REPORT TO THE CITY COUNCIL FROM: HENRY THOMPSON, Director of Aviation Airports Department THROUGH: MELISSA GARZA-PERRY, Airports Properties Manager Airports Department BY: BRITTNEY VERROS, Airports Property Supervisor Airports Department SUBJECT ..Title Actions related to the Baggage Cart Concession Agreement with Smarte Carte, Inc.: 1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines. 2. Approve the Baggage Cart Concession Agreement between the City of Fresno and Smarte Carte, Inc., at Fresno Yosemite International Airport. The term of the agreement is 5 years plus a 5-year option. Total annual revenue is estimated to be $5,700. Total anticipated revenue during the full term of the agreement is approximately $28,500. (Council District 4) ..Body RECOMMENDATION Staff recommends that City Council adopt a finding of Categorical Exemption, pursuant to Section 15301 of the California Environmental Quality Act (CEQA) Guidelines, and authorize the Director of Aviation or designee to execute the Baggage Cart Concession Agreement (Agreement) with Smarte Carte, Inc., (Smarte Carte), at Fresno Yosemite International Airport (FAT). EXECUTIVE SUMMARY Smarte Carte provides self-serve vended luggage carts. They are currently operating under a month-to-month Temporary Use Permit (TUP). The Concession Agreement with previous provider was terminated, as they were unable to fulfill their obligation for bag cart services to passengers. This Agreement replaces the TUP with a term of 5 years with a 5-year option. The annual revenue generated will be $2,100 from the Minimum Annual Guarantee (MAG) plus approximately $3,600 in Gross Receipts. BACKGROUND Baggage carts are a basic airport amenity expected by the traveling public. These carts provide a safe and convenient method to transport baggage from the parking lot or curbside to the ticketing counter for departing customers, and from baggage claim to vehicles for arriving customers. The prior baggage cart Concessionaire was unable to fulfill the obligations of their Agreement. Therefore, the Airports Department terminated the prior Agreement with another provider as they continually did not have working equipment, which provided an inconvenience to passengers. Previously, the Airport completed a Letter of Interest (LOI) for baggage cart concession services. Other than the current provider, Smarte Carte was the only company who responded to the LOI. The Airport reached out to Smarte Carte to gauge interest in bringing their products and services to FAT. Smarte Carte and the Airport reached an agreement that Smarte Carte provide three (3) brand new vending systems and carts for the baggage claim area, outside the terminal, and at the new parking garage. Further, Smarte Carte is supplying international passengers with new carts at no charge to them. Smarte Carte has been in the industry for over 40 years and is the leader in self-serve luggage cart services in airports around the country. Smarte Carte will have an employee on-site who will be responsible for collecting all loose carts, as well as assisting in servicing the equipment should there be any problems. The City Attorney has reviewed and approved the Baggage Cart Concession Agreement as to form. ENVIRONMENTAL FINDINGS This Agreement falls within the Class 1 Categorical Exemption for Existing Facilities set forth in CEQA Guidelines, Section 15301 for existing facilities, as it involves no alteration of existing facilities, with no expansion of use, and will not result in any significant negative effects relating to traffic, noise, air quality or water quality. Furthermore, none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to this project. LOCAL PREFERENCE Local preference is not applicable to this project pursuant to Fresno Municipal Code 4-109(b)(3). FISCAL IMPACT The annual revenue will be $5,700. Total anticipated revenue to be generated during the full term of the agreement is approximately $28,500 during the initial 5-year term plus an additional $28,500 during the 5-year option term. All revenue will be deposited into the Airports Enterprise Fund and will contribute to the operation and maintenance of FAT. There is no impact to the General Fund or ratepayers of the City of Fresno from this item. Attachment: Baggage Cart Concession Agreement