than 10 percent of total regional employment in Eastern JacksonCounty, with projections indicating that increases will keep this share constant through 2020. Theindustries that contribute most significantly to employment in the area of Lee’s Summit today areprofessional/service-related positions (44 percent), retail and wholesale trade (25 percent), andindustrial (16 percent). Manufacturing, construction, and finance/insurance/real estate employmenteach account for 9 percent of local employment.

Industrial and Office Development

The City of Lee’s Summit truly began to grow with the suburbanization of Kansas City in1950s and 1960s. Following a significant annexation in the 1970s, the City nearly reached thegeographic size it is today. Since 1995, as reported in Advantage, Lee’s Summit has added morethan 2.3 million square feet of new industrial space, with total new nonresidential property valuationcontributing more than $364 million in taxes for the City to date. The total inventory of rentableindustrial and warehouse space in 2006 was estimated at about five million square feet, with avacancy rate of just over 5.5 percent, or approximately 283,500 square feet. Industrial space inLee’s Summit is primarily available in three major industrial parks, one of which is located near US50 and Highway 291. A second industrial/business park is bounded by I-470, Douglas Street, US50, and Chipman Road. The third area available for industrial and/or commercial development islocated between the Airport and I-470. According to Advantage, the City of Lee’s Summit hasabout 1,148 acres in business and industrial parks, in addition to more than 25 additional industrialsites throughout the area.

The City has also experienced a boom in the construction of office space, adding more than200,000 square feet of new office space to the market annually for six of the last eight years. Asreported in Advantage, development since 1995 has added nearly three million square feet of officespace to the area. The Lee’s Summit area boasts a number of commercial office space locations tosupport the growth and expansion of the local business community, including:

! Summit Technology Campus! Eastport Office Condo! Legacy Ridge Corporate Centre! Lakewood Business Park! Chapel Ridge Corporate Center! Executive Lakes at Lakewood

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Employment

While the City continues to grow via business expansions and relocations, there are a numberof major companies that have contributed jobs to the area for a significant length of time. Table 15displays some of the area’s major employers:

Table 15 - Lee’s Summit Area Major Employers

Employer Product/Service Employees

Lee’s Summit R-7 School District Educational Institution 1,850

AT & T Telecom. Customer Service 1,146

Truman Medical Center Lakewood Hospital 1,044

John Knox Village Retirement Community 1,035

City of Lee’s Summit Municipal Government 600

Caremark Inc. Pharmaceutical Customer Service 559

Unity School of Practical Christianity Religious Education Organization 550

Metropolitan Comm. Coll.- Longview Educational Institution 532

Immigration & Naturalization Services Federal Government 500

HyVee West Grocery Store 414

HyVee East Grocery Store 380

Saint Luke’s East- Lee’s Summit Hospital 368

Toy’s R’ Us Toy Distribution Center 350

ADESA Kansas City Wholesale Auto Auction 280

Diodes- FabTech Inc. Electronic Component Manufacturer 250

R & D Tool & Engineering Tools Design, Parts & Distribution 250

Plastic Enterprises Co. Inc. Plastic Container Manufacturer 200Source: Lee’s Summit Economic Development Council, www.leessummit.org, Retrieved January 2008.

Other major employers in Lee’s Summit include the Department of Homeland Security NationalRecords Center, Lee’s Summit Hospital, and Lab One (pharmaceutical customer service), whichcontribute roughly 1,000 jobs combined.

Lee’s Summit Plans for Future Development

Observing the growth trends for the City of Lee’s Summit, and the Kansas City Region, it

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2 Source: www.missouridevelopment.org


is clear that the economic outlook for the area is strong. The City has taken steps to respond todemands placed on the community by growth and development, which are set forth in the Lee’sSummit Comprehensive Plan, adopted in 2005. The plan concludes with a Recommended Land UsePlan, which endeavors to guide development in a reasonable and practical order in the future. Theplan responds to the unique characteristics of several sub-areas within the City, including the I-470corridor, the central/south area, and the north area, the area where Lee’s Summit Municipal Airportis located.

The City Comprehensive Plan recognizes the potential for development around Lee’sSummit Municipal Airport. The plan states that the Airport offers excellent potential forbusiness/redevelopment opportunities, noting that such development is subject to FAA mandatesregarding Runway Protection Zones and building height restrictions. The plan also supports thecontinued maintenance and improvement of the City’s public infrastructure system, in addition todiscussing the importance of economic development for its future. The plan goes on to state thatthe City benefits by creating business opportunities and portraying a pro-business image throughsound planning practices in order to compete in the market for continued economic growth.

The current airport capital projects at Lee’s Summit, as described in Chapter 3, indicates thatthe City has devoted significant resources to ensuring the facility is well-positioned for futuregrowth.

This Business Plan asserts that Lee’s Summit Municipal Airport is an important part of theoverall transportation system in the area. As such, the Airport contributes to local businesses todayand in the future by offering access to air transportation as an alternative to Kansas CityInternational and Charles B. Wheeler Downtown Airports.

State Development Incentives & Programs

Understanding of the local business climate in Lee’s Summit is benefitted by a review ofState incentives and programs available to businesses in the area. Such incentives and programs,in addition to established industrial and commercial centers, create an environment where businessesare able to start-up and mature within the same community. Below are brief summaries of TaxIncentive programs offered by the State of Missouri through the Missouri Department of EconomicDevelopment (DED) and local communities2, which may be appropriate for businesses at theAirport. A full listing of these programs is presented in Appendix B.

! Loan Guarantee Fee Tax Credit Program: Provides state tax credits to an "eligiblesmall business" for the amount of a guarantee fee paid to either the U.S. SmallBusiness Administration or the U.S. Department of Agriculture for a small businessloan.

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! Quality Jobs Program: Facilitates new quality jobs by targeted business projects.! Sales Tax Exemption: Machinery and equipment used to establish a new

manufacturing facility or expand an existing manufacturing facility is exempt fromlocal and state sales/use tax, provided such machinery/equipment is used directly tomanufacture a product ultimately intended for sale.

State Infrastructure Financing

In addition to the tax benefit programs listed above, the State of Missouri also offersincentives to local public and private sector interests for the Improvement of the State’sinfrastructure. Below are brief summaries of Public Infrastructure programs offered by the State ofMissouri.

! Industrial Development Bond: Facilitate the financing of business projects. Citiesor counties may purchase or construct certain types of projects with bond proceedsand lease or sell the project to a company. Costs that may be eligible costs are thepurchase, construction, extension and improvement of warehouses, distributionfacilities, and industrial plants.

! Tax Increment Financing (TIF): Facilitates redevelopment by providing essentialpublic infrastructure.

Venture Capital

The Missouri Department of Economic Development also has access to resources that canfacilitate capital formation for new and expanding high growth businesses. One such resource thatmay be appropriate for business activities at the Airport is:

! Certified Capital Companies: A CAPCO may invest in an eligible business, whichis in need of venture capital and cannot obtain conventional financing. The eligiblebusinesses must derive their revenue primarily from manufacturing, processing orassembling of products; conducting research and development; or, servicebusinesses, which can demonstrate that more than 33% of its revenue would be fromoutside the state of Missouri.

Finance Programs

The State of Missouri also has special financing packages, which are available to qualifyingcompanies with high-paying manufacturing and industrial jobs, as well as enterprises establishedin urban areas, such as:

! Action Fund Loan: For-profit manufacturing, processing and assemblycompanies located in a non-entitlement area that has wages above the county averageand provide medical benefits may be eligible for a loan which may be used for the

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3 Source: (http://web.nbaa.org/public/ops/airports/mkc/)


purchase of new machinery and equipment or working capital. The loan must bemade in cooperation with a city or county sponsor.

Summary of Factors Supporting Growth and Development of the Airport

The factors discussed in the previous section point toward a highly positive environment forcontinued growth and development in Lee’s Summit which translate into opportunities for growthat Lee’s Summit Municipal Airport. In fact, growth and development trends in the Kansas CityRegion, and Lee’s Summit in particular, are encouraging, as evidenced by growth in industrial andoffice development and the strong foundation of major employers in the area. Additionally, the Cityhas identified the Airport as offering excellent potential for business development and hascommitted significant financial resources in recent years. All of these factors support a future ofgrowth and development at the Airport.

5.3 Obstacles to Airport Performance and Goal Attainment

In addition to factors that support growth and development of Lee’s Summit MunicipalAirport, there are a number of factors that present challenges to such growth, and the attainment ofstated goals and objectives for the financial performance of the Airport. The following brieflysummarize such obstacles.

! Competition with Other Kansas City Airports: The future success of Lee’s SummitMunicipal Airport must be considered in light of other airports in the Greater KansasCity area, which compete for the local market of general aviation activity. Inparticular, Charles B. Wheeler Downtown Airport (MKC) and East Kansas CityAirport (3GV), in Grain Valley, which are approximately 23.5 and 17.5 miles by carand 16.3 and 9.3 air miles from Lee’s Summit Municipal Airport. Together, theseairports account for nearly 400 based aircraft. While single and twin-engine aircraftcomprise most of such aircraft, MKC is home to nearly 50 turboprops and jets.3 Theambitious hangar construction project underway at Wheeler Airport will replaceolder units, but has a net gain of 49 hangar units. For LXT to be successful incompeting for based aircraft and in filling new or existing hangar space, the Airportmust make a compelling value proposition to the local market in order to captureactivity that may have options at Wheeler Airport and other regional airports.

! Community and Political Support: Support for Lee’s Summit in the broadercommunity, and specifically for implementation of the Airport Master Plan, isdivided. These sentiments may date back to 1977 when the City purchased theAirport with the goal that the facility would be self-sustaining. Since this level ofperformance has not always been met, annual financial support for the Airport has

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been scrutinized. This situation, while troublesome, is not unique when comparedto other general aviation airports across the region and the country. If Lee’s Summitis to reach its full potential as an airport, it will need the support of the communityand its leaders. This support will likely be based on a reasoned plan with definablegoals and methods of achieving its objectives.

! Highest and Best Use of the Airport Property: As discussed in the opening chapterof this Business Plan, there is some dispute concerning the highest and best use ofthe existing airport property. The current market for available land in the City isnarrowing, and areas suitable for industrial development are becoming more scarce.This has created some pressure for the Airport to show economic impactscomparable to non-aviation industrial development.

! Land Use Compatibility: In addition to pressure to ensure that the Airport meetsexpectations as the highest and best use for its land, there are concerns regarding thecompatibility of the airport use with other types of development planned orunderway in the area. For instance, plans are proceeding for an interchangeproposed for I-470 and Strother Road, which bounds the Airport’s north side.Amendments to the Chapel Ridge and North tax increment financing (TIF) district,a new TIF for the I-470 Business and Technology Center, and transportationdevelopment districts are in place, creating new revenue streams for significantroadway improvement projects to serve a mix of planned retail, office, andresidential uses. As the City pursues these projects, there will likely come a pointwhere their success, and the willingness of the development community and themarket to invest in these projects, will require a definitive decision regarding thefuture development of the Airport.

! Limited Aircraft Demand: As mentioned at the outset of this section, the currentmaster plan forecast the Airport to accommodate 310 based aircraft by the year 2015.This prediction was made using data from the early to mid-1990s. Since that time,the economics of aircraft ownership have changed dramatically. All costs have risenincluding fuel, storage, insurance, and the actual cost of the aircraft themselves.These costs, coupled with low production of aircraft units have slowed forecastgrowth of aircraft throughout the U.S. Updated forecasts in the FAA’s TerminalArea Forecast indicate a year 2015 based aircraft total of 185. This significantdifference points toward the need to scale back or postpone some of the AirportMaster planned development including hangars and apron area.

! Perceived Noise Level of Jets: The potential increased use of the Airport bycorporate and jet aircraft to enhance revenues may result in some communityresistance due to the perceived noise impact associated with increased jet operations.As such, it should be noted that current modern jet engine technologies can actuallyreduce overall noise, as compared to older jet engine technology that is in the process

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of being phased out (due to age and inefficiencies). This is true even for somepiston-power aircraft that are noisier than some new jet aircraft. Corporate jetoperators also conduct much fewer operations on average than light aircraft as theyare used primarily for transportation, not recreation or primary flight training. Assuch, jets spend less time in the flight patterns around the Airport as they aredropping off or picking up business travelers, while flight students may continuouslycircle the airport, landing and taking off repeatedly. Jet activity is also typicallyflown during business hours, with less activity at night and on weekends.

5.4 Revenue Enhancement

Considering the positive factors and obstacles discussed in previous sections along withcurrent activity levels and financial conditions at Lee’s Summit Municipal Airport, there are anumber of ways to increase net revenues and improve the long-term financial viability of theAirport. Generally, such strategies can be understood as those which either increase revenues or cutcosts. In this section, revenue enhancement strategies that focus on increasing revenues arepresented. Elements of this strategy include the following:

! Extension of Runway 18-36: As a general aviation reliever airport, Lee’s SummitMunicipal Airport is intended to serve as an alternative to Kansas City InternationalAirport. As mentioned in the Environmental Assessment for the runway extension,the closure of Richards-Gebaur Memorial Airport has left a gap in service to theregion, as there are no facilities with precision approach capability or runway lengthof more than 4,500 feet in the southeastern portion of the Metropolitan area. Theextension of Runway 18-36 to a length of greater than 5,000 feet will, therefore,greatly assist the Airport in accommodating regional demand. The Airport MasterPlan and ALP Narrative identify land beyond both Runway ends for this extension,with Runway 36 end accommodating added length of approximately 1,284 feet, andRunway 18 end adding approximately 200 feet. This will accomplish a total lengthof 5,500 feet of pavement on Runway 18-36, which can be anticipated to attract newactivity as the new runway will easily meet insurance requirements for mostcorporate flight departments.

In concert with the runway extension, the City is interested in upgrading the Airportfrom ARC B-II to C-II standards, which requires greater separation between therunways and taxiways, in addition to increased Runway Safety Areas and ObjectFree Areas. While the expansion of the Airport to C-II standards is ultimatelyneeded, this plan points out that such improvements may be postponed to anintermediate or long term timeframe. If the runway and taxiway offset is developedunder B-II standards, the Airport will have a chance to attract business jets in thatcategory and allow revenue to develop in the shorter term future. Key to the financialstrategy is to first develop the runway extension that does not require the immediatedemolition of revenue producing hangars.

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While 5,500 feet is the ultimate length sought for Runway 18-36 and constructionof the entire 1,484-foot extension at the same time may appear appropriate, from abusiness standpoint some modification to this timeline warrants consideration.Specifically, from a cost/benefit perspective, the Airport can better accomplish itsgoals of extending the runway and attracting new business aircraft by focusing onextending the Runway end 36 first, to a length of 5,300 feet. This length surpassesa key threshold for business jet operations (5,000 feet), meeting a significantcommon criterion for corporate flight departments and their insurance requirementsfor airfield use.

! Attraction of Corporate Aviation: The attraction of new corporate aviation activities,including transient operations and based corporate tenants, at Lee’s Summit isdirectly linked to the extension of Runway 18-36. Stage lengths for corporateaircraft are hindered by shorter runways and thus to maximize efficiencies for theseoperators, longer runway length is needed. Once the Runway extension project isfully funded and programmed for construction, an aggressive recruitment strategyshould be implemented to attract new corporate users, with the ultimate goal ofsecuring such users as tenants of aircraft hangars. When successful, new businessescreate significant revenue enhancement for airport sponsors. With 5,500 feet ofrunway length, in addition to precision instrument approach capability, the Airportwill be well equipped to accommodate a broad range of business jet aircraft.Possible jet tenants could include those basing at other regional airports, new jetowners, or companies that management fractional ownership of business jets.(Fractional ownership of corporate aircraft involves the sale of portions or fractionsof an aircraft to companies or individuals that they can use in the form of flight hoursper year.) A survey of corporate aircraft owners in the Kansas City metro area wasundertaken to determine potential demand for space at Lee’s Summit MunicipalAirport. Three corporate aircraft owners indicated a desire to possibly base theiraircraft at Lee’s Summit if the runway were lengthened. Appendix C presents asample letter sent prior to this study from a jet aircraft owner desiring to locate atLee’s Summit Municipal Airport. Included in the letter are descriptions of some ofthe financial activity associated with jet aircraft ownership.

! Hangar Development: The attraction of new business aviation users and basedcorporate flight operations to the Airport can be accelerated through the developmentof aircraft storage hangars, which also provide additional sources of revenue for theCity. Currently, there are 138 T-hangar bays with a total storage capacity ofapproximately 137,000 square feet. The paved aircraft parking apron has 66 tie-downs for itinerant and based aircraft and is approximately 27,500 square yards.Because of significant recent price inflation, conventional hangars may be more cost-effective to develop because of their flexibility to accommodate small aircraft in thenear term, and larger aircraft as business/corporate aviation activity increases.Conversely, T-hangars are limited in their ability to accommodate only smaller

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aircraft. If the airport desires the ability to attract more corporate or business aircraft,conventional hangars offer the ability to begin housing small aircraft in a communityconfiguration and later convert to only one or two corporate aircraft if thatopportunity presents itself. Different methods of funding hangar development arepresented in Section 6 of this plan.

! New or Improved Terminal Services, Amenities, and Activities: This business planexamined a number of existing terminal services, airport amenities, and activities.As business and corporate aviation will be least impacted by high fuel prices andother inflated costs, certain recommendations focus on bringing the Airport intohigher standards of service and amenities for these users. This would include the useof fuel trucks, the development of a new or improved terminal building withamenities such as a conference room, catering, pilots lounge, etc., groundtransportation availability, and corporate/business aesthetics.

! Airport Branding: Branding is the process of developing a unique identity for aproduct or service in a given market, which can be defined as both a geographic areaand the conceptual space occupied by service providers in competition for customersshopping for such services. In this regard, the development of a unique selling pointand identity in the market for Lee’s Summit Municipal Airport can be beneficial tothe future growth of the Airport. In shifting toward an image that attracts morecorporate and business use, the City may desire to re-brand the Airport once therunway is extended. This may include a name change for the Airport, new logo,upgraded website, or marketing campaign.

! Non-Aviation Property Development: At Lee’s Summit Municipal Airport, there areapproximately 73 acres available for potential non-aviation development withincurrent Airport property. This total contains a number of smaller areas as depictedon Figure 7. Approximately 54 acres of this area is located to the east of Runway18-36 and 19 acres to the west. Airport property that will not be needed foraeronautical purposes can be developed for non-aviation uses to increase revenueproduction at the Airport. To obtain land releases from FAA, often the airport mustagree to devote all revenues from that land to the operation or capital improvementof the airport.

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6. RECOMMENDED PLAN

THE RECOMMENDED BUSINESS PLAN FOR LEE’S SUMMIT Municipal Airport focuses on threepossible development scenarios for the facility: Baseline, Full Build-Out, and PerformanceBuild-Out as first presented in Section 5. For purposes of this plan, the build-out optionsboth accelerate the runway expansion to the first five-year period. The difference between

the two involves the use of ARC B-II standards for the performance option versus ARC C-IIstandards for the full build-out option. This section presents the financial implications of eachoption for the City’s consideration. It is important to note that the financial differences betweenscenarios are based primarily on the various hangar development options. Performance of eachoption is shown in detail in Section 6.5 and Appendix D. In summary, the following generalobservations can be made:

! Baseline: The Baseline alternative continues the operation of the Airport undercurrent practices and without significant capital improvement projects. Financialperformance of this option was shown in Section 4. Under this option, year 2013 netoperating revenues were projected to be -$118,700 with a 5-year cumulativeoperating deficit of -$517,500.

! Full Build-Out: The Full Build-Out alternative assumes the expansion of the airfieldfrom ARC B-II to ARC C-II design standards. This alternative shows runwayexpansion and the removal of 68 T-hangars along Runway 18-36. Depending uponthe method used to replace those hangars, potential financial performance couldrange from a five-year net revenue deficit of -$823,000 to -$1,331,500.

! Performance Build-Out: The Performance Build-Out alternative is a scaled-backversion of the Full Build-Out alternative, which extends the Runway 18-36 to 5,300feet but remains at ARC B-II designation in the short term. This could leave all ofthe T-hangars along Runway 18-36 intact (and revenue producing) for the five-yearplanning timeframe. Financial performance under this option could result in aprojected year 2013 net revenue operating surplus of $15,500 with a 5-yearcumulative operating deficit of -$350,900.

Included in the following sections are suggested means of improving airport management andfinancial performance of the Airport. As such, the remainder of the Section is organized to includethe following:

! Potential Management and Policy Actions! Revenue Enhancement Recommendations! Cost Efficiency Recommendations! Impacts on Revenues and Expenses! Summary of Business Plan Recommendations

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6.1 Potential Management and Policy Actions

Two areas of consideration in this section involved the airport management structure and thecontinuing training and education of airport employees.

Airport Governance Structure

Since the purchase of the Airport in 1977, FBO services at LXT have been provided by theCity of Lee’s Summit. As the FBO, the City provides a range of FBO services, including fuel sales,aircraft marshaling and ramp parking, pilot supplies shop, rental cars, courtesy transportation, publictelephone, and weather information. Flight training, aircraft rental, aircraft charter, and aircraftmaintenance are provided by other businesses on the Airport. A quick review of comments onwww.airnav.com posted by transient users indicates that the Airport has been performing well interms of customer service for the past several years.

At the outset of this study, there was some question as to how LXT’s Airport managementstructure compared with other airport governance structures across the U.S. Examination of thestructure in Section 2 of this report indicated a normal reporting process through several Citydepartments, the Board of Aeronautic Commissioners (BOAC) advisory group, and finally to theMayor and City Council. Some communities have fewer layers involved in the governance process,but they all essentially ensure that programs and capital expenditures are vetted through a group ofexperienced personnel and professionals before reaching the municipal legislative body. Ultimatelythis group must make decisions concerning the future direction and funding of the Airport. Asresponsible representatives to their constituents, the City Council must gather the best informationavailable and vote for the direction that will best benefit the City.

Thus, overall, the process and structure appear to be set up in a reasonable framework.Changes to the process or structure can be more of the mechanics of making it work. That is, if adifferent cross section of members is desired on the BOAC, those changes can be made within thecurrent structure. Changing term lengths and how each member is appointed is a function of Citypolicy rather than this business plan. Therefore, it is recommended that:

The City could examine other successful government models for improvingthe governance of the Airport and if changes are desired, can consider

making those within the current structure.

Airport Management Training & Continuing Education

It was observed that the Airport Management at Lee’s Summit is very proficient relative toother general aviation airports of the same size and complexity across the nation. To ensure thatturnover doesn’t remove the experience and value of existing employees, the City should offercontinuing education and training opportunities to their Airport management staff. This would

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include exposure of management personnel to industry conferences, American Association ofAirport Executives (AAAE) continuing education programs and certifications, as well as crosstraining with fire fighting professionals. Currently Airport management has a very good grasp ofregional and national issues. However, the aviation industry is changing quickly. To stay ahead ofthis learning curve, it is recommended that:

The City should continue to invest in its Airport staff with training andcontinuing education opportunities as they arise.

6.2 Revenue Enhancement Recommendations

Revenue enhancement activities recommended for Lee’s Summit Municipal Airport focusprimarily on efforts to attract corporate aviation and construct hangar facilities. Otherrecommendations that should enhance revenues include new and/or improved terminal services andamenities, an Airport branding project, the development of Airport property for non-aviation uses,and adjustments to current rates and charges toward market rates. The following sections describein greater detail these revenue enhancement recommendations.

Near-term Extension of Runway 18-36

The current approved Airport Master Plan sets forth a set of improvements, which are aimedat expanding the airfield to meet ARC C-II design standards by the year 2014. These standardsprimarily require increases to Runway Safety Areas and runway/taxiway separation, among otherimprovements, to accommodate the needs of a higher-level critical aircraft such as the GulfstreamG350 or G450. This Business Plan suggests that rather than wait until year 2014 to expand therunway, it should be expanded as soon as possible in order to begin building a corporate aviationactivity base. Because of revenue considerations, a strategic option is to develop the runwayextension to ARC B-II standards, leaving the existing T-hangars intact in the short term. Ultimately,ARC C-II standards would be imposed, but these could occur after the useful life of the T-hangarshas expired (post-2013). The important consideration now is the immediate attraction of corporateaviation to the Airport. Therefore, it is recommended that:

The City should plan to expand Runway 18-36 as soon as is practical.

This recommendation includes the possibility of using ARC B-II standards for the first phaseof the project. Such a recommendation must be approved by MoDOT and discussions of thisstrategy should be initiated by the City with MoDOT. These discussions should highlight theeconomic incentive (T-hangar revenues) as a primary reason for this first phase action. While 5,500feet is the ultimate length sought for Runway 18-36, from a cost/benefit perspective, the Airport canbetter accomplish its goals of extending the runway and attracting new business aircraft by focusing

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on extending Runway end 36 first, to a length of 5,300 feet. This length surpasses a key thresholdfor business jet operations (5,000 feet), meeting a significant criterion for corporate flightdepartments and their insurance requirements for airfield use. Therefore, it is further recommendedthat:

The City should consider extending Runway 18-36 to a length of 5,300 feet in the near term, with a future extension to an ultimate

length of 5,500 feet under ARC C-II standards.

Attraction of Corporate/Business Aviation

As the general aviation industry has matured, most airport owners, sponsors, and operatorsthroughout the country have recognized that corporate/business aviation provides a higher sourceof revenue to airports than recreational general aviation. This is especially the case given the risingcosts of fuel, which for business users can be passed on to their customers as the cost of doingbusiness. For this reason, as well as the numerous spin-off benefits from business aviation such asjob creation, the attraction of additional corporate/business aviation tenants and transient trafficshould be a priority for Lee’s Summit Municipal Airport.

As mentioned, Lee’s Summit Municipal Airport is classified as a general aviation relieverairport, which is intended to serve as an alternative to Kansas City International Airport. At present,there are no facilities with precision approach capability or runway length of more than 4,500 feetin the southeastern portion of the Metropolitan area, leaving a gap service that Lee’s Summit ispositioned to accommodate. The extension of Runway 18-36 to a length of greater than 5,000 feet,therefore, will greatly assist the Airport in accommodating regional demand. In this regard, stagelengths for corporate aircraft are hindered by shorter runways and thus to maximize efficiencies forthese operators, longer runway length is needed. If business jet operators must conduct refuelingstops prior to reaching their destinations, the time savings value of using jet aircraft is significantlyreduced. In addition, the takeoff portion of the flight is the most costly in terms of fuel consumption.Therefore, the fewer takeoffs, the more cost efficient the operation. All of this is to say thatcorporate jet operators are attracted by airport facilities that can support longer stage lengths for theiraircraft.

In concert with the Runway extension project, it will be time to identify and allocate fundingfor an aggressive recruitment campaign to attract new business users and prospective hangar tenantsto the Airport. The Greater Kansas City Region benefits from a long list of recognizablecorporations serving national and international markets in a variety of industries, with more than 30companies making recent announcements of new or expanded operations to the area. The City ofLee’s Summit is in a good position to take advantage of Kansas City’s place atop all other largeMidwest cities for growth in young companies and rapid growth, as evidenced by the fact that 4,344business licenses were issued in 2006.

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The recruitment campaign should be based on a new marketing plan for the Airport, whichidentifies target markets, and both established and new and growing companies within thosemarkets, for aggressive marketing activities. The new marketing plan need not start from scratch,as the State has recently released a research report (through the Missouri Economic ResearchInstitute), which provides an overview of Missouri's eight targeted industry clusters identified bythe Missouri Department of Economic Development. The report, "Looking to the Future: MissouriTargeted Industry Clusters" identifies the target industries as: agribusiness, automotive,defense/homeland security, energy, finance, information technology, life sciences,transportation/logistics.

Using this report as the basis of an Airport marketing plan, the City can take advantage ofexisting business lists by industry from the Greater Kansas City Chamber of Commerce, or Citydatabases, to develop a list of companies to market for basing operations at Lee’s Summit MunicipalAirport. Additionally, other corporate and jet aircraft tenants could include those basing at otherregional airports, new jet owners, or companies that management fractional ownership of businessjets. Therefore, it is recommended that:

The City should allocate funding for the development of a marketing plan, and targeted recruitment strategy/activities for attracting new

corporate aviation activity to the Airport.

Generally speaking, marketing activities will not occur without funding. Thus, if marketing ofcorporate aviation is going to occur, adequate resources will need to be dedicated to this effort.Such an effort need not be expensive and could be accommodated for $10,000 or less per year. Itshould begin once the runway expansion is underway.

The process of developing the Airport marketing plan and recruitment strategy should beguided by a committee whose members represent a balance of interests, from both public and privatesectors, such as City staff and economic development professionals, representatives from thebusiness community, pilots, and commercial real estate professionals.

Hangar Development Options

The development of hangars is important to an airport not just because of the revenuegenerated from hangar rents, but also to create an airport population of based aircraft that willcontribute to the operational revenues in terms of fuel sales and the support of aircraft maintenancework on the airport. Because of the spiraling costs of developing aircraft hangars, it may not bepractical for the City to undertake all of the replacement hangar development with their own fundsor available grants. For example, if there is a need to replace 68 hangars that will be demolished,it is possible that the total cost to the City would approach $4.7 million. Even with the accrual of

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4 In 2008, this entitlement amount dropped to 80 percent of the $150,000 due to incomplete fundingon the national level.


$150,000 entitlement dollars each year over a four-year period,4 this amount would not begin tomeet the funding needed to construct these hangars. In addition, 35,000 square feet of conventionalhangar space is estimated to cost $4.2 million. Thus, total hangar construction costs are roughly $9million for the immediate five year planning period. Therefore, creative options are needed for thedevelopment of hangars.

For this plan, three primary options were considered with several hybrid scenarios thatcombined options or worked with the timing of implementation:

! City Development of Hangars! Private Development of Hangars! Postponement of Hangar Development

Each of these options and their permutations are described in the following sections.

City Development of Hangars

If the City decides to develop hangars with the notion of investing in these facilities andreceiving some significant return on investment, it may be difficult to achieve. In this regard, thefinancing of $8.3 million in hangar development ($8.9 million minus $600,000) over a 25-yearperiod at 5 percent interest would result in a need to repay $657,300 per year or $54,800 per month.Assuming that the corporate based aircraft paid their full share of the costs ($332,600 per year), itwould still leave a large amount for T-hangar debt repayment. Rental rates needed to repay the debtfor conventional hangars were estimated at $4,000 per month for the 5,000 square foot hangars and$8,000 per month for the 10,000 square foot hangars. For T-hangars, individual units (including $20per month in maintenance recovery charges) would cost an average of $375 per month. These costsare clearly higher than average hangar fees in the region and may not be supportable (see Table 11).If these rental rates were used, it is likely that Lee’s Summit, which has no hangar waiting list now,would actually lose based aircraft. A loss of 40 or 50 based aircraft and a decrease in the numberof projected based jets from five to three would significantly impact fuel sales, maintenance work,and rental revenues. Even so, this option provides the City with the greatest amount of control overtheir Airport investment, but has a very poor return. As described in Section 6.4 (Table 19), thispolicy would result in a year 2013 net operating loss of -$296,600 (5-year cumulative net revenuesof -$1,331,500).

Private Development of Hangars

A second pure option would be to put all new hangar development in the Northeast Quadrantout for bid and let the private sector lease land and develop hangars. This option would provide landlease revenues to the City, but would not approach the current revenues generated by the existing

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hangars (which are completely free of debt). This option would result in a year 2013 net operatingloss of -$86,600. One permutation of this option would be to have the City develop a 10-unit T-hangar with its accumulated entitlement grants (estimated at $600,000). This option would resultin a year 2013 net operating loss of -$70,300 (5-year cumulative net revenues of -$823,000).

Postponement of Replacement Hangar Development

The third option would be to postpone the demolition and replacement of the 68 existinghangars along Runway 18-36 for as long as possible. A recent study by a local architect indicatedthat the useful life of the open T-hangar units (40 units) would probably extend another five years.There may some additional maintenance costs associated with this action. Thus, if the City couldpostpone their demolition, while at the same time extending runway 18-36 to more than 5,000 feetbut keeping the ARC at B-II standards, strong financial performance could be expected at theAirport. This development scheme would need to be discussed with FAA and MoDOT, but it wouldprovide the best results in terms of operating revenues. For year 2013, this scenario projects anoperating surplus of $15,500 (5-year cumulative net revenues of -$350,900). Given the aboveoptions, it is recommended that:

The City should consider postponing replacement hangar development for aslong as is practical.

Once new hangar development needs to occur, the analysis indicates that the potential bestoption for the City is to use entitlement grant money to develop as large a hangar as its resourceswill permit. For the remainder of needed development, private enterprise should be encouraged toinvest in the Airport through the Request For Proposal (RFP) process. In this regard, it isrecommended that:

The City should consider using grant dollars to develop hangars. Privateenterprise could be solicited to develop the remainder of needed hangars.

If private developers are used, the Request For Proposal (RFP) process should include arequest for both the total cost of the proposed development and the proposed rental rates. If therental rates are too high, the City should consider developing the hangars if they can match or betterthe hangar pricing. The key is to keep prices competitive so that based aircraft will be retained atthe Airport. Therefore, it is recommended that:

The RFP process for hangar development should require estimates of thetotal cost of development and proposed rental rates.

If a 25-year lease is given to private developers with a reversion clause (ownership reverts

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to the City after that period), there would likely be a net gain in revenues since the land lease willbe paying positive cash flows to City from the start of the lease. Therefore if this option isemployed, it is recommended that:

If the City uses private enterprise to develop hangars, leases should bestructured to include reversion clauses for City ownership of the buildings

after a set period of time.

Typically, these leases are structured to run from as low as 20 years to as high as 32.5 years. Mostare in the 25-year range.

Hangar rental price escalations have lagged behind the Consumer Price Index. While thisis a good policy to attract market share, the recent cost escalations for all services brought about byenergy cost inflation should not be ignored. Most airport tenants are not happy with price increases,but they do understand that costs increase over time. The City should keep pace with the rise inprices by increasing rents periodically. Therefore, it is recommended that:

Hangar prices should be increased to mirror the CPI, if they are withinservice area competitive market rates.

Surveys of service area pricing could be undertaken each year prior to any potential rate increases.These increases should occur annually, but could be stretched out no longer than once every threeyears.

New or Improved Terminal Services, Amenities, and Activities

If Lee’s Summit Municipal Airport is to successfully court business and corporate aviation,the Sponsor will need to focus on not only the development of the facility, but on the amenities andservices offered. In light of the strategic initiative to attract more corporate and business aviation,there is a transition needed from a focus on general aviation personal use to a focus on corporate andbusiness use. While this has already been underway for some time, the 4,000-foot runway lengthhas limited the amount of corporate and business jet usage of the facility. With runway expansion,more corporate activity can be expected. Many times, corporate pilots have the authority to chosewhich airports they will use in a particular metropolitan area. If an airport is known for its servicesand facilities, it will attract this discretionary use. In preparation for this, the followingrecommendations can be made:

Fuel Trucks

Typically, business jet operators do not pump their own fuel. Thus, self-serve jet fuel wouldbe used primarily by after-hours helicopter medevac operators rather than fixed wing operators.

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Most business jet operators prefer fueling truck capabilities that can accommodate their aircraft attheir own hangar apron. Fueling on the transient apron is also important for transient corporate andbusiness aircraft. Fuel trucks if purchased immediately, will improve the ability to attract corporateand business aviation. Therefore, it is recommended that:

The City should consider the acquisition of fuel trucks to dispense fuel to thevarious apron areas.

The fuel trucks do not have to be new. There are good deals on second-hand trucks that can beeconomical to purchase or lease. Used fuel trucks can be purchased for between $30,000 (AvGas)and $65,000 (Jet A), depending upon the size, model year, and fuel tank capacity. New fuel truckstypically cost between $90,000 and $150,000. Another option for use with AvGas refueling is a600-gallon tow-behind trailer. These trailers can be purchased for around $13,000. Because the fueltrucks are to be used as a service to fuel purchasers, the cost of ownership versus leasing shoulddrive the acquisition decision. That is, the monthly cost of these vehicles is of prime importance.The decision to lease or own used vehicles should be decided on the relative monthly costs of eachmethod. Based on estimated cost for ownership of two used fuel trucks ($90,000), monthly paymentsof $1,450 could be expected over 6 years. Leasing similar vehicles has been recently estimated tocost approximately $1,300 per month. However, if a used truck was leased for use with Jet A, anda tow-behind trailer was purchased for AvGas, monthly payments would total approximately $1,100.Considering the fact that new fuel vehicles are not necessary and ownership of used vehiclesamounts to $17,400 per year, the lease of a used fuel truck for Jet A and the purchase of a tow-behind trailer for AvGas is considered the most cost-effective. However, until these purchases aremade, management should be pricing other used equipment to determine if better deals can bestructured.

After Hours Jet Fuel Availability

There are several helicopter aerial medical evacuation (medevac) teams associated with thehospitals in the Kansas City metro area. These operations function on a 24/7 basis and must beavailable to fly at night. As such, the availability of self serve Jet A fuel is important to theseoperators. For regional coverage, a number of inquiries have been made to LXT concerning afterhours jet fuel availability. It is believed that if this service were available, it would be used.Estimates of up to 10,000 gallons annually could be sold to these operators during night timeoperations. Therefore, it is recommended that:

The City should consider the provision of after hours Jet A fuel through self-serve fueling tanks at the Airport.

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Terminal Building

The capital improvement program indicates that a new terminal building is planned forconstruction. If this building could be constructed to include amenities associated with corporateand business aviation, it would serve to attract this segment of the aviation market. FBOs that attracta significant portion of corporate aviation include Signature Flight, Million Air, Atlantic Aviation,Wilson Air, Landmark Aviation, TACAir, and others. Characteristics of these FBOs include a highlevel of capitalization, first class terminal buildings and pilot lounges, clean/modern bathrooms, foodand catering, meeting space such as a conference room, cable TV, high-end carry-out food (ribs,steaks, etc.). Also included in a number of these terminal buildings is space for either a satellite carrental or some type of courtesy car availability. If pilots can make decisions where to land, FBOshave learned to market their amenities and services to these people. Terminal buildings that areaesthetically pleasing and that meet corporate and business standards are important in this process.Therefore, it is recommended that:

As a part of the terminal construction, consideration should be given toincluding a conference room, corporate pilots lounge, and other services

and aesthetics needed to attract corporate aviation.

Ground Transportation

In order to promote corporate aviation and business use of the Airport, it is important to haveconvenient ground transportation available on the premises. Even though Enterprise Rent-a-Car cansupply vehicles to the Airport, there is an added benefit to itinerant users of having an availablesupply of vehicles located at the airport. Even the availability of a courtesy car with after-hoursaccess can be a means of attracting corporate and business aviation activity. Therefore, it isrecommended that:

Once the runway system is expanded, the City should seek a satellite carrental firm to locate at the Airport.

Prior to this, the Airport may want to provide its own unrestricted courtesy car (current cars havecity license plates and are restricted to the city limits) that can be made available to corporate andbusiness aviation on the basis of fuel purchases, overnight stays, etc.

All-Weather Operation

Unlike personal use or recreational flying, business users have a greater need to fly duringinclement weather conditions. Often, business meeting schedules are not flexible and as such,transportation to and from these meetings must be reliable regardless of the weather. Airports that

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attract corporate and business aviation will provide facilities and services needed to ensure accessduring most types of poor weather conditions. This would include the need for a precisioninstrument approach and snow removal services. The Airport currently has WAAS/GPS-based LPVapproaches on all runway ends with visibility minimums of 1 mile and decision heights of 250 feet.A majority of corporate aircraft are being equipped with GPS-capable instruments. Marketconditions should dictate whether or not additional staffing or contract services are needed for this.Therefore, it is recommended that:

In preparation for corporate aviation activity, the Airport should work towardan all-weather operation capability to include a retention of precision

instrument approaches and timely snow removal services.

Corporate Aviation Standards

In the transition to corporate aviation standards, aesthetics that surround corporate andbusiness aviation should be implemented at the Airport. This would include attention to detailsenforcing contract and lease language for existing tenants. Language which requires tenants to keeptheir premises clean and sanitary, and in the best condition and repair needs to be enforced.Development standards such as setback requirements, landscaping, and aviation versus non-aviationuse of Airport property should all be considered in upgrading the image of the Airport. With thisin mind, it is recommended that:

Development standards, lease language, and property use should all begeared toward upgrading the facility aesthetically and functionally to

corporate aviation standards.

Airport Zoning and Special Use Permits

The Airport is subject to the City’s zoning laws as they apply to the various districts withinthe City limits. In Lee’s Summit, zoning divides the community into districts or zones andestablishes different regulations governing the use, placement, spacing and size of land and building.The City's Unified Development Ordinance (UDO) contains regulations for each zoning district thatspecify permitted uses, required yard setbacks, maximum building height, basic parkingrequirements, and related development standards. In this regard, the Airport Hazard Overlay Districtis very important and beneficial for the protection of both property owners and airport users. Thisdistrict limits the height of new construction and permits the lighting or marking of existingobstructions to air navigation. The City should consider the re-zoning of the Airport, now thatadditional property has been purchased. Therefore, it is recommended that:

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Any re-zoning of the Airport District should incorporate all airport property,along with future properties and influence area outlined in the current

Airport Master Plan.

As defined in the UDO, some uses of land are not appropriate as a “permitted use” in certainzoning districts and are designated as special uses. These uses may be approved at a particularlocation because of factors or reasons not applicable to the zoning district as a whole. Special usesmay have a unique impact on the adjoining uses of land, and are therefore subject to individualizedconsiderations as to location and conditions of use. Currently, the Airport is considered a specialuse. As such, it requires a permit process to develop new buildings and to undertake alterations tothe existing facilities. This process can be cumbersome and can take up to two years before ashovel-ready site can be developed. Many businesses do not have two years to go through this typeof process and will select a less difficult (builder-friendly) site to develop.

In the airport environmental assessment process, the FAA has developed a categoricalexclusion list of development projects that do not have to go through the long processes associatedwith environmental review. It is known that these projects will not be deleterious to theenvironment since they will not cause additional noise or can all be conducted on property that isalready disturbed. By making these distinctions among projects, some development can be fast-tracked without adversely impacting the environment. In a similar manner, it is recommended thatthe City of Lee’s Summit adopt categorical exclusions for on-airport development projects. Forexample, it is known that aircraft hangars conform to aviation uses. Further, the dimensions andmaterials used for normal hangar development have been well established in the industry. Inaddition, areas of the Airport have been previously designated for hangar development asdocumented in the approved Airport Layout Plan (ALP). Thus, categorical exclusions could be usedto fast-track this important revenue enhancement program. Therefore, it is recommended that:

The City should consider the use of categorical exclusions for the Airport tobe incorporated into the Special Use Permit process in order to allow fast-tracking of hangar development and other revenue producing activities.

If this policy is not acceptable, the Airport should immediately seek permits for development ofhangars and any other planned development through the current permitting process. Since thegeneral area of development is known, and since a variety of building materials can be specified,these properties can be readied for development. If these sites are made “shovel ready,” whendemand for these facilities occurs, the City will not be at a competitive disadvantage to other airportswith faster permitting processes.

Non-Aviation Uses of Airport Property for Community Outreach and Public Relations

There has been some question as to the permitted uses of Airport leased property for other-

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than-aviation purposes. In this regard, the current leases for aircraft hangars do not readilyaccommodate other uses without special use permits. A recent example included the desire of onetenant to hold a poker tournament inside their aircraft hangar. While no revenues would be availablefrom this use to the Airport sponsor, there is some intangible public relations value for holdingpublic gatherings at the Airport.

Permitted uses of airport facilities should consider the value of public relations in allowingsome types of non-aviation uses. In this regard, people who have been exposed to enjoyableactivities at the Airport are less likely to harbor negative emotional sentiment toward the facility.At other airports, policies have been implemented that encourage all types of public interaction atthe airport. Citizen support of the airport will never be unanimous. However, recommendations toenhance or expand the concept of intangible assets should be considered by the City. Intangibleassets are benefits that cannot be adequately quantified with a financial value. For example, anintangible asset of the Airport is its ability to serve as a venue for community-related functions.Other airports have been used as venues for fund raisers, model airplane contests, dog shows, airshows, fly-in breakfasts, and static displays of aircraft. In addition, local schools, scout troops, andday camps regularly tour these airports, increasing their visibility and integration into thecommunity. Intangible safety benefits associated with the Airport can include aerial searchoperations and aerial medical evacuations when needed. There is significant value in having thegeneral public attend functions held at the Airport. Thus, it would be helpful if the lease languageassociated with the use of hangars and/or other airport facilities were modified to include publicgatherings or outreach. Therefore, it is recommended that:

The City should consider modifying hangar lease language to permit non-aviation uses that do not impede aviation uses.

In a larger sense, the Airport should be promoted by the City as a venue for community outreach,educational, and charity events. Some of these events can actually produce revenue for the Airport.

Additional Activities/Studies

There are additional studies that would be helpful for the Airport in its attainment of itsbusiness and economic development potential. Already mentioned has been the formation of amarketing committee to seek out corporate aviation in association with attraction of businesses tolocal industrial/business parks.

A new metric called Airport/Community Value is being used to measure the worth of anairport to the community and to help estimate the return on investment for capital and other spendingat the airport. Airport/Community Value studies measure both the economic activity and the assetvalue of an airport. This is similar to examining the income statement and balance sheet of abusiness to determine its economic health. This type of study would assist the Airport in justifyingits expenditures and use of land in the community. Often, residents of a community don’t know or

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appreciate the true value of the local airport. Measurement, publication, and dissemination of thisinformation promotes understanding and appreciation. Community support is an intangible asset.Therefore, it is recommended that:

An Airport/Community Value study should be developed for the Airport andpublicized locally to enhance understanding and appreciation.

Airport Branding

As discussed in a previous section, branding is a valuable process for developing a uniqueselling identity for a product or service. A successful brand is one that calls to mind a host ofpositive thoughts and associations in the minds of consumers, compelling them to purchase andexperience the brand. As such, a significant consideration in a branding effort concerns the marketposition of the product or service being offered. Strong brand recognition in the market begins firstwith a distinct identity that claims a place in the market and distinguishes the offering from thecompetition. Building upon this identity is the quality and value of the product, which backs up thename by delivering on the brand’s promise of meeting the consumer’s need.

In this regard, the development of a unique selling point and identity in the market for Lee’sSummit Municipal Airport can be beneficial to the future growth of the Airport. In shifting towardan image that attracts more corporate and business use, the City may desire to re-brand the Airportonce the runway is extended. This should include a new logo, upgraded website, which is carriedthrough the recruitment/marketing campaign. Additionally, compelling tagline or slogan, supportedby mission and values statements, which can be displayed in the terminal area, will effectivelycommunicate the Airport’s brand to the market. Therefore, it is recommended that:

The City should consider a branding effort for the Airport, including a newlogo, website, signage, tagline, and mission and values statements.

The branding effort should be followed-up with a public relations and promotional campaignto reintroduce Lee’s Summit Municipal Airport to the local and regional market, with a focus onbusiness aviation. Therefore, it is recommended that:

The City should market via the Internet and aviation publications,promoting the Airport as a gateway to the Greater Kansas City region.

Such marketing could take the form of providing information (or at least a link to theAirport’s website) on the websites of the major downtown and regional destinations, and in return,provide a similar level of information or linkage to these destination websites. In addition,informational material can be published on www.airnav.com highlighting services and facilities at

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the Airport. Joint marketing efforts between Lee’s Summit Economic Development Council, andeven the Economic Development Corporation of Kansas City.

Ideally, a branding project should be the starting point for all marketing, businessrecruitment, advertising, public relations, and promotion activities involving the Airport, becausethe branding process truly sets the stage for all these activities. However, it is possible to executesuccessful marketing and business attraction activities without the branding effort. The benefit ofthe branding project is to develop a strong, recognizable, distinct, and lasting identity for the Airport,and messaging that can be consistent and incorporated into all outreach efforts. At the conclusionof the branding project, protocols are established for the consistent use of logos, taglines, andmessaging, which, when used consistently across all medium, offers the biggest advantage andopportunity for the Airport by reinforcing the brand and building awareness in the market for thelong term.

At several airports throughout the country, Cities have formally changed the name of theairport as the fundamental component of the branding effort. Name changes to reflect the regionalcontext of the airport and/or the type of air service provided are most common. For example, theairport name of “Kansas City – Lee’s Summit Municipal Airport” provides a regional context.Alternatively, “Lee’s Summit Executive Airport” indicates the desired user/tenant.

This Business Plan has already recommended a marketing budget of $10,000 for theattraction of corporate aviation. This budget would be sufficient to also include the branding effortrecommended here.

Rates and Charges

Based upon analysis of the Airport’s service area and general industry guidance, the rateschedule for ramp parking and hangar storage at Lee’s Summit Municipal Airport are within themid-to-upper price range and are considered reasonable. Thus, the rate schedule and fees shouldnot be raised at this time. Land lease rates for hangar owners and FBOs cannot be adjusted exceptby mutual agreement. The current FBO agreement provides for 6-year renewals with ConsumerPrice Index adjustments at the time of each renewal. There are no recommendations to raise thesefees at this time. Land lease rates are $0.25 per square foot, which is considered reasonable, basedon other lease rates in this and other regions. Thus, it is recommended that:

No changes to existing rates and charges are needed, with the exception ofCPI adjustments annually or longer if required by lease agreement.

When new hangars are constructed, rates will have to be developed that reflect the cost ofcapital and debt service for those facilities. Thus, future hangar rates will depend upon the cost ofconstruction and desired rates of return on that investment. For new leases, rates that are higher thanthose on older leases and which reflect the prevailing market rates for real estate in the area should

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be pursued. In order to do this, however, it is necessary to first obtain reliable local data to justifysuch higher rates. Therefore,

For new hangar development, land lease rates should be developed based on a study of the prevailing market lease rates for property of similar

characteristics in the region and/or at other, competing airports.

Non-Aviation Development

Such a scenario for development at the Airport rests significantly on the commercial realestate market in the Lee’s Summit area, trends in development in the region, and the overalleconomic health of private interests in the area.

If Airport land would be sold, proceeds must be used to reimburse FAA for its share of theproperty. However, if the land is leased, all revenues could be used to benefit the operational andcapital needs of Lee’s Summit Municipal Airport. Thus, to create a long-term revenue stream forthe Airport, a lease arrangement for Airport property must be a part of any development deal. Whilethese can be structured with private developers or even public development corporations, it wouldtake work to structure such a beneficial arrangement for the Airport. In spite of these challenges,the prospect of creating additional revenue through the lease of Airport land for private non-aviationbusiness use is an attractive option for the community and for the Airport. Therefore, it isrecommended that:

The City should consider the identification of Airport property that can be used for non-aviation development, and the assembly of attractive land

offerings through targeted acquisition.

6.3 Cost-Efficiency Recommendations

A management audit of Lee’s Summit Municipal Airport was not performed as a part of thisbusiness plan. Therefore, a review of cost-efficiency consisted of a cursory review of Airportexpense data rather than on-airport observations of activity. Examination of existing Airport costsrevealed that expense levels appear to be within reasonable limits. Without evidence to the contrary,it was concluded that there are no significant cost-cutting or efficiency improving measures that willlikely impact current or forecast levels of expenses. This does not preclude the need for additionalstaff in the future.

6.4 Impact on Revenues/Expenses

Quantifying the levels of additional potential revenue that would result from implementingthe strategies listed above is highly subjective. The only reasonable method is one where the

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assumptions for each strategy are stated, along with the resulting impact. Then, if the assumptionsare not met, deviations from the predicted revenues can be expected. An overall theme of thisBusiness Plan is the assumption that increases in revenues to the City would come primarily fromincreased airport development and corporate aviation activity.

Changes in Aviation Activity

The first step in determining the impacts of revenue enhancement strategies presented inprevious sections of this Business Plan is to predict the change in aviation demand that would occurif each strategy were implemented. Table 16 presents a listing of the potential demand changesalong with the assumptions used in estimating demand changes.

Table 16 - Potential Demand Changes by Year 2013 Current Activity Operations Based Aircraft

33,700 177

Demand Change Assumption

Extension of Runway Extend RWY 18-36 to length of 5,000' or greater 1% 0

Corporate Aviation Derived from marketing businesses with corporateflight departments and/or companies that rely ongeneral aviation.

6% 5

Airport Branding Promotional activities to enhance awareness andcapture larger market base.

1% 0

New Terminal services Minor impacts to demand 0% 0Hangar Development Net gain of 10 new T-hangars and 35,000 sf of

conventional hangars within 5 year period.5% 10

Non-Aviation PropertyDevelopment

Supports revenues for Airport operation andcapital expenditures.

0% 0

Additional Potential Growth 13% 15Total Potential Activity 38,081 192

As indicated in Table 16, the key revenue enhancement strategy for Lee’s SummitMunicipal Airport is attraction of corporate aviation, followed by the development of conventionaland T-hangar units. These activities rely significantly on the extension of Runway 18-36 to a lengthof 5,000 feet or greater, as mentioned in previous sections. In this Business Plan, these strategiesare assumed to create sufficient interests to attract five based jet aircraft, and tenants to occupy theT-hangar units. Without these activities, revenue growth potential at the Airport may be limited.

Impact on Revenues

Using these estimates of future aviation demand, projections of future financial performance

Draft



were then calculated for Lee’s Summit Municipal Airport based on a number of assumptions (seeAppendix C). Should the assumptions utilized for the following pro-formas not materialize, somedeviation from projected revenues can be expected. The following assumptions were used todevelop projections for the future performance of the Airport upon implementation of the BusinessPlan revenue enhancement strategies, as follows:

! Attraction of Corporate Aviation: The addition of five based business jets has apotential to increase Airport revenues by as much as $564,000 by 2013. Thisestimate is based upon the lease of two 10,000 square-foot conventional hangars andthree 5,000 square-foot conventional hangars for storage and fuel usage of 100,000gallons (20,000 gallons per jet annually). Considering the extent to whichconventional hangar rental fees and sales of jet fuel contribute to an airport’srevenue, it is clear that jets based at Lee’s Summit Municipal Airport have enormouspotential to change the revenue picture for the City at the Airport.

! T-Hangar Development: If hangar pricing is competitive, there exist several optionsfor the City to pursue development. These options include:- Keeping existing T-hangars for five years.- Seeking private enterprise to construct hangars in concert with using the

City’s entitlement grants to construct hangars.- City development of all hangars.

Each scenario has a different financial production outcome, with the first option ofkeeping the existing hangars contributing most to the Airport’s bottom line.

! Extension of Runway 18-36 to Length of 5,000 feet or Greater: As discussed inChapter 5 of this business plan, the extension of Runway 18-36 will contributesignificantly to an increase in corporate/business activity at the Airport. Thisincrease in activity of approximately 1 percent of existing operations (340operations) is projected to result in an increase in fuel sales at the same rate, forapproximately $7,080 in revenue by 2013.

! New or Improved Terminal Services, Amenities, and Activities: It is difficult toforecast revenue increases from such activities, even though over time revenues cangrow exponentially. Such improvements have a more qualitative than quantitativeimpact at Airports, as they generally contribute more toward the overall customerexperience than operating revenues. However, improved terminal services at theAirport as discussed in previous sections are projected to account for $55,000 inadditional revenue by 2013.

! Airport Branding: The branding project recommended for Lee’s Summit MunicipalAirport can be anticipated to increase awareness in the Greater Kansas City regionalmarket, and outside the area for transient operators. The new Airport brand, which

Draft



will be communicated through an aggressive marketing, recruitment, and promotionscampaign, is projected to have an impact primarily on fuel sales. An increase ofapproximately 1 percent of total fuel sales is projected, amounting to approximately$7,080 by 2013.

These assumptions have been applied to the three scenarios for future revenue developmentat Lee’s Summit Municipal Airport. Table 17 presents a projection of how potential demandincreases could impact the revenue picture for the Airport, if the assumptions for each scenario aremet.

Table 17 - Projected Revenues Comparison - 2013Revenue Category Private Hangar

Developmentwith City’s Entitlement

Keep Existing HangarFacilities for 5 Years

City Development of all Hangars with

EntitlementUnleaded Fuel $9,669 $9,669 $9,669Turbine Fuel 770,901 770,901 550,901100LL Fuel 581,831 581,831 414,781Hangar Rental 445,987 534,281 384,175Tie-Down/Ground Rental 20,135 20,135 20,135Sectional Maps 11,997 11,997 11,997Other Revenue 25,526 25,526 25,526

Total Revenue $1,866,046 $1,954,340 $1,417,184

As indicated, projected revenues from fuel sales, tie-down fees, sales of sectional maps, andother revenue are expected to remain steady through 2013. Based on the method of hangardevelopment selected by the City, revenues from hangar rental will likely range from approximately$384,200 if the City elects to develop all hangar facilities to $534,300 if the City chooses to keepexisting hangars in place through 2013. The benefit of the latter option is the deferment of incurringnew debt for the construction of hangars for five years. In a similar manner, fuel sales will beimpacted by the number of based aircraft at the Airport. Those sales would suffer if hangar pricingforced aircraft tenants to seek other home-base airports.

Impact on Expenses

The next step in completing the pro-formas for Lee’s Summit Municipal Airport is anassessment of impacts on future operating expenses. For this projection, the three options developedfor the revenue scenarios were examined for their impact on Airport expenses. For these options,only the revenue margin was considered for each hangar development scenario. That is, debt serviceand revenue production were considered equal for the City’s development of all hangars’ option.As mentioned in Section 6.2, it is recommended that the City acquire fuel trucks to better servecorporate aviation users. This need would increase costs by $1,100 per month for a total annual cost

Draft



of $13,200 from 2009 through 2013. Other increases in Airport expenses, such as salaries,maintenance and repairs, utilities, and fuels/lubricants, were assumed to increase at 4 percentannually, reflecting the common factor used to anticipate the rate of inflation. Fuel Add-onrepresents the additional wholesale fuel that is projected to be purchased for both Avgas and Jet Afuel. Finally, a marketing budget of $10,000 annually was added to the Airport expenses, beginningin 2010. Table 18 presents the projection of operating expenses at Lee’s Summit Municipal Airport.As noted, the first two columns have identical expenses while the third option assumes lowerwholesale fuel purchase costs due to fewer based aircraft caused by higher hangar rental prices.

Table 18 - Projected Expenses Comparison - 2013Expense Category City Development T-

Hangars withEntitlement


City Development allHangars withEntitlement

Salaries, wages and benefits $456,387 $456,387 $456,387

Maintenance and repairs 120,234 120,234 120,234Utilities 48,032 48,032 48,032Fuels and lubricants 569,054 569,054 469,054Fuel Add on 526,000 526,000 401,000Fuel Truck Leases 13,200 13,200 13,200Marketing 10,000 10,000 10,000Other 195,916 195,916 195,916

Total Expenses $1,938,823 $1,938,823 $1,713,823

Comparison of Revenues & Expenses

When the forecast of potential revenue increases resulting from revenue enhancementstrategies under each hangar development scenario is compared to the forecast of baseline operatingexpenses for Lee’s Summit Municipal Airport, a forecast of future net operating costs for the Airportcan be estimated. Table 19 presents this comparison.

Table 19 - Projected Operating Revenue & Expense ComparisonYear City Development T-




2008 $1,058,690 $1,058,690 $1,058,690

2009 998,210 1,102,729 992,319

2010 1,063,486 1,162,210 1,005,622

Draft


Table 19 - Projected Operating Revenue & Expense ComparisonYear City Development T-





2011 1,329,396 1,423,056 1,147,512

2012 1,601,712 1,691,069 1,294,185

2013 1,868,496 1,954,340 1,417,184

2013 Operating Expenses $1,938,824 $1,938,824 $1,713,823

2013 Forecast Net Operating Costs

($70,328) $15,516 ($296,639)

Comparison of the baseline operating expenses and forecasted levels of enhanced operatingrevenues under each hangar development scenario indicates an operating surplus through 2013 forthe scenario that considers keeping existing hangars in place for the forecast period. As shown, eachscenario that includes the demolition of the 68 existing T-hangar units and replacing them with anequal number on the opposite side of the runway in the near term produces a net operating deficitby 2013. While the ultimate goal of the Airport is to construct adequate T-hangar facilities toreplace the units demolished, the near term impacts on revenues of this decision will be significant.This is especially true given that displaced tenants will likely relocate to other facilities and executelong-term leases under terms which may keep them from considering Lee’s Summit for some time.

Draft



7. SUMMARY OF BUSINESS PLAN RECOMMENDATIONS

A NUMBER OF RECOMMENDATIONS HAVE BEEN MADE AS a part of this Business Plan, all withthe ultimate goal of improving financial performance of Lee’s Summit Municipal Airportand securing the long-term viability of the facility and its service to the region. As has been

discussed, this can be accomplished primarily through improving airside and landside facilities toaccommodate increased corporate activity, aggressive marketing to recruit and retain new hangartenants, and enhanced terminal services that respond to the needs of corporate operators. Many ofthese strategies also offer additional primary and secondary economic benefits to the broader Lee’sSummit and eastern Jackson County that other commercial office, industrial, and retail developmentscannot affect.

This Business Plan sets forth a set of options for the Airport and the City, which restsconceptually on three primary strategic initiatives:

! Expansion of Airside and Landside Facilities: As discussed, the expansion ofRunway 18-36 to a length of 5,300 feet or greater, combined with the developmentof five conventional hangars and retention or replacement 68 existing T-hangar unitsforms the basis for the business plan analysis. Increasing airside and landsidecapacity to accommodate such activity and compete in the regional market,especially considering the significant hangar enhancement project underway atWheeler Downtown Airport, is the basis for a strategic path forward for Lee’sSummit Municipal Airport.

! Attraction of Corporate Aviation: The attraction of new corporate aviation users inthe form of tenants and transient business activity offers the greatest long-termbenefit to City at the Airport. Such activity’s impact in terms of revenueenhancement creates a strong opportunity to improve the long-term viability of Lee’sSummit Municipal Airport, making the facility a contributing partner in theeconomic development initiatives of the City, County, and State.

! Expansion of Airport Services: The expansion of Airport services will make thefacility one that provides a competitive suite of traditional offerings that areimportant to corporate aviation operators and users. As described previously, thisbusiness plan recommends: the acquisition of fuel trucks; provision of first-classfacility amenities and food services, improved ground transportation, and all weatheroperation (precision approach capability). Additionally, improved standards formaintaining a first-class facility, revisions to zoning and special permitting thatallows for increased use of the Airport by the community are ways for the Airportto improve business use of the facility.

Specific recommendations by timeframe are as follows:

Draft



Phase 1! 1st Priority - Runway Extension: The City should plan to expand Runway 18-36 as

soon as practical.! 2nd Priority - Attract Corporate Aviation: The City should allocate funding for the

development of a marketing plan, and targeted recruitment strategy/activities forattracting new corporate aviation activity to the Airport.

! 3rd Priority - After-Hours Fuel Service: The City should consider the provision ofafter hours Jet A fuel through self-serve fueling tanks at the Airport.

! 4th Priority - Fuel Trucks: The City should consider the acquisition of fuel trucksto dispense fuel to the various apron areas.

! 5th Priority - Airport Branding: The City should consider a branding effort for theAirport, including a new logo, website, signage, tagline, and mission and valuesstatements.

Phase 2! 1st Priority - Runway Extension: The City should consider extending Runway 18-36

to a length of 5,300 feet in the near term, with a future extension to an ultimatelength of 5,500 feet under ARC C-II standards.

! 1st Priority (tie) - Hangar Development Options: The City should considerpostponing replacement hangar development for as long as is practical.

! 2nd Priority - Hangar Development Funding: The City should consider using grantdollars to develop hangars. Private enterprise could be solicited to develop theremainder of needed hangars.- The RFP process for hangar development should require estimates of the

total costs of development and proposed rental rates.! 3rd Priority - Hangar Development Ownership: If the City uses private enterprise

to develop hangars, leases should be structured to include reversion clauses for Cityownership of the buildings after a set period of time.

! 4th Priority - Airport Zoning District: Any re-zoning of the Airport District shouldincorporate all airport property, along with future properties and influence areaoutlined in the current Airport Master Plan.

! 5th Priority - Categorical Exclusion: The City should consider the use of categoricalexclusions for the Airport to be incorporated into the Special Use Permit process inorder to allow fast-tracking of hangar development and other revenue producingactivities.

! 6th Priority - Non-Aviation Property Development: The City should consider theidentification of Airport property that can be used for non-aviation development, andthe assembly of attractive land offerings through targeted acquisition.

Phase 3! 1st Priority - Marketing Activities: The City should market via the Internet and

aviation publications, promoting the Airport as a gateway to the Greater Kansas City

Draft



region.! 2nd Priority - Rates and Charges Adjustment: Hangar prices should be increased to

mirror the CPI, if they are within service area competitive market rates.- For new hangar development, land lease rates should be developed based on

a study of the prevailing market lease rates for property of similarcharacteristics in the region and/or at other, competing airports.

! 3rd Priority - Corporate Standards: Development standards, lease language, andproperty use should all be geared toward upgrading the facility aesthetically andfunctionally to corporate aviation standards.

Phase 4! 1st Priority - New Terminal Building Amenities: As a part of the terminal

construction, consideration should be given to including a conference room,corporate pilots lounge, and other services and aesthetics needed to attract corporateaviation.

! 2nd Priority - Ground Transportation: Once the runway system is expanded, the Cityshould seek a satellite car rental firm to locate at the Airport.

! 3rd Priority - All-Weather Operation: In preparation for corporate aviation activity,the Airport should work toward an all-weather operation capability to include theretention of precision instrument approaches and timely snow removal services.

Management/Policy Considerations! Airport Governance: The City could examine other successful government models

for improving the governance of the Airport and if changes are desired, can considermaking those within the current structure.

! Staff Training: The City should continue to invest in its Airport staff with trainingand continuing education opportunities as they arise.

! Economic Impact: The economic impact of the Airport should be updated andpublicized locally to enhance understanding and appreciation.

! Special Use of Hangar Facilities: The City should consider modifying hangar leaselanguage to permit non-aviation uses that do not impede aviation uses.

Timetable and Trigger Points

Table 20 presents a listing of pro forma assumptions for implementation of the recommendedplan, grouped by type of action (administrative, marketing, etc.).

Table 20 - Pro Forma AssumptionsAction Description Trigger Points Timeframe

Management/Policy

Staff Training Continue to invest in Airport staff withtraining and continuing education.

Case by caseconsideration.

Regularly.

Draft




Economic Impact The economic impact of the Airport should bemeasured and publicized.

Conclusion ofBusiness Plan.

Phase 1

Special Use of Hangar Facilities

Consider modifying hangar lease language topermit occasional non-aviation uses that donot impede regular aviation activities.


Phase 1

Airport Governance Examine options for improved governance ifdesired.

If problemsarise.

Long term.

Marketing

Branding Consider a branding effort for the Airport,including new logo, website, signage, tagline,and mission/values statements.

Uponlengthening ofrunway

Phase 1

Attract Corporate Aviation Allocate funding for marketing plan, targetedrecruitment strategy/activities.


Phase 2

Marketing Activities City should market via the Internet andaviation publications, promoting the Airport.

As soon asbrochures areavailable.

Phase 3

TerminalServices/Amenities

After-Hours Jet Fuel Service Consider providing after hours Jet A fuelthrough self-serve tanks at the Airport.

As soon aspractical

Phase 1

Fuel Trucks Consider the acquisition of a fuel truckthrough lease or purchase.

As soon aspractical

Phase 1

All-Weather Operation To service increased corporate activity, theAirport should develop precision instrumentapproach capability and timely snow removal.


Phase 4

New Terminal Building Amenities

Consider a conference room, corporate pilotslounge, and aesthetics to attract corporation.

Design Phaseof NewTerminal.

Phase 4

Ground Transportation City should seek interests from car rentalcompanies to locate a satellite location at theAirport.

Once Runwayhas beenExpanded

Phase 4

Airport Development

Runway Extension The City should expand Runway 18-36 assoon as practical.

Start processImmediately

Phase 2

Hangar Development Options

The City should consider postponingreplacement hangar development for as longas practical.

Conclusion ofBusiness Plan

Phase 2

Hangar Development Funding

Pursue grant money for development of 10-unit T-Hangar; private development ofremaining hangar needs through RFP process.


Phase 2

Draft




Hangar Development Ownership

Private hangar development should includereversion clauses for ownership to transferback to the City at a future date.

In response toinquiry fromprivateinterests.

Phase 2

Non-Aviation Development Non-aeronautical property should be releasedfor compatible revenue producing activities.

Upon demandfor property.

Phase 2

Airport Zoning District Revisions to the Airport District zoningregulations should incorporate all airportproperty and future acquisition/influenceareas.

Prior tosignificantdevelopment inneighboringareas.

Phase 2

Categorical Exclusion The City should consider the use ofcategorical exclusions as a means for fast-tracking hangar development and otherprojects, based on the Airport’s pre-existingapproved use.

Prior to hangarand terminaldevelopmentandconstruction.

Phase 2

Corporate Standards Development standards, lease language, andproperty use should be updated to reflect thefuture of the Airport as facility intended toserve corporate aviation needs.

Prior tosignificantlandsidedevelopment.

Phase 3

Rates and Charges

Hangar Lease Rates Hangar prices should be increased to reflect toConsumer Price Index (CPI) if within servicearea competitive market rates.

Annually,unless morethan marketrates.

Phase 1

Lease Rate Study Initiate a study of prevailing market leaserates for property of similar characteristics inthe region and/or at competing airports.

As soon aspractical

Phase 2

Appendix A:Airport Facility Directory - LXT

NC, 05 JUNE 2008 to 31 JULY 2008

LEE’S SUMMIT MUNI (LXT) 3 N UTC�6(�5DT) N38°57.58� W94°22.28� KANSAS CITY1004 B S4 FUEL 100LL, JET A, MOGAS OX 4 TPA—See Remarks L–10J, ARWY 18–36: H4016X75 (CONC) S–30, D–30 MIRL IAP, AD

RWY 18: REIL. VASI(V4L)—GA 3.5° TCH 31�. Tree.RWY 36: REIL. VASI(V4L)—GA 3.5° TCH 31�. Rgt tfc.

RWY 11–29: H3800X75 (CONC) S–30, D–30 MIRLRWY 11: REIL. PAPI(P4L)—GA 3.0° TCH 45�. Tree. Rgt tfc.RWY 29: REIL. PAPI(P4R)—GA 3.0° TCH 40�. Tree.

AIRPORT REMARKS: Attended 1130Z‡–dusk; attended 1 hr after sunset.Wildlife on and invof arpt. When winds are less than 5 knots useRwy 18. Apch ends of Rwy 18, Rwy 36 and Rwy 29 are notmutually visible due to terrain and trees. No rgt turns under 2500�

or within 3 miles of the arpt when departing on Rwy 29. No leftturns under 1500� or within ½ mile of the end of the rwy whendeparting on Rwy 18. No left turns under 2500� or within 3 milesof the arpt departing on Rwy 36. For acft under 6,000 lbs TPA1804(800); acft over 6,000 lbs TPA 2504(1500). MIRL Rwy11–29 and Rwy 18–36 preset on low ints dusk–0400Z‡, forhigher ints after 0400Z‡ ACTIVATE—CTAF. For REIL Rwy 18, Rwy36, Rwy 11 and Rwy 29, PAPI Rwy 11 and Rwy 29 and VASI Rwy36—CTAF. VASI Rwy 18 on continuously.

WEATHER DATA SOURCES: ASOS 124.175 (816) 347–9807.COMMUNICATIONS: CTAF/UNICOM 122.8

COLUMBIA FSS (COU) TF 1–800–WX–BRIEF. NOTAM FILE LXT.�R KANSAS CITY APP/DEP CON 118.4 CLNC DEL 118.45

RADIO AIDS TO NAVIGATION: NOTAM FILE COU.NAPOLEON (L) VORTACW 114.0 ANX Chan 87 N39°05.73� W94°07.73� 227° 14.0 NM to fld. 878/7E.

LEWIS CO RGNL (See MONTICELLO)

LEXEY N39°23.22� W94°40.62� NOTAM FILE MCI. KANSAS CITYNDB (LOM) 275 DY 193° 5.6 NM to Kansas City Intl. A

LEXINGTON MUNI (4K3) 3 NW UTC�6(�5DT) N39°12.59� W93°55.68� KANSAS CITY691 B FUEL 100LL L–27ARWY 13–31: 3100X125 (TURF) IAP

RWY 13: P-lines. RWY 31: Road.RWY 04–22: H2925X40 (ASPH) LIRL (NSTD)

RWY 04: P-lines. RWY 22: Trees.RWY 18–36: 2250X125 (TURF)

RWY 18: Trees. RWY 36: Road.AIRPORT REMARKS: Attended Mon–Fri 1500Z‡–dusk, Sat–Sun

1400Z‡–dusk. 100LL unavbl indef. Parachute Jumping. Birdsinvof arpt during spring rains and flooding. Ultralight activity andradio controlled airplanes on and invof arpt. Trees in rwy visibilityzone between Rwy 22 end and Rwy 13 end. NSTD rwy safety areabyd Rwy 22, Rwy 13, Rwy 18, and Rwy 31 ends, incorrect terraingrades, insufficient length, ditch, brush, trees, pole, crops. Rwy22 +1–50� tall trees and brush first 1,000� of Rwy 22, 86–250� Nof rwy pavement edge and 100–250� S of rwy pavement edge. Rwy04–22 rough large pits in surface, cracks, tall grass and weedsgrowing in cracks. Rwy 18–36 multiple pot holes entire length ofrwy marked by small survey flags. Rwy 04–22 NSTD LIRL, spacingof rwy lgts varies from 240–250�, 6 thld lgts located 20� NE ofRwy 22 thld, all thld lgts incorrect spacing. Sport aviationactivities in progress on weekends. ACTIVATE LIRL Rwy 04–22—CTAF.

COMMUNICATIONS: CTAF/UNICOM 122.7COLUMBIA FSS (COU) TF 1–800–WX–BRIEF. NOTAM FILE COU.KANSAS CITY CENTER APP/DEP CON 135.575

RADIO AIDS TO NAVIGATION: NOTAM FILE COU.NAPOLEON (L) VORTACW 114.0 ANX Chan 87 N39°05.73� W94°07.73� 047° 11.6 NM to fld. 878/7E.

MISSOURI 215

Appendix B:Economic Development Incentives

1 Source: www.missouridevelopment.org

B-1

Appendix B - State and Local Economic Development Incentives

State Development Incentives & Programs

Below are brief summaries of Tax Incentive programs offered by the State of Missourithrough the Missouri Department of Economic Development (DED) and local communities.1

! Business Facility Tax Credit Program: Provides tax incentives to facilitate theexpansion of new or existing businesses in Missouri that occurred prior to 1/1/2005.

! Chapter 353 Tax Abatement: Tax abatement is available to for-profit "urbanredevelopment corporations" organized pursuant to the Urban RedevelopmentCorporation Law. Tax abatement under the Urban Redevelopment Corporations Lawis extended to real property that has been found to be a "blighted area" by the city.

! Enhanced Enterprise Zone: Provides state tax credits to new or expandingbusinesses in a Missouri Enhanced Enterprise Zone.

! Enterprise Zone Tax Benefit Program: Provide tax incentives to facilitate theexpansion of new or existing businesses in Missouri that occurred prior to 1/1/2005.

! Film Production Tax Credit Program: Provides a state income tax credit toqualified film production companies up to 50% of the company's expenditures inMissouri for production or production related activities necessary for the making ofa film, not to exceed $1 million in tax credits per project.

! Loan Guarantee Fee Tax Credit Program: Provides state tax credits to an "eligiblesmall business" for the amount of a guarantee fee paid to either the U.S. SmallBusiness Administration or the U.S. Department of Agriculture for a small businessloan.

! Mutual Fund Tax Apportionment: Stimulates the mutual fund industry in the stateby allowing those certified by DED to utilize a more favorable state incomeapportionment method for tax purposes.

! Quality Jobs Program: Facilitates new quality jobs by targeted business projects.! Rebuilding Communities Tax Credit Program: Helps stimulate eligible business

activity in Missouri's "distressed communities" by providing state tax credits toeligible businesses that locate, relocate or expand their business within a distressedcommunity.

! Sales Tax Exemption: Machinery and equipment used to establish a newmanufacturing facility or expand an existing manufacturing facility is exempt fromlocal and state sales/use tax, provided such machinery/equipment is used directly tomanufacture a product ultimately intended for sale.

! Small Business Incubator Tax Credit Program: The Missouri Department ofEconomic Development (DED) may issue a 50% state tax credit to a taxpayer whomakes a contribution to an approved incubator sponsor in Missouri.

! Wine and Grape Tax Credit Program: Assists vineyards and wine producers withthe purchase of needed new equipment and materials, by granting a state tax credit

B-2

for a portion of the purchase price.

State Infrastructure Financing

In addition to the tax abatement, credit, and other tax benefit programs listed above, the Stateof Missouri also offers incentives to local public and private sector interests for the Improvementof the State’s infrastructure. Below are brief summaries of Public Infrastructure programs offeredby the State of Missouri.

! Industrial Development Bond: Facilitate the financing of business projects. Citiesor counties may purchase or construct certain types of projects with bond proceedsand lease or sell the project to a company. Costs that may be eligible costs are thepurchase, construction, extension and improvement of warehouses, distributionfacilities, and industrial plants.

! Industrial Infrastructure Grant: Assists local governments in the development ofpublic infrastructure that allows industries to locate new facilities, expand existingfacilities, or prevent the relocation or closing of a facility. Grants must be made incooperation with a city or county sponsor in a "non-entitlement" area where theproject will be located. (Cities with populations less than 50,000 and/or counties withpopulations under 200,000). For-profit manufacturing, processing and assemblycompanies are prioritized.

! Tax Credit for Contribution Program: Grants a tax credit equal to 50% of anymoneys contributed by any taxpayer. The Contribution must be made to one of three"funds" established by the Board's statutes: the "industrial development and reservefund," the "infrastructure development fund," or the "export finance fund."Contributions to the "industrial development guarantee fund" are not eligible toreceive a credit.

! Tax Increment Financing (TIF): Facilitates the redevelopment of blighted areas byproviding essential public infrastructure.

Venture Capital

The Missouri Department of Economic Development, other state agencies, and federalagencies also have access to a variety of resources to facilitate capital formation for new andexpanding high growth businesses. The following describes a handful of options available to privatebusinesses in Lee’s Summit.

! Seed Venture Capital: Venture Capital is equity financing. Equity financinginvolves no direct obligation of the business to repay any fund; however, it doesinvolve selling a partial interest of the business to the investor. Because the investorowns a share of the business, they are interested in the long-term success and futureprofitability of the business. Equity financing tends to be very complicated and willrequire the business to seek the advice and representation of an attorney andaccountant.

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! New Enterprise Creation Act: The New Enterprise Creation Act is intended togenerate investment for new, startup Missouri businesses that have not developed tothe point where they can successfully attract conventional financing or significantventure capital from later-stage funds.

! Certified Capital Companies: A CAPCO may invest in an eligible business, whichis in need of venture capital and cannot obtain conventional financing. The eligiblebusinesses must derive their revenue primarily from manufacturing, processing orassembling of products; conducting research and development; or, servicebusinesses, which can demonstrate that more than 33% of its revenue would be fromoutside the state of Missouri.

Finance Programs

The State of Missouri also has special financing packages, which are available to qualifyingcompanies high-paying manufacturing and industrial jobs, as well as enterprises established in urbanareas, as follows:

! Action Fund Loan: For-profit manufacturing, processing and assemblycompanies located in a non-entitlement area that has wages above the county averageand provide medical benefits may be eligible for a loan which may be used for thepurchase of new machinery and equipment or working capital. The loan must bemade in cooperation with a city or county sponsor.

! Industrial Development Bonds: Industrial development bonds facilitate thefinancing of business projects. Cities or counties purchase or construct certain typesof projects with bond proceeds and lease or sell the project to a company. Costs thatmay be eligible are the purchase, construction, extension and improvement ofwarehouses, distribution facilities and industrial plants.

! Urban Enterprise Loan Program: Assist Missouri's small business owners with thecreation, expansion and retention of their business enterprise located in the St. Louisand Kansas City urban areas by offering low-interest loans.

Redevelopment

The State of Missouri has also recognized that the redevelopment of underutilized and/orvacant industrial sites is important to the long-term viability of some communities, and has providedincentive for their redevelopment.

! Brownfield Program: Provides financial incentives for the redevelopment ofcommercial/industrial sites that are contaminated with hazardous substances andhave been abandoned or underutilized for at least three years.

Appendix C:Corporate Aviation Interest Letter

Appendix D:Revenue & Expense Proformas

D-1

Appendix D - Revenue & Expense Projections by Scenario

Table D-1 - Private Development & City Development of T-Hangars with EntitlementRevenue Category 2008 2009 2010 2011 2012 2013

Unleaded Fuel $11,260 $10,922 $10,595 $10,277 $9,969 $9,669Turbine Fuel $123,971 $131,409 $139,294 $347,724 $562,471 $770,901100LL Fuel $437,496 $454,996 $486,705 $518,414 $550,122 $581,831Hangar Rental $439,140 $352,187 $376,250 $400,312 $424,375 $448,437Tie-Down/Ground Rental $15,981 $16,620 $17,285 $17,976 $18,696 $20,135Sectional Maps $9,861 $10,255 $10,665 $11,092 $11,536 $11,997Other Revenue $20,981 $21,820 $22,693 $23,601 $24,545 $25,526

Total Revenue $1,058,690 $998,210 $1,063,486 $1,329,396 $1,601,712 $1,868,496

Expense Category

Salaries, wages andbenefits

$375,117 $390,121 $405,726 $421,955 $438,833 $456,387

Maintenance and repairs $98,824 $102,777 $106,888 $111,163 $115,610 $120,234Utilities $33,960 $35,318 $36,731 $40,460 $44,303 $48,032Fuels and lubricants $467,721 $486,430 $505,887 $526,123 $547,168 $569,054Fuel Add on $0 $22,000 $44,000 $203,060 $366,940 $526,000

Fuel Truck Leases $0 $13,200 $13,200 $13,200 $13,200 $13,200Marketing $0 $0 $10,000 $10,000 $10,000 $10,000Other $161,029 $167,470 $174,169 $181,136 $188,381 $195,916

Total Expenses $1,136,651 $1,217,317 $1,296,601 $1,507,097 $1,724,435 $1,938,824

Net Operating Deficit ($77,961) ($219,107) ($233,115) ($177,702) ($122,723) ($70,327)

D-2

Table D-2 - Keep Existing Hangar Facilities for 5 YearsRevenue Category 2008 2009 2010 2011 2012 2013


Total Revenue $1,058,690 $1,102,729 $1,162,210 $1,423,056 $1,691,069 $1,954,340

Expense Category


$375,117 $390,121 $405,726 $421,955 $438,833 $456,387

Maintenance and repairs $98,824 $102,777 $106,888 $111,163 $115,610 $120,234Utilities $33,960 $35,318 $36,731 $40,460 $44,303 $48,032Fuels and lubricants $467,721 $486,430 $505,887 $526,123 $547,168 $569,054Fuel Add on $0 $22,000 $44,000 $203,060 $366,940 $526,000Fuel Truck Leases $0 $13,200 $13,200 $13,200 $13,200 $13,200Marketing $0 $0 $10,000 $10,000 $10,000 $10,000Other $161,029 $167,470 $174,169 $181,136 $188,381 $195,916

Total Expenses $1,136,651 $1,217,317 $1,296,601 $1,507,097 $1,724,435 $1,938,824

Net Operating Deficit ($77,961) ($114,588) ($134,391) ($84,041) ($33,366) $15,517

D-3

Table D-3 - City Development of All Hangars with EntitlementRevenue Category 2008 2009 2010 2011 2012 2013


Total Revenue $1,058,690 $992,319 $1,005,622 $1,147,512 $1,294,185 $1,417,184

Expense Category


$375,117 $390,121 $405,726 $421,955 $438,833 $456,387

Maintenance and repairs $98,824 $102,777 $106,888 $111,163 $115,610 $120,234Utilities $33,960 $35,318 $36,731 $40,460 $44,303 $48,032Fuels and lubricants $467,721 $486,430 $482,086 $477,742 $473,398 $469,054

Fuel Add on $0 $22,000 $44,000 $161,810 $283,190 $401,000Fuel Truck Leases $0 $13,200 $13,200 $13,200 $13,200 $13,200Marketing $0 $0 $10,000 $10,000 $10,000 $10,000Other $161,029 $167,470 $174,169 $181,136 $188,381 $195,916

Total Expenses $1,136,651 $1,217,317 $1,272,800 $1,417,467 $1,566,915 $1,713,823

Net Operating Deficit ($77,961) ($224,998) ($267,178) ($269,955) ($272,730) ($296,639)

Documents

Draft - colscf.cityofls.netcolscf.cityofls.net/content/reports/Airport/Draft Final business...R.A. Wiedemann & Associates, Inc. 1 DRAFT TECHNICAL REPORT ... implementation will be