Draft EUG Master Plan Update, February 2010

Home Browse Search

CHAPTER5 FINANCIAL FEASIBILITY ANALYSIS While such action is considered favorable, there is no guarantee that this aid will be made available until such time as the FAA releases grants for these respective projects. In addition, it should be noted that the FAA may require the Airport to fully obligate its entitlement funds prior to receipt of any AIP discretionary funding. 3.2 Passenger Facility Charges In addition to AIP funding, the Airport has the ability to levy an Airport Passenger Facility Charge (PFC) to provide locally generated funds for implementation of its capital plan. PFC collection is authorized under the Aviation Safety and Capacity Expansion Act of 1990 and Part 158 of the Federal Aviation Regulations, the Passenger Facility Charge Program (14 CFR, Part 158). PFCs are collected for enplaning passengers at an airport and these funds are used to finance all or portions of capital improvements that are identified by the Airport Sponsor and approved by the FAA. To be eligible for PFC funding, a project must preserve or enhance safety, security, or capacity of the national air transportation system; reduce or mitigate airport noise from an airport; or provide opportunities for enhanced competition between or among air carriers. The Airport began collecting PFCs in 1993. Since that time, the Airport has completed nine PFC applications with a total value of $21.2 million and is currently levying and collecting a $4.50 PFC. It is assumed that for purposes of this analysis the Airport will continue to collect a $4.50 PFC over the entire planning period and will use revenues to implement eligible Airport improvement projects through FY 3 2028. The Airport’s existing authority to impose a PFC expires in December 2011. Moreover, the Terminal Ramp Rehabilitation Project (Phase I) as well as the Relocate Baggage Screening Area project are currently included in an approved PFC application and are slated to be undertaken in Fiscal Years 2009 and 2010 respectively. Table 5-2 indicates that PFC collections for the Airport are projected to total $39.4 million over the planning period while Table 5-3 reveals that $36.2 million in PFC revenue, including anticipated debt service payments, is anticipated to be used to fund portions of the projects identified in this CIP. Given the scope and magnitude of the Terminal – Phase II – Airport Administration & Baggage project ($9.6 million PFC revenues), the Concourse B Expansion ($1.9 million PFC revenues), the Concourse C – Phase I Expansion ($6.7 million PFC revenues), and improvements to the Airport Access Road ($1.6 million PFC revenues), it is proposed that the Airport consider issuing bonds backed by its future stream of PFC revenues to retire this debt and complete this work in a timely fashion. Table 5-8in Section 6. Debt Service provides a debt service schedule for bonds issued in FY 2010 for the Terminal Phase II project, Concourse B expansion and Access Road improvements projects. In addition, this table assumes that in FY 2014 additional bonds will be issued for the Concourse C – Phase I expansion. These debt service assumptions are tracked in Table 5-3 in the annual “Required PFC Fund” calculations along with projects scheduled to be completed on a pay-as-you-go basis. Of the $36.2 million in PFC revenue slated for use, approximately $19.8 million is to be utilized to back the issuance of bonds for improvements to the air carrier access road as well as terminal building. As noted on Table 5-3, the Airport is expected to generate sufficient PFC revenues to retire all debt issued for this work and complete other pay-as-you-go projects as previously delineated in Table 5-1 provided airport 3 A separate financing scenario will be completed assuming a $7.00 PFC, based on the likelihood Congress will ultimately allow this higher collection amount. 5-14 Eugene Airport Master Plan Update (February 2010)