Item C13 BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: 12/11/2013 Division: County Administrator
Bulk Item: Yes Department: Airports
Staff Contact Person/Phone#: Peter Horton, 809-5200
AGENDA ITEM WORDING: Approval of the FY2014 Airline Rates and Charges for the Key West
International Airport, effective October 1, 2013.
ITEM BACKGROUND: As part of our budget process,Newton & Associates, Inc. has updated the Airport's
Rates and Charges.
PREVIOUS RELEVANT BOCC ACTION: Approval of the FY2013 Airline Rates and Charges.
CONTRACT/AGREEMENT CHANGES: New rates and charges.
STAFF RECOMMENDATION: Approval.
TOTAL COST: N/A INDIRECT COST: NA BUDGETED: N/A
DIFFERENTIAL OF LOCAL PREFERENCE: NA
COST TO COUNTY: N/A SOURCE OF FUNDS: N/A
COST TO AIRPORT: N/A
COST TO PFC: N/A
REVENUE PRODUCING: Yes X No AMOUNT PER YEAR: approximately $3.8 million
APPROVED BY: County Attorney N/A OMB/Purchasing N/A Risk Management N/A
DOCUMENTATION: Included X Not Required
DISPOSITION: AGENDA ITEM#
W100 &- Amdahl 10C4
AVIATION INDUSTRY CONSULTANTS
November 14, 2013
VIA ELECTRONIC MAIL
EYW Air Carrier Representatives
Re: FY 2014 Airline Rates and Charges
Key West International Airport
Dear Air Carrier Representative:
On behalf of Monroe County and the Key West International Airport,please find attached for
your review a copy of the FY 2014 airline rates and charges ("Rates and Charges")for the Key
West International Airport ("Airport"). The Rates and Charges are calculated based on the
Airport's estimated expenses for the subject year, using the same methodology used since 2002,
As in the past,the County wishes to extend the opportunity to review and discuss the Rates and
Charges with the airlines serving the Airport. A meeting to discuss the FY 2014 Rates and
Charges with the airlines has been scheduled for Thursday,November 21,2013 at 9:00 am for
this purpose. The meeting will be held in the conference room located adjacent to the office of
the Airport Director. The FY 2014 Rates and Charges are scheduled to go into effect
retroactively to October 1, 2013, which is the first day of the County's 2014 fiscal year.
FY 2014 Airline Rates and Charges Summary:
Following summarizes the Average Airline Terminal Rental Rate, Landing Fee Rate, Checkpoint
Security Charge,and Average Airline Cost per Enplaned Passenger for FY 2014:
Budget Adjusted' Proposed
FY 2013 FY 2013 FY 2014
Average Terminal Rental Rate $42.49 $41.18 $48.16
Landing Fee Rate $ 2.88 $ 3.19 $ 3.13
Checkpoint Security Charge $ 0.84 $ 0.84 $ 0.77
Airline Cost per Enplaned Passenger $ 9.04 $ 9.31 $ 9.04
Airport Operating and Maintenance("O&M") Expenses:
Schedule A presents a comparison of O&M Expenses for Budget FY 2013 (adjusted)and
Proposed FY 2014. Total Airport O&M Expenses have been budgeted to increase from$4.2
million in FY 2013 to$4.8 million in FY 2014. This increase is largely attributable to increases
in personal services expense, general repairs and maintenance expense and Aircraft and Fire
Fighting(ARFF) services expense.
I The FY 2013 Adjusted colunm reflects the reclassification of ARFF non-personal services expense which was
incorrectly classified in the FY 2013 Budget Rates and Charges.
1806 ROCKY RIVER ROAD * CHARLOTTE, NC 28213 ® (70 ) 5 7-43 4 ® FAX (7041 597.4 85
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EYW Air Carrier Representatives
November 14,2013
Page 2
Contractual Services -Security Expense:
Airport Security Expenses are budgeted to increase from$2,011,042 in FY 2013 to $2,200,958
in FY 2014. The amount of Airport Security Expense allocable to airline cost centers had been
previously reduced by security grants($50,000) received by the County froni the US
Transportation Security Administration("TSA"), through the Law Enforcement Office
Reimbursement Agreement Program("TSA Grant'). TSA Grant fiords have not been
reauthorized for FY 2014, but the County has applied to the TSA for a renewal of the security
grant. For the purpose of calculating the FY 2014 Rates& Charges, the Airport is not
anticipating that the County will receive any TSA Grant fluids for Budget FY 2014. FY 2014
Rates & Charges may be adjusted in the fixture to reflect the actual TSA Grant authorization, if
any. The County will continue to identify and apply for state and federal grants which may
offset Airport Security Expenses in the future.
For the upcoming year,the airline security checkpoint response reimbursement direct bill charge
is budgeted to increase by 3.0%, frorn$314,375 in Budget Fiscal Year 2013 to$323,806 in
Budget Fiscal Year 2014. Notwithstanding this increase,the estimated security reimbursement
charge per enplaned passenger is projected to decrease due to the projected increase in the
estimated enplaned passengers from those estimated for Budget FY 2013 (373,998)to the
estimated Budget FY 2014 (421,332). This charge per enplaned passenger is projected to be
$0.77 compared to the current$0.84. This calculation is demonstrated on the Airport Security
Requirements Worksheet in the Rates and Charges package.
Landing Fee Rate:
Schedule C depicts the calculation of the airfield landing fee rate. The Total O&M and Capital
Expenses allocated to the Airfield cost center are estimated to be$1,942,441 ("Airfield
Requirement'). The Airfield Requirement is then reduced by estimated FY 2014 general
aviation revenues($250,000) resulting in a Net Airfield Requirement of$1,692,441. NAI
requested estimated total airline weights from each carrier in FY 2014. Based on the information
provided,total airline landed weight for FY 2014 is estimated to be 541,186 thousand pound
units. Based on the Net Airfield Requirement($1,692,441)and the total estimated units of
aircraft landed weight(541,186),the Airline Landing Fee Rate has been calculated to be$3.13,
which is a decrease of$0.06 over the current landing fee rate of$3.19.
Airline Terminal Rental Rate:
Schedule D presents the calculation of Terminal Rental Rates for FY 2014. Total projected FY
2014 O&M and Capital Expenses allocated to the Terminal cost center is$3,142,912("Terminal,
Requirement'). The Terminal Requirement excludes directly billed airline checkpoint security
reimbursement charges ($323,806). Based on the total estimated square footage space of the
terminal complex(65,257 square feet), the FY 2014 Average Terminal Rental Rate is$48.16 per
square foot,which is a $6.98 increase over the current Average Terminal Rental Rate of$41.18.
The Airport is pleased to advise that the debt service on the 2006 Bonds which were issued to
complete the terminal expansion and renovation project was paid in full this year. Although this
debt service was never included in the airline rate base,PFCs that were used to pay the debt
EYW Air Carrier Representatives
November 14, 2013
Page 3
service will now be available to fiind other necessary airport improvements, thereby insulating
the airline rate base,to the extent possible,from capital expense.
Airline Cost Per Enplaned Passenger:
Based on the calculation of FY 2014 Rates and Charges, the average airline cost per enplaned
passenger is budgeted to decrease by$0.26,from$9.31 to $9.04.
We look forward to answering any questions you may have at our meeting on November 21,
2013. In the mean time,we invite you to contact me should you have any inmiediate questions
regarding the FY 2014 Rates& Charges. You may reach us at 704 597-4384.
Sincerely,
Frank C.Newton, III
Vice President
Attachments
cc: Peter Horton(EYW)
April Pearson (EYW)
Angelica Sweeting(EYW)
KEY WEST INTERNATIONAL AIRPORT
FY 2014 AIRLINE RATES & CHARGES
SUMMARY
Variance
Budget Adj.Budget Budget FY 2014 Over
FY 2013 FY 2013 FY 2014 FY 2013
Airline Terminal Rentals:
Terminal Requirement-Basic O&M and Capital $1,637,013 $1,550,897 $1,840,221 $289,324
Terminal Requirement-Security 1,470,782 1,470,782 1,650,000 179,219
Total Terminal Requirement 3,107,795 $3,021,679 $3,490,221 468,543
(Less Reimbursements&Credits) (335,110) (334,471) (347,309) (12,838)
Net Terminal Requirement 2,772,665 $2,667,206 $3,142,912 $455,704
Airline Terminal Revenue Requirement
Basic O&M Component $969,019 $917,773 $1,069,190 $171,417
Security Component 693,308 693,308 795,103 101,794
Subtotal Airline Terminal Revenue Requirement $1.662,328 $1,611,081 $1,884,293 $273,212
Total Terminal Space 65,257 65,257 65,257 0
Required Average Rental Rate per Square Ft. $42.49 $41.18 $48.16 $6.98
Airline Landing Fees:
Airfield Requirement-Basic O&M&Capital $1,438.337 $1,589,926 $1,722,441 $132,516
Airfield Requirement-Security 196,104 196,104 220,000 23,896
Total Airfield Requirement $1,634.441 $1,786,029 $1,942,441 $156,412
(Less: G.A.Revenues) (218,818) (218,818) (250,000) (31.182)
Airline Landing Fee Revenue Required $1,415,622 $1,567,210 $1,692,441 $125,231
Estimated Airline Landing Weight(1,000 lb.units) 490,839 490,839 541,186 50,347
Estimated Passenger Airline Landed Weight 487,771 487,771 537,186 49,415
Passenger Airline Landing Fee Revenue
Basic O&M Component $1,236,230 $1,385,142 $1,490,958 $105,816
Security Component 168,549 170,846 190,434 19,588
Subtotal Passenger Airline Landing Fee Revenue $1,404,779 $1,555,988 $1,681,392 $125,404
Airline Landing Fee Rate Requirement $2.88 $3.19 $3.13 ($0.06)
Security Checkpoint Reimbursement Charges:
Checkpoint Security Fee per Enplanement $0.84 $0.84 $0.77 ($0.07)
Estimated Passenger Airline Revenue
Terminal Rental Revenues(Occupied) $1,662,328 $1,611,081 $1,806,259 $194,178
Security Reimbursement Revenues 314,375 314,375 323,806 9,431
Passenger Airline Landing Fees 1,404,779 1,555,988 1,681,392 125,404
Total Estimated Passenger Airline Revenue $3,381,482 $3,481,444 $3,810,457 $329,013
Enplaned Passengers 373,998 373,998 421,332 47,334
Total Cost Per Airline Enplaned Passenger $9.04 $9.31 $9.04 ($0.26)
Newton&Associates,Inc. 11/14/13
c:12014 Rates Charges v5111413.xlsx