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OREGON DEPARTMENT OF AVIATION





 
DIVISION 10
RATES AND CHARGES FOR STATE-OWNED AIRPORTS

738-010-0010
Purpose of Rule and Statutory Authority
The purpose of this rule is to establish fair, reasonable and nondiscriminatory rates and charges for all users of Oregon State-owned airports.
Stat. Auth.: ORS 835.035, ORS 835.040, ORS 835.112

Stats. Implemented: ORS 835.035, 835.040, 835.112 & 836.055

Hist.: 1AD 2-1981, f. & ef. 4-20-81; AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0015
Revenue Disbursement
All revenue generated from State-owned airport activities and services shall be expended by the Department only for State-owned airport operations, maintenance and capital improvements.
Stat. Auth.: ORS 835.035, ORS 835.040 & 835.112

Stats. Implemented: ORS 835.035, 835.040, 835.112 & ORS 836.055

Hist.: 1AD 2-1981, f. & ef. 4-20-81; AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0020
Establishment of Rates and Charges
(1) The Department may use various methods to memorialize State-owned airport user rates or charges and fees assessed for the public use or tenancy of State-owned airport property and facilities, including but not limited to contract, agreement, permit or direct assessment.
(2) The payment structure for any lease shall be determined by the Department and may consist of:
(a) A fixed rent for a defined land parcel, hangar or other facility it occupies, or
(b) A variable payment (related to fuel flowage, volume of business, aircraft operations, etc.) for the use of the airport property by its own aircraft or those of its customers.
Stat. Auth.: ORS 835.035, ORS 835.040 & ORS 835.112

Stats. Implemented: ORS 835.035, 835.040, 835.112 & 836.055

Hist.: 1AD 2-1981, f. & ef. 4-20-81; AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0025
Types of Rates, Charges and Fees
Each user of an
Oregon State-owned airport shall be charged one or more of the following types of
rates, charges and fees for the use of the premises and the rights granted by the
Department:
(1) All leases
of improved or unimproved state-owned land at state-owned airports shall include
rent assessed at an annual rate per square foot. All rents and other charges for
a lease of Department property shall reflect fair market rent as determined by first
considering the fair market value established by the most recent appraisal of the
property, if available, adjusted, if necessary, to reflect current lease market
conditions as reflected in a market rent analysis conducted by a licensed real estate
broker or a similar analysis conducted by Department staff experienced in such analysis.
The market rent or similar analysis shall consider relevant circumstances including
but not limited to whether the land is buildable and the restrictions, if any, that
apply to the land. Lessees shall also pay all real property taxes and other taxes,
if any, imposed on the leased property.
(a) Rent
shall be paid to the Department as follows:
(A) Annually
in full, with the first annual payment on or before the date the lease begins and
subsequent payments on the anniversary date;
(B) Monthly
in equal installments, payable at the beginning of each month; or
(C) By the
terms of a payment-in-kind agreement that may constitute partial payment or full
payment. The Department will determine and assign a value to payments in kind based
upon a determination of the value of the goods, improvements or services actually
received or to be provided. In kind payments are subject to rent escalation clauses.
The determination of value will be based on an objective process which compares
estimates obtained by the Department, the lessee or the proposed lessee from service
providers for like services, goods or improvements. A payment-in-kind agreement
and all documents used to determine payment-in-kind value must be retained in the
lease file. Acceptance of an in kind payment offering requires documentation of
an affirmative finding by the Department that the value of the in kind offering
primarily benefits the airport generally rather than the individual lessee or the
business of the individual lessee. Any payment-in-kind provision contained in an
agreement executed before the effective date of this rule will be deemed valid.
(b) In new
or renewed leases where all or part of the capital improvements are constructed
at the Department’s expense, the Department reserves the right to amortize
all or part of the construction costs of the capital improvements, plus a reasonable
rate of return as part of the rent, during the term of the lease.
(2) A fuel
flowage fee, not to exceed $0.12 per gallon, shall be assessed to each FBO for all
types of fuel received from a commercial distributor. Fuel flowage fees shall be
calculated from the FBO’s fuel flowage delivery report and shall be paid in
full not later than two working days after the conclusion of the reporting period.
(3) Each
user with an agreement to access the State-owned airport property shall pay an access
fee according to a published fee schedule. To ensure equity among all users, the
schedule shall be based on the quantity and individual weight of user’s aircraft
that will access the airport.
(a) Each
commercial operator shall pay a fee to the Department, either annually on the agreement
anniversary date or monthly on or before the 25th, for the month then in process.
(A) The fee
shall be the greater of:
(i) A fee
for each aircraft based on the adjacent property, based on aircraft maximum gross
landing weight as shown below; or
(ii) A minimum
guaranteed amount determined by Airport Category, as follows:
$275.00 —
Per month per Category II Airport.
$175.00 —
Per month per Category III and IV Airports.
$75.00 —
Per month per Category V Airport.
(B) For multiple
aircraft, payment shall be accompanied by a report listing each based aircraft showing
aircraft class, N-number, aircraft type and the hangar or tie-down number where
the aircraft is stored.
(b) Each
non-commercial operator shall pay a fee for each aircraft based on the adjacent
property, based on aircraft’s maximum gross landing weight as set forth in
Table 1 below. Payment is due either:
(A) Annually
on the anniversary date of the agreement; or
(B) Monthly
on or before the 25th, for the month then in process.
(c) At residential
airparks, access fees as set forth below shall be assessed for each developed lot
with airport access, whether or not the access is being utilized.
PER AIRCRAFT WEIGHT-BASED
FEE FOR ALL STATE-OWNED AIRPORTS
Aircraft
Weight Class — Weight Range — Monthly Fee Per Aircraft.
Class 1 —
Up to 5,000 lbs — $15 per month.
Class 2 —
5,001 to 10,000 lbs — $24 per month.
Class 3 —
10,001 to 20,000 lbs — $44 per month.
Class 4 —
20,001 to 30,000 lbs — $66 per month.
Class 5 —
30,001 to 40,000 lbs — $88 per month.
Class 6 —
40,001 lbs. and over — $120 per month.
(4) The Department
shall offer tie-down facilities to based and transient aircraft at specific State-owned
airports where there are no FBO-provided tiedowns. Based aircraft operators leasing
an available tiedown shall pay rent for an entire year in full beginning at lease
commencement and subsequently on each anniversary date of the lease, according to
rates set forth below.
(a) NON-COMMERCIAL
TIE-DOWN FEES:
Category II Airports
— $20 per month.
Category
III and IV Airports — $17.50 per month.
Category
V Airports — $15 per month.
(b) COMMERCIAL TIE-DOWN
FEES: ODA shall rent tie-down facilities to FBOs wherever possible. ODA shall collect
30% of all tie-down revenue generated. There shall be no flat fee per tie-down.
FBOs shall be responsible for providing a monthly accounting of all tie-down revenue
received.
(5) The Department
may negotiate individual fee and rent agreements at each State-owned airport, recognizing
the diversity of services performed by the caretakers of different airports. These
agreements shall be based on the specific services provided by the caretaker and
the Department shall ensure that all the financial terms of those agreements are
consistent among the same category of airport.
(6) The Director,
or the Director’s designee, may negotiate a unique rent or fee structure and
enter into a special use agreement to benefit the general public, the local community
or the State, for such activities as fire protection facilities, sports complexes,
farming rights, weather equipment site leases and concession storage areas. All
rental rates and charges applicable to special use agreements shall be determined
through an analysis of similar activities, rates and charges at comparable airports
in addition to consideration of overall benefit to the general public and the State
aviation system.
(7) Each
commercial operator conducting any type of agricultural-related aeronautical activity
at a State-owned airport shall be required to lease property from the Department
to store materials and equipment applicable to such operation. The rental rate shall
be determined as of the day of occupancy.
(8) Each
Mobile Service Provider (MSP) is required to obtain an annually renewable permit
from the Department and pay the appropriate fee as represented below.
Category II Airports
— $25 per month or $250 annually.
Category
III and IV Airports — $20.00 per month or $200 annually.
Category
V Airports — $15 per month or $150 annually.
(9) The Director,
or the Director’s designee, may negotiate a specific rate or fee to support
the Department’s mission of developing and promoting aviation in the State
of Oregon. Any such negotiated fee agreement will contain a fair and equitable rate
structure, will not be used routinely and will only be considered for the most unique
circumstances.
(10) The
Director, or the Director’s designee, may waive certain fees for government
aircraft, in order to comply with Federal Airport improvement grant assurances.
The Director, or the Director’s designee, may also waive certain fees for
an organization or person engaged in a non-profit aeronautical program or activity
that benefits a charitable organization or community.
Stat. Auth.: ORS
835.035, 835.040 & 835.112

Stats. Implemented:
ORS 835.035, 835.040, 835.112 & 836.055

Hist.: 1AD
2-1981, f. & ef. 4-20-81; AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02; AVIA 4-2002,
f. 11-27-02, cert. ef. 12-1-02; AVIA 2-2003, f. & cert. ef. 4-3-03; AVIA 1-2010(Temp),
f. & cert. ef. 1-7-10 thru 7-6-10; AVIA 2-2010, f. 6-9-10, cert. ef. 7-7-10;
AVIA 1-2012(Temp), f. & cert. ef. 2-28-12 thru 8-26-12; Administrative correction
9-20-1
738-010-0030
Adjustments of Fuel Flowage, Access, Tiedown, Mobile Service and Special Use Fees
The Department shall regularly review the rate and charges for State-owned airports and compare them to rates in effect at non-State-owned airports.
(1) The Department shall review and may adjust rates and charges for fuel flowage, access, tiedown, mobile service and special use fees at least every two years.
(2) The Department shall provide 60 days' advance written notice of any adjustment to any affected lessee.
Stat. Auth.: ORS 835.035, ORS 835.040 & ORS 835.112

Stats. Implemented: ORS 835.035, ORS 835.040, 835.112 & 836.055

Hist.: 1AD 2-1981, f. & ef. 4-20-81; AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0035
Fair Market Value Cost of Construction -- Adjustments of Unimproved Land, Improved Land and Facility Rents
All rents set forth in agreements for rental of improved or unimproved land, or for any facility or structure, may be adjusted by the Department as follows:
(1) Adjustments shall be made at intervals not to exceed every two years;
(2) Adjustments shall be based on the Consumer Price Index-Urban of the State of Oregon, provided that no adjustment shall exceed three percent (3%) of the rent for the previous year;
(3) Except as provided in subsection (4), at intervals of not less than five (5) years, the Department may engage a certified appraiser or equally qualified aviation consultant, at its sole expense, to determine by either appraisal or market rent analysis, the current fair market value or rent for any property subject to a rental agreement.
(4) The minimum five (5) year interval described in subsection (3) may be waived by the Department when the Department finds it necessary to meet a legitimate business need arising prior to conclusion of the five-year period.
(5) The Department shall be responsible for the engagement of an appraiser or aviation consultant. All expenses for the appraisal or market rent analysis shall be borne by the Department.
Stat. Auth.: ORS 835.035, 835.040 & 835.112

Stats. Implemented: ORS 835.035, 835.040, 835.112 & 836.055

Hist.: AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02; AVIA 1-2010(Temp), f. & cert. ef. 1-7-10 thru 7-6-10; AVIA 2-2010, f. 6-9-10, cert. ef. 7-7-10
738-010-0040
Appraisal/Market Rent Analysis Standards
(1) Any appraisal of property for the purpose of sale, exchange or lease shall be performed by an appraiser who is certified by a recognized appraisal organization.
(2) In addition, any appraiser considered for an appraisal contract with the Department must comply with the following criteria:
(a) Any Oregon appraiser must be a state certified general appraiser.
(b) Any out-of-state appraiser must hold all appropriate licenses or certificates required for any general appraiser legally conducting services in Oregon.
(c) The appraiser must conform to all applicable ODA requirements and to any city, county, State or Federal requirements that apply at the time of undertaking the appraisal.
(d) The appraiser shall have working knowledge of the aviation industry (to include both fixed base operations and other aeronautical activities) and demonstrate familiarity with FAA and ODA rules, regulations and policies affecting airport properties.
(e) The appraiser shall have completed a minimum of five (5) appraisals of aeronautical property within the past five (5) years and shall provide a list to ODA that identifies the location and type of appraisal conducted. Appraisals performed on real property not located on an airport or not then in use for aeronautical purposes shall not satisfy this requirement.
(3) In those circumstances where the Department determines that an appraisal is not required, the Department retains the right to utilize a qualified aviation consultant to complete a Market Rent Analysis (i.e., to establish market rents and fees other than for sale or exchange of airport property). Aviation consultants must comply with the following criteria:
(a) Must possess qualifications and experience commensurate to the assigned task;
(b) Must demonstrate the education, skill, learning and experience necessary for the specific Market Rent Analysis task;
(c) Must be independent; and
(d) Must execute a statement that he or she does not have any conflicts of interest with the Department or any existing or prospective lessee.
(4) Determination of sufficient qualifications and experience shall be at the sole discretion of the Director, or the Director's designee, but shall be generally consistent with those required for a qualified and experienced appraiser.
Stat. Auth.: ORS 835.035, ORS 835.040, ORS 835.112

Stats. Implemented: ORS 835.035, ORS 835.040, ORS 835.112, ORS 836.055

Hist.: AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0045
Appraisal/Market Rent Analysis Methodology
Appraisals and market rent analyses performed on all aeronautical properties, including either land only or land and improvements, shall meet the following minimum requirements:
(1) An income analysis must be employed, through evaluating rental rates, fees and charges of similar aeronautical land and improvements at comparable airports.
(2) All appraisals and analyses shall utilize current methods appropriate to valuation of aeronautical properties and facilities.
(3) Survey data compiled by recognized aviation organizations may be used as ancillary support for rental rates and fees used in the process; however, all survey data used in the analysis shall be made available to lessor or lessee in the transaction.
(4) Rates of return utilized in the income analysis shall be obtained through reasonable and acceptable methods and must be adequately discussed within the report.
Stat. Auth.: ORS 835.035, ORS 835.040, ORS 835.112

Stats. Implemented: ORS 835.035, ORS 835.040, ORS 835.112, ORS 836.055

Hist.: AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0050
Rate of Return
(1) If the appraisal is to determine the value of unimproved land only, then the value conclusion shall assume a "target" rate of return of not less than ten percent (10%), in order to yield the appropriate annual ground rental rate. The rate of return applied shall be commensurate with the term of the lease and capital improvements to be completed on the property.
(2) If there are any improvements situated on the property (including, but not limited to, paved ramp/apron, office facilities, hangars and terminal buildings), the value conclusion shall assume a "target" rate of return of not less than ten percent (10%), in order to yield the appropriate annual rental rate. The rate of return utilized shall be commensurate with the term of the lease and capital improvements to be completed on the property.
(3) If an appraisal is performed, the appropriate rental rate shall be derived by multiplying the rate of return by the final value conclusion.
Stat. Auth.: ORS 835.035, ORS 835.040, ORS 835.112

Stats. Implemented: ORS 835.035, ORS 835.040, ORS 835.112, ORS 836.055

Hist.: AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0055
Highest and Best Use of State-Owned Aeronautical Property
An appraisal or market rent analysis conducted pursuant to sections 738-010-0035 through 738-010-0050 shall assume that the highest and best use of the property is for aviation-related activities, and shall further assume:
(1) That the property under analysis will continue to be part of an operating public use airport, and
(2) That access to the infrastructure and amenities of the airport will continue to be available to the public.
Stat. Auth.: ORS 835.035, ORS 835.040, ORS 835.112

Stats. Implemented: ORS 835.035, ORS 835.040, ORS 835.112, ORS 836.055

Hist.: AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02
738-010-0060
Penalties
(1) All lease agreements shall provide that the lessee shall pay a penalty for late or delinquent payments. Such penalty shall not exceed ten percent (10%) of the delinquent payment for each month, prorated according to the actual date of receipt by the Department.
(2) Whenever a bank-issued check is presented for payment of any State-owned airport fee, and said check is returned to the ODA due to insufficient funds, closed account, or other similar reason, the Department shall charge the lessee presenting such check an additional fee of $50, plus any and all related collection fees. If the initial charges and returned check fees are not paid within 14 days after notification to lessee, ODA may suspend, revoke or place in default all of lessee's permits, agreements or leases in force at that time, according to the terms specified in such contract.
Stat. Auth.: ORS 835.035, ORS 835.040, ORS 835.112

Stats. Implemented: ORS 835.035, ORS 835.040, ORS 835.112, ORS 836.055

Hist.: AVIA 3-2002, f. 10-30-02 cert. ef. 11-1-02


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