Draft EUG Master Plan Update, February 2010

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CHAPTER5 FINANCIAL FEASIBILITY ANALYSIS 5. Historical and Projected Airport Operating Expenses Table 5-6 The Airport’s historical operating expenses for FY 2003 through FY 2009 are presented in . As shown in this table, personnel expenses (including salaries, labor, and employee benefits) have consistently represented the largest category of Airport expenditures over these years. It is expected that during FY 2009 personnel costs will total $3,680,839 and represent approximately 56 percent of all operating expenses of the Airport. The next largest components of total Airport operating expenditures are materials and supplies ($817,951), contractual services ($519,040), utilities ($415,329), maintenance and repair ($308,233), and rent ($224,500). Estimates of the Airport’s future operating expenses were developed based on a review of historical trends, the Airport’s FY 2009 expenses, and incremental adjustments that might occur due to facility Table 5-7 expansions planned at the Airport over the projection period. presents actual FY 2007 expenses, budgeted expenses for fiscal years 2008-2009, and projected operating expenses for the period FY 2010 through FY 2016. For purposes of this analysis, expenses at the Airport are examined in the following classifications: Salaries and Labor Employee Benefits Maintenance and Repairs Utilities Contractual Services Insurance Summary of Projected Total Airport Expense These operating expense categories represent all expenses associated with the day-to-day operations of the Airport. Each expense category, and the assumptions used to project expenses for each, is discussed in the following sections. 5.1 Salaries and Labor Salaries and labor represent personnel expenditures for Airport management, administrative, fire department, and operations and maintenance employee salaries and wages. Between FY 2003 and FY 2009, these costs increased from $1,946,366 to $2,379,173. As shown in Table 5-7, future salaries and labor expenses are projected to increase from $2,379,173 in FY 2009 to $3,000,276 in FY 2016, representing a compounded annual increase of approximately 3.0 percent. These projections were developed based on an estimated rate of inflation as well as the need to hire two (2) additional Airport Maintenance Workers in FY 2012 to support the expanded terminal building. 5.2 Employee Benefits Employee benefits expenses include fringe benefit costs, such as employee wage-related taxes, health care, and employee pension. Employee benefits increased from $899,385 in FY 2003 to $1,301,666 in FY 2009. This category of Airport operating expense is projected to increase approximately 6.0 percent per year from FY 2009 to FY 2016 from $1,301,666 in FY 2009 to $2,005,401 in FY 2016. 5-22 Eugene Airport Master Plan Update (February 2010)