Draft EUG Master Plan Update, February 2010

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SUPPLEMENTAL FINANCIAL ANALYSIS APPENDIX B Overview of the Airport’s Operating Financial Results FY 2008 - Present The single-most negative impact for EUG created by changing national, state and local economic conditions was a 14.6 percent decline in passenger activity in FY 2009. Reduced passenger levels influenced the loss of approximately $900,000 in overall revenues (11.9%) between FY 2008 and FY 2009. Lower automobile parking fees, airline landing fee collections, airline terminal building fees and food/beverage concession fees were primarily responsible for this reduced level of funding. While operating revenues lagged, the Airport experienced an increase in operating expenditures of approximately $400,000 or 7.2 percent during this period. Salaries and labor increased because of obligations contained in the Airport’s current labor agreement as well as the hiring of 3.5 full-time equivalent positions in the Airport’s Maintenance Division needed to address the evolving workload associated with the mission of this Department. Additionally, the Airport’s payment to the City of Eugene for central services increased 38 percent or $139,000. Despite declining revenues and increased expenditures, EUG met all required expenditure obligations and was capable of making payments to its required reserve funds including a $124,500 contribution to its Operating and Capital Reserve Fund. Of equal importance is the fact that the Airport achieved positive financial results during this difficult period void of increasing airline rates and charges. As noted earlier, all sources of airline revenue were generally down over FY 2008 due in most part to management’s proactive decision to hold airline rates and fees constant in recognition of the need to maintain EUG’s favorable operating environment for its carriers. Thus far in FY 2010, both passenger activity and revenue performance appear to have stabilized as reflected by the fact that fourth quarter of calendar year 2009 was especially strong for EUG. Mid-year forecasts of revenues and expenditures reveal that EUG should meet budgeted amounts for revenues and expenditures while enplanements should total approximately 349,000 representing a 5.4 percent increase over FY 2009. Although these trends are quite positive, it is important to recognize that should this growth be sustained during the remaining six months of this fiscal year, EUG’s passenger totals will essentially mirror results for FY 2006 when 360,258 boardings were experienced while total Airport revenues will achieve levels consistent with FY 2007 levels. The Revised FY 2011-15 Capital Improvement Plan The FY 2011-15 Capital Improvement Plan (CIP) described in Chapter 5 projects the need for $35.9 million in federal and local funds to complete a host of projects. It includes a phased expansion of the terminal building to accommodate three (3) additional airline gates as well as expansion of the airline ramp area for aircraft parking. The cumulative cost of these projects represents approximately $25.0 million of this $35.9 million plan. Due to the decrease in passenger activity in FY 2009 and an expected slow recovery period, these capacity-related projects have been removed from the revised five year planning horizon. Furthermore, the issuance of Passenger Facility Charge (PFC) backed bonds for these projects has also been delayed due to this change. In fact, no additional borrowing is anticipated through FY 2016; indicating that EUG will remain debt-free during this period. B-2 Eugene Airport Master Plan Update (February 2010)