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From the Director of Transportation and Public Works, requesting that the County Board amend Milwaukee County Ordinance Section 4.05.04(2)(a) and create Section 4.33(3) to provide for an Off-Airport Parking Operator Privilege Fee.
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POLICY ISSUE
Changes to County Ordinances require County Board approval.
BACKGROUND
All users of General Mitchell International Airport are required to pay a user fee in the form of lease or rental payments, landing fees, gallonage fees, or a percentage of gross revenues for the opportunity to conduct business with the tenants and passengers who travel through or use the Airport. This policy is further embodied in County Ordinance 4.02(1).
Many of the nation's airports have already adopted ordinances to require that off-airport parking companies pay a percentage of gross receipts to the airport operator for the opportunity and privilege of conducting business and earning revenue that is generated from the airport.
Table II-12 is a compilation of the results of two surveys conducted by Airport Ground Transportation in 2010 and Airports Council International - North America (ACI-NA) in 2005. Table II-12 lists 58 airports that assess one or more types of fees on off-airport parking operators. The surveys show:
· Types of fees collected from off-airport parking operators: (1) percentage of gross revenue, (2) annual fee per shuttle vehicle, (3) fee per trip, (4) annual fee per parking space, and (5) annual permit fee by company.
· The most common practice is the assessment of fee as a percentage of gross revenue (Figure II-5). Thirty-three of the 58 airports in Table II-12 collected a percentage of gross revenue, ranging from 2% to 10%. Figure II-6 shows how many airports in the combined sample collected a particular percentage: 13 airports collected 10%; 8 airports, 8-9%; 7 airports 6-7%; and 6 airports, 1-5%.
· A number of airports collect more than one type of fee. Of the 16 airports that collect more than one type of fee, 11 collect two fees, four collect three fees, and one collects four fees. An annual permit fee and a per trip fee is the most popular combination of fees.
The County currently assesses off-airport parking operators at GMIA an annual fee of $500 per shuttle vehicle.
For some time now, airport staff has been considering an ordinance to assess a percent-of-gross privilege fee for off-airport parking operators. Similar percent-of-gross fees are already being assessed by County Ordinance to the off-airport rent-a-car companies and off-airport catering companies.
The City of Oak Creek is negotiating a fee proposal with a developer which is proposing building hotel(s) and a large off-airport parking lot to generate revenue for Oak Creek (see attachment 1).
Toward the goal of initiating such an off-airport parking operator privilege fee, airport staff met with the operators on February 3, 2011. At that meeting Airport staff provided a draft County Ordinance which, in addition to defining off airport parking operators and their requirements for providing service to the airport, included subparagraph (d) Charges Fees and Accounting which indicated that "in addition, pursuant to the exercise of the privileges identified herein, said Off-Airport Parking Operator will pay to the Airport a Privilege Fee for the privilege and opportunity of using the Airport and the business benefit it derives there from, said Privilege Fee to be in the amount of eight percent (8%) in 2011 of the gross revenues that are received as a result of Airport patrons parking in Off-Airport parking lots; that percentage privilege fee is to increase by ½% each calendar year thereafter and would maximize at, and not exceed, ten percent 10% in 2015, payable monthly as defined in (d)(ii) below."
At the meeting the Airport Director answered numerous questions from the operators and offered to consider any counter proposal. Corporation Counsel was present at the meeting and explained that Courts have upheld fees similar to the one proposed here. The off-airport parking operators opposed the ordinance, and offered no counter proposals for consideration.
RECOMMENDATION
Airport staff recommends that Section 4.33(3) be established and that Section 4.05.04(2)(a) of the General Ordinances of Milwaukee County be amended to initiate an Off Airport Parking Operator Privilege Fee in recognition of the operators' use of General Mitchell International Airport for its revenues.
FISCAL NOTE
In 2011, an estimated $320,000 will be generated by the collection of 8% of off-airport parking revenue, with a projected increase of ½% each calendar year thereafter and would maximize at, and not exceed 10% in 2015.
_____________________ _______________________________
Jack H. Takerian, Director C. Barry Bateman
Transportation and Public Works Airport Director
H:\Private\Clerk Typist\Aa01\TPW&T 11\Report - Off Airport Parking Fee.doc