MEMORANDUM Page 1 of 9 TO: Finance and Administration Committee FROM: Karen Schaefer, Manager - Budget (612-794-9143) SUBJECT: REPORTS Budget Variance Report 3 rd Quarter DATE: October 21, The third quarter Budget Variance Report is presented for your review with the first pages providing a summary of the year-to-date activity. Details for the variances are available in the report. Operating Revenues are over budget $5.2 million or 2.2%. Greater than Budget Terminal 2 Humphrey Other/Passenger Fees greater activity relating to FIS (Federal Inspection Service) fees Ground Transportation fees Higher activity Building & Facilities Lease extension Building Auto CFC s Increase in transactions GA/Airside Fees Additional service not included in budget 3,000 2,500 Enplaned Passengers by Month 2013 Passengers =000 2,000 1,500 1,000 500 -
Operating Expenses are under budget $3.5 million or 3.1%. Page 2 of 9 Lower than Budget Personnel Less overtime, doubletime and Temps due to a milder winter and greater vacancies Operating Services Delayed start for the Quick Ride ramp shuttle and a lower contract rate than the budget anticipated Non-Operating Revenues and Expenses are greater than budget $729,000. Net Revenues Available for Designation total $102.4 million. Net Revenues Available for Designation Year-to-Date $=000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $-
Metropolitan Airports Commission September Budget Variance Analysis Operating Revenue ($=000) OPERATING REVENUES Page 3 of 9 Year to Date Year To Date Dollar % Total Actual Actual Budget Variance Variance Budget Forecast Airline Rates & Charges Airline Agreement Landing Fees $ 42,532 $ 44,604 $ 43,973 $ 631 1.4% $ 59,238 $ 59,000 Ramp Fees 5,082 5,576 5,446 130 2.4% 7,264 7,200 Airline R & R 2,696 2,828 2,789 39 1.4% 3,720 3,720 Terminal 1-Lindbergh - Rentals 27,799 27,731 27,316 415 1.5% 36,456 36,400 Terminal 1-Lindbergh - Other Rentals 3,459 4,771 4,365 406 9.3% 5,717 5,740 Concessions Rebate - - - - (13,061) (13,220) Total Airline Agreement 81,567 85,510 83,889 1,621 1.9% 99,334 98,840 Terminal 2-Humphrey Lobby Fees 9,083 7,831 7,615 216 2.8% 8,133 8,200 Terminal 2-Humphrey Other/Passenger Fees 1,749 2,136 1,633 503 30.8% 1,862 2,475 Total Airline Rates & Charges 92,399 95,477 93,137 2,340 2.5% 109,329 109,515 Concessions Terminal/Other Food & Beverage 11,731 12,088 11,768 320 2.7% 16,007 16,500 News 2,661 2,641 2,701 (60) -2.2% 3,631 3,550 Retail 3,453 3,488 3,697 (210) -5.7% 4,936 4,800 Passenger Services 2,965 3,333 3,407 (74) -2.2% 4,782 4,600 Total Terminal/Other 20,810 21,549 21,572 (24) -0.1% 29,356 29,450 Parking/Ground Transportation Parking 61,265 66,100 65,850 251 0.4% 87,776 89,000 Ground Transportation Fees 4,367 4,427 3,850 577 15.0% 5,169 5,400 MSP Employee Parking 2,181 2,487 2,364 123 5.2% 3,152 3,200 Auto Rental-On Airport 15,555 15,284 14,945 338 2.3% 17,601 17,601 Total Parking/Ground Transportation 83,369 88,298 87,009 1,289 1.5% 113,698 115,201 Other Concessions 507 1,332 1,399 (67) -4.8% 1,908 1,795 Total Concessions 104,686 111,179 109,980 1,199 1.1% 144,963 146,446 Rentals/Fees Buildings & Facilities 5,187 6,570 5,975 595 9.9% 7,723 8,725 Building Auto - CFC's 7,615 7,881 7,359 521 7.1% 11,100 11,500 Ground Rentals 6,767 6,668 6,860 (192) -2.8% 9,010 8,500 Reliever Airports 4,906 5,151 4,918 233 4.7% 6,465 6,465 Total Rentals/Fees 24,476 26,269 25,112 1,157 4.6% 34,298 35,190 Utilities and Other Revenue Utilities 2,472 2,557 2,583 (26) -1.0% 4,613 4,760 GA/Airside Fees 1,919 2,438 1,827 610 33.4% 2,594 3,345 Consortium Fees 2,185 2,234 2,275 (41) -1.8% 3,250 3,250 Other Revenues 1,217 1,074 1,074 0 0.0% 1,484 1,548 Reimbursed Expense 2,146 1,977 2,001 (24) -1.2% 2,879 2,800 Total Utilities and Other Revenue 9,940 10,279 9,759 520 5.3% 14,820 15,703 Total Operating Revenue $ 231,501 $ 243,204 $ 237,989 $ 5,216 2.2% $ 303,410 $ 306,854 Brackets ( ) Represent Revenue Items under Budget and Expense Items over Budget
September Budget Variance Analysis Operating Expenses Non-Operating Revenues & Expenses ($=000) Page 4 of 9 Year to Date Year To Date Dollar % Total Actual Actual Budget Variance Variance Budget Forecast Total Operating Revenue $ 231,501 $ 243,204 $ 237,989 $ 5,216 2.2% $ 303,410 $ 306,854 OPERATING EXPENSE Personnel $ 54,008 $ 53,722 $ 55,351 $ 1,630 2.9% $ 76,400 $ 75,050 Administrative 1,208 1,081 1,094 13 1.2% 1,665 1,685 Professional Services 2,653 2,960 3,106 146 4.7% 5,439 5,648 Utilities 14,803 13,064 13,203 139 1.1% 19,147 18,850 Operating Services 12,611 13,988 15,086 1,098 7.3% 23,966 22,766 Maintenance 23,773 25,071 25,562 491 1.9% 33,656 33,950 Other 2,497 2,744 2,774 30 1.1% 3,304 3,463 Total Operating Expenses $ 111,553 $ 112,630 $ 116,176 $ 3,546 3.1% $ 163,577 $ 161,412 (excludes depreciation and noise amortization) Net Operating Revenues $ 119,948 $ 130,574 $ 121,813 $ 8,762 7.2% $ 139,834 $ 145,442 NON-OPERATING REVENUE (EXPENSES) ($=000) Year to Date Year To Date Dollar % Total Actual Actual Budget Variance Variance Budget Forecast Other Non-Operating Revenue Interest Income $ 3,384 $ 4,660 $ 4,500 $ 160 3.6% $ 6,000 $ 6,250 Self-Liquidating Income 3,866 4,777 4,777-0.0% 5,796 5,796 7,250 9,437 9,277 160 1.7% 11,796 12,046 Debt Service Short Term Financing (212) (133) (133) - 0.0% (1,861) (1,861) Equip. Financing Prinicipal/Interest Pymts (2,210) (2,194) (2,194) - 0.0% (2,978) (2,625) Gen. Airport Revenue Bond Requirement (22,899) (24,452) (24,888) 436-1.8% (91,200) (90,845) (25,321) (26,779) (27,215) 436-1.6% (96,039) (95,331) Equipment Capital Expenditures (607) (681) (706) 25-3.5% (935) (915) Equipment Purchases (4,271) (8,002) (8,002) - 0.0% (9,887) (9,887) Baggage Handling System - (2,000) (2,000) - 0.0% (8,050) - Passenger Facility Charge Revenue - 2,000 2,000-0.0% 8,050 - Equipment Financing 3,963 4,187 4,187-0.0% 4,185 4,185 (915) (4,496) (4,521) 25-0.6% (6,637) (6,617) Other - Six Month Reserve Transfer (3,298) (6,982) (6,982) - 0.0% (6,982) (6,982) Interstate Payments (Settlement) 540 540 540-0.0% 820 820 Easement Receipt 183 22-22 0.0% - - Grant Reimbursement 35 - - - 0.0% - - Gain (Loss) on Equipment & Other 85 86-86 0.0% - - (2,455) (6,334) (6,442) 108-1.7% (6,162) (6,162) Total Non-Operating Revenues (Expenses) $ (21,441) $ (28,172) $ (28,901) $ 729-2.5% $ (97,042) $ (96,064) Net Revenues Available for Designation $ 98,507 $ 102,402 $ 92,912 $ 9,491 10.2% $ 42,791 $ 49,378 Brackets ( ) Represent Revenue Items under Budget and Expense Items over Budget
OPERATING REVENUE Page 5 of 9 Operating revenue for September year-to-date is $5.2 million or 2.2% over budget. The greatest variance exists in the following categories: Airline Rates and Charges Landing Fees Landing Fees are over budget 1.4% or $630,896. The following table reports landed weight by month: Landed Weight 9/30/ (One thousand pound units) Actual Budget Variance 1st Qtr 5,076,340 5,015,000 61,340 2nd Qtr 5,446,470 5,376,250 70,220 July 2,030,984 1,997,500 33,484 August 2,005,476 1,997,500 7,976 September 1,779,326 1,721,250 58,076 Total 16,338,596 16,107,500 231,096 Terminal 2 Humphrey Lobby Fees Terminal 2 Lobby Fees are over budget $215,697 or 2.8% as a result of Sun Country with greater activity than the budget anticipated. Terminal 2 Other/Passenger Fees Other Passenger Fees at Terminal 2 are over budget $503,485 due to the FIS (Federal Inspection Service) fees. Passenger utilization is 23% over the same time period in. In addition, Landing Fees for non-signatory airlines is greater due to an airline status change from a signatory airline. Concessions Concessions year-to-date revenue is $1.2 million or 1.1% greater than budget. Concessions Variance % Variance $ Passengers as of August (includes non revenue -year over year) 2.8% n/a Food & Beverage 2.7% $ 320,044 News -2.2% $ (60,189) Retail -5.7% $ (209,532) Passenger Services -2.2% $ (73,991) Parking 0.4% $ 250,722 Ground Transportation 15.0% $ 576,558 MSP Employee Parking 5.2% $ 123,305 Auto Rental - On Airport 2.3% $ 338,399 Other Concessions -4.8% $ (66,561) Total Variance 1.1% $ 1,198,755
$15,000,000 $12,000,000 Total Concessions 2012 2013 Page 6 of 9 $9,000,000 $6,000,000 $3,000,000 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Food & Beverage Food & Beverage year-to-date revenue is $320,044 or 2.7% greater than budget due to strong public spending at T1 and T2. $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Food & Beverage Revenue 2012 2013 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec News and Retail News is under budget $60,189 or 2.2% primarily due to the closure of two news stores. Retail is under budget $209,532 or 5.7% due to the loss of key brands in the Duty Free program along with changes in suppliers and exclusives.
$1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 News & Retail Revenue 2012 2013 Page 7 of 9 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Parking Parking year-to-date revenue is over budget $250,722 or 0.4%. The negative variances in the table are due to the solar project and the diverting of vehicles to either the Quick Ride Ramp or T2 which have a lower parking rate. Parking Revenue 9/30/ Actual Budget Variance 1st Qtr $ 24,396,874 $ 23,892,644 $ 504,230 2nd Qtr $ 21,704,352 $ 21,496,357 $ 207,995 July $ 6,559,493 $ 6,741,202 $ (181,709) August $ 6,914,009 $ 6,907,976 $ 6,033 September $ 6,525,595 $ 6,811,422 $ (285,827) Total $ 66,100,323 $ 65,849,601 $ 250,722 $12,000,000 $10,000,000 Parking Revenue 2012 2013 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Note: A rate increase was implemented in January 2012 and January.
Ground Transportation Page 8 of 9 Ground Transportation fees are greater than budget $576,558 or 15.0% due to more commercial vehicle trips than the budget anticipated and the activity for a new off airport auto rental company that was not included in the budget. Rentals/Fees Buildings & Facilities Buildings & Facilities are over budget $594,509 or 9.9% as a result of a lease extension that occurred after the budget was completed along with lease reconciliations to reflect proper classifications between the Buildings & Facilities and Ground Rentals categories (the Ground Rental category is reflecting a 2.8% decrease in revenue). Building Auto CFC s Building Auto CFC s are over budget $521,279 or 7.1% as a result of a 3.5% increase in onairport transactions. Utilities and Other Revenue GA/Airside Fees GA/Airside Fees are greater than budget $610,110 or 33.4% due to an additional service that was not included in the budget. OPERATING EXPENSE Operating expenses are under budget $3.5 million or 3.1%. Personnel Personnel expenses are under budget $1.6 million or 2.9% due to higher vacancies than anticipated and the lighter than average snowfall in the first quarter which resulted in less overtime and doubletime expense as well as fewer temporary workers. Professional Services Professional Services are under budget $145,702 or 4.7% primarily as a result of lower legal fees. Legal fees are budgeted based on prior years averages.
Operating Services Page 9 of 9 Operating Services are lower than budget $1.1 or 7.3% primarily as a result of the delayed start of the shuttle service for the Quick Ride parking ramp along with a lower than projected shuttle rate. In addition, a new parking management contract resulted in a lower rate than the budget anticipated. Maintenance Maintenance is under budget $490,734 or 1.9% as a result of the lighter than average snowfall in the first quarter. NON-OPERATING REVENUES AND EXPENSES Non-Operating Revenues and Expenses are $729,000 greater than budget as a result of interest income higher than budgeted in investments and debt service reserve accounts. The investment earnings on the debt service reserve accounts reduce the MAC contribution to its General Airport Revenue Bonds requirement. COMMITTEE ACTION REQUESTED: RECOMMEND TO THE FULL COMMISSION APPROVAL OF THE BUDGET VARIANCE REPORT AND AUTHORIZE EXPENDITURES IN THESE CATEGORIES UP TO THE BUDGETED OR FORECASTED BUDGET AMOUNTS.