City Council
Report
City Council Meeting: August 27, 2024
Agenda Item: 5.E
1 of 4
To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Airport Subject: Approval of Fourth Modification to Agreement #10071 (CCS) with Vector Airport Systems for Operation of the City’s Landing Fee Program at the Santa Monica Airport
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Authorize the City Manager to negotiate and execute a fourth modification to agreement #10071 (CCS) with Vector Airport Systems (Vector) to adjust the terms of the commission-based compensation for landing fee collection services and to extend the contract term through December 31, 2028. This would result in an amended 8.5-year agreement with a new total not to exceed amount of $2,114,546, with future year funding contingent on Council budget approval.
Summary
Staff recommends that Council approve a fourth modification to the current Agreement with Vector Airport Systems (“Vector”) to increase Vector’s compensation from 21% of gross monthly landing fee receipts to 30%, and to extend the Agreement term by 3.5 years to December 31, 2028, to allow for uninterrupted services. These changes are necessary due to the reduction in the landing fee rates that became effective on July 1, 2024.
Discussion
2 of 4
On April 29, 2010, Vector and the City entered into an agreement for Vector to administer the assessment and collections portion of the Airport’s Landing Fee Program. On June 1, 2013, Vector and the City executed Agreement #9384 for Vector to continue administering the Airport’s Landing Fee Program. On July 31, 2015, Vector and the City executed Agreement #10071, which is the current agreement under which Vector is administering the City’s program. Vector is the only vendor in the United States that provides a full-service solution to general aviation airports such as Santa Monica for the photo capture of aircraft operating at the airport, billing, and the collection of landing fees. Vector provides the City with all necessary equipment for the assessment and collection of landing fees, including the onsite photo capture camera array system, associated data servers, and transponders. Vector’s services also include maintenance of all equipment and staffing to support the billing and collections associated with their service.
Change of Commission Percentage Rate
Vector’s current agreement provides for a commission of either 18% or 21% of gross receipts depending on the gross landing fee revenue realized each month. The Airport runway was shortened in 2017 which reduced the maximum gross landing weight of aircraft that can safely operate at the Airport. Since that time, the City has paid Vector the higher of the two commission rates, or 21% of gross revenue receipts.
The Council recently adopted new rates and charges for all aeronautical facilities at the Airport that became effective July 1, 2024, including a reduced landing fee from $5.48 to $2.56 per thousand pounds maximum certificated gross landing weight. The newly reduced landing fee rate consequently reduces the gross landing fee revenue, making it nonviable for Vector to continue providing the City with these services at the current 21% commission rate. Vector has proposed to increase the percentage to 30% in order for them to continue providing the City with a turnkey solution of photo capturing, billing and collecting landing fees. The increase in the percentage rate does not equate to an increase in the annual payments to Vector therefore, staff 3 of 4
agrees with Vector’s proposal and recommends increasing the commission rate paid to Vector to 30% of gross monthly receipts.
Gross landing fee collections are estimated for FY 2024-25 at $267,143, an amount that would generate approximately $187,000 in budgeted net landing fee revenues for the City and approximately $80,143 annually in commission to Vector for their services. It is anticipated that gross landing fee collections and commission payments to Vector will remain at these same levels through December 31, 2028.
Extension of Term
Vector’s current agreement expires on June 30, 2025. To ensure uninterrupted services, staff recommends an extension of the term of the existing contract to end on December 31, 2028.
Environmental Review
The agreement for landing fee services is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines, which states that CEQA does not apply “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The agreement would continue the City’s land fee services to capture, bill, and collect the City’s landing fees utilizing cameras and software. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Past Council Actions
Meeting Date Description
06/09/2015 (Attachment A) Approval of CCS #10071 with Vector Airport Systems Agreement and Sole Source
09/26/2017 (Attachment B) Second Modification to Agreement #10071 (CCS) with Vector Airport Systems
06/23/2020 (Attachment C) Third Modification to Agreement #10071 (CCS) with Vector Airport Systems
Financial Impacts and Budget Actions
4 of 4
Staff seeks authority to approve available funding from the Airport Fund to increase the amount of the Agreement with Vector Airport Systems to operate the Airport’s landing fee program by an additional $298,562 for a total contract not to exceed $2,114,546.
Agreement
#
Current
Authorized
Amount
FY
2024-25
Amount
Future
Years
Amount
FY 2024-25
Budget Dept
Account #
Total
Revised
Contract
Amount
10071 $1,815,984 $18,062 $280,500 57500001.552010 $2,114,546 Prepared By: Kate Schlesinger, Senior Administrative Analyst Approved Forwarded to Council
Attachments:
A. 06/09/2015 Staff Report - Vector Agreement and Sole Source Approval B. 09/26/2017 Staff Report - Vector Mod 2
C. 06/23/2020 Staff Report - Vector Mod 3
D. Oaks Initiative Form - Vector
E. Levine Act Disclosure Form - Vector
F. Original Contract #10071 - Vector
G. First Modification #10071 - Vector
H. Second Modification #10071 - Vector
I. Third Modification #10071 - Vector