HomeMy WebLinkAboutR-2025-065 Resolution authorizing a SIED funding agreement with Yakima County for a Minimum Revenue GuaranteeDocusign Envelope ID: 4A85B15F-17F6-4F78-A620-6173E6707EE7
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BOARD OF YAKIMA COUNTY COMMISSIONERS
Agenda Requet Form (ARF)
Deliver completed ARF and finalized agenda item to the Clerk or Deputy Clerk
of the Board at the Yakima County Commissioners' Office, Room 232.
Brenda Garcia
Prepared by:
Financial Services
Department:
04/22/2025
Requested Agenda Date:
Brian Carlson
Presenting:
Board of County Commissioners Record Assigned
BOCC Agreement
1 3 2 - 2 0 2 5
Yakima County, WA
Action Requested — Check Applicable Box:
PASS RESOLUTION ri EXECUTE or AMEND
DAGREEMENT, CONTRACT, or GRANT
PASS ORDINANCE
SSUE PROCLAMATION
Fin-1ER
Document Title:
Funding agreement between Yakima County and City of Yakima for Minimum Revenue Guarantee.
Background Information:
This contract is between the County & the City of Yakima for the City's Minimum Revenue Guarantee (MRG)
Program for the Yakima Air Terminal. The MRG Program is designed to attract and retain commercial air
service by offsetting potential revenue shortfalls for airlines during the initial stages of service expansion. This
initiative is part of a broader economic development strategy aimed at enhancing regional connectivity,
supporting business drowtt% and improving access to air travel for residents and visitors in the Yakima area.
Describe Fiscal Impact:
The fiscal impact for the County is a grant of $500,000.00 from the SIED Fund, specifically funded by the
SIED interest, to the City of Yakima for the Minimum Revenue Guarantee (MRG) Program for the City's
Aimort.
Summary & Recommendation:
Recommend approving the agreement as presented.
Department He d/EIe
ed Official Signature Corporate Counsel Initial (for Agreements Only)
Docusign Envelope ID: 4A85B15F-17F6-4F78-A620-6173E6707EE7
FUNDING AGREEMENT BETWEEN
YAKIMA COUNTY AND CITY OF YAKIMA
FOR MINIMUM REVENUE GUARANTEE
THIS AGREEMENT ("Agreement") is entered into effective the 22nd day
of April, 2025 (the "Effective Date") by and between the City of Yakima (City), and
Yakima County ("The County"). The City and the County are referred to
collectively as the "Parties".
AGREEMENT RECITALS:
WHEREAS, the Yakima County Board of County Commissioners are
fully committed to increasing economic development in Yakima County, and
believe that helping to facilitate additional flights to and from Yakima will greatly
assist in increasing economic development, tourism, the creation and retention of
jobs, and to provide invaluable direct and indirect benefits and value
consideration to the citizens of Yakima County and the State and Washington,
and,
WHEREAS, the Yakima Airport operated by the City is seeking to fund a
Minimum Revenue Guarantee for commercial air service flights provided by a
"Mainline" or "Regional" passenger airline with an Air Operator Certificate issued
by the Federal Aviation Administration (FAA); and,
WHEREAS, the contract with the selected airline requires that the City
have a Minimum Revenue Guarantee Airline Fund in the amount of
$1,000,000.00 (the "Fund") set aside to pay the difference between the actual
costs of the flight and the actual revenue received from those flights over the
course of the contract, approximately one year; and,
WHEREAS, Yakima County will fund up to and not to exceed
$500,000.00 of the required Minimum Revenue Guarantee with a matching
commitment from the City of Yakima for the remaining $500,000.00 to complete
the total amount required for the project; and,
WHEREAS, the $500,000.00 contribution from Yakima County will be
held with the County as committed funds, ensuring that the County's portion of
the Fund will be available for disbursement when required if explicit condition
precedents are met which shall trigger contractual responsibilities under the
terms of this Agreement; and,
NOW, THEREFORE, it is agreed between the parties hereto as follows*
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1'SCOPE 0F SERVICE: Yakima County and the City ofYakima have agreed to
fund oMinimum Revenue Guarantee (K0F|G)Fund tmsupport commercial air
oen/ima flights provided by o "Mainline" or "Regional" passenger airline with on Air
Operator Certificate issued by the Federal Aviation Administration (FAA). The
purpose ofthe K8RGFund intocover any revenue shortfall between the actual
costs ofthe flights and the actual revenue generated bythose flights.
The City agrees that it shall befully responsible for the creation, management,
control, auditing and accounting mfthe K8RGFund. The City shall take all
naaomnmb|a steps to ensure that the K8RG Fund is operated under general
government accounting principles and adequate internal controls exist with
management ofthe fund.
2. TERMS FOR FUNDING PAYMENTS: Under the terms and conditions set forth
herein. Yakima County agrees to provide the City of Yakima with a total of up to
and not to exceed Five Hundred Thousand Dollars ($500,000.00) to be applied
toward the Minimum Revenue Guarantee (MRG) Fund. These funds will be
provided onareimbursement basis aaoutlined insection 3ot the discretion of
Yakima County ifsufficient documentation ioprovided which at the determination
ofthe County warrants payment offunds for the purpose stated herein.
3'RE|MBLJRSMENTOFFUNDS: The City ofYakima shall submit aninvoice bu
`yahirna County requesting reimbursement for N1RG-na|atedexpenses,
accompanied byappropriate detailed documentation from the airline showing a
revenue shortfall. Yoh(rna County will then review the request and, at its' sole
discretion, /fitdetermines that the request is vm|id, aho|| authorize the
disbursement ofthe requested funds hothe City ofYakima.
Payments hothe ^K8ain|ine^or^Raoionm|^passenger airline will bmsplit 50/50
between the City of Yakima's Small Community Air Service Development
Program funds and the County for invoices reflecting lost revenue.
The parties expressly agree that Yakima County shall have the righthorejeo
payment requests that itdeems donot contain adequate documentation to
support a quarterly payment by the County.
The parties also agree that at no point, shall any payment by the County exceed
$125`OOOper quarter. Payments shall bemade expressly proportionately tohalf
of the claimed revenue guarantee ofthe additional flights. |Dthe event, no
additional fights are ultimately obtained and/or the flights donot generate an
economic loss, Yakima County shall not baresponsible for payment.
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The Project must be completed three years from the date this contract is
approved by the County. If the project is not complete by this date, the grant will
be terminated and the City will not receive any remaining grant funds not already
requested for reimbursement.
Frequency of MRG Payments:
MRG payments for lost revenue will be made quarterly to help smooth out
fluctuations in revenue. If in a given quarter the airline experiences a revenue
shortfall in one month, but subsequent months show gains that outweigh the loss,
no payment will be required for that quarter. Payments will only be made when
the airline's revenue shortfall is confirmed and when necessary to cover the
difference between operating costs and actual revenue.
Disbursements will occur on a reimbursement basis only after the airline has
provided a verified invoice for the revenue shortfall, and the City of Yakima
submits the request. All funds will be used exclusively for the payment of any
shortfall between the airline's operating costs and revenue generated from the
flights.
This reimbursement structure ensures that payments are only made when
needed and helps manage fluctuations in the airline's revenue over time.
4. MINIMUM REVENUE GUARANTEE (MRG) TERMS AND CONDITIONS:
Revenue Calculation: The funds are allocated to a Minimum Revenue
Guarantee for commercial air service flights provided by a "Mainline" or
"Regional" passenger airline with an Air Operator Certificate issued by the
Federal Aviation Administration (FAA).
Oversight and Pre -Approval: The County retains oversight and pre -approves
the MRG terms for fund allocation. Key considerations for approving MRG
payments include:
• Method used by the airline to calculate revenue for the flight.
• Frequency of revenue reporting (monthly, quarterly, or annually).
• Flight schedule, destination city, forecasted load factors, and historical
passenger data for travel between Yakima and the destination.
• Adequacy of the airline's and local community's marketing plan to attract
passengers.
• Inclusion of an early cancellation policy in the MRG if flights are
underutilized, with County input on the decision.
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• Monthly meetings with the City to review flight utilization and revenue
performance to assess if the MRG should continue.
GENERAL CONDITIONS:
5. ASSIGNMENT: This Agreement may not be assigned by the City or the
County without prior written consent of the other, which consent will not be
unreasonably withheld. It is expressly intended and agreed that no third -party
beneficiaries are created by this Agreement, and that the rights and remedies
provided herein shall inure only to the benefit of the Parties to this Agreement.
6. INTEGRATION: This Agreement represents the entire understanding of the
City and the County as to those matters contained herein. No prior oral or written
understanding shall be of any force or effect with respect to those matters
covered herein. This Agreement may not be modified or altered except in
writing signed by both parties.
7. JURISDICTION AND VENUE: This Agreement shall be administered and
interpreted under the laws of the State of Washington. Jurisdiction of any
dispute or litigation arising from this Agreement shall be in Washington State. If
any part of this Agreement is found to conflict with applicable laws, such part
shall be inoperative, null, and void insofar as it conflicts with said laws, but the
remainder of this Agreement shall be in full force and effect. Venue for all
disputes arising under this Agreement shall be in a court of competent
jurisdiction in Yakima County, State of Washington.
8. DISPUTE RESOLUTION: In the event that any dispute shall arise as to the
interpretation of this Agreement and if the Parties hereto cannot mutually settle
such differences, then the Parties shall first pursue mediation as a means to
resolve the dispute. If the afore mentioned method is unsuccessful then the
dispute will be resolved through litigation. If both parties consent in writing, other
available means of dispute resolution may be implemented.
9. NOTICE: Any notice required to be given under the terms of this Agreement
shall be directed to the Party at the address set forth below. Notice shall be
considered issued and effective upon receipt thereof by the addressee -party, or
seventy-two (72) hours after mailing to the address set forth below, return receipt
requested, whichever is earlier. Either Party may change the address for notice to
said Party by providing the new address, in writing, to the other Party.
TO CITY: Victoria Baker
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TO COUNTY,-
[]h/Mmnegar
12SNorth 2nd Street
Yakima, WA 98901
Yakima County
128 N 2nd Street
Yakima, VVA988O1
10-FORCE MAJEURE: Neither Party hereto shall have any liability for delay
ornon- fulfillment ofany terms ofthis Agreement caused bxany cause not
within such Party's reasonable control (but excluding financial inability) such as
an act of God, vvmr, hots or civil dioturbanma, atrikea, aocident, iire,
transportation conditions, labor and/or material ehortageo, governmental
oontru|a, regulations and permits and/or embargoes.
11.AMENDMENTS: This agreement contains all terms andconditionsagreed upon by
the parties. No change or addition to this agreement shaUbeva|id or binding upon either
party unless such change or addition is in writing and executed by both parties.
12. WAIVER: Waiver of any breach or default on any occasion shall not be deemed to
beawaiver of any subsequent breach ordefault. Any waiver shall not beconstrued UJbm
a modification of the terms and conditions of this AonemnnenL Only o majority vote of
quorum ofthe Yakima County Board ofCounty Commissioners has the authority towaive
any term Drcondition ofthis Agreement onbehalf ofthe County.
13'SEVERABILITY: Ifany term of this Agreement isheld invalid byany court, the
remainder of the Agreement remains valid and in full force and effect.
14'INSURANCE: The City agrees that at all times during the life of this contract that it
will maintain on a primary and non-contributory basis and at its sole expmnae, the
insurance coverage |imnita, and endorsements described below. All such insurance shall
not be subject to any deductible or self -insured retention (8|R). Thera shall be no
omnme||atimn, nno0eha| change, reduction in limits or intent not to renew the insurance
coverage(s) without 30 days' written notice from the contractor or its insurer(s) to Yakima
County. The requirements contained herein, as well as the County's or designee's review
or acceptance of insurance maintained by The City is not intended to and shall not in any
manner limit or qualify the liabilities or obligations assumed by Contractor under this
contract.
Commercial General Liability Insurance: The City agrees to maintain a policy with a
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Docusign Envelope ID: 4A85B15F-17F6-4F78-A620-6173E6707EE7
limit of liability of not less than two million ($2,000,000.00) each occurrence and five
million ($5,000,000.00) General Aggregate coverage. Insurance shall be written on ISO
occurrence form CG 00 01 or an alternative form providing equal or broader liability
coverage. Such coverage shall not contain any endorsement(s) excluding or limited
Products Completed, Operations, or Contractual Liability and/or Cross Liability. The
County shall be named as Additional Insured under the coverage with respect to the
work performed under this agreement.
15. NONDISCRIMINATION: The City agrees that it shall not discriminate against any
person on the grounds of race, creed, color, religion, national origin, sex, sexual orientation,
age, marital status, political affiliation or belief, or the presence of any sensory, mental or
physical handicap in violation of the Washington State Law Against Discrimination (RCW
chapter 49.60) or the Americans with Disabilities Act (42 U.S.C. 12101 et seq.) or any other
applicable state, federal or local law, rule or regulation.
The City and any subcontractors shall abide by the requirements of 41 CFR §§ 60-
300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified
individuals on the basis of protected veteran status or disability, and require affirmative
action by covered prime contractors and subcontractors to employ and advance in
employment qualified protected veterans and individuals with disabilities.
16. TERMINATION: Either party may terminate this Agreement upon sixty (60) days
written notice sent by certified mail to the addresses listed above.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their respective authorized officers or representatives as of the
effective date set forth above.
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Docusign Envelope ID: 4A85B15F-17F6-4F78-A620-6173E6707EE7
CITY OF Y 1 BO
Baker. (try ger
Sara Watkins, City Attorney
Attest:
4410 011ef
Rosali nda 1 barra, City Clerk
01/-03-P-Oac
Date
CITY CONTRACT NO' 4205 4'63
RE SOLUTION NO
BOCC Agreement
1 3
2 5
Yakima County. liVA
7
,
OF COUNTY COMMISSIONERS
Kyle Curtis, Chair
LaDon Linde, Commissioner
Amanda McKinney, Commissioner
Approved as to Form:
l-Deputy Prosecuting Attorney
t.1‘.
ri
CONTRACT AUTHORIZATION
Attest:
Julie Lawrence, Clerk of the Board
APR 2 2 2025
Date
4;',111.44,1 fe04
Item No. 9.D.
For Meeting of: April 1, 2025
ITEM TITLE:Resolution authorizing a SIED funding agreement with Yakima County
for a Minimum Revenue Guarantee
SUBMITTED BY:Robert Hodgman, Airport Director
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
SUMMARY EXPLANATION:
An agreement between the Yakima County and the City of Yakima for a Minimum Revenue Guarantee to
fund additional flights to and from the Yakima Air Terminal. Yakima County will fund up to and not to
exceed $500,000.00 of the required Minimum Revenue Guarantee with a matching commitment from the
City of Yakima for the remaining $500,000.00 to complete the total amount required for the project.
ITEM BUDGETED: N/A
STRATEGIC PRIORITY 24-25: A Thriving Yakima
RECOMMENDATION: Adopt Resolution.
ATTACHMENTS:
2025_SIED_Airport_Revenue_Guarantee_Resolution_Final_
Yakima County Air Service Pledge Agreement (SIED).pdf
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