HomeMy WebLinkAbout11274Docusign Envelope ID: E5E17769-A6A9-84DC-80B9-97EE462880A4
ORDINANCE NO. 11274
AN ORDINANCE APPROVING AN AIRLINE OPERATING
AGREEMENT AND TERMINAL BUILDING LEASE BETWEEN
THE CITY OF PUEBLO, A COLORADO MUNICIPAL
CORPORATION, AND KEY LIME AIR CORPORATION DBA
DENVER AIR CONNECTION, A CORPORATION DOING
BUSINESS IN THE STATE OF COLORADO, AND
AUTHORIZING THE MAYOR TO EXECUTE SAME
WHEREAS, the City of Pueblo, a Colorado Municipal Corporation, ("City") is the
owner and operator of the Pueblo Memorial Airport together with the land on which said
Airport is situated; and
WHEREAS, Key Lime Air Corporation dba Denver Air Connection ("Airline") is engaged
in the business of commercial air transportation of persons, property, cargo, and mail as a
scheduled air carrier and is certificated or otherwise authorized by the United States
Government to engage in such business; and
WHEREAS, Airline has requested that City grant it certain rights, privileges, and services
in connection with the use of said Airport and its facilities in the conduct of Airline's business as
a scheduled air carrier; and
WHEREAS, City is willing to grant Airline such rights, privileges, and services upon the
terms and conditions and for the consideration hereinafter stated; and
WHEREAS, City and Airline deem it desirable to enter into a written agreement setting
forth the respective rights, privileges, obligations, and duties of the parties hereto and defining
the rights, services, and privileges granted and the terms, conditions, and consideration on
which they are granted; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1
A certain Airline Operating Agreement and Terminal Building Lease ("Lease"), by and
between the City of Pueblo, a Colorado Municipal Corporation, and Key Lime Air Corporation
dba Denver Air Connection to lease space for a commercial service airline operation at the
Pueblo Memorial Airport, a copy of which is attached hereto and made a part hereof by
reference, after having been approved as to form by the City Attorney, is hereby approved.
SECTION 2.
The Mayor is hereby authorized to execute the Lease on behalf of the City of Pueblo, a
Colorado Municipal Corporation, and the City Clerk shall affix the Seal of the City thereto and
attest same.
Docusign Envelope ID: E5E17769-A6A9-84DC-80B9-97EE462880A4
SECTION 3.
The officers and staff of the City are authorized to perform any and all acts consistent
with the intent of this Ordinance and the attached Lease to implement the terms and conditions
described therein.
SECTION 4.
This Ordinance shall become effective on the date of final action by the Mayor and City
Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on September 14, 2026.
Final adoption of Ordinance by City Council on September 28, 2026. DocuSignedby:
President of City Council
Action by the Mayor:
❑ Approved on
❑ Disapproved on
09/30/2026
based on the following objections:
Action by City Council After Disapproval by the Mayor:
❑ Council did not act to override the Mayor's veto.
❑ Ordinance re -adopted on a vote of
on
Mayor
❑ Council action on failed to override the Mayor's veto.
President of City Council
ATTEST 1.Docusignedby:
City Clerk
Docusign Envelope ID: E5E17769-A6A9-84DC-80B9-97EE462880A4
City Clerk's Office Item # S2
Ciify of
PUEBLO
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Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: September 28, 2026
TO: President Mark Aliff and Members of City Council
CC: Mayor Heather Graham
VIA: Clyde Bishop, City Clerk
FROM: Greg Pedroza, Director Aviation
SUBJECT: AN ORDINANCE APPROVING AN AIRLINE OPERATING AGREEMENT
AND TERMINAL BUILDING LEASE BETWEEN THE CITY OF PUEBLO,
A COLORADO MUNICIPAL CORPORATION, AND KEY LIME AIR
CORPORATION DBA DENVER AIR CONNECTION, A CORPORATION
DOING BUSINESS IN THE STATE OF COLORADO, AND
AUTHORIZING THE MAYOR TO EXECUTE SAME
SUMMARY:
Attached is an Ordinance approving an Airline Operating Agreement and Terminal
Building Lease between the City of Pueblo, a Colorado Municipal Corporation, and Key
Lime Air Corporation DBA Denver Air Connection, a corporation doing business in the
State of Colorado, and authorizing the Mayor to execute same.
PREVIOUS COUNCIL ACTION:
City Council approved this same type of agreement with Southern Airways Express,
LLC through Ordinance 10370 on December 27, 2022, to cover the previous U.S.
Department of Transportation (USDOT) agreement term. The previous airline
terminated the Agreement when their commitment to Essential Air Service ended
March 31, 2025. This Agreement with Key Lime Air Corporation DBA Denver Air
Connection will cover the new USDOT agreement term.
BACKGROUND:
The City owns 31201 Bryan Circle, Pueblo, Colorado, commonly known as the
Terminal Building at the Pueblo Memorial Airport. The Terminal Building is used for
commercial service airline operations.
Air service at the Pueblo Memorial Airport is under the Federal Essential Air Service
(EAS) program, which is managed by the USDOT. On March 17, 2025, the USDOT
awarded a contract to Key Lime Air Corporation DBA Denver Air Connection ("DAC"),
to provide air service at Pueblo, Colorado, for the term beginning April 1, 2025, and
Docusign Envelope ID: E5E17769-A6A9-84DC-80B9-97EE462880A4
ending March 31, 2027. Southern Airways Express was ordered to hold in place until
March 30, 2025. The Agreement between the City and DAC is for the use of Exclusive
Use Space, Preferential Use Space, Common Use Space, and Enplanement Gates at
the Airport.
FINANCIAL IMPLICATIONS:
From the first year of the Agreement, from April 1, 2025, through December 31, 2025,
DAC will pay $1,630.00 per month for all Leased and Common Use Spaces.
Effective January 1, 2026, and through March 31, 2027, Airline shall pay the following
rates: $26.17 per square foot per year for Finished Exclusive Use Space; $21.46 per
square foot per year for Unfinished Exclusive Use Space; and $0.08 per square foot per
year for Preferential Apron Space. Applied to the areas stated in Sections 4.2 and 4.3,
those rates produce the following annual amounts:
(i) Ticketing Counter, 210 square feet at $26.17: $5,495.70;
(ii) Airline Offices, 286 square feet at $26.17: $7,484.62;
(iii) Airline Operations Garage, 920 square feet at $21.46: $19,743.20; and
(iv) Apron Area, 3,174 square feet at $0.08: $253.92.
The total annual amount is $32,977.44, payable in monthly installments of $2,748.12.
Additional revenue will be garnered through additional utilization fees, per use fees, and
landing fees paid monthly in addition to rents.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
If this Ordinance is not approved, the Airlin
RECOMMENDATION:
e
It is the recommendation of the Department of Aviation that this Ordinance be
approved.
ATTACHMENTS:
1. AIRLINE 2026 09 14 OPERATING AGREEMENT AND TERMINAL BUILDING
LEASE 2025-2026