Grant Agreement for SkyWest Overnight Service GRANT AGREEMENT
This Grant Agreement ("Agreement") is made and entered into thi6' day of /Lc4,
2024, by and between the City of Salina, a political subdivision of the State of Kansas
("City"), and the Salina Airport Authority ("Authority").
WHEREAS, the City desires to support the Salina Airport Authority in its effort to enhance air
service development through a partnership with SkyWest Airlines, providing an overnight
nonstop flight to Denver; and
WHEREAS, the Authority has negotiated an air service development agreement (Attached
Exhibit A) with SkyWest Airlines, requiring funding support for its successful execution and
operation;
WHEREAS, on December 4, 2023, the Salina City Commission voted to "accept and concur
with the Salina Community Economic Development Organization's recommendation;
authorize the reallocation of $400,000 of Economic Development Funds to provide the
City's portion of the contribution to the funding of overnight flights on a reimbursement basis
for a period of one year at seven flights a week as recommended; and authorize the City
Manager to execute an agreement for the use of such funds";
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Grant Award: The City hereby agrees to award a grant in the total amount of Four Hundred
Thousand Dollars ($400,000.00) to the Authority, to be disbursed in accordance with the
payment schedule set forth herein.
Payment Schedule: Effective May 1, 2024, the Authority will begin to submit monthly
requests for reimbursement in the amount of $33,333.33 per month based upon SAA
confirmation of seven (7) overnight flights per week completed by SkyWest Airlines in the
preceding calendar month. Each request for reimbursement will include an invoice from
SkyWest Airlines.
Use of Funds: The Authority agrees to use the grant funds exclusively for the purposes of
funding a portion of the air service development agreement with SkyWest Airlines, as
detailed in the agreement negotiated by the Authority.
Reporting and Accountability: The Authority shall provide the City with quarterly reports
detailing the use of the funds and copies of the monthly invoices from SkyWest Airlines Inc,
and also any significant milestones achieved, and challenges encountered.
Claw-back Provisions:
• Flight Agreement Termination: In the event the Overnight Flight agreement between
the Salina Airport Authority and SkyWest Airlines, Inc. is terminated for any reason,
the City reserves the right to reclaim any remaining grant funding awarded.
• Change in Denver Hub Bank Schedules: Should there be a change in Salina flight
times by more than four (4) hours outside the United Airlines' morning bank of
departure flights at Denver or the United Airline's evening bank of arrival flights at
Denver, the City retains the right to reclaim any remaining grant funding awarded.
Term: This Agreement shall commence upon execution and shall remain in effect until the
completion of twelve (12) monthly payments to the Salina Airport authority, unless earlier
terminated in accordance with the terms herein,or until June 1, 2025,whichever comes first.
Termination: Either party may terminate this Agreement upon written notice to the other
party if there is a breach of any material provision that is not cured within thirty (30) days of
such notice. In the event of early termination, the Grantee agrees to return any unspent
grant funding to the City.
Governing Law:This Agreement shall be governed by and construed in accordance with the
laws of the State of Kansas.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.
CITY:
AI
Michael D. chrage
' City Manager, City of Salina
AUTHORITY:
Timoth/y7
F. oge ,
Executive Director, Salina Airport Authority
Exhibit A
OVERNIGHT FLIGHT AGREEMENT
This Agreement is made and entered into this o?7 day of 1-,K"4 2023, by and
between SkyWest Airlines, Inc. (SKW), whose affiliated companies are doca business as United
Express, and the Salina Airport Authority (Authority).
WITNESSETH:
WHEREAS, SKW has been asked to reschedule the existing mid-day Salina Regional
Airport(SLN) flight that operates to/from Denver International Airport (DEN) flight to a nonstop
overnight flight where the aircraft remains overnight (RON) at SLN; and
WHEREAS, SKW will incur an estimated$3 million in RON flight startup costs related to
flight crew, aircraft maintenance, air crew training, ground station staff training, and air crew hotel
expense; and
WHERAS, SKW seeks a one-time reimbursement of a portion of the SLN RON start-up
costs as an inducement to schedule a SLN RON flight; and
WHEREAS, the Authority can reimburse SKW for up to $900,000 in RON flight start-up
costs; and
WHEREAS, the offer to reimburse SKW up to $900,000 in RON start-up costs provides
SKW the incentive to operate a nonstop, seven(7) day per week, SLN to/from DEN RON flight
WHERAS, SKW has been selected by USDOT to provide nonstop DEN and ORD EAS
flights using 50-seat CRJ200 aircraft at SLN for a three-year contract term starting January 1,
2024, and ending December 31, 2026; and
WHEREAS, SKW would initiate a nonstop SLN to/from DEN RON flight and a nonstop
midday ORD flight as soon as possible and make best efforts to operate the flights for the duration
of the airline's three year, SLN USDOT EAS contract effective.
NOW THEREFORE, in consideration of the premises and of the mutual obligations and
undertakings hereinafter set forth, the parties agree as follows:
1. SKW will establish an SLN to/from DEN RON flight utilizing CRJ-200 aircraft.
2. SKW will schedule the SLN RON flight to operate nonstop seven days per week to
provide SLN an early morning departure to DEN and an evening arrival from DEN.
3. The Authority will reimburse SKW up to a maximum of$900,000 for expenses
incurred and related to RON flight start-up. The reimbursement will be over a 12-
month period starting at the effective date of this agreement.
4. SKW will submit monthly invoices for completed overnight flights to the
Authority for reimbursement.
5. The Authority will reimburse SKW for RON flight start-up expenses based on
overnight flights completed per month at a rate of$3,000 per completed RON flight.
6. This Agreement shall be governed by the laws of the State of Kansas. Exclusive
venue for any claims,suits or any other action arising from or connected in any way to
this Agreement,or the performance of this Agreement shall be in Kansas.
7. Neither party will be responsible to the other party for its failure to perform its
responsibilities hereunder in the event and to the extent that such performance is
delayed or prevented for a period of at least fifteen consecutive business days, by any
cause beyond its control and not caused by the party claiming relief hereunder,
including, without limitation, acts of God, public enemies, war, insurrection, acts or
orders of governmental authorities, fire, flood, explosion, riots or the recovery from
such cause("Force Majeure"). Either party may terminate this Agreement immediately
if the other Party is unable to perform its obligations hereunder due to any such event,
which continues for a period of thirty(30) consecutive days or more.
8. All notices, demands, requests, consents, and approvals by either party to this
agreement shall be made in writing and sent by U.S. mail, or by recognized overnight
courier, or by hand delivery, or by facsimile transmission (if confirmed by email,
overnight courier,or hand deliver). All such notices shall be addressed as follows:
Salina Airport Authority SkyWest Airlines, Inc.
3237 Arnold Ave. 444 South River Road
Salina, KS 67401 St. George, UT 84790
Attn: Timothy F. Rogers Attn: Daniel Belmont
IN WITNESS WHEREOF,the parties hereto affix their duly authorized signatures as of the date
set forth on the first page of this Agreement.
SALINA AIRPORT AUTHORITY
By: _ /-73—/Ro.?,/
Timoth . 'ogers, : -cutiv- )irector Date
SKYWEST AIRLINES,Inc
B : 1/25/2024
Y
Wade Steel,Chief Commercial Officer Date