Draft EUG Master Plan Update, February 2010

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CHAPTER 5 FINANCIAL FEASIBILITY ANALYSIS expenditures increased from $360,000 in FY 2003 to $503,000 in FY 2009. Based upon discussions with Airport Management, Central Service Allocation costs are projected to increase more modestly between FY2009 and FY 2016, increasing from $503,000 to approximately $618,627 or by 3.0 percent per year during this period. Aggregating operating expenses with non-operating expenses yields total annual expenditures incurred by the Airport. As shown in Table 5-6, total Airport Operating Expenses increased from $5,336,935 in FY 2003 to $6,599,939 in FY 2009. Projected increases in the Airport’s total expenses are presented in Table 5-7, which forecasts expenditure levels increasing from $6,699,939 in FY 2009 to approximately $9,152,109 in FY 2016. 6. Debt Service Given the magnitude and scope of the projects contained in the recommended CIP, the issuance of new debt will be necessary to underwrite the following elements of this work: Terminal, Phase II – Airport Administration and Baggage project ($9.6 million PFC eligible as well as $2.4 million for non AIP and PFC project components) Concourse B Expansion ($1.9 million PFC revenues) Concourse C – Phase I Expansion ($6.7 million PFC revenues) Airport Access Road Improvements ($1.6 million PFC revenues) Phase I – Passenger Parking Expansion Project ($2.2 million) Since portions of the terminal construction projects are eligible for funding through the PFC program, it is proposed that the Airport weigh the feasibility of pursuing debt financing backed by its future stream of PFC revenues to retire this debt and complete this work in a timely fashion. Since the Airport successfully retired all outstanding debt as of June 30, 2008 the Airport will be in an opportune position to issue new debt to undertake these projects assuming passenger activity and operating financial results are achieved and are reasonably expected to continue for the duration of the debt payment period. Several options exist for the Airport to pursue debt financing for these projects including: General Obligation Bonds issued by the City on behalf of the Airport with PFC revenue and general airport revenue pledged to support payment of debt service General Airport Revenue Bonds secured by a pledge of general airport and PFC revenue to retire debt service Stand-Alone PFC Bonds backed solely by PFC revenues Each of the above options have unique advantages and disadvantages which the Airport should more thoroughly and thoughtfully weigh prior to proceeding with issuing bonds for these projects. In terms of the Passenger Parking Expansion and Airport Administration Projects, it is recommended that the Airport issue either General Obligation Bonds or General Airport Revenue Bonds secured by a pledge of general airport revenues for retirement of this debt. 5-26 Eugene Airport Master Plan Update (February 2010)