Draft EUG Master Plan Update, February 2010

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CHAPTER 5 FINANCIAL FEASIBILITY ANALYSIS 5.3Maintenance and Repairs Maintenance and repairs expenses represent the cost of materials and supplies needed for maintaining and repairing all of the Airport’s grounds and facilities as well as charges for minor equipment outlays. Maintenance and repairs expenses grew at an annual rate of 9.0 percent between the years of FY 2003 and FY 2009 increasing from $179,876 to $308,233. As shown in Table 5-7, this category of expense is projected to increase from $308,233 in FY 2009 to $762,625 in FY 2016. This growth includes a $100,000 increase in FY 2009 to account for the steep rise in gas prices and further anticipates additional expenditures following the construction of the first portion of the terminal expansion ($50,000 in FY 2014). 5.4 Utilities Expenditures captured in the “Utilities” category include charges for electricity for terminal and airfield facilities, natural gas for heating, and water and sewage services. These expenditures have ranged from a low of $329,045 in FY 2003 to a high of $415,329 in FY 2009, resulting in a compounded annual increase of approximately 4.0 percent. As shown in Table 5-7, utilities are projected to increase from $415,329 in FY 2009 to $546,545 in FY 2016, representing a compounded annual increase of approximately 4.0 percent. Future utilities expenses were projected based on historical actual costs and the anticipated costs associated with proposed expansion of airfield and terminal facilities. 5.5 Contractual Services Contractual services expenses represent the annual costs of providing contract services to aid in the efficient operation of the Airport. This expense has fluctuated over the last seven fiscal years, ranging from a low of $343,784 in FY 2004 to high of $629,518 in FY 2003. For purposes of this analysis, future contractual service expense is projected based on the total expense for this category anticipated to occur in FY 2009. As shown in Table 5-7, contractual services expenses are projected to increase from $519,040 in FY 2009 to $706,342 in FY 2016, representing a compounded annual increase of approximately 5.0 percent. 5.6 Insurance Insurance expenses are comprised of the costs of providing liability, property, and other insurance coverage to account for the risks associated with the operation of and damage to Airport facilities. Insurance expenses have increased from $122,609 in FY 2003 to $131,047 in FY 2009. Based on discussion with Airport management, FY 2009 insurance expenses were used as the base for future projections of this category of expense and as shown in Table 5-7, thus, this category of expense is projected to increase from $131,047 in FY 2009 to $140,500 in FY 2016. 5.7 Summary of Projected Total Airport Expense In addition to the previously described operating expenses, the Airport incurs expenses that are considered non-operational in nature. These expenses are presented in Table 5-6 and Table 5-7 as “Central Services Allocation” and represents indirect costs allocated to the Airport by the City of Eugene for support services, such as Information Technology. The City, through the preparation of a cost allocation plan, estimates these annual costs for the Airport and as shown in Table 5-6, these 5-25 Eugene Airport Master Plan Update (February 2010)