Draft EUG Master Plan Update, February 2010

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CHAPTER 5 FINANCIAL FEASIBILITY ANALYSIS As noted, sufficient PFC revenues should exist to fund the proposed plan even with this reduced passenger level; however, it will be necessary for the Airport to “multi-year” its FAA grant program in Fiscal Years 2011, 2012 and 2014 in order to garner sufficient federal funding. Since the Airport intends to construct an Aircraft Deicing Facility in 2011, and this project already has FAA Discretionary funding tentatively earmarked for it, it is likely that the FAA would allocate the additional resources to complete this project. If additional discretionary funding is provided, the Airport would only be required to multi-year entitlement funds in FY 2012 and 2014. While Table 5-12 focuses on the short and mid-term planning horizon, extrapolation of the adjustments to enplanements described above for the entire master plan period indicates that aggregate FAA entitlements would total $59.9 million while PFC collections would total $33.2 million creating a shortfall of approximately $4.3 million for the recommended capital program. To bridge the lack of PFC funds, the Airport should consider either allocating resources from its Operating and Capital Reserve Fund, earmark funds from the lease of land for construction, and/or increase airport fees and charges. Of course, such measures would need to be factored against an evaluation of the need to undertake capacity-driven projects such as passenger automobile parking expansions, terminal building projects, and fuel farm expansion work if such an economic/passenger downturn were to occur. 8.3 Additional Revenue Generation It is recognized that the Airport currently maintains an inventory of property which it could lease to generate revenue to help pay for the CIP. The purpose of this review and subsequent analysis is to provide observations and recommendations on the physical, legal and economic aspects of those Exhibit 5-2 properties identified on the as being available for consideration for revenue generation for the Eugene Airport. Following are items the City needs to consider in conjunction with determining if these properties are suitable for non-airport operations. All identified properties are located outside of the Urban Growth Boundary of the City; therefore, urban services are not available including water and sanitary sewer service. Many of the parcels can be developed; however, without these services, their utility is limited since fire sprinklers are required in buildings over certain sizes. These parcels will be difficult to market as they cannot support fire suppression systems due to the lack of public water service. In addition, the lack of sanitary sewer service will also limit the development of most parcels, as the soils in the area are not conducive for traditional septic systems. A prime example of this is the States Veneer Facility at Hwy 99 and Enid, where it was necessary to have a very expensive sand filter system installed to accommodate their operations. If public services can be made available to any of the parcels being considered for revenue generation, this should be fully explored prior to marketing the properties. Additional consideration should be given to the method of taxation, as it is assumed that the properties will go onto the City’s tax rolls if any property rights are conveyed to a private, for-profit entity. There is a provision that allows Airport property to remain tax exempt even when improved with private sector for-profit uses, so a determination of the applicability of this exemption should be explored in-depth by legal counsel prior to moving forward with implementation of any marketing activities. 5-35 Eugene Airport Master Plan Update (February 2010)