Draft EUG Master Plan Update, February 2010

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CHAPTER 5 FINANCIAL FEASIBILITY ANALYSIS contained in this analysis is presented in terms of the Airport’s fiscal year detail as opposed to a calendar year basis. Because the Airport operates under a modified accrual based accounting system, revenues are recorded when they are earned and expenses are recognized when they are incurred. For purposes of considering the historical revenues and expenditures presented in this analysis, all functional categories and financial results parallel Exhibit 7, “Statement of Revenues, Expenses, and Changes in Fund Net Assets” contained in the City of Eugene’s Comprehensive Annual Financial Accounting Reports (CAFR) for Fiscal Years 2003-2007. Moreover, all ensuing fiscal years projecting anticipated operating results align with these functional categories. The City has established six broad functional areas for tracking Airport revenues, including the Airfield, Terminal Area, Common Use Area, Parking Area, Administration, and Other Areas while it reports Airport expenses in the following 10 functional areas: 1. Salaries and Labor 2. Employee Benefits 3. Maintenance & Repairs 4. Materials and Supplies 5. Rent 6. Taxes 7. Utilities 8. Contractual Services 9. Insurance 10. Central Services Administration For the purposes of this analysis, these categories are maintained for ease of comparison. It should be noted that both the City and Airport Division track each area in much greater detail through an established financial reporting system; however, such detail is not required for purposes of this analysis. The Airport has in effect an airline lease and use agreement (Use Agreement) with the scheduled airlines serving the Airport. The agreement establishes landing fees, terminal building rentals, and terminal building joint use and common use fees and is currently in effect through June 30, 2010. Under the terms of the Use Agreement, the signatory airlines serving the Airport pay a landing fee calculated at a rate per thousand pounds of landed weight, terminal building rental rates for areas for exclusive and preferential use, joint use fees for baggage and security areas used by all airlines, and common use fees for the use of, and services provided to, public use areas in the terminal building. The Airport collects 10 percent of the total rental requirement for joint use areas on a pro-rata basis from each of the signatory airlines. The remaining 90 percent of the requirement for joint use areas is collected from the airlines based on their respective share of passenger enplanements. The total common use fee requirement for the terminal building is collected from the airlines based on their respective share of passenger enplanements. For FY 2009, the landing fee is $2.20 per thousand pounds of landed weight, the rental rate for exclusive and preferential space is $29.86 per square foot per year, while joint use and customer use space are assessed $0.58 and $1.45 per passenger, respectively. The non-signatory airline landing fee charge is currently established at $2.75 per thousand pounds of landed weight and non-signatory airline terminal rental fees are $37.33 per square foot per year. These fees are incorporated into an Airport Fee Schedule 5-3 Eugene Airport Master Plan Update (February 2010)