REPORT TO THE CITY COUNCIL July 20, 2017 FROM: KEVIN R. MEIKLE, Director of Aviation Airports Department SUBJECT ..Title Approval of a consulting services agreement with John C. Martin Associates, LLC, to conduct an Economic Impact Study for Fresno Yosemite International Airport in the amount of $82,000 (Council District 4) ..Body RECOMMENDATIONS Staff recommends that City Council authorize the Director of Aviation to execute a consulting services agreement (Agreement) with John C. Martin Associates, LLC, to conduct an Economic Impact Study for Fresno Yosemite International Airport (FAT) in the amount of $82,000. EXECUTIVE SUMMARY Airports conduct economic impact studies on a regular basis, which provide information related to (i) the impact on the local economy, (ii) justification of investments in airport development and capital work, (iii) new or added air service routes, and, (iv) understanding the economic contribution of various activities such as domestic and international passengers, military, goods movement, and general aviation. The economic impact study will also help define the role of FAT as an economic development engine for the community and surrounding region. Airports are clusters of varied economic activities, such as scheduled air service, construction, aircraft maintenance, cargo operations, car rental, and retail. Therefore, they are increasingly recognized as key drivers of regional economic growth, both as local employment centers and as regional gateways to the world. As an employment center the California Airports Council reported in 2012, that 2,190 workers were employed at FAT. These positions range from entry level to those requiring complex skill sets. According to the same source, every job at a California commercial airport supports 2.3 off-site jobs. Applying the same ratio, FAT contributed an estimated 5,037 jobs to the region's employment base at that time. As a regional gateway to the world, FAT provides convenient one-stop connectivity to and from over 300 destinations on five (5) continents. This study will enable the management of these and other performance measures so appropriate actions can be taken to optimize them and to respond to new opportunities. BACKGROUND Through a competitive Request for Qualifications (RFQ) process the Department invited financial and economic analysis consultancies that specialize in the economic impact of transportation entities to participate. The Department issued a public notice of the RFQ in The Business Journal, on the Airport Consultants Council and American Association of Airport Executives websites, and on the Airport's website. Seven (7) professional consulting firms responded by submitting Statements of Qualifications, which were evaluated in accordance with the provisions of the RFQ. Of those firms, it has been determined by the Department that John C. Martin Associates, LLC, is most qualified to perform the Project. Martin Associates, LLC, is a transportation and economic consulting firm with a wide range of expertise in transportation and experience at airports both large and small. A sampling of airport clients include Oakland, San Jose, Sacramento, Portland and Sea-Tac - all having domestic and international service. The proposed approach to developing the economic impact study will be tailored to FAT's market by conducting passenger surveys and interviewing airport stakeholders as a means to understand the scope and range of services available and what segments of the economy they serve. This methodology will result in: * Classifying FAT into distinct economic sectors, such as airline service, construction, tourism, cargo, military, and non-aviation; * Defining employers within each sector - for example employers in the airline service sector would include passenger airlines, general aviation, and Airports administration; * Estimating the economic impact by sector. This hands-on approach enables the development of a model specific to FAT which can be used as input to support decision-making for such things as capital improvements/expansions, additional flights, new international service, service to new markets, the effect of increases or decreases in traffic, and for predicting the effect of investments in incentives and marketing. Martin Associates, LLC, provides the expertise and specialized resources to conduct the economic impact study that Airports does not possess. The agreement is for $67,000 and includes a $15,000 contingency for further breakdowns of economic sectors or a targeted analysis of a specific capacity project should additional study effort be required by the airport. The total compensation with contingency is an amount not to exceed $82,000. The City Attorney has reviewed and approved the Agreement as to form. ENVIRONMENTAL FINDINGS Local preference was not applied because no local businesses submitted qualifications. LOCAL PREFERENCE The City's Local Preference Ordinance was not applied because the Agreement does not include a bid or award of a construction or services contract. FISCAL IMPACT The economic impact study will help define FAT's value to the community as an employment center and its contribution to local and regional economic development. Funds are available in Airports' FY 2018 budget for this Agreement. There is no General Fund impact associated with this action. Attachments: - Agreement with John C. Martin Associates, LLC