Northwest Florida Beaches International Airport. Fiscal Year 2016 Operating & Capital Budget

Transcription

1 Northwest Florida Beaches International Airport Fiscal Year 2016 Operating & Capital Budget

2 Northwest Florida Beaches International Airport Fiscal Year 2016 Operating and Capital Budget Introduction FY 2015 represents the fifth full year of operations at the Northwest Florida Beaches International Airport (ECP). The Airport opened on May 23, 2010 with increased flights, improved competition and lower airfares. Passenger volumes were down approximately 2% for Fiscal Year 2014, but with the addition of United Airlines and Silver Airways service in 2015, along with Southwest service to Dallas, passenger volumes increased, enabling ECP to maintain a market share of 22% of the Panhandle region, second only to Pensacola International Airport. In the month of July 2015, ECP recorded its best month ever with the passage of over 99,000 passengers through the airport. As we close out the fifth fiscal year of operation, the Airport is poised to continue the development of a sound financial structure. This year was an excellent year for military and general aviation. Fuel sales were higher than expected and Sheltair s ramp expansion of nearly 5 acres continues to reflect the growth of General Aviation. With the finalizing of the Airport Master Plan in 2015, ECP realized one of its goals, but there are still goals that must be completed during FY These efforts include completing the Environmental Assessment and U.S. Army Corps of Engineers 404 Permit for additional land development, working with the local Economic Development Alliance to encourage aviation-related businesses to locate at the airport, continuing to develop additional air service opportunities for our region, and focusing on preparing for future expansion as the airport must grow to meet capacity needs. As in the past, continuing refinement of the business process, improved cost effectiveness and marketing initiatives, as well as other strategic initiatives, will guide our vision for the upcoming fiscal year. The remainder of this budget message is intended to provide our stakeholders with a general overview of the FY 2016 budget.

3 Passenger Activity Total passengers since 2011 are shown in the table below for the Northwest Florida Beaches International Airport. Passenger traffic in 2011 and 2012 set records for total activity. Passenger traffic in 2013 and 2014 decreased, in large part due to schedule adjustments by the airlines. In 2014, Delta announced that ECP would be primarily a mainline station, offering multi-class service on all Delta flights traffic increased as a result of the additional service provided by our airline partners. Fiscal year Total Passengers % Change 2011 Actual 867, % 2012 Actual 900, % 2013 Actual 821, % 2014 Actual 811, % 2015 Projected 860, % 2016 Estimated 920,000* 7.0% Total Passengers 900, , , , , , *Based on present airline schedules and passenger numbers submitted by airlines

4 Operating Revenues Operating revenues, detailed in Schedule 3, are primarily generated from users of the airport and include airline fees and charges, concessions, public parking, car rentals, general aviation, space rentals and building rentals. Per FAA Regulations, fees and charges to air carriers may not exceed the cost to provide the space or service to the air carriers. FY 2015 Projected Operating Revenues Significant items regarding the FY 2015 projections compared to the FY 2015 budget include the following: Airline Revenues, Rental Car Revenues and Parking Revenues are expected to be very close to budgeted amounts. Terminal concessions are 5% ahead of budget. The primary reason for this is the increase in passenger traffic due to the addition of United Airlines, Silver Airways and expanded service by Southwest and Delta. General aviation revenues are 5% below budget due to vacancies in T-Hangars during the year, and due to actual FBO rents being less than budgeted. Other revenues are projected to be below budget by $17,686 due to fewer vendors than anticipated not accepting our Purchasing Card, decreasing the anticipated rebate. Overall, total operating revenues are projected at $12,308,387 ($4,349 more than budget). FY 2016 Budgeted Operating Revenues Significant and notable items in the FY 2016 budget compared to the FY 2015 projected revenues are presented below. The calculation of airline revenue has been streamlined to account for a rental fee for all services provided in the terminal complex based on a cost per square foot and landing fees for all costs incurred in operating and servicing the debt in the airfield. The 2016 rates reflect the costs of providing services to the air carriers under the terms of the airline operating agreements. Car rental revenues are projected to increase. The concession fee represents 10% of the car rental company s gross receipts and the customer facility charge is calculated at $4.50 per rental day which is used to cover the cost of investment and all rents for the facilities they use. Parking revenue will increase to $2,750,000 due to the success of covered parking and increased demand. General Aviation and non-airline revenues will increase due to new leases that have been executed or are anticipated. Overall, operating revenues increase 8.5% to $13,346,098, a gain of $1,042,060.

5 Operating Expenses Operating expenses, detailed in Schedule 4, include salaries and benefits, purchased services, supplies and materials, utilities, insurance and other expenses. Salaries and benefits represent approximately 43% of the airport s annual operating expenses and purchased services account for 37%. The remaining 20% consists of supplies and materials (5%), utilities (11%), insurance (3%) and other expenses (1%). FY 2015 Projected Operating Expenses The major classifications of operating expenses are discussed below, along with significant items in the FY 2015 projections compared to the FY 2015 budget. Salaries and benefits are projected at $3,235,907, $144,508 less than budget, primarily due to delayed hiring of vacant positions. Keeping the positions open resulted in additional overtime costs, but overall costs still remained well below budget. Purchased services are projected to be less than budget by $217,128. Through a concerted effort by all departments, staff was able to keep costs to a minimum. Supplies and materials are projected at $340,715 for FY 2015, $6,385 over budget. The reason for this increase was the unanticipated purchase of computer supplies. Utilities are projected at $860,500, $1,500 under budget. Insurance costs are $18,338 more than budget, due to an increase in Liability coverage that we did not anticipate when preparing last year s budget. Other expenses are $38,950 under budget due to cost containment measures implemented by Staff. Overall, the FY 2015 projected operating expenses are 4.75% below budget, reflecting a savings of $377,363 for the fiscal year. FY 2016 Budgeted Operating Expenses The following provides highlights and discussion of significant and notable items in the FY 2016 operating expense budget. Salaries and benefits are budgeted at $3,598,620 for FY 2016, which allows for all positions to be filled. The costs contained in the FY 2015 budget for the positions that have been held vacant account for $80,000 of the increase. Increases in health insurance costs, increases in retirement costs due to higher salaries, and increases in worker s compensation coverage account for an increase of $58,000. The budget contains a 2.5% merit pool and a.5% goal incentive pool, totaling $72,000. An adjustment, effective January 1, 2016, has been made to the current salary schedule. The adjustment increases the maximum salary for each position by 3%.

6 The purchased services budget of $2,978,616 represents a.6% ($20,624) decrease compared to the FY 2015 budget. Decreases in professional and security services ($75,000) offset other small increases. Supplies and materials are increasing 10% ($33,560). The reason for this increase is to allow for electrical work in the ATCT and for repairs to jet bridges. Utilities are budgeted at $910,000 for FY The increase of $48,000 is to allow for increases in water and electric rates. Insurance premiums are budgeted at $240,500, allowing for premium increases for the upcoming year. (While our current carrier guarantees no increase in rates, as property and equipment are added, overall cost increases.) Other expenses are budgeted at $108,274. This is a $581 decrease from the 2015 budget. Overall, the FY 2016 operating expense budget is 3.8% more than the FY 2015 budget, representing an increase of $305,454. The FY 2016 budget reflects an amount which will provide for the efficient operation of the airport and will provide the necessary resources to meet our established goals for the upcoming year. Capital Development Program The airport s Capital Development Program, detailed on Schedules 7 and 8, is funded through the use of Federal Airport Improvement Program Grants (FAA), Florida Department of Transportation Grants (FDOT), and available airport funds. Available airport funds are the remaining amount of operating revenues after the payment of operating expenses, satisfying debt service and reserves and airline rebates/incentives. Schedule 6 provides a summary of the source and use of funds for the capital improvement budget. The main focus of the capital program centers on taxiway and aircraft parking ramp improvements, continued development of the environmental mitigation program, replacement of passenger loading bridges, expanding capacity and improving safety and security. Stormwater repairs needed as a result of heavy rains in April of 2014 will be made, utilizing FEMA and SERT funds for 87.5% of the cost. The capital requirement from airport funds for the FY 2016 budget is $1,701,228.

7 Rates and Charges Based on this budget and projected passenger activity levels, the rates for FY16 have been calculated as follows. Prior years are presented for comparison purposes. Settlement FY14 Budget FY15 Budget FY16 Terminal Rental Rate $52.36 $56.43 $61.63 Landing Fee $ 5.48 $ 6.53 $ 5.96 Signatory Cost per Enplanement (CPE) $ 7.25 $ 7.87 $ 7.43 Average Nonsignatory CPE N/A N/A $14.32 Revenue Sharing and Reserve Deposit In an effort to control our cost per enplaned passenger (CPE), which is an airline performance measure, we have the ability, based on our current financial position, to share success with the airlines at the time of settlement. If the airlines are successful and we have a commensurate increase in passengers and revenue, we may elect to reduce our contribution to our reserve funds. This would have a positive impact on the CPE and would increase the amount of revenue sharing. This budget includes a $500,000 contribution to our reserves.

8 Schedule 1 PROJECTED SUMMARY OF OPERATING RESULTS FOR FISCAL YEARS ENDED SEPTEMBER 30, 2015 AND 2016 FY 2015 FY 2015 FY 2016 Approved Projected Budget Description Budget Actual Request Revenues - Schedule 3 12,304,038 12,308,387 13,346,098 Expenses - Schedule 4 7,898,446 7,521,083 8,203,900 Funds available for debt service 4,405,592 4,787,304 5,142,198 Principal payments 1,148,683 1,152,203 1,205,204 Interest payments 1,940,891 1,937,371 1,884,370 Funded with Passenger Facility Charges 1,500,000 1,500,000 1,606,578 Debt service from current operations 1,589,574 1,589,574 1,482,996 Capital Projects & Equipment 305, ,000 98,100 Capital Reserve 100, , ,000 Net remaining revenues before revenue sharing 2,410,252 2,647,730 3,061,102 Distribution of airline revenue sharing 1,205,126 1,323,865 1,527,257 Less Southwest Airlines incentive payment 467, ,600 - Net income for Capital Funds and reserve accounts 737, ,265 1,533,845 BUDGET IMPACT ON PASSENGER AIRLINES TERMINAL RENTS AND LANDING FEES FOR FISCAL YEARS ENDED SEPTEMBER 30, 2015 AND 2016 Schedule 2 FY 2015 FY 2015 FY 2016 Approved Projected Budget Description Budget Actual Request signatory non-signatory Passenger airline landing fees 3,090,023 3,110,846 2,880, ,220 Terminal Rentals 1,704,837 1,718,833 1,748, ,247 Total airline fees and charges 4,794,860 4,829,679 4,628, ,467 Less airline revenue sharing 1,205,126 1,323,865 1,527,257 N/A Less Southwest Airlines incentive payment 467, , Total airline fees and charges after rebate/incentive 3,122,134 3,038,214 3,101, ,467 Enplaned passengers 396, , ,273 42,267 Airline cost per enplaned passenger

9 Schedule 3 COMPARISON OF BUDGETED REVENUES FOR FISCAL YEARS ENDED SEPTEMBER 30, 2015 AND 2016 FY 2015 FY 2015 FY 2016 Approved Projected Budget Description Budget Actual Request Airlines Passenger airline landing fees 3,090,023 3,110,846 3,195,407 Cargo airline landing fees 16,000 16,500 16,750 Terminal rentals and common use fees 1,704,837 1,718,833 2,038,578 Total Airline Revenue 4,810,860 4,846,179 5,250,735 Car Rentals Concession fee 1,750,000 1,750,000 1,825,000 Customer facility charge 1,650,000 1,650,000 1,744,343 Total Car Rental Revenue 3,400,000 3,400,000 3,569,343 Terminal Complex Public and employee parking 2,500,000 2,500,000 2,750,000 Ground transportation fees 70,000 70,000 75,450 Food & beverage concession 215, , ,000 Retail merchandise concession 67,000 85,000 90,000 Advertising 127, , ,000 Miscellaneous terminal rentals 117, , ,500 Total Terminal Complex Revenues 3,096,500 3,117,300 3,382,950 General Aviation Fixed base operator rents 248, , ,500 Fuel flowage fees 35,000 40,000 42,000 Hangar rentals 288, , ,170 Total General Aviation Revenues 571, , ,670 Other Revenue Other tenants & miscellaneous (includes P-card rebate) 274, , ,900 Cargo building 140, , ,000 Interest Income 4,000 6,000 6,000 Total Other Revenue 6,000 6,500 6, , , ,400 Total Revenues 12,304,038 12,308,387 13,346,098

10 COMPARISON OF OPERATING EXPENSES FOR FISCAL YEARS ENDED SEPTEMBER 30, 2015 AND 2016 Schedule 4 FY 2015 FY 2015 FY 2016 Approved Projected Budget Description Budget Actual Request Salaries and Benefits Salary and wages 2,344,930 2,230,849 2,497,115 Overtime 59,127 69,000 59,818 FICA contributions 183, , ,488 Group insurance 459, , ,019 Retirement 229, , ,287 Workers compensation insurance 66,361 66,653 73,000 Other employee costs 37,287 38,657 34,893 Total Salaries and Benefits 3,380,415 3,235,907 3,598,620 Purchased Services Janitorial 625, , ,500 Bank charges & credit card fees 102, , ,000 Computer and IT systems services 252, , ,000 Elevator/escalator services 35,000 35,000 35,000 Financial services 22,000 23,000 23,000 Terminal & Facilities services 88, ,200 93,600 Legal services 100,000 50,000 75,000 BHS/loading bridges maintenance 300, , ,000 Marketing and advertising 230, , ,000 Parking lot management 430, , ,500 Professional services 409, , ,700 Security services and systems maintenance 101, ,000 51,056 Trash removal 18,000 18,000 18,000 Radio and PA maintenance services 30,000 23,000 24,000 Postage/copy services 11,400 10,900 10,900 Other services and maintenance 243, , ,360 Total Purchased Services 2,999,240 2,782,112 2,978,616 Supplies and Materials Office supplies 15,750 21,133 16,000 Fuel, oil, tires, vehicles, equipment 84,700 71,988 84,700 Airfield and Grounds 121, , ,900 Building supplies 42,100 84,100 88,600 Uniforms 16,680 13,835 15,990 Other materials and supplies 53,200 40,375 45,700 Total Supplies and Materials 334, , ,890

11 COMPARISON OF OPERATING EXPENSES FOR FISCAL YEARS ENDED SEPTEMBER 30, 2015 AND 2016 Schedule 4 FY 2015 FY 2015 FY 2016 Approved Projected Budget Description Budget Actual Request Utilities Electricity 650, , ,000 Telephones 87,000 35,500 50,000 Water and sewer 125, , ,000 Total Utilities 862, , ,000 Insurance Property 163, , ,000 Liability 37,163 55,050 60,500 Vehicle and equipment 13,214 13,254 17,000 Total Insurance 213, , ,500 Other Expenses Dues and subscriptions 38,550 32,300 38,365 Promotions and special events 8,500 4,500 8,500 Travel and conference 32,700 20,330 34,184 Training 28,120 12,100 24,760 Miscellaneous expenses ,465 Total Other Expenses 108,855 69, ,274 Total Operating Expenses 7,898,446 7,521,083 8,203,900

12 Schedule 5 STAFFING LEVELS FOR FY 2015 AND FY 2016 FY 2015 FY 2015 FY 2016 Approved Projected Budget Description Budget Actual Request Executive Director Deputy Executive Director Director Finance & Administration Manager Finance & administration Accountant Executive Assistant Systems Technician Operations Specialist Chief of Police Deputy Chief of Police Lieutenant Sergeant Police Officer Administrative Clerks Communications Supervisor Operations Coordinator Fire Chief Assistant Fire Chief ARFF Officers ARFF Firefighters Maintenance Manager Assistant Maintenance Manager - Turf Maintenance Supervisor Maintenance Worker II Maintenance Worker I Seasonal Maintenance Workers Totals

13 Schedule 6 SOURCE AND USE OF CAPITAL IMPROVEMENT FUNDS Funds Available at September 30, ,513,820 Fiscal Year 2015 Receipts From Operations - Schedule 1 12,308,387 Federal Grants 2,508,396 FDOT Grants 1,580,421 16,397,204 Funds Available Before Expenditures 24,911,024 Fiscal Year 2015 Expenditures Operating Expenses - Schedule 1 7,521,083 Debt Service 1,589,574 Approved Capital Projects & Equipment 4,725,592 Estimated Revenue Sharing 1,791,465 15,627,714 Estimated Funds Available at September 30, ,283,310 Fiscal Year 2016 Receipts From Operations - Schedule 1 13,346,098 Federal Grants 4,325,400 State Grants 716,528 FEMA/CERT funding 3,937,500 22,325,526 Funds Available Before Expenditures 31,608,836 Fiscal Year 2016 Expenditures Operating Expenses - Schedule 1 8,203,900 Debt Service 1,482,996 Approved Capital Projects & Equipment 10,680,656 Estimated Revenue Sharing 1,527,257 21,894,809 Estimated Funds Available at September 30, ,714,027 Summary of Estimated Funds Available at September 30, 2015 Revenue Fund 9,664,027 Construction Fund 50,000 Total Estimated Funds Available at September 30, ,714,027

14 Schedule 7 CAPITAL IMPROVEMENT PROJECTS & EQUIPMENT FISCAL YEAR 2016 Project Title Project Cost AIP Grants FEMA Grants FDOT Grants CERT Grants Airport Funds Security Exit Lane Improvements 250, ,000 9,000 16,000 Mitigation Site Development - Phase 6 976, ,400 97,600 Taxiway Kilo Widening 1,500,000 1,350, ,000 Construct Aircraft Parking Ramp 124,844 62,422 62,422 Taxiway Juliet Improvements 170,200 85,100 85,100 Construct T-Shades 349, , ,506 Upgrade Security System 50,000 25,000 25,000 Extend Airport Infrastructure 620, , ,000 Stormwater Repairs 4,500,000 3,375, , ,500 Capital Equipment (See Schedule 8) 2,140,600 1,872,000 50, ,100 Total Capital Improvement Program 10,680,656 4,325,400 3,375, , ,500 1,701,228

15 Schedule 8 FY 2016 CAPITAL EQUIPMENT Number of Cost per FY 2015 FAA FDOT Airport Description Units Unit Request Funding Funding Funding Operations Pick Up Truck 1 23,500 23,500 11,750 11,750 Handheld Thermal Imaging Camera 1 8,000 8,000 8,000 Replacement ARFF Truck 1 880, , ,000 38,750 49,250 Utility Trailers 2 1,400 2,800 2,800 HXC 15 Mower Deck 1 20,000 20,000 20,000 Computers 6 1,050 6,300 6,300 Jet Bridges 2 600,000 1,200,000 1,080, , ,140,600 1,872,000 50, ,100