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Item I09
1.9 Coty f � ,�� ,' BOARD OF COUNTY COMMISSIONERS �� Mayor David Rice,District 4 The Florida Keys � Mayor Pro Tem Craig Cates,District 1 y Michelle Coldiron,District 2 James K.Scholl,District 3 Ij Holly Merrill Raschein,District 5 County Commission Meeting August 17, 2022 Agenda Item Number: I.9 Agenda Item Summary #10973 BULK ITEM: No DEPARTMENT: Airports TIME APPROXIMATE: STAFF CONTACT: Richard Strickland(305) 809-5200 n/a AGENDA ITEM WORDING: Approval of a resolution authorizing the issuance of Monroe County Airport Revenue Bonds to finance and refinance various costs of capital improvements to the Key West International Airport, providing a pledge of the net revenues derived from the operation of the Key West International Airport and certain eligible PFC revenues to secure payment of the principal of and interest on said bonds. ITEM BACKGROUND: The Bonds will be issued to (1) finance and refinance the cost of certain capital improvements at the Key West International Airport including the development, construction and equipping of a new second-level concourse of approximately 48,805 square feet("Concourse A") consisting of: (A) seven gates all fitted with passenger boarding bridges, holdroom areas, passenger circulation space, concession areas, restrooms, a nursing room, a pet relief area, building support areas, including mechanical rooms, IT/Communication rooms, an electrical room, elevator, storage,janitors closet, and stair areas and (B) a ground(apron) level below Concourse A to support a new baggage make-up area and device(s), tug lanes, airline ramp space, ramp equipment storage, and circulation space (collectively the"Project"); (2)fund necessary deposits to the reserve account securing the Bonds; (3) capitalize a portion of the interest of the Bonds; and (4)pay costs related to the issuance of the Bonds. PREVIOUS RELEVANT BOCC ACTION: On July 20, 2022, the BOCC approved advertising of a public hearing for August 17, 2022 for the purpose of receiving comments and hearing discussion concerning the County's proposed issuance of NTE $50,000,000.00 in aggregate principal amount of Monroe County, Florida Airport Revenue Bonds (Key West International Airport), Series 2022. CONTRACT/AGREEMENT CHANGES: n/a STAFF RECOMMENDATION: Approval DOCUMENTATION: Packet Pg. 2180 1.9 Master Bond Resolution 8 2 2022 Report of the Airport Consultant FINANCIAL IMPACT: Effective Date: Expiration Date: Total Dollar Value of Contract: n/a Total Cost to County: 0 Current Year Portion: Budgeted: Source of Funds: CPI: Indirect Costs: Estimated Ongoing Costs Not Included in above dollar amounts: Revenue Producing: No If yes, amount: Grant: County Match: Insurance Required: No Additional Details: REVIEWED BY: Beth Leto Completed 08/02/2022 3:49 PM Richard Strickland Completed 08/02/2022 3:50 PM Pedro Mercado Completed 08/02/2022 3:53 PM Purchasing Completed 08/02/2022 4:02 PM Budget and Finance Completed 08/02/2022 4:08 PM Brian Bradley Completed 08/02/2022 4:13 PM Lindsey Ballard Completed 08/02/2022 4:23 PM Board of County Commissioners Pending 08/17/2022 9:00 AM Packet Pg. 2181 1.9.a s MONROE COUNTY, FLORIDA 0 0 i CN CN CN AIRPORT REVENUE BOND RESOLUTION C (KEY WEST INTERNATIONAL AIRPORT) co 0 cn 0 cn m ADOPTED AUGUST 17, 2022 .. c� Packet Pg. 2182 1.9.a TABLE OF CONTENTS PAGE ARTICLE I GENERAL SECTION 1.01. DEFINITIONS ........................................................................... 1 SECTION 1.02. AUTHORITY FOR RESOLUTION........................................ 14 SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT .................. 14 SECTION 1.04. FINDINGS ............................................................................... 14 0 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION 2.01. AUTHORIZATION OF BONDS ............................................ 16 SECTION 2.02. EXECUTION OF BONDS ...................................................... 16 SECTION 2.03. AUTHENTICATION............................................................... 17 SECTION 2.04. TEMPORARY BONDS........................................................... 17 SECTION 2.05. BONDS MUTILATED, DESTROYED, STOLEN OR LOST........................................................................................ 17 SECTION 2.06. INTERCHANGEABILITY, NEGOTIABILITY AND CN TRANSFER............................................................................. 18 Ci CN SECTION 2.07. FORM OF BONDS .................................................................. 19 001 ARTICLE III REDEMPTION OF BONDS SECTION 3.01. PRIVILEGE OF REDEMPTION ............................................ 28 SECTION 3.02. SELECTION OF BONDS TO BE REDEEMED ....................28 SECTION 3.03. NOTICE OF REDEMPTION ..................................................28 SECTION 3.04. REDEMPTION OF PORTIONS OF BONDS.........................29 SECTION 3.05. PAYMENT OF REDEEMED BONDS ................................... 30 SECTION 3.06. PURCHASE IN LIEU OF OPTIONAL REDEMPTION........ 30 c� ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4.01. BONDS NOT TO BE INDEBTEDNESS OF ISSUER........... 31 SECTION 4.02. SECURITY FOR BONDS ....................................................... 31 SECTION 4.03. CONSTRUCTION FUND ....................................................... 31 SECTION 4.04. CREATION OF FUNDS AND ACCOUNTS ......................... 33 SECTION 4.05. DISPOSITION OF GROSS REVENUES AND ELIGIBLE PFCREVENUES..................................................................... 34 i Packet Pg. 2183 1.9.a SECTION 4.06. PFC CAPITAL IMPROVEMENT FUND...............................43 SECTION 4.07 REBATE FUND.......................................................................43 SECTION 4.08 INVESTMENTS ......................................................................44 SECTION 4.09 SEPARATE ACCOUNTS .......................................................45 ARTICLE V COVENANTS SECTION 5.01. GENERAL ...............................................................................46 SECTION 5.02. ANNUAL BUDGET................................................................46 SECTION 5.03. RATES .....................................................................................46 SECTION 5.04 BOOKS AND RECORDS .......................................................47 SECTION 5.05 ANNUAL AUDIT.................................................................... 47 SECTION 5.06 NO MORTGAGE OR SALE OF THE AIRPORT..................48 SECTION 5.07 INSURANCE ...........................................................................49 SECTION 5.08 ENFORCEMENT OF COLLECTIONS.................................. 50 SECTION 5.09 NO COMPETING FACILITIES.............................................. 50 SECTION 5.10 CONSULTANTS ..................................................................... 50 SECTION 5.11. MAINTENANCE OF PFC REVENUES ................................ 50 SECTION 5.12. COMPLIANCE WITH PFC ACT, PFC REGULATIONS AND PFC AUTHORITY ........................................................ 50 CN SECTION 5.13. MANAGEMENT OF AIRPORT............................................. 51 a SECTION 5.14. OPERATION OF THE AIRPORT .......................................... 52 C SECTION 5.15. COVENANTS WITH CREDIT BANKS AND INSURERS .. 52 co SECTION 5.16 GOVERNMENT GRANTS..................................................... 52 SECTION 5.17. FEDERAL INCOME TAXATION COVENANTS; 0 TAXABLE BONDS ................................................................ 52 SECTION 5.18. HEDGE AGREEMENTS......................................................... 53 SECTION 5.19. COVENANTS RELATING TO FEDERAL SUBSIDY BONDS. ................................................................................... 53 ARTICLE VI SUBORDINATED INDEBTEDNESS,ADDITIONAL BONDS AND SPECIAL PURPOSE FACILITIES BONDS c� SECTION 6.01. SUBORDINATED INDEBTEDNESS. ................................... 55 ° SECTION 6.02. ISSUANCE OF ADDITIONAL BONDS................................ 55 SECTION 6.03. BOND ANTICIPATION NOTES............................................ 57 SECTION 6.04 ISSUANCE OF OBLIGATIONS NOT SECURED HEREUNDER— SPECIAL PURPOSE FACILITIES BONDS .................................................................................... 57 ii Packet Pg. 2184 1.9.a ARTICLE VII DEFAULTS AND REMEDIES SECTION 7.01. EVENTS OF DEFAULT ......................................................... 58 SECTION 7.02. REMEDIES .............................................................................. 58 SECTION 7.03. DIRECTIONS TO TRUSTEE AS TO REMEDIAL PROCEEDINGS. ..................................................................... 59 SECTION 7.04. REMEDIES CUMULATIVE................................................... 59 SECTION 7.05. WAIVER OF DEFAULT......................................................... 59 SECTION 7.06. APPLICATION OF MONEYS AFTER DEFAULT............... 59 SECTION 7.07 CONTROL BY INSURER ...................................................... 61 0 ARTICLE VIII SUPPLEMENTAL RESOLUTIONS 0 SECTION 8.01. SUPPLEMENTAL RESOLUTION WITHOUT BONDHOLDERS' CONSENT................................................ 62 SECTION 8.02. SUPPLEMENTAL RESOLUTION WITH , BONDHOLDERS' AND INSURER AND CREDIT BANK CONSENT ............................................................................... 63 SECTION 8.03. AMENDMENT WITH CONSENT OF INSURER AND CN CN CREDIT BANK ONLY........................................................... 64 a CN i CN ARTICLE IX 001 MISCELLANEOUS SECTION 9.01. DEFEASANCE........................................................................ 66 SECTION 9.02. CAPITAL APPRECIATION BONDS..................................... 67 SECTION 9.03. SALE OF BONDS ................................................................... 68 SECTION 9.04. SEVERABILITY OF INVALID PROVISIONS..................... 68 SECTION 9.05. VALIDATION AUTHORIZED .............................................. 68 SECTION 9.06. REPEAL OF INCONSISTENT RESOLUTIONS................... 68 SECTION 9.07. EFFECTIVE DATE ................................................................. 68 c� Packet Pg. 2185 1.9.a RESOLUTION NO. -2022 A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA, AUTHORIZING THE ISSUANCE OF MONROE COUNTY, FLORIDA AIRPORT REVENUE BONDS FROM TIME TO TIME TO FINANCE AND REFINANCE VARIOUS COSTS OF CAPITAL IMPROVEMENTS TO THE KEY WEST INTERNATIONAL AIRPORT; PROVIDING A PLEDGE OF THE NET REVENUES DERIVED FROM THE OPERATION OF THE KEY WEST INTERNATIONAL AIRPORT AND CERTAIN ELIGIBLE PFC REVENUES TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SAID BONDS; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION. BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA: CN CN ARTICLE I C GENERAL 00 SECTION 1.01. DEFINITIONS. When used in this Resolution, the following terms shall have the following meanings, unless the context clearly otherwise requires: 0 "Accreted Value" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest Date next preceding the date of computation or the date of computation if an Interest Date, such interest to accrue at a rate not exceeding the legal rate, compounded semiannually, plus, with respect to matters related to the payment of the Capital Appreciation Bonds prior to maturity thereof, if such date of computation shall not be an Interest Date, a portion of the difference between the Accreted Value as of the immediately preceding Interest Date and the Accreted Value as of the immediately succeeding Interest Date, calculated based on the assumption that Accreted Value accrues during any semi-annual period in equal daily amounts on the basis of a 360-day year. "Act" shall mean Chapter 125, Part I, and Chapter 332, Florida Statutes, and other applicable provisions of law. 1 Packet Pg. 2186 1.9.a "Additional Bonds" shall mean the obligations issued at any time under the provisions of Section 6.02 hereof. "Airport" shall mean the real property and airport and aviation facilities constituting the existing Key West International Airport and all Projects and all Improvements to the Airport. "Airport Consultant" means any engineer, engineering firm, firm of certified public accountants, airport consulting firm or corporation, or other qualified Person of favorable repute for skill and experience in performing the duties for which it is S employed by the Issuer under Section 5.10 of this Resolution. 0 "Airport Surplus Fund" shall mean the fund created pursuant to Section 4.04(D) hereof. 0 "Annual Audit" shall mean the annual audit prepared pursuant to the requirements of Section 5.05 hereof. "Annual Budget" shall mean the annual budget prepared pursuant to the requirements of Section 5.02 hereof. "Authorized Investments" shall mean any investment allowable under � applicable law that is approved by the Governing Body of the Issuer. Ci CN i "Authorized Issuer Officer" shall mean the Mayor, the Clerk, the County 00 Administrator or the Airport Director, and when used in reference to any act or document, also means any other person authorized by resolution of the Issuer to perform such act or sign such document. "Airport Director" shall mean the Senior Director of Airports of the Issuer or his 0 or her designee. U) "Bond Counsel" shall mean Nabors, Giblin & Nickerson, P.A., or any other attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and E political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. ° "Bondholder" or "Holder" or "holder" or any similar term, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds as provided in the registration books of the Issuer. "Bond Insurance Policy" shall mean the municipal bond new issue insurance policy or policies issued by an Insurer guaranteeing the payment of the principal of and interest on any portion of the Bonds. 2 Packet Pg. 2187 1.9.a "Bonds" shall mean the Monroe County, Florida Airport Revenue Bonds (Key West International Airport), Series 2022, together with any Additional Bonds issued pursuant to this Resolution. "Bond Year" shall mean the period commencing on October 2 of each year and continuing through the next succeeding October 1, or such other period as may be provided by Supplemental Resolution of the Issuer. "Capital Appreciation Bonds" shall mean those Bonds which may be either Serial Bonds or Term Bonds and which shall bear interest payable only at maturity or S redemption. In the case of Bonds that convert to or from Capital Appreciation Bonds with interest payable prior to maturity or mandatory redemption of such Bonds, such Bonds shall be considered Capital Appreciation Bonds only during the period of time interest accrues and is not payable to the Holder thereof. 0 "Clerk" shall mean the Clerk of the Circuit Court and Comptroller in and for Monroe County, Florida, and ex-officio Clerk to the Board of County Commissioners of Monroe County, Florida, and such other person as may be duly authorized to act on his or her behalf. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. CN CN i "Construction Fund" shall mean the fund established pursuant to Section 4.03 N1 00 hereof. "Cost," when used in connection with a Project, shall mean all expenses incurred 0 by or on behalf of the Issuer in connection with the acquisition, construction, installation, reconstruction, renewal or replacement thereof, including without limitation: (1) costs of physical construction; (2) costs of acquisition by or for the Issuer of such Project; o (3) costs of land and interests therein and the cost of the Issuer incidental to such L- acquisition; (4) costs of any indemnity and surety bonds and premiums for insurance during construction; (5) all interest due to be paid on the Bonds and other obligations relating to the Airport during the period of acquisition, construction and equipping of such Project and for such period subsequent to completion as the Issuer shall determine and shall be allowable under applicable provisions of the Code; (6) engineering, legal and other consultant fees and expenses; (7) costs and expenses of the financing, including audits, fees and expenses of any Paying Agent, Registrar, escrow agent or depository; (8) amounts, if any, required by this Resolution to be paid into the Interest Account upon the issuance of any Series of Bonds; (9) payments, when due (whether at the maturity of principal or the due date of interest or upon redemption) on any indebtedness of the Issuer (other than Bonds) incurred for a Project for the System; (10) costs of machinery, equipment and supplies and reserves required by the Issuer for the commencement of operation of such Project; and (11) any other costs properly attributable to such 3 Packet Pg. 2188 1.9.a construction or acquisition, as determined by generally accepted accounting principles applicable to public airports similar to the Airport, and shall include reimbursement to the Issuer for any such items of Cost heretofore paid by the Issuer and interest on any interfund loan related thereto. A Supplemental Resolution may provide for additional items to be included in the aforesaid Costs. "Counterp arty" shall mean the entity entering into a Hedge Agreement with the Issuer. Counterparty would also include any guarantor of such entity's obligations under such Hedge Agreement. "County Administrator" shall mean the County Administrator of the County, or his or her authorized designee. "Credit Bank" shall mean as to any particular Series of Bonds, the Person (other than an Insurer) providing a letter of credit, a line of credit or other credit or liquidity o facility, as designated in the Supplemental Resolution providing for the issuance of such 0 Bonds. "Credit Facility" shall mean as to any particular Series of Bonds, an irrevocable letter of credit, a line of credit or other credit or legal liquidity facility (other than a Bond Insurance Policy issued by an Insurer), as approved in the Supplemental Resolution providing for the issuance of such Bonds. CN CN i "Debt Service" shall mean, at any time, the aggregate amount in the then CNi 00 applicable period of time of (1) interest required to be paid on the Outstanding Bonds during such period of time, except to the extent that such interest is to be paid from deposits in the Interest Account or Construction Fund made from Bond proceeds, (2) principal of Outstanding Serial Bonds maturing in such period of time, and (3) the W Sinking Fund Installments herein designated with respect to such period of time. For purposes of this definition, (A) all amounts payable on a Capital Appreciation Bond shall be considered a principal payment in the year it becomes due, (B) subject to the U) provisions of Section 5.18 hereof, with respect to debt service on any Bonds which are subject to a Qualified Hedge Agreement, interest on such Bonds during the term of such Qualified Hedge Agreement shall be deemed to be the Hedge Payments coming due during such period of time, (C) if any Series of Bonds has 25% or more of the aggregate principal amount of such Series coming due in any one year, Debt Service shall be determined on such Series during such period of time as if the principal of and interest on such Series were being paid from the date of incurrence thereof in substantially equal annual amounts over a period of 30 years from the date of calculation, (D) the amount on deposit in the Reserve Account (or any subaccount thereof) on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the Bonds which are secured by such Reserve Account (or subaccount thereof) and in each preceding year until such amount is exhausted, and (E) with respect to debt service on any Federal Subsidy Bonds, when determining the interest on such Bonds for any 4 Packet Pg. 2189 1.9.a particular Interest Date the amount of the corresponding Federal Subsidy Payment shall be deducted from the amount of interest which is due and payable to the holders of such Bonds on the Interest Date, but only to the extent that the Issuer reasonably believes that it will be in receipt of such Federal Subsidy Payment on or prior to such Interest Date. "Eligible PFC Revenues" shall mean PFC Revenues which shall be legally available to pay the principal of and interest on the Bonds in accordance with the PFC Act, the PFC Regulations and PFC Authority. The Issuer may identify Eligible PFC Revenues with respect to any particular Series of Bonds in a Supplemental Resolution. S "FAA" shall mean the Federal Aviation Administration, or the successor to its power and authority. 0 "Federal Securities" shall mean non-callable direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of Treasury) or non-callable obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. All such obligations shall not permit redemption prior to maturity at the option of the obligor. "Federal Subsidy Bonds" shall mean Bonds issued under Section 54AA of the Code, Section 1400U-2 of the Code or any other applicable provision of the Code, the interest on which is not exempt from federal income taxation, with respect to which the N Issuer elects to receive, or is otherwise entitled to receive, Federal Subsidy Payments N1 CN from the United States Department of Treasury. 0� "Federal Subsidy Payments" shall mean the direct payments made by the United States Department of Treasury to the Issuer with respect to any Federal Subsidy Bonds pursuant to Sections 54AA(g), 6431 and 1400U-2 of the Code, or any other applicable a� provision of the Code. ao "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law. "Fitch" shall mean Fitch Ratings and any assigns and successors thereto. "Governing Body" shall mean the Board of County Commissioners of Monroe County, Florida, or its successor in function. "Government Grant," when used with respect to the Airport, shall mean any sum of money heretofore or hereafter received by the Issuer from the United States of America or any agency thereof or from the State of Florida or any agency or political subdivision thereof as or on account of a grant or contribution, not repayable by the Issuer, for or with respect to the construction, acquisition or other development of an addition, extension or improvement to any part of the Airport or any costs of any such 5 Packet Pg. 2190 1.9.a construction, acquisition or development. Government Grant shall not include any grants or contributions received by the Issuer which are not intended for the payment or reimbursement of capital expenditures and are provided for purposes of, or which may be used, without violating any obligation of the Issuer or condition of such grant, for (1) funding Operation and Maintenance Costs or (2)paying debt service on obligations of the Issuer. Any grants or contributions described in the immediately preceding sentence shall be considered "Gross Revenues." "Gross Revenues" or "Revenues" shall mean for any period all moneys paid or accrued for the use of and for services and facilities furnished by, or in connection with the ownership or operation of, the Airport, or any part thereof or the leasing or use thereof calculated in accordance with generally accepted accounting principles applicable to publicly owned airports similar to the Airport, including, but not limited to (1) rentals, (2) concession fees, (3) use charges, (4) landing fees, (5) license and permit fees, (6) service fees and charges, (7) moneys from the sale of fuel, and or other merchandise, and �o (8) Investment Earnings; provided, however, that Gross Revenues shall not include (A) U) proceeds received from the sale of Bonds, Subordinated Indebtedness or Special Purpose Facilities Bonds, (B) proceeds from the sale or taking by eminent domain of any part of the Airport, (C) gifts or Government Grants, (D) ad valorem tax revenues, (E) any insurance proceeds received by the Issuer (other than insurance proceeds paid as compensation for business interruption), (F) amounts received which are required to be CN paid to any other governmental body, including, but not limited to taxes and impact fees, Ci (G) PFC Revenues, and (H) any noise abatement charges received for disbursement to Ci 00 others. "Hedge Agreement" shall mean an agreement in writing between the Issuer and the Counterparty pursuant to which (1) the Issuer agrees to pay to the Counterparty an amount, either at one time or periodically, which may, but is not required to, be determined by reference to the amount of interest (which may be at a fixed or variable rate) payable on a notional amount related to the debt of the Counterparty specified in such agreement in the period specified in such agreement and (2) the Counterparty agrees to pay to the Issuer an amount, either at one time or periodically, which may, but is not required to, be determined by reference to the amount of interest (which may be at a fixed or variable rate) payable on a notional amount equal to the principal amount of all or a portion of a Series of Bonds specified in such agreement during the period specified in such agreement. Hedge Agreement shall include any financial product or agreement which is used by the Issuer as a hedging device with respect to its obligation to pay interest on the Bonds, or any portion thereof, which is designated by the Issuer as a "Hedge Agreement." "Hedge Payments" shall mean any amounts payable by the Issuer as interest on the related notional amount under a Qualified Hedge Agreement; excluding, however, 6 Packet Pg. 2191 1.9.a any payments due as a penalty or a fee or by virtue of termination of a Qualified Hedge Agreement or any obligation of the Issuer to provide collateral. "Hedge Receipts" shall mean any amounts receivable by the Issuer calculated as interest on the related notional amount under a Qualified Hedge Agreement. "Improvement" or "Capital Improvement" shall mean such buildings, structures, equipment, and land or interests in land and such renewals, replacements, additions, extensions and betterments, other than ordinary maintenance and repairs, as may be deemed necessary or desirable by the Issuer to develop or maintain the safe, S secure, competitive, efficient operation of the Airport. 0 "Initial Rating Requirement" shall mean, with respect to Counterparties to Qualified Hedge Agreements, "A-" or better by Standard & Poor's and "AY or better by Moody's. "Insurance Consultant" shall mean such Person recognized and qualified in U) surveying risks and recommending insurance coverage for such facilities as the Airport facilities and for organizations engaged in such operations as those to be conducted by the Issuer at the Airport, at the time retained by the Issuer to perform the acts and carry out the duties as herein provided for such Insurance Consultant or the risk management department or officer of the Issuer if the Issuer determines by resolution that such � department or officer meets the criteria set forth above, which resolution shall remain in N1 CN effect until repealed. 00 "Insurer" shall mean as to any particular Series of Bonds, the Person (other than a Credit Bank) providing a municipal bond insurance or guaranty policy, as designated in the Supplemental Resolution providing for the issuance of such Bonds. W "Interest Account" shall mean the separate account in the Sinking Fund M established pursuant to Section 4.04(C) hereof. L- U) "Interest Date" or "interest payment date" shall be such date or dates as shall be provided by Supplemental Resolution of the Issuer with respect to a Series of Bonds. "Investment Earnings" shall mean all income and earnings derived from the investment of moneys in the funds and accounts established hereunder, other than the Construction Fund, the PFC Account, the PFC Capital Improvement Fund and the Rebate Fund. "Issuer" or "County" shall mean Monroe County, Florida. "Kroll" shall mean Kroll Bond Rating Agency, LLC, and any assigns and successors. 7 Packet Pg. 2192 1.9.a "Maximum Annual Debt Service" shall mean the largest aggregate amount of the Debt Service becoming due in any Bond Year in which Bonds are Outstanding. "Maximum Interest Rate" shall mean, with respect to any particular Variable Rate Bonds, a numerical rate of interest, which shall be set forth in the Supplemental Resolution of the Issuer delineating the details of such Bonds, that shall be the maximum rate of interest such Bonds may at any particular time bear. "Mayor" shall mean the Mayor of the Governing Body, or, in his or her absence or unavailability, the Mayor Pro Tem of the Governing Body. "Moody's" shall mean Moody's Investors Service, and any assigns and successors thereto. "Net Revenues" shall mean Gross Revenues less Operation and Maintenance 0 Costs. a� U) "Operation and Maintenance Costs" shall mean any and all costs incurred by the Issuer in operating, maintaining and administering the Airport, including, but not , limited to, the general administrative and legal costs of the Issuer related to operation, maintenance, management, security and development of the Airport; costs associated with equipment, vehicles, supplies, materials, services and support for the operation, CN maintenance, management, security and development of the Airport; any costs of Ci litigation or a legal judgment against the Issuer; all costs incurred in planning or applying N1 00 for, obtaining, maintaining and defending permits; accounting, legal and engineering C expenses; ordinary and current rentals of equipment or other property; refunds of moneys lawfully due to others; payments to pension, retirement, health and hospitalization funds; U) payments in lieu of taxes or franchise fees or impact fees; and fees for management of the W Airport or any portion thereof, all to the extent properly attributable to the Airport in accordance with generally accepted accounting principles applicable to publicly owned airports similar to the Airport; but does not include any costs or expenses in respect of original construction or improvement other than expenditures necessary to prevent an interruption or continuance of an interruption of service or of Gross Revenues or minor capital expenditures necessary for the proper and economical operation or maintenance of the Airport, or any accruals required to be recognized with respect to pension, retirement, health and hospitalization funds that do not require or result in the expenditure of cash, or any provision for interest, depreciation, amortization or similar charges, or any loss resulting from the valuation of investment securities, Hedge Agreements at market value and any other loss that does not require or result in the expenditure of cash. "Operation and Maintenance Fund" shall mean the fund created pursuant to Section 4.04(B) hereof. 8 Packet Pg. 2193 1.9.a "Operation and Maintenance Payment Account" shall mean the separate account in the Operation and Maintenance Fund established pursuant to Section 4.04(B) hereof. "Operation and Maintenance Reserve Account" shall mean the separate account in the Operation and Maintenance Fund established pursuant to Section 4.04(B) hereof. "Operation and Maintenance Reserve Requirement" shall mean an amount equal to 25% of the Operation Maintenance Costs for the then current Fiscal Year as set S forth in the corresponding Annual Budget. 0 "Outstanding," when used with reference to Bonds and as of any particular date, shall describe all Bonds theretofore and thereupon being authenticated and delivered except, (1) any Bond in lieu of which other Bond or Bonds have been issued under agreement to replace lost, mutilated or destroyed Bonds, (2) any Bond surrendered by the Holder thereof in exchange for other Bond or Bonds under Sections 2.04 and 2.06 hereof, (3) Bonds deemed to have been paid pursuant to Section 9.01 hereof and (4) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity. "Passenger Facility Charges" or "PFCs" shall mean the passenger facility CN charges relating to the Airport authorized to be charged by the Issuer from time to time CNi CNI under the PFC Act and the PFC Regulations. 00 "Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to Supplemental Resolution and its successor or assigns, and any other Person which may at any time be substituted in its place pursuant to Supplemental Resolution. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization, governmental entity or U) other legal entity. "PFC Account" shall mean the separate account established in the Revenue Fund a established pursuant to Section 4.04(A) hereof. "PFC Act" shall mean the Aviation Safety and Capacity Expansion Act of 1990 (now codified as 49 U.S. §40117), as amended or replaced from time to time. "PFC Authority" shall mean the FAA's Records of Decision, as the same may be amended from time to time, issued by the FAA relating to Passenger Facility Charges imposed or to be imposed by the Issuer at the Airport. "PFC Capital Improvement Fund" shall mean the fund established pursuant to Section 4.04(E) of this Resolution. 9 Packet Pg. 2194 1.9.a "PFC Improvements" shall mean Improvements made to the Airport for which PFCs may be used under the PFC Act, the PFC Regulations and PFC Authority to fund such Improvements or related indebtedness. "PFC Regulations" shall mean Part 158 of the Federal Aviation Regulations (14 C.F.R. Part 158), as amended from time to time, and any other regulation(s) issued with respect to the PFC Act. "PFC Revenues" shall mean all revenues received by the Issuer from time to time from the Passenger Facility Charges imposed by the Issuer at the Airport pursuant to the PFC Act, PFC Regulations and PFC Authority, including any investment income with respect thereto, and including proceeds thereof and gains from sales of investments after 6 such revenues have been remitted to the Issuer as provided in the PFC Regulations. "Pledged Funds" shall mean, (1) the Net Revenues, (2) Eligible PFC Revenues, (3) any Hedge Receipts, and (4) until applied in accordance with the provisions of this Resolution, all moneys, including investments thereof, in the funds and accounts established hereunder, except (A) moneys in the PFC Account and the PFC Capital Improvement Fund (but only to the extent not legally available to pay debt service on the Bonds) and the Rebate Fund, (B) moneys in any fund or account to the extent such moneys shall be required to pay the Operation and Maintenance Costs in accordance with CN the terms of the Resolution, and (C) moneys on deposit in a subaccount of the Reserve Q Account to the extent moneys on deposit therein shall be pledged solely for the payment CNi of the Series of Bonds for which it was established in accordance with the provisions 00 hereof. A Supplemental Resolution may provide for additional items to be included as Pledged Funds for any Series of Bonds. U) 0 "Policy Costs" shall mean, collectively, the repayment of draws, reasonable expenses and interest related to a Reserve Account Insurance Policy and/or Reserve 0 Account Letter of Credit. a� U) "Prerefunded Obligations" shall mean any bonds or other obligations of any 2 state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (1) which are (A) not callable prior to maturity or (B) as to which irrevocable instructions have been given to the fiduciary for such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (2) which are fully secured as to principal, redemption premium, if any, and interest by a fund held by a fiduciary consisting only of cash or Federal Securities, secured in the manner set forth in Section 9.01 hereof, which fund may be applied only to the payment of such principal of, redemption premium, if any, and interest on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as the case may be, (3) as to which the principal of and interest on the Federal Securities, which have been deposited in such fund along with any cash on 10 Packet Pg. 2195 1.9.a deposit in such fund are sufficient to pay principal of, redemption premium, if any, and interest on the bonds or other obligations on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in clause (1) above and are not available to satisfy any other claims, including those against the fiduciary holding the same, and (4) which are rated in the highest rating category (without regard to gradations, such as "plus" or "minus" of such categories) of two of the Rating Agencies. "Principal Account" shall mean the separate account in the Sinking Fund established pursuant to Section 4.04(C) hereof. "Projects" shall mean any structure, property or facility which the Issuer from 0 time to time may determine to construct or acquire as part of the Airport, together with all W equipment, structures, facilities and other property necessary or appropriate in connection therewith which are financed in whole or in part with indebtedness secured by this o Resolution, as such Projects may be generally described in a Supplemental Resolution and more particularly described in the plans and specifications on file with the Issuer. "Qualified Hedge Agreement" shall mean a Hedge Agreement with a Counterparty that meets the Initial Rating Requirement at the time it was entered. "Rating Agencies" means Fitch, Kroll, Moody's and Standard & Poor's. CN CN i "Rebate Fund" shall mean the Rebate Fund established pursuant to Section `Ni 00 4.04(F) hereof. "Redemption Price" shall mean, with respect to any Bond or portion thereof, the 0 principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or this Resolution. 0 "Refunding Securities" shall mean Federal Securities and Prerefunded Obligations. "Registrar" shall mean any registrar for the Bonds appointed by or pursuant to Supplemental Resolution and its successors and assigns, and any other Person which may at any time be substituted in its place pursuant to Supplemental Resolution. "Reserve Account" shall mean the separate account in the Sinking Fund established pursuant to Section 4.04(C) hereof. "Reserve Account Insurance Policy" shall mean the insurance policy deposited in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to Section 4.05(D)(4) hereof. 11 Packet Pg. 2196 1.9.a "Reserve Account Letter of Credit" shall mean a letter of credit or line of credit or other credit facility (other than a Reserve Account Insurance Policy) deposited in the Reserve Account in lieu of or in partial substitution for cash on deposit therein pursuant to Section 4.05(D)(4) hereof. "Reserve Account Requirement" shall mean, as of any date of calculation for the Reserve Account or any subaccount therein, an amount equal to the lesser of (1) Maximum Annual Debt Service for all Outstanding Bonds secured thereby, (2) 125% of the average Debt Service for each Bond Year for all Outstanding Bonds secured thereby, or (3) the maximum amount of Bond proceeds which may be deposited to the Reserve Account without subjecting the same to yield restriction under the Code, or causing interest on any of the Bonds secured thereby (other than Taxable Bonds) to be included in a gross income for purposes of federal income taxation or otherwise violating applicable W provisions of the Code; provided, however, the Issuer may establish by Supplemental Resolution a different Reserve Account Requirement for a subaccount of the Reserve °0 Account which separately secures a Series of Bonds pursuant to Section 4.05(D)(4) U) hereof, which Reserve Account Requirement may be $0.00. In computing the Reserve Account Requirement in respect of a Series of Bonds that constitutes Variable Rate Bonds, the interest rate on such Bonds shall be assumed to be (A) if such Variable Rate Bonds have been Outstanding for at least 12 months prior to the date of calculation, the highest interest rate borne by such Variable Rate Bonds during the preceding 12 month N period, and (B) if such Variable Rate Bonds have not been Outstanding for at least 12 C14i months prior to the date of calculation, the Bond Buyer Revenue Bond Index most C00 recently published prior to the time of calculation. The Reserve Account Requirement 9= shall be calculated as of September 30 of each year with respect to the next succeeding Bond Year. "Resolution" shall mean this Resolution, as the same may from time to time be amended, modified or supplemented by Supplemental Resolution. 0 "Revenue Account" shall mean the separate account in the Revenue Fund established pursuant to Section 4.04(A) hereof. "Revenue Fund" shall mean the fund established pursuant to Section 4.04(A) E hereof. c� "Serial Bonds" shall mean all of the Bonds other than the Term Bonds. "Series" shall mean all the Bonds delivered on original issuance in a simultaneous transaction and identified pursuant to Section 2.01 hereof or a Supplemental Resolution authorizing the issuance by the Issuer of such Bonds as a separate Series, regardless of variations in maturity, interest rate, Sinking Fund Installments or other provisions. 12 Packet Pg. 2197 1.9.a "Sinking Fund" shall mean the fund established pursuant to Section 4.04(C) hereof. "Sinking Fund Installment" shall mean an amount designated as such by Supplemental Resolution of the Issuer and established with respect to the Term Bonds. "Special Purpose Facilities" shall mean any projects, improvements or facilities determined by the Issuer to be useful in the conduct of the operations of the Airport that are financed with the proceeds of Special Purpose Facilities Bonds. "Special Purpose Facilities Bonds" shall mean indebtedness described in 2 Section 6.04 thereof and which are issued for the purpose of paying the cost of Special 0 Purpose Facilities or refunding bonds previously issued for such purpose, which bonds shall not be payable from or secured by the Pledged Funds. 0 00 "Standard & Poor's" shall mean S&P Global Ratings, a business of Standard & Poor's Financial Services LLC, and any assigns and successors thereto. U) "State" shall mean the State of Florida. , "Subordinated Indebtedness" shall mean that indebtedness of the Issuer, subordinate and junior to the Bonds, issued in accordance with the provisions of Section CN 6.01 hereof. CN i CN i "Supplemental Resolution" shall mean any resolution of the Issuer amending or 00 supplementing this Resolution adopted and becoming effective in accordance with the 2 terms of Sections 8.01, 8.02 and 8.03 hereof. U) "Taxable Bonds" means those Bonds, other than Federal Subsidy Bonds, which state, in the body thereof, that the interest income thereon is includable in the gross income of the Holder thereof for federal income taxation purposes or that such interest is subject to federal income taxation. Except as otherwise provided herein, Taxable Bonds shall not include Federal Subsidy Bonds. "Term Bonds" shall mean those Bonds which shall be designated as Term Bonds hereby or by Supplemental Resolution of the Issuer. "Term Bonds Redemption Account" shall mean the separate account in the Sinking Fund established pursuant to Section 4.04(C) hereof. "Transfer Amount" shall mean the lesser of (1) the sum of (A) amounts on deposit in the Airport Surplus Fund on the last day of the Fiscal Year, to the extent such amounts are not restricted to other uses, plus (B) amounts paid from the Airport Surplus Fund during such Fiscal Year toward Operation and Maintenance Costs and Debt 13 Packet Pg. 2198 1.9.a Service, minus (C) amounts deposited into the Airport Surplus Fund in such Fiscal Year, or (2) twenty five percent (25%) of Debt Service payable in such Fiscal Year. "Variable Rate Bonds" shall mean Bonds issued with a variable, adjustable, convertible or other similar rate which is not fixed in percentage for the entire term thereof at the date of issue. The terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar terms, shall refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption S of this Resolution. 0 Words importing the masculine gender include the feminine gender, and vice versa. 0 00 Words importing the singular number include the plural number, and vice versa. SECTION 1.02. AUTHORITY FOR RESOLUTION. This Resolution is adopted pursuant to the provisions of the Act. The Issuer has ascertained and hereby determined that adoption of this Resolution is necessary to carry out the powers, purposes and duties expressly provided in the Act, that each and every matter and thing as to which provision is made herein is necessary in order to carry out and effectuate the purposes of CN the Issuer in accordance with the Act and to carry out and effectuate the plan and purpose CNi of the Act, and that the powers of the Issuer herein exercised are in each case exercised in CNi 00 accordance with the provisions of the Act and in furtherance of the purposes of the Issuer. SECTION 1.03. RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holders of the Bonds and shall be deemed to be and o shall constitute a contract between the Issuer, the Holders from time to time of the Bonds and any Insurer or Credit Bank. The pledge made in this Resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Holders of any and all of said Bonds and any Insurer or Credit Bank, but only in accordance with the terms hereof. All of the Bonds, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or pursuant to this Resolution. SECTION 1.04. FINDINGS. It is hereby ascertained, determined and declared: (A) That the Issuer owns, operates and maintains the Airport for the benefit of the citizens of Monroe County, Florida. 14 Packet Pg. 2199 1.9.a (B) That it is necessary and desirable and in the best interests of the Issuer to borrow moneys from time to time to improve, expand and maintain the Airport and to refinance certain indebtedness related to the Airport. (C) The Bonds issued hereunder shall be secured by the Pledged Funds as provided herein and such Pledged Funds are not currently pledged or encumbered to any other indebtedness other than the Issuer's debt obligations under a Line of Credit Agreement between the Issuer and PNC Bank, National Association, dated as of July 1, 2021, which debt obligations will be paid in full upon the issuance of the initial Series of Bonds hereunder. (D) That the estimated Gross Revenues and Eligible PFC Revenues to be 0 derived in each year hereafter from the operation of the Airport will be sufficient to pay W all the Operation and Maintenance Costs, the principal of and interest on the Bonds to be issued pursuant to this Resolution, as the same become due, and all other payments o provided for in this Resolution. (E) That the principal of and interest on the Bonds to be issued pursuant to this Resolution, and all other payments provided for in this Resolution will be paid solely from the Pledged Funds in accordance with the terms hereof, and the Issuer may not be w compelled by any Person to exercise the ad valorem taxing power of the Issuer or use ad C14 valorem tax revenues to pay the principal of and interest on the Bonds to be issued Q pursuant to this Resolution, or to make any other payments provided for in this CN CN Resolution, and the Bonds shall not constitute a lien upon the Airport or upon any other 00 property whatsoever of or in the Issuer, other than the Pledged Funds. 0 U) [Remainder of page intentionally left blank] U) c� 15 Packet Pg. 2200 1.9.a ARTICLE II AUTHORIZATION, TERMS,EXECUTION AND REGISTRATION OF BONDS SECTION 2.01. AUTHORIZATION OF BONDS. This Resolution creates an issue of Bonds of the Issuer to be designated as "Monroe County, Florida Airport Revenue Bonds (Key West International Airport)" which may be issued in one or more Series as hereinafter provided. The aggregate principal amount of the Bonds which may be executed and delivered under this Resolution is not limited except as is or may hereafter be provided in this Resolution or as limited by the Act. The Bonds may, if and when authorized by the Issuer pursuant to this Resolution through the adoption of a Supplemental Resolution, be issued in one or more Series, with 0 such further appropriate particular designations added to or incorporated in such title for the Bonds of any particular Series as the Issuer may determine and as may be necessary to distinguish such Bonds from the Bonds of any other Series. Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. The Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or rates not exceeding the maximum rate permitted by law; and shall be payable in lawful money of the United States of America on such dates; all as determined by Supplemental Resolution of the Issuer. N N The Bonds shall be issued in such denominations and such form, whether coupon CNI or registered; shall be dated such date; shall bear such numbers; shall be payable at such 001 place or places; shall contain such redemption provisions; shall have such Paying Agents 0 and Registrars; shall mature in such years and amounts; and the proceeds shall be used in such manner; all as determined by Supplemental Resolution of the Issuer. The Issuer may issue Bonds which may be secured by a Credit Facility or by a Bond Insurance Policy of an Insurer all as shall be determined by Supplemental Resolution of the Issuer. The Governing Body may delegate approval of the terms, details and sale of a Series of Bonds to an Authorized Issuer Officer pursuant to a Supplemental Resolution. SECTION 2.02. EXECUTION OF BONDS. The Bonds shall be executed in the name of the Issuer with the manual or facsimile signature of the Mayor and the official seal of the Issuer shall be imprinted thereon, attested and countersigned with the manual or facsimile signature of the Clerk. In case any one or more of the officers who shall have signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease to be such officer of the Issuer before the Bonds so signed and sealed have been actually sold and delivered such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bond shall hold the 16 Packet Pg. 2201 1.9.a proper office of the Issuer, although at the date of such Bond such person may not have held such office or may not have been so authorized. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Resolution, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and delivered. SECTION 2.03. AUTHENTICATION. No Bond of any Series shall be secured hereunder or entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall be manually endorsed on such Bond a certificate of authentication by the Registrar or such other entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The form of such certificate shall be substantially in the form provided in Section 2.07 hereof. M SECTION 2.04. TEMPORARY BONDS. Until the definitive Bonds of any Series are prepared, the Issuer may execute, in the same manner as is provided in Section 2.02, and deliver, upon authentication by the Registrar pursuant to Section 2.03 hereof, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary CN Bond or Bonds are issued, in denominations authorized by the Issuer by subsequent Q resolution and with such omissions, insertions and variations as may be appropriate to C temporary Bonds. The Issuer, at his own expense, shall prepare and execute definitive 00 Bonds, which shall be authenticated by the Registrar. Upon the surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall 0 deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as 0 definitive Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith canceled by the Registrar. SECTION 2.05. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new < Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses as the 17 Packet Pg. 2202 1.9.a Issuer and the Registrar may incur. All Bonds so surrendered shall be canceled by the Registrar. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. Any such duplicate Bonds issued pursuant to this Section 2.05 shall constitute original contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights as to lien on the Pledged Funds to the same extent as all other Bonds issued hereunder. 6 U) SECTION 2.06. INTERCHANGEABILITY, NEGOTIABILITY AND TRANSFER. Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or M his attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series and maturity of any other authorized denominations. The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the Uniform Commercial Code of the State of Florida, subject to the provisions for registration and transfer contained in this Resolution Q and in the Bonds. So long as any of the Bonds shall remain Outstanding, the Issuer shall Ni maintain and keep, at the office of the Registrar, books for the registration and transfer of 00 the Bonds. Each Bond shall be transferable only upon the books of the Issuer, at the office of the Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder thereof in person or by his attorney duly authorized in writing upon surrender 0 thereof together with a written instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or his duly authorized attorney. Upon the transfer of any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and Series and maturity as the surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer may deem and treat the Person in whose name any Outstanding Bond shall be registered upon the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid and neither the Issuer nor the Registrar nor any 18 Packet Pg. 2203 1.9.a Paying Agent or other fiduciary of the Issuer shall be affected by any notice to the contrary. Except as provided by Supplemental Resolution in the case of Variable Rate Bonds, the Registrar, in any case where it is not also the Paying Agent in respect to any Series of Bonds, forthwith (A) following the fifteenth day prior to an Interest Date for such Series; (B) following the fifteenth day next preceding the date of first mailing of notice of redemption of any Bonds of such Series; and (C) at any other time as reasonably requested by the Paying Agent of such Series, shall certify and furnish to such Paying Agent the names, addresses and holdings of Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Bond shall effect payment of interest on such Bonds by mailing a check to the Holder entitled thereto or may, in lieu thereof, transmit such payment by bank wire transfer or other electronic means for the account of such Holder. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Issuer shall execute and deliver Bonds and the Registrar shall authenticate such Bonds in accordance with the provisions of this Resolution. Execution of Bonds by the Mayor and the Clerk for purposes of exchanging, replacing or transferring Bonds may occur at the time of the original delivery of the Series of which such Bonds are a part. All Bonds surrendered in any such exchanges or transfers shall be held by the Registrar in C14 safekeeping until directed by the Issuer to be canceled by the Registrar. For every such Q exchange or transfer of Bonds, the Issuer or the Registrar may make a charge sufficient to C reimburse it for any tax, fee, expense or other governmental charge required to be paid 00 with respect to such exchange or transfer. Except as provided by Supplemental Resolution in the case of Variable Rate Bonds, the Issuer and the Registrar shall not be 0 obligated to make any such exchange or transfer of Bonds of any Series during the 15 days next preceding an Interest Date on the Bonds of such Series (other than Capital Appreciation Bonds), or, in the case of any proposed redemption of Bonds of such Series, then, for the Bonds subject to redemption, during the 15 days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. The Issuer may elect to issue any Bonds as uncertificated registered public obligations (not represented by instruments), commonly known as book-entry E obligations, provided it shall establish a system of registration therefor by Supplemental Resolution. SECTION 2.07. FORM OF BONDS. The text of the Bonds, except for Capital Appreciation Bonds and Variable Rate Bonds, the form of which shall be provided by Supplemental Resolution of the Issuer, shall be in substantially the following form with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor or the Clerk prior to the issuance thereof (which necessity 19 Packet Pg. 2204 1.9.a and/or desirability and approval shall be presumed by such officer's execution of the Bonds and the Issuer's delivery of the Bonds to the purchaser or purchasers thereof): [Remainder of page intentionally left blank] 0 U) 0 U) i CN CN CD CN i CN CO 0 U) 0 U) M c� 20 Packet Pg. 2205 1.9.a No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA MONROE COUNTY, FLORIDA AIRPORT REVENUE BONDS (KEY WEST INTERNATIONAL AIRPORT), SERIES Date of Interest Rate Maturity Date Original Issue CUSIP U) 0 Registered Holder: Principal Amount: MONROE COUNTY, FLORIDA, a political subdivision of the State of Florida CN (the "Issuer"), for value received, hereby promises to pay, solely from the Pledged Funds CNi hereinafter described, to the Registered Holder identified above, or registered assigns as CNi hereinafter provided, on the Maturity Date identified above, the Principal Amount a identified above and to pay interest on such Principal Amount from the Date of Original Issue identified above or from the most recent interest payment date to which interest has U) been paid at the Interest Rate per annum identified above on and of each year commencing until such Principal Amount shall have been paid, except as the provisions hereinafter set forth with respect to redemption prior to maturity may be or become applicable hereto. Such Principal Amount and interest and the premium, if any, on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Such Principal Amount and the premium, if any, on this Bond, are payable at the designated corporate trust office of , as Paying Agent. Payment of each installment of interest shall be made to the person in whose name this Bond shall be registered on the registration books of the Issuer maintained by , as Registrar, at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding each interest payment date and shall be paid by a check of such Paying Agent mailed to such Registered Holder at the address appearing on such registration books or by bank wire transfer for the account of such 21 Packet Pg. 2206 1.9.a Holder. Interest shall be calculated on the basis of a 360-day year of twelve 30-day months. This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $ (the 'Bonds") of like date, tenor and effect, except as to maturity date, interest rate, registered holder, denomination and number, issued to finance in and for the Issuer, under the authority of and in full compliance with the Constitution and laws of the State of Florida, particularly Chapter 125, Part I, and Chapter 332, Florida Statutes, and other applicable provisions of law (collectively, the "Act"), and Resolution No. duly adopted by the Board of County Commissioners of the Issuer on August 17, 2022, as supplemented (the "Resolution"), and is subject to all the terms and conditions of the Resolution. All capital terms used in a this Bond not otherwise defined herein shall have the meanings ascribed thereto in the Resolution. 0 This Bond and the interest hereon are payable solely from and secured by a lien upon and a pledge of (1) the Net Revenues to be derived from the operation of the Airport, (2) Eligible PFC Revenues, and (3) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in the funds and accounts established under the Resolution, except (A) moneys in the PFC Account, the PFC Capital Improvement Fund (to the extent not legally available to pay debt service on CN the Bonds) and the Rebate Fund, (B) moneys in any fund or account to the extent such Q moneys shall be required to pay the Operation and Maintenance Costs in accordance with C the terms of the Resolution, and (C) moneys on deposit in a subaccount of the Reserve 00 Account established by the Resolution to the extent such moneys shall be pledged solely for the payment of the Series of Bonds for which it was established in accordance with the provisions of the Resolution (collectively, the "Pledged Funds"), subject in each case to the application thereof for the purposes and on the conditions permitted by the Resolution. It is expressly agreed by the Registered Holder of this Bond that the full faith 0 and credit of the Issuer are not pledged to the payment of the principal of, premium, if any, and interest on this Bond and that such Holder shall never have the right to require or compel the exercise of the taxing power of the Issuer to the payment of such principal, ; premium, if any, and interest. This Bond and the obligation evidenced hereby shall not constitute a lien upon the Airport or any other property of the Issuer, but shall constitute a lien only on, and shall be payable solely from, the Pledged Funds in accordance with the terms of the Resolution. Obligations may be issued by the Issuer from time to time on parity with the Bonds pursuant to the terms of the Resolution. This Bond is transferable in accordance with the terms of the Resolution only upon the books of the Issuer kept for that purpose at the designated corporate trust office of the Registrar by the Registered Holder hereof in person or by his attorney duly authorized in writing, upon the surrender of this Bond, together with a written instrument of transfer satisfactory to the Registrar duly executed by the Registered Holder or his 22 Packet Pg. 2207 1.9.a attorney duly authorized in writing, and thereupon a new Bond or Bonds in the same aggregate principal amount shall be issued to the transferee in exchange therefor, and upon the payment of the charges, if any, therein prescribed. The Bonds are issuable in the form of fully registered Bonds in the denomination of $ and any integral multiple thereof, not exceeding the aggregate principal amount of the Bonds. The Issuer, the Registrar and any Paying Agent may treat the Registered Holder of this Bond as the absolute owner hereof for all purposes, whether or not this Bond shall be overdue, and shall not be affected by any notice to the contrary. The Issuer shall not be obligated to make any exchange or transfer of the Bonds during the 15 days next preceding an interest payment date or, in the case of any proposed redemption of the Bonds, then, for the 0 Bonds subject to such redemption, during the 15 days next preceding the date of the first 0 mailing of notice of such redemption and continuing to the redemption date. The Issuer has established a book-entry system of registration for the Bonds. Except as specifically provided otherwise in the Resolution, an agent will hold this Bond L_ on behalf of the beneficial owner hereof. By acceptance of a confirmation of purchase, U) delivery or transfer, the beneficial owner of this Bond shall be deemed to have agreed to such arrangement. ' (INSERT REDEMPTION PROVISIONS) CN CN Redemption of this Bond under the preceding paragraphs shall be made as CNi provided in the Resolution upon notice given by first class mail sent at least 20 days prior CNi to the redemption date to the Registered Holder hereof at the address shown on the C registration books maintained by the Registrar; provided, however, that failure to mail notice to the Registered Holder hereof, or any defect therein, shall not affect the validity 0 of the proceedings for redemption of other Bonds as to which no such failure or defect W has occurred. In the event that less than the full principal amount hereof shall have been called for redemption, the Registered Holder hereof shall surrender this Bond in exchange for one or more Bonds in an aggregate principal amount equal to the unredeemed portion of principal, as provided in the Resolution. Reference to the Resolution and any and all resolutions supplemental thereto and modifications and amendments thereof and to the Act is made for a description of the pledge and covenants securing this Bond, the nature, manner and extent of enforcement of such pledge and covenants, and the rights, duties, immunities and obligations of the Issuer. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, in regular and due form and time as required by the laws and Constitution of the State of Florida applicable thereto, and that the issuance of the Bonds does not violate any constitutional or statutory limitations or provisions. 23 Packet Pg. 2208 1.9.a Neither the members of the Board of County Commissioners of the Issuer nor any person executing this Bond shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Registrar. IN WITNESS WHEREOF, Monroe County, Florida has issued this Bond and has caused the same to be executed by the manual or facsimile signature of the Mayor of its Board of County Commissioners, and by the manual or facsimile signature of the Clerk to such Board, and its seal or a facsimile thereof to be affixed or reproduced hereon, all as of the Date of Original Issue. 0 a� MONROE COUNTY, FLORIDA 0 (SEAL) Mayor, Board of County Commissioners w CN ATTESTED AND COUNTERSIGNED: CN a CN i CN 00 Clerk of the Circuit Court and Controller 0 and ex-officio Clerk to the Board of County Commissioners of Monroe County, Florida 0 APPROVED AS TO FORM AND LEGAL SUFFICIENCY: c� County Attorney 24 Packet Pg. 2209 1.9.a CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the issue described in the within-mentioned Resolution. DATE OF AUTHENTICATION: Registrar 0 0 By: Authorized Officer 0 U) i CN CN CN 00 i 0 U) 0 U) M c� 25 Packet Pg. 2210 1.9.a Unless this certificate is presented by an authorized representative of The Depository Trust Company to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by the authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. FOR VALUE RECEIVED, the undersigned sells, assigns and transfers to Insert Social Security or Other Identifying Number of Assignee 0 (Name and Address of Assignee) U) the within bond and does hereby irrevocably constitute and appoint as attorneys to register the transfer of the said bond on the books kept for registration thereof, with full power of substitution in the � premises. C1400 i Dated: Signature guaranteed: 0 NOTICE: Signature must be guaranteed by NOTICE: The signature to this assignment an institution which is a participant in the must correspond with the name of the Securities Transfer Agent Medallion Registered Holder as it appears upon the Program (STAMP) or similar program. face of the within bond in every particular, without alteration or enlargement or any change whatever and the Social Security or other identifying number of such assignee must be supplied. 26 Packet Pg. 2211 1.9.a The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM --as tenants in common TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT -- (Cust.) ao Custodian for U) under Uniform Transfers to Minors Act of (State) w Additional abbreviations may also be used though not in list above. CN CN i CN 00 0 U) 0 U) E 27 Packet Pg. 2212 1.9.a ARTICLE III REDEMPTION OF BONDS SECTION 3.01. PRIVILEGE OF REDEMPTION. The terms of this Article III shall apply to redemption of Bonds other than Capital Appreciation Bonds or Variable Rate Bonds. The terms and provisions relating to redemption of Capital Appreciation Bonds and Variable Rate Bonds shall be provided by Supplemental Resolution. The provisions of this Article III may also be modified pursuant to Supplemental Resolution to accommodate any redemption provisions with respect to Federal Subsidy Bonds. Specific redemption terms for any Series of Bonds shall be determined pursuant to Supplemental Resolution. SECTION 3.02. SELECTION OF BONDS TO BE REDEEMED. The Bonds shall be redeemed only in authorized denominations and integral multiples thereof. The Issuer shall, at least 25 days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar), notify the Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the Outstanding Bonds of a single maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected not more than 45 days and not less than 20 days prior to the redemption date by the Registrar from the Outstanding Bonds of CN the maturity or maturities designated by the Issuer by such method as the Registrar shall Q deem fair and appropriate and which may provide for the selection for redemption of CCN Bonds or portions of Bonds in principal amounts of$5,000 and integral multiples thereof. 00 If less than all of a Term Bond is to be redeemed the aggregate principal amount to be redeemed shall be allocated to the Sinking Fund Installments on a pro-rata basis unless the Issuer, in its discretion, designates a different allocation. If less than all of the Outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the �o Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. SECTION 3.03. NOTICE OF REDEMPTION. Notice of such redemption shall specify the Bond or Bonds (or portions thereof) to be redeemed and the date and place for redemption, shall be given by the Registrar on behalf of the Issuer, and (A) shall be filed with the Paying Agents of such Bonds, and (B) shall be mailed first class, postage prepaid, at least 20 days nor more than 45 days prior to the redemption date to all Holders of Bonds to be redeemed at their addresses as they appear on the registration books kept by the Registrar as of the date of mailing of such notice. Failure to mail such notice to the Holders of the Bonds to be redeemed, or any defect therein, shall not affect the proceedings for redemption of Bonds as to which no such failure or defect has 28 Packet Pg. 2213 1.9.a occurred. Failure of any Holder to receive any notice mailed as herein provided shall not affect the proceedings for redemption of such Holder's Bonds. Each notice of redemption shall state: (1) the CUSIP numbers and any other distinguishing number or letter of all Bonds being redeemed, (2) the original issue date of such Bonds, (3) the maturity date and rate of interest borne by each Bond being redeemed, (4) the redemption date, (5) the Redemption Price, (6) the date on which such notice is mailed, (7) if less than all Outstanding Bonds are to be redeemed, the certificate number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond to be redeemed, (8) that on such redemption date there shall become due and payable upon each Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portions of the principal thereof in the case of Bonds to be redeemed in part only, together with interest accrued thereon to the redemption date, and that from and after such date interest thereon shall cease to accrue and be payable, (9) that the Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the Redemption Price at the designated office of the Registrar at an address U) specified, (10) the name and telephone number of a Person designated by the Registrar to be responsible for such redemption, (11) unless sufficient funds have been set aside by the Issuer for such purpose prior to the mailing of the notice of redemption, that such redemption is conditioned upon the deposit of sufficient funds for such purpose on or prior to the date set for redemption, and (12) any other conditions that must be satisfied CN prior to such redemption. Ci CN i In addition to the mailing of the notice described above, each notice of redemption 00 and payment of the Redemption Price shall be sent to the Electronic Municipal Market 2 Access system maintained by the Municipal Securities Rulemaking Board within ten (10) 0 days of the mailing of the notice of redemption to Bondholders; provided, however, the failure to provide such further notice of redemption or to comply with the terms of this paragraph shall not in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed above. The Issuer may provide that a notice of redemption may be contingent upon the occurrence of certain condition(s) and that if such condition(s) do not occur, the notice will be rescinded; provided notice of rescission shall be mailed in the manner described E above to all affected Bondholders as soon as practicable. SECTION 3.04. REDEMPTION OF PORTIONS OF BONDS. Any Bond which is to be redeemed only in part shall be surrendered at any place of payment specified in the notice of redemption (with due endorsement by, or written instrument of transfer in form satisfactory to the Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of any authorized denomination, as requested by such Holder in an aggregate 29 Packet Pg. 2214 1.9.a principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered. SECTION 3.05. PAYMENT OF REDEEMED BONDS. Notice of redemption having been given substantially as aforesaid, the Bonds or portions of Bonds so to be redeemed shall (subject to the satisfaction of any conditions specified in the notice), on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar and/or Paying Agent at the appropriate Redemption Price, plus accrued interest. All Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. SECTION 3.06. PURCHASE IN LIEU OF OPTIONAL REDEMPTION. Notwithstanding anything in this Resolution to the contrary, at any time the Bonds are subject to optional redemption pursuant to this Resolution, all or a portion of the Bonds to be redeemed as specified in the notice of redemption, may be purchased by the Paying Agent, as trustee, at the direction of the Issuer, on the date which would be the redemption date if such Bonds were redeemed rather than purchased in lieu thereof at a purchase price equal to the redemption price which would have been applicable to such CN Bonds on the redemption date for the account of and at the direction of the Issuer who Q shall give the Paying Agent, as trustee, notice at least 10 days prior to the scheduled C14 redemption date accompanied by an opinion of Bond Counsel to the effect that such 0 purchase will not adversely affect the exclusion from gross income for federal income tax purposes of interest on such Bonds or any other Outstanding Bonds. In the event the Paying Agent, as trustee, is so directed to purchase Bonds in lieu of optional redemption, no notice to the holders of the Bonds to be so purchased (other than the notice of redemption otherwise required under this Resolution) shall be required, and the Paying Agent, as trustee, shall be authorized to apply to such purchase the funds which would have been used to pay the redemption price for such Bonds if such Bonds had been redeemed rather than purchased. Each Bond so purchased shall not be canceled or discharged and shall be registered in the name of the Issuer. Bonds to be purchased under this Resolution in the manner set forth above which are not delivered to the Paying Agent, as trustee, on the purchase date shall be deemed to have been so purchased and not optionally redeemed on the purchase date and shall cease to accrue interest as to the former holder thereof on the purchase date. [Remainder of page intentionally left blank] 30 Packet Pg. 2215 1.9.a ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION 4.01. BONDS NOT TO BE INDEBTEDNESS OF ISSUER. The Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of any constitutional or statutory provision, but shall be special obligations of the Issuer, payable solely from and secured by a lien upon and pledge of the Pledged Funds, in the manner and to the extent provided in this Resolution. No Holder of any Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond or be entitled to payment of such Bond from any moneys of the Issuer except from the Pledged Funds in the manner and to the extent provided herein. The Bonds and the obligations evidenced thereby shall not constitute a lien upon the Airport or any other property of the Issuer, but shall constitute a lien only on, and shall be payable solely from, the Pledged Funds. o SECTION 4.02. SECURITY FOR BONDS. The payment of the principal of or Redemption Price, if applicable, and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and lien upon the Pledged Funds; provided, however, a Series of Bonds may be further secured by a Credit Facility or Bond Insurance Policy in addition to the security provided herein; and provided further that a Series of Bonds may N be secured independently of any other Series of Bonds by the establishment of a separate Q subaccount in the Reserve Account for such Series of Bonds or by not being secured in i CNI any manner by the Reserve Account as provided in a Supplemental Resolution. The 00 Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal 2 of or Redemption Price, if applicable, and interest on the Bonds in accordance with the 2 provisions hereof. In addition, the Issuer does hereby irrevocably pledge and grant a lien upon the Pledged Funds to the payment of the Policy Costs in accordance with the provisions hereof, provided, however, such pledge and lien shall be junior and subordinate in all respects to the pledge of and lien upon such Pledged Funds granted hereby to the Bondholders. Except as otherwise provided by Supplemental Resolution, the obligation of the Issuer to make Hedge Payments to a Counterparty pursuant to a Qualified Hedge Agreement shall be on parity with the Bonds as to lien on and pledge of the Pledged Funds in accordance with the terms hereof(any other payments related to a Qualified Hedge Agreement, including fees, penalties and termination payments and the obligation of the Issuer to collateralize, shall be Subordinated Indebtedness of the Issuer). < The Pledged Funds shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. SECTION 4.03. CONSTRUCTION FUND. The Issuer covenants and agrees to establish a fund to be known as the "Monroe County, Florida Key West International 31 Packet Pg. 2216 1.9.a Airport Construction Fund," which shall be used only for payment of the Cost of a Project. Moneys in the Construction Fund, until applied in payment of any item of the Cost of a Project in the manner hereinafter provided, shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders. There shall be paid into the Construction Fund the amounts required to be so paid by the provisions of this Resolution, and there may be paid into the Construction Fund, at the option of the Issuer, any moneys received for or in connection with a Project by the Issuer from any other source. The Issuer shall establish within the Construction Fund a separate account for each Project the Cost of which is to be paid in whole or in part out of the Construction Fund. 0 Moneys in such accounts shall be used to pay Costs of Projects. W The proceeds of insurance maintained pursuant to this Resolution against physical loss of or damage to a Project, or of contractors' performance bonds with respect thereto pertaining to the period of construction thereof, shall be deposited into the appropriate account of the Construction Fund. Any moneys received by the Issuer from the State or from the United States of America or any agencies thereof for the purpose of financing part of the Cost of a Project shall be deposited into the appropriate account of the Construction Fund and used in the � same manner as other Bond proceeds are used therein; provided that separate accounts or CNi subaccounts may be established in the Construction Fund for moneys received pursuant 001 to the provisions of this paragraph whenever required by federal or State law; provided, 0 further, any such moneys shall not be subject to the lien and charge in favor of the Holders of the Bonds The Issuer covenants that the acquisition, construction and installation of each Project will be completed without delay and in accordance with sound engineering practices. The Issuer shall make disbursements or payments from the Construction Fund to pay the Cost of a Project upon the filing with the Clerk of certificates and/or documents signed by an Authorized Issuer Officer, stating with respect to each disbursement or payment to be made: (A) the item number of the payment, (B) the name and address of the Person to whom payment is due, (C) the amount to be paid, (D) the account of the Construction Fund from which payment is to be made, (E) the purpose, by general classification, for which payment is to be made, and (F) that (i) each obligation, item of cost or expense mentioned therein has been properly incurred, is in payment of a part of the Cost of a Project and is a proper charge against the account of the Construction Fund from which payment is to be made and has not been the basis of any previous disbursement or payment, or (ii) each obligation, item of cost or expense mentioned therein has been previously paid by the Issuer, is a reimbursement of a part of the Cost of a Project, is a proper charge against the account of the Construction Fund from which payment is made, has not been theretofore reimbursed to the Issuer or 32 Packet Pg. 2217 1.9.a otherwise been the basis of any previous disbursement or payment and the Issuer is entitled to reimbursement thereof. The Clerk shall retain all such certificates and/or documents for such other period of time as required by applicable law. The Clerk shall make available the certificates and/or documents at all reasonable times for inspection by any Holder of any of the Bonds or the agent or representative of any Holder of any of the Bonds. Notwithstanding any of the other provisions of this Section 4.03, to the extent that other moneys are not available therefor, amounts in the Construction Fund derived from proceeds of the Bonds may be applied to the payment of principal of and interest on such Bonds when due. 0 U) The date of completion of the acquisition, construction and equipping of a Project 0 shall be documented by an Authorized Issuer Officer in the appropriate records of the Issuer. Promptly after the date of the completion of a Project, and after paying or making provision for the payment of all unpaid items of the Cost of such Project, the Issuer shall U) transfer the balance of any money in the Construction Fund which shall deposit such moneys in the following order of priority in (A) another account of the Construction Fund for which an Authorized Issuer Officer has determined that there are insufficient moneys present to pay the Cost of the related Project, (B) the Reserve Account, to the extent of a deficiency therein, and (C) such other fund or account established hereunder as shall be CN determined by the Governing Body, provided the Issuer has received an opinion of Bond Q Counsel to the effect that such transfer shall not adversely affect the exclusion, if any, of C interest on the Bonds from gross income for purposes of federal income taxation or shall 0 not otherwise affect the status of any Outstanding Bonds issued as Federal Subsidy Bonds or the Issuer's receipt of Federal Subsidy Payments with respect to any Outstanding Federal Subsidy Bonds.. SECTION 4.04. CREATION OF FUNDS AND ACCOUNTS. The Issuer covenants and agrees to establish the following funds and accounts: (A) The "Monroe County, Florida Key West International Airport Revenue Fund." The Issuer shall maintain two separate accounts in the Revenue Fund: the "Revenue Account" and the "PFC Account." (B) The "Monroe County, Florida Key West International Airport Operation and Maintenance Fund." The Issuer shall maintain two separate accounts in the Operation and Maintenance Fund: the "Operation and Maintenance Payment Account" and the "Operation and Maintenance Reserve Account." (C) The "Monroe County, Florida Key West International Airport Sinking Fund." The Issuer shall maintain four separate accounts in the Sinking Fund: the "Interest Account," the "Principal Account," the "Term Bonds Redemption Account" and the "Reserve Account." 33 Packet Pg. 2218 1.9.a (D) The "Monroe County, Florida Key West International Airport Surplus Fund." (E) The "Monroe County, Florida Key West International Airport PFC Capital Improvement Fund." (F) The "Monroe County, Florida Key West International Airport Rebate Fund." Moneys in the aforementioned funds and accounts (except for moneys in the Rebate Fund), until applied in accordance with the provisions hereof, shall be subject to a 2 lien and charge in favor of the Holders of the Bonds and for the further security of such 0 Holders in accordance with the terms hereof. The Issuer may at any time and from time to time appoint one or more depositaries to hold, for the benefit of the Bondholders, any one or more of the funds and accounts established hereby. Such depositary or depositaries shall perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys to and from each of such funds or accounts as herein set forth, and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the Issuer and its agents and employees. Any such depositary shall be a bank or trust company duly authorized to exercise corporate trust powers and subject to examination by federal or CN state authority, of good standing, and be qualified under applicable State law. N1 i 00 Notwithstanding the foregoing, none of the aforementioned funds and accounts are required to be established prior to the time any such fund or account is required to be funded or otherwise utilized hereunder. SECTION 4.05. DISPOSITION OF GROSS REVENUES AND ELIGIBLE PFC REVENUES. (A) Revenue Fund. Into the Revenue Account, the Issuer shall deposit promptly, as received, all Gross Revenues. Into the PFC Account, the Issuer shall deposit promptly, as received, all PFC Revenues. (B) Operation and Maintenance Payment Account. Moneys in the Revenue Account shall first be used each month to deposit in the Operation and Maintenance Payment Account such sums as are necessary to pay Operation and Maintenance Costs for the ensuing month; provided the Issuer may transfer moneys from the Revenue Account or the Airport Surplus Fund or the Operation and Maintenance Reserve Account to the Operation and Maintenance Payment Account at any time to pay Operation and Maintenance Costs to the extent there is a deficiency in the Operation and Maintenance Payment Account for such purpose. Amounts in the Operation and Maintenance 34 Packet Pg. 2219 1.9.a Payment Account shall be paid out from time to time by the Issuer for Operation and Maintenance Costs. (C) PFC Account. Moneys in the PFC Account shall be applied on or before the 25' day of each month in the following order of priority: (1) Sinking Fund. The Issuer shall deposit or credit to the Interest Account, the Principal Account and the Term Bonds Redemption Account such amounts as it shall determine pursuant to its Annual Budget and which are Eligible PFC Revenues. (2) PFC Capital Improvement Fund. The remainder of moneys in the 0 PFC Account shall be deposited into the PFC Capital Improvement Fund and shall be utilized in accordance with the terms of Section 4.06 hereof. 0 (D) Subsequent to the payment described in Section 4.05(B) hereof, moneys on deposit in the Revenue Account shall be applied by the Issuer on or before the 25' day of U) each month in the following order of priority: i (1) Interest Account. The Issuer shall deposit or credit to the Interest Account the sum which, together with the balance in said Account including any moneys transferred from the PFC Account to the Interest Account, shall equal the N interest on all Bonds Outstanding (except as to Capital Appreciation Bonds) CNi accrued and unpaid and to accrue to the end of the then current calendar month. �i All Hedge Receipts and Federal Subsidy Payments shall be deposited directly to a the Interest Account upon receipt. With respect to interest on Bonds which are subject to a Qualified Hedge Agreement, interest on such Bonds during the term of the Qualified Hedge Agreement shall be deemed to include the corresponding Hedge Payments. Moneys in the Interest Account shall be applied by the Issuer (a) for deposit with the Paying Agents to pay the interest on the Bonds on or prior to the date the same shall become due and (b) for Hedge Payments. Any Federal Subsidy Payments deposited to the Interest Account shall be deemed to have been applied to the payment of interest on the Federal Subsidy Bonds to which such Federal Subsidy Payments relate. The Issuer shall adjust the amount of the deposit to the Interest Account not later than a month immediately preceding any Interest Date so as to provide sufficient moneys in the Interest Account to pay the interest on the Bonds coming due on such Interest Date. No further deposit need be made to the Interest Account when the moneys therein are equal to the interest coming due on the Outstanding Bonds on the next succeeding Interest Date. With respect to debt service on any Bonds which are subject to a Qualified Hedge Agreement, any Hedge Payments due to the Qualified Hedge Agreement Counterparty relating to such Bonds shall be paid to the Qualified Hedge Agreement Counterparty on a parity basis with the aforesaid required payments into the Sinking Fund. In computing the interest on Variable Rate Bonds which shall accrue during a 35 Packet Pg. 2220 1.9.a calendar month, the interest rate on such Variable Rate Bonds shall be assumed to be (A) if such Variable Rate Bonds have been Outstanding for at least 24 months prior to the commencement of such calendar month, the highest interest rate borne by such Variable Rate Bonds during any 30-day period during such preceding 24 months, and (B) if such Variable Rate Bonds have not been Outstanding for at least 24 months prior to the date of calculation, the Bond Buyer Revenue Bond Index most recently published prior to the commencement of such calendar month. (2) frincipal Account. Commencing no later than the month which is one year prior to the first principal due date, the Issuer shall next deposit into the Principal Account the sum which, together with the balance in said Account, including any moneys transferred from the PFC Account to the Principal Account, shall equal the principal amounts on all Bonds Outstanding due and unpaid and that portion of the principal next due which would have accrued on such Bonds during the then current calendar month if such principal amounts were deemed to accrue monthly (assuming that a year consists of 12 equivalent calendar months having 30 days each) except for the Sinking Fund Installments to be deposited pursuant to Section 4.05(D)(3) hereof, in equal amounts from the next preceding ' principal payment due date, or, if there be no such preceding payment due date from a date one year preceding the due date of such principal amount. Moneys in the Principal Account shall be applied by the Issuer for deposit with the Paying � Agents to pay the principal of the Bonds on or prior to the date the same shall Ci mature, and for no other purpose. Serial Capital Appreciation Bonds shall be CNi 00 payable from the Principal Account in the years in which such Bonds mature and a monthly payments into the Principal Account on account of such Bonds shall commence in the twelfth month immediately preceding the maturity date of such Bonds. The Issuer shall adjust the amount of the deposit to the Principal Account not later than the month immediately preceding any principal payment date so as to provide sufficient moneys in the Principal Account to pay the principal on Bonds becoming due on such principal payment date. No further deposit need be made to the Principal Account when the moneys therein are equal to the principal coming due on the Outstanding Bonds on the next succeeding principal payment date. (3) Term Bonds Redemption Account. Commencing in the month which is one year prior to the first Sinking Fund Installment due date, there shall be deposited to the Term Bonds Redemption Account the sum which, together with the balance in such Account including any moneys transferred from the PFC Account to the Term Bonds Redemption Account, shall equal the Sinking Fund Installments on all Bonds Outstanding due and unpaid and that portion of the Sinking Fund Installments of all Bonds Outstanding next due which would have accrued on such Bonds during the then current calendar month if such Sinking Fund Installments were deemed to accrue monthly (assuming that a year consists 36 Packet Pg. 2221 1.9.a of 12 equivalent calendar months having 30 days each) in equal amounts from the next preceding Sinking Fund Installment due date, or, if there is no such preceding Sinking Fund Installment due date, from a date one year preceding the due date of such Sinking Fund Installment. Moneys in the Term Bonds Redemption Account shall be used to purchase or redeem Term Bonds in the manner herein provided, and for no other purpose. Term Capital Appreciation bonds shall be payable from the Term Bonds Redemption Account in the years in which such Bonds mature and monthly payments into the Terms Bonds Redemption Account on account of such Bonds shall commence in the twelfth month immediately preceding the due date of the related Sinking Fund Installments. The Issuer shall adjust the amount 0 of the deposit to the Term Bonds Redemption Account on the month immediately preceding any Sinking Fund Installment Date so as to provide sufficient moneys in the Term Bonds Redemption Account to pay the Sinking Fund Installments becoming due on such date. Payments to the Term Bonds Redemption Account 0 shall be on parity with payments to the Principal Account. Amounts accumulated in the Term Bonds Redemption Account with respect to any Sinking Fund Installment (together with amounts accumulated in the Interest Account with respect to interest, if any, on the Term Bonds for which such Sinking Fund Installment was established) may be applied by the Issuer, on or prior to the 60th day preceding the due date of such Sinking Fund Installment, N (a) to the purchase of Term Bonds of the Series and maturity for which such Ci Sinking Fund Installment was established, or (b) to the redemption at the CNi applicable Redemption Prices of such Term Bonds, if then redeemable by their C terms. Amounts in the Term Bonds Redemption Account which are used to redeem Term Bonds shall be credited against the next succeeding Amortization Installment which shall become due on such Term Bonds. The applicable Redemption Price (or principal amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall be deemed to constitute part of the Term o Bonds Redemption Account until such Sinking Fund Installment date, for the purposes of calculating the amount of such Account. As soon as practicable after the 60th day preceding the due date of any such Sinking Fund Installment, the Issuer shall proceed to call for redemption on such due date, by causing notice to be given as provided in Section 3.03 hereof, Term Bonds of the Series and maturity for which such Sinking Fund Installment was established (except in the case of Term Bonds maturing on a Sinking Fund Installment date) in such amount as shall be necessary to complete the retirement of the unsatisfied balance of such Sinking Fund Installment. The Issuer shall pay out of the Term Bonds Redemption Account and the Interest Account to the appropriate Paying Agents, on or before the day preceding such redemption date (or maturity date), the amount required for the redemption (or for the payment of such Term Bonds then maturing), and such amount shall be applied by such Paying Agents to such redemption (or payment). All expenses in connection with the purchase or 37 Packet Pg. 2222 1.9.a redemption of Term Bonds shall be paid by the Issuer from the Operation and Maintenance Payment Account. (4) Reserve Account. There shall be deposited to the Reserve Account an amount which would enable the Issuer to restore the funds on deposit in the Reserve Account (including any subaccounts therein) to an amount equal to the Reserve Account Requirement applicable thereto. All deficiencies in the Reserve Account must be made up no later than 12 months from the date such deficiency first occurred, whether such shortfall was caused by decreased market value of the investments therein of more than 5% or withdrawal (whether from cash or a Reserve Account Insurance Policy or Reserve Account Letter of Credit). On or prior to each principal payment date and Interest Date for the Bonds (in no event a earlier than the 25' day of the month next preceding such payment date), moneys W in the Reserve Account shall be applied by the Issuer to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds to the extent moneys in the Interest Account, the Principal Account and the Term Bonds Redemption Account shall be insufficient for such purpose, but only to the extent the moneys transferred from the Airport Surplus Fund, the PFC Capital ' Improvement Fund and the Operation and Maintenance Reserve Account for such purposes pursuant to Sections 4.05(D)(7), 4.06 and 4.05(D)(6), respectively, hereof shall be inadequate to fully provide for such insufficiency. Whenever there CN shall be surplus moneys in the Reserve Account by reason of a decrease in the C14i Reserve Account Requirement or as a result of a deposit in the Reserve Account C1400 Letter of Credit or a Reserve Account Insurance Policy, such surplus moneys, to a the extent practicable, shall be deposited by the Issuer into the Revenue Account of the Revenue Fund. The Issuer shall promptly inform each Insurer of any draw 0 upon the Reserve Account for purposes of paying the principal of and interest on the Bonds. 0 Upon the issuance of any Series of Bonds under the terms, limitations and conditions as herein provided, the Issuer shall fund the Reserve Account in an amount at least equal to the Reserve Account Requirement to the extent such Series of Bonds are to be secured by the Reserve Account or any subaccount therein; provided, however, nothing herein shall be construed to require the Issuer to fund the Reserve Account or any subaccount for any Series of Bonds. Upon the adoption of the Supplemental Resolution authorizing the issuance of a Series of Bonds, the Issuer shall determine whether such Series of Bonds shall be secured by the Reserve Account or any subaccount therein and, if the Issuer determines that the Series of Bonds will be secured by a separate subaccount therein, the Issuer shall also establish the Reserve Account Requirement applicable thereto. Such required amount, if any, shall be paid in full or in part from the proceeds of such Series of Bonds or may be accumulated in equal monthly payments to the 38 Packet Pg. 2223 1.9.a Reserve Account over a period of months from the date of issuance of such Series of Bonds, which shall not exceed 36 months. Notwithstanding the foregoing provisions, in lieu of or in substitution of the required deposits into the Reserve Account, the Issuer may cause to be deposited into the Reserve Account a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for the benefit of the Bondholders in an amount equal to the difference between the Reserve Account Requirement applicable thereto and the sums then on deposit in the Reserve Account, if any. The Issuer may also substitute a Reserve Account Insurance Policy and/or Reserve Account Letter of Credit for cash on deposit in the Reserve Account upon compliance with the terms of this Section 4.05(D)(4). Such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit shall be payable to the Paying Agent (upon the W giving of notice as required thereunder) on any Interest Date or redemption date on which a deficiency exists which cannot be cured by moneys in any other fund °0 or account held pursuant to this Resolution and available for such purpose. Upon the initial deposit of any such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit, the provider thereof shall be either (a) an insurer whose ' municipal bond insurance policies insuring the payment, when due, or the principal of and interest on municipal bond issues results in such issues being w rated in one of the three highest rating categories by at least two of the Rating N Agencies (without regard to gradations, such as "plus" or "minus" or %," 112" or CNi 113"), or (b) a commercial bank, insurance company or other financial institution C14i which has been assigned a rating in one of the two highest rating categories by at r. least one of the Rating Agencies (without regard to gradations, such as "plus" or "minus" or 111," 112" or "3"). Any Reserve Account Insurance Policy and/or 0 Reserve Account Letter of Credit shall equally secure all Bonds secured by the W Reserve Account or subaccount into which such Policy or Letter of Credit is deposited. Each Reserve Account Insurance Policy and Reserve Account Letter of Credit shall provide for a revolving feature under which the amount available thereunder will be reinstated to the extent of any reimbursement of draws or claims paid. If the revolving feature is suspended or terminated for any reason, the right of the provider of the Reserve Account Insurance Policy or Reserve Account Letter of Credit to reimbursement will be subordinated to cash replenishment of the Reserve Account to an amount equal to the difference between the full original amount available under the Reserve Account Insurance Policy or Reserve Account Letter of Credit and the amount then available for further draws or claims. If(a) the provider of a Reserve Account Insurance Policy or Reserve Account Letter of Credit becomes insolvent or (b) the provider of a Reserve Account Insurance Policy or Reserve Account Letter of Credit defaults in its payment obligations thereunder or (c) the rating of the provider of a Reserve Account Insurance Policy 39 Packet Pg. 2224 1.9.a falls below a rating of"A-" or "AY by all of the Rating Agencies then rating such provider or (d) the rating of the provider of a Reserve Account Letter of Credit falls below a rating of "AA-" or "Aa3" by all of the Rating Agencies then rating such provider, the obligation to reimburse the provider of the Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be subordinate to the cash replenishment of the Reserve Account. Where applicable, the amount available for draws or claims under a Reserve Account Insurance Policy or Reserve Account Letter of Credit may be reduced by the amount of cash or investments deposited in the Reserve Account pursuant to the provisions hereof. 0 If the revolving reinstatement feature described in the preceding paragraph is suspended or terminated or if the Reserve Account Insurance Policy or Reserve Account Letter of Credit is no longer valid and enforceable, the Issuer shall either (i) deposit into the Reserve Account an amount sufficient to cause the cash or investments on deposit in the Reserve Account or applicable subaccount to equal °0 the Reserve Account Requirement on all Outstanding Bonds then secured by such Reserve Account or subaccount, such amount to be paid over the ensuing five years in equal installments deposited at least semi-annually or (ii) replace such instrument with a Reserve Account Insurance Policy or a Reserve Account Letter of Credit meeting the requirements described herein within six months of such occurrence. CN CN If three days prior to an interest or principal payment date, or such other C period of time as shall be required by the terms of the Reserve Account Insurance 00 Policy or Reserve Account Letter of Credit, the Issuer shall determine that a deficiency exists in the amount of moneys available to pay in accordance with the 0 terms hereof interest and/or principal due on the Bonds on such date, the Issuer shall immediately notify (a) the issuer of the applicable Reserve Account Insurance Policy and/or the issuer of the Reserve Account Letter of Credit and submit a demand for payment pursuant to the provisions of such Reserve Account Insurance Policy and/or the Reserve Account Letter of Credit, (b) the Paying Agent, and (c) the Insurer, if any, of the amount of such deficiency and the date on which such payment is due. The Issuer may evidence its obligation to reimburse the issuer of any Reserve Account Letter of Credit or Reserve Account Insurance Policy by executing and delivering to such issuer a subordinate promissory note therefor; provided, however, any such note (a) shall not be a general obligation of the Issuer the payment of which is secured by the full faith and credit or taxing power of the Issuer, and (b) shall be payable solely from the Pledged Funds in the manner provided herein. The obligation to reimburse the provider of a Reserve Account Insurance Policy or Reserve Account Letter of Credit for any Policy Costs shall be subordinate to the payment of debt service on the Bonds. 40 Packet Pg. 2225 1.9.a Any consent or approval of any Insurer described in this Section 4.05(D)(4) shall be required only so long as there are Outstanding Bonds secured by a Bond Insurance Policy issued by such Insurer which is in full force and effect and the commitments of which have been honored by such Insurer. The term "Paying Agent" as used in this Section 4.05(D)(4) may include one or more Paying Agents for the Outstanding Bonds. Whenever the amount of cash in the Reserve Account, together with the other amounts in the Debt Service Fund, are sufficient to fully pay all Outstanding Bonds in accordance with their terms (including principal or applicable Redemption Price and interest thereon), the funds on deposit in the Reserve Account may be transferred to the other Accounts of the Sinking Fund for the a payment of the Bonds. The Issuer may also establish a separate subaccount in the Reserve Account M for any Series of Bonds and provide a pledge of such subaccount to the payment of such Series of Bonds apart from the pledge provided herein. To the extent a Series of Bonds is secured separately by a subaccount of the Reserve Account, the Holders of such Bonds shall not be secured by any other moneys in the Reserve Account. Moneys in a separate subaccount of the Reserve Account shall be maintained at the Reserve Account Requirement applicable to such Series of N Bonds secured by the subaccount; provided the Supplemental Resolution a authorizing such Series of Bonds may establish the Reserve Account Requirement CN relating to such separate subaccount of the Reserve Account at such level as the 00 Issuer deems appropriate. In the event the Issuer by Supplemental Resolution establishes the Reserve Account Requirement for a particular Series of Bonds to be zero dollars ($0.00) or it shall determine that such Series are not to be secured in any manner by the Reserve Account or a subaccount, then it shall not be required to establish a separate subaccount; provided, however, such Series of Bonds shall have no lien on or pledge of any moneys on deposit in the Reserve Account. Moneys used to replenish the Reserve Account shall be deposited in the separate subaccounts in the Reserve Account and in the Reserve Account on a pro- rata basis. In the event the Issuer shall maintain a Reserve Account Insurance Policy or Reserve Account Letter of Credit and moneys in the Reserve Account or any subaccount, the moneys shall be used prior to making any disbursements under such Reserve Account Insurance Policy or Reserve Account Letter of Credit. (5) Subordinated Indebtedness. There shall next be deposited by the Issuer for the payment of any debt service on and other required deposits with respect to Subordinated Indebtedness incurred by the Issuer in connection with Improvements to the Airport and in accordance with the proceedings authorizing such Subordinated Indebtedness. 41 Packet Pg. 2226 1.9.a (6) Operation and Maintenance Reserve Account. There shall be deposited to the Operation and Maintenance Reserve Account an amount which would enable the Issuer to restore the funds on deposit in the Operation and Maintenance Reserve Account to an amount equal to the Operation and Maintenance Reserve Requirement. The moneys in the Operation and Maintenance Reserve Account shall be applied by the Issuer for the purpose of paying Operation and Maintenance Costs to the extent the amounts in the Operation and Maintenance Payment Account are insufficient therefor; provided, however, that on or prior to each principal and interest payment date for the Bonds (in no event earlier than the 25' day of the month next preceding such payment 0 date), moneys in the Operation and Maintenance Reserve Account shall be applied for the payment into the Interest Account, the Principal Account and the Term a Bonds Redemption Account when the moneys therein are insufficient to pay the W principal of and interest on the Bonds coming due, but only to the extent moneys 0 transferred from the Airport Surplus Fund and the PFC Capital Improvement Fund for such purpose pursuant to Sections 4.05(D)(7) and 4.06, respectively, shall not be adequate to fully provide for such insufficiency. (7) Airport Surplus Fund. The balance of any moneys remaining in the Revenue Account shall be deposited in the Airport Surplus Fund and applied for w any lawful purpose relating to the Airport. Moneys in the Airport Surplus Fund CN shall be applied to the payment, on or prior to each principal and interest payment Ci date for the Bonds (in no event earlier than the 25' day of the month next CNi preceding such payment date), into the Interest Account, the Principal Account C and the Term Bonds Redemption Account when the moneys therein shall be insufficient to pay the principal of and interest on the Bonds coming due. (E) Whenever moneys on deposit in the Sinking Fund are sufficient to fully pay all Outstanding Bonds in accordance with their terms (including principal or applicable 0 Redemption Price and interest thereon), no further deposits to the Sinking Fund need be made. If on any payment date the Gross Revenues and Eligible PFC Revenues are insufficient to deposit the required amount in any of the funds or accounts or for any of the purposes provided above, the deficiency shall be made up on the subsequent payment dates. The Issuer, in its discretion, may use moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming due on the next principal payment date, provided such purchase or redemption does not adversely affect the Issuer's ability to pay the principal or interest coming due on such principal payment date on the Bonds not so purchased or redeemed. (F) In the event the Issuer shall issue a Series of Bonds secured by a Credit Facility, the Issuer may establish separate subaccounts in the Interest Account, the Principal Account and the Term Bonds Redemption Account to provide for payment of 42 Packet Pg. 2227 1.9.a the principal of and interest on such Series; provided payment from the Pledged Funds of one Series of Bonds shall not have preference over payment of any other Series of Bonds. The Issuer may also deposit moneys in such subaccounts at such other times and in such other amounts from those provided in Section 4.05(D) as shall be necessary to pay the principal of and interest on such Bonds as the same shall become due, all as provided by the Supplemental Resolution authorizing such Bonds and the Credit Facility. In the case of Bonds secured by a Credit Facility, amounts on deposit in the Sinking Fund may be applied as provided in the applicable Supplemental Resolution and the Credit Facility to reimburse the Credit Bank for amounts drawn under such Credit Facility to pay the principal of, premium, if any, and interest on such Bonds or to pay the purchase price of any such Bonds which are tendered by the holders thereof for payment; provided such Credit Facility shall have no priority over Bondholders or an Insurer to amounts on deposit in the Sinking Fund. Other payments due to a Credit Bank in relation to obligations arising under its Credit Facility may be on parity with the Bonds as to °0 source of and security for payment to the extent provided in the Supplemental Resolution relating thereto. i SECTION 4.06. PFC CAPITAL IMPROVEMENT FUND. The Issuer shall apply moneys on deposit in the PFC Capital Improvement Fund, to the extent permitted by the PFC Act, PFC Regulations and PFC Authority, to pay the principal of(whether at C14 maturity or in satisfaction of the Sinking Fund Installments) and interest on the Bonds Q when due, whenever and to the extent that the money on deposit in the Interest Account, CN the Principal Account and the Term Bonds Redemption Account and moneys transferred 0 from the Airport Surplus Fund to said Accounts pursuant to Section 4.05(D)(7) hereof are 2 insufficient for such purposes. 0 U) The Issuer, at its option, but only after determining that no amounts are required to be applied to pay the principal of and interest on the Bonds as described above, may o apply any amounts remaining in the PFC Capital Improvement Fund for any one or more of the following purposes: (A) to pay the costs of PFC Improvements, (B) to pay debt service on any obligation incurred by the County to finance or refinance costs of PFC Improvements, (C) to purchase or redeem Bonds, if permitted by the PFC Act and PFC Regulations, or (D) to the extent permitted by the PFC Act and the PFC Regulations, for E any other lawful Airport purpose. SECTION 4.07 REBATE FUND. Amounts on deposit in the Rebate Fund shall be held in trust by the Issuer and used solely to make required rebates to the United States (except to the extent the same may be transferred to the Revenue Account) and the Bondholders shall have no right to have the same applied for debt service on the Bonds. For any Series of Bonds for which the rebate requirements of Section 148(f) of the Code are applicable, the Issuer agrees to undertake all actions required of it in its arbitrage certificate relating to such Series of Bonds, including, but not limited to: 43 Packet Pg. 2228 1.9.a (A) making a determination in accordance with the Code of the amount required to be deposited in the Rebate Fund; (B) depositing the amount determined in clause (A) above into the Rebate Fund; (C) paying on the dates and in the manner required by the Code to the United States Treasury from the Rebate Fund and any other legally available moneys of the Issuer such amounts as shall be required by the Code to be rebated to the United States Treasury; and (D) keeping such records of the determinations made pursuant to this Section 0 4.07 as shall be required by the Code, as well as evidence of the fair market value of any investments purchased with proceeds of the Bonds. 0 The provisions of the above-described arbitrage certificates may be amended without the consent of any Holder, Credit Bank or Insurer from time to time as shall be necessary, in the opinion of Bond Counsel, to comply with the provisions of the Code. SECTION 4.08 INVESTMENTS. Moneys on deposit in the Construction Fund, the Sinking Fund, the PFC Capital Improvement Fund, the Operation and Maintenance Fund, the Airport Surplus Fund and the Revenue Fund shall be continuously � secured in the manner by which the deposit of public funds are authorized to be secured Ci by the laws of the State. Moneys on deposit in the Construction Fund, the PFC Capital N1 00 Improvement Fund, the Operation and Maintenance Fund, the Airport Surplus Fund, the C Revenue Fund and the Sinking Fund (other than the Reserve Account) shall be invested and reinvested by the Issuer in Authorized Investments, maturing not later than the dates U) on which such moneys will be needed for the purposes of such Fund or Account. Moneys on deposit in the Reserve Account may be invested or reinvested by the Issuer in Authorized Investments which shall have an average aggregate weighted term to maturity not greater than five years. Notwithstanding any other provision hereof, all amounts on deposit in the Construction Fund or Interest Account representing accrued interest and capitalized interest shall be pledged solely to the payment of interest on the corresponding Series of Bonds and, unless otherwise provided by Supplemental Resolution, shall be invested only in Federal Securities maturing in such times and in such amounts as are necessary to pay the interest to which they are pledged. All investments shall be valued at cost; provided, however, that the amounts on deposit in the Reserve Account shall be valued at the market price thereof. Investments in the Reserve Account shall be valued by the Issuer on an annual basis as of September 30 of each year. Any and all income received from the investment of moneys in each separate account of the Construction Fund, the Interest Account, the Principal Account, the Term Bonds Redemption Account, the Operation and Maintenance Payment Account, the Airport Surplus Fund, the PFC Capital Improvement Fund, the PFC Account, the 44 Packet Pg. 2229 1.9.a Revenue Account, the Reserve Account (to the extent such income and the other amounts in the Reserve Account do not exceed the Reserve Account Requirement) and the Operation and Maintenance Reserve Account (to the extent such income and other amounts in the Operation and Maintenance Reserve Account do not exceed the Operation and Maintenance Reserve Requirement) shall be retained in such respective Fund or Account. Any and all income received from the investment of moneys in the Reserve Account (only to the extent such income and the other amounts in the Reserve Account exceeds the Reserve Account Requirement) and of moneys in the Operation and Maintenance Reserve Account (to the extent such income and other amounts in the Operation and Maintenance Reserve Account exceeds the Operation and Maintenance a Reserve Requirement) shall be deposited upon receipt thereof in the Revenue Account. Nothing in this Resolution shall prevent any Authorized Investments acquired as investments of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United States. SECTION 4.09 SEPARATE ACCOUNTS. The moneys required to be accounted for in each of the foregoing funds, accounts and subaccounts established herein may be deposited in a single bank account, and funds allocated to the various N funds, accounts and subaccounts established herein may be invested in a common Q investment pool, provided that adequate accounting records are maintained to reflect and CN CN control the restricted allocation of the moneys on deposit therein and such investments 00 for the various purposes of such funds, accounts and subaccounts as herein provided. The designation and establishment of the various funds, accounts and subaccounts in and by this Resolution shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of U) such revenues as herein provided. c� [Remainder of page intentionally left blank] 45 Packet Pg. 2230 1.9.a ARTICLE V COVENANTS SECTION 5.01. GENERAL. The Issuer hereby makes the covenants provided in this Article V, in addition to all other covenants in this Resolution, with each and every Holder of any of the Bonds so long as any of said Bonds remain Outstanding. SECTION 5.02. ANNUAL BUDGET. The Issuer shall prepare and adopt, prior to the beginning of each Fiscal Year, an Annual Budget for the Airport in accordance with applicable law. No expenditure for Operation and Maintenance Costs of the Airport or Improvements shall be made in any Fiscal Year in excess of the aggregate amount provided for Operation and Maintenance Costs and Improvements in the Annual Budget unless the Issuer complies in all respects with its policies and procedures for authorizing such excess Operation and Maintenance Costs or Improvements and amending its Annual Budget. In each Fiscal Year, the Issuer shall designate as part of its Annual Budget the amount of Eligible PFC Revenues which shall be utilized to pay debt service on the Bonds. If for any reason the Issuer shall not have adopted the Annual Budget before the first day of any Fiscal Year, other than the first Fiscal Year, the preliminary budget for such year or the Annual Budget for the preceding Fiscal Year shall be deemed to be in N effect for such Fiscal Year until the Annual Budget for such Fiscal Year is adopted. C1400 i The Issuer shall mail copies of such Annual Budgets and amended Annual Budgets and all resolutions authorizing increased expenditures for Operation and Maintenance Costs or Improvements to any Credit Bank or Insurer of Bonds who shall U) file its address with the Clerk and request in writing that copies of all such Annual a� Budgets and amended Annual Budgets and resolutions be furnished to it. The Issuer shall also make available all such Annual Budgets, amended Annual Budgets and resolutions authorizing increased expenditures for Operation and Maintenance Costs or Improvements at all reasonable times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder or Holders who requests in writing to review such instruments. c� SECTION 5.03. RATES. For the Fiscal Year commencing October 1, 2022 and for each Fiscal Year thereafter, the Issuer shall fix, establish, maintain and collect such rates, fees, rentals and charges for the services and facilities of the Airport, and revise the same from time to time, whenever necessary, so as always to provide in each Fiscal Year: (A) Net Revenues, together with the Eligible PFC Revenues and the Transfer Amount, equal to at least 125% of the Debt Service becoming due in such Fiscal Year; provided 46 Packet Pg. 2231 1.9.a (B) the Net Revenues, together with Eligible PFC Revenues, shall be adequate at all times to pay in such Fiscal Year at least 100% of(1) the Debt Service becoming due in such Fiscal Year, (2) any amounts required by the terms hereof to be deposited in the Reserve Account or with any issuer of a Reserve Account Letter of Credit or Reserve Account Insurance Policy in such Fiscal Year, (3) any amounts required by the terms hereof to be deposited in the Operation and Maintenance Reserve Account in such Fiscal Year, and (4) any Subordinated Indebtedness coming due in said Fiscal Year to the extent the County reasonably expects to pay such Subordinated Indebtedness from Net Revenues or Eligible PFC Revenues or to the extent such Subordinated Indebtedness is paid from Net Revenues or Eligible PFC Revenues. 0 Such rates, fees, rentals and other charges shall not be so reduced so as to be insufficient to provide adequate Net Revenues, Eligible PFC Revenues and the Transfer Amount for the purposes provided therefor by this Resolution. If, in any Fiscal Year, the Issuer shall fail to comply with the requirements contained in this Section 5.03, it shall cause the Airport Consultant to review its rates, fees, rentals, charges, income, Gross Revenues, Eligible PFC Revenues, Operation and Maintenance Costs and methods of operation and to make written recommendations as to the methods by which the Issuer may promptly seek to comply with the requirements set forth in this Section 5.03. The Issuer shall forthwith commence to implement such CN recommendations to the extent required so as to cause it to thereafter comply with said Q requirements. So long as the Issuer implements such recommendations within 120 days CN of the receipt thereof, the Issuer's failure to comply with this Section 5.03 shall not be 00 considered an Event of Default under Section 7.01 hereof. 0 SECTION 5.04 BOOKS AND RECORDS. The Issuer shall keep sufficient books, records and accounts of the Gross Revenues, Eligible PFC Revenues, Operation and Maintenance Costs and the operations of the Airport and the Holders of any Bonds 0 Outstanding or the duly authorized representatives thereof shall have the right at all reasonable times to inspect all books, records and accounts of the Issuer relating thereto, U) upon written request. SECTION 5.05 ANNUAL AUDIT. The Issuer shall, after the close of each Fiscal Year, cause the books, records and accounts relating to the Airport to be properly audited by a recognized independent firm of certified public accountants, and shall ° require such accountants to complete their report of such Annual Audit in accordance with applicable law. Each Annual Audit shall be in conformity with generally accepted accounting principles as applied to governmental entities and publicly owned airports such as the Airport. A copy of each Annual Audit shall regularly be furnished to any Credit Bank or Insurer who shall have furnished its address to the Clerk and requested in writing that the same be furnished to it. 47 Packet Pg. 2232 1.9.a SECTION 5.06 NO MORTGAGE OR SALE OF THE AIRPORT. The Issuer irrevocably covenants, binds and obligates itself not to sell, lease, encumber or in any manner dispose of the Airport as a whole or any substantial part thereof(except as provided below) until all of the Bonds and all interest thereon shall have been paid in full or provision for payment has been made in accordance with Section 9.01 hereof. The foregoing provision notwithstanding, the Issuer shall have and hereby reserves the right to sell, lease or otherwise dispose of any of the property comprising a part of the Airport in the following manner, if any one of the following conditions exist: (A) such property is not necessary for the operation of the Airport, (B) such property is not useful in the operation of the Airport, (C) such property is not profitable in the operation of the Airport, or (D) in the case of a lease of such property, will be advantageous to the Airport and will not materially adversely affect the security for the W Bondholders. Prior to any such sale, lease or other disposition of said property: (1) if the amount to be received therefor is not in excess of five percent (5.00%) of the market value of the gross plant of the Airport, an Authorized Issuer Officer shall make a finding in writing determining that one or more of the conditions for sale, lease or disposition of property provided for in the second paragraph of this Section 5.06 have been met; or (2) if the amount to be received from such sale, lease or other disposition of said property shall be CN in excess of five percent (5.00%) of the market value of the gross plant of the Airport, (a) Q an Authorized Issuer Officer shall first make a finding in writing determining that one or C14 more of the conditions for sale, lease or other disposition of property provided for in the 00 second paragraph of this Section 5.06 have been met, (b) the Governing Body shall, by 2 resolution, duly adopt, approve and concur in the finding of the Authorized Issuer 0 Officer, and (c) the Issuer shall obtain an opinion of Bond Counsel to the effect that such sale, lease or other disposition is not in violation of the Act and will not adversely affect the federal tax exempt status of interest on the Bonds (other than Taxable Bonds) or shall o not otherwise affect the status of any Outstanding Bonds issued as Federal Subsidy Bonds or the Issuer's receipt of Federal Subsidy Payments with respect to any Outstanding Federal Subsidy Bonds. Unless otherwise directed by Bond Counsel, the proceeds from any such sale or other disposition shall be deposited into the Airport Surplus Fund. Proceeds from any such lease shall constitute Gross Revenues and shall be deposited in the Revenue Account. The transfer of the Airport as a whole from the control of the Governing Body to some other board or authority which may hereafter be created for such purpose and which constitutes a governmental entity, interest on obligations issued by which are excluded from gross income for purposes of federal income taxation, shall not be deemed prohibited by this Section 5.06 and such successor board or authority shall fall within the 48 Packet Pg. 2233 1.9.a definition of "Issuer" in Section 1.01 hereof and such successor board or authority shall adopt a resolution or take such other action to evidence its obligations hereunder. Notwithstanding the foregoing provisions of this Section 5.06, the Issuer shall have the authority to sell for fair and reasonable consideration any land comprising a part of the Airport which is no longer necessary or useful in the operation of the Airport and the proceeds derived from the sale of such land shall be disposed of in accordance with the provisions of the fourth paragraph of this Section 5.06. Notwithstanding provisions of this Section 5.06, the Issuer may make contracts or grant licenses for the operation of, or grant easements or other rights with respect to, any part of the Airport if such contract, license, easement or right does not, in the opinion of 0 the Airport Consultant, as evidenced by a certificate to that effect filed with the Issuer, impede or restrict the operation by the Issuer of the Airport, but any payments to the Issuer under or in connection with any such contract, license, easement or right in respect o of the Airport or any part thereof shall constitute Gross Revenues and shall be deposited in the Revenue Account. i SECTION 5.07 INSURANCE. The Issuer will carry such insurance as is ordinarily carried by public entities owning and operating aviation facilities similar to the Airport with a reputable insurance carrier or carriers, in such amounts as the Issuer shall determine to be sufficient and such other insurance against loss or damage by fire, Q explosion, hurricane, tornado or other hazards and risks, and said property loss or damage CN i insurance shall at all times be in an amount or amounts equal to the fair appraisal value of 00 the buildings, properties, furniture, fixtures and equipment of the Airport, or such other amount or amounts as the Insurance Consultant shall approve as sufficient. The Issuer shall engage an Insurance Consultant from time to time to assist it with obtaining and maintaining such insurance. 0 The Issuer may establish minimum levels of insurance for which the Issuer may self-insure. Such minimum levels of insurance shall be in amounts as recommended in writing by the Insurance Consultant. The proceeds from property loss and casualty insurance shall be deposited in the Airport Surplus Fund and, together with other available funds of the Issuer, shall be used to repair or replace the damaged portion of the Airport; provided, however, if the Issuer makes a determination in accordance with Section 5.06 hereof that such damaged portion of the Airport is no longer necessary or useful in the operation of the Airport, such proceeds shall (1) if such proceeds equal or exceed $1,000,000, (a) be applied to the redemption or purchase of Bonds, or (b) be deposited in irrevocable trust for the payment of Bonds in the manner set forth in Section 9.01, provided the Issuer has received an opinion of Bond Counsel to the effect that such deposit shall not adversely affect the exclusion, if any, from gross income of interest on the Bonds for purposes of federal income taxation (other than Taxable Bonds) and will not otherwise affect the status of 49 Packet Pg. 2234 1.9.a any Outstanding Bonds issued as Federal Subsidy Bonds or the Issuer's receipt of Federal Subsidy Payments with respect to any Outstanding Federal Subsidy Bonds, or (2) if such proceeds are less than $1,000,000, be deposited in the Revenue Account. SECTION 5.08 ENFORCEMENT OF COLLECTIONS. The Issuer will diligently enforce and collect the rates, fees, rentals and other charges for the services and facilities of the Airport herein pledged; will take all reasonable steps, actions and proceedings for the enforcement and collection of such rates, charges, rentals and fees as shall become delinquent, to the full extent permitted or authorized by law; and will maintain accurate records with respect thereof. All such fees, rates, charges, rentals and revenues herein pledged shall, as collected, be held in trust to be applied as herein provided and not otherwise. a SECTION 5.09 NO COMPETING FACILITIES. To the full extent of the law and other than Marathon Airport, the Issuer will not grant, or cause, consent to, or allow the granting of any franchise or permit to conduct aeronautical services or provide access to the Airport to conduct aeronautical services to any Person or undertake any aviation project not made a part of the Airport which will materially compete with the Airport, as determined by the Issuer. SECTION 5.10 CONSULTANTS. The Issuer will, for the purpose of C14 performing and carrying out the duties imposed on the Airport Consultant and Insurance Q Consultant by this Resolution, employ one or more Persons having a favorable reputation C14 C14i for skill and experience in such work. The cost of employing such Consultants as 00 provided by this Resolution shall be treated as a part of the Operation and Maintenance Cost of the Airport or as a Cost of a Project as appropriate. The Issuer may appoint one or more Airport Consultants and Insurance Consultants to perform the responsibilities described herein for such Consultants. 0 SECTION 5.11. MAINTENANCE OF PFC REVENUES. The Issuer covenants to do all things necessary on its part to continue the levy of the Passenger Facility Charges in compliance with the PFC Act and any successor provision of law and to diligently enforce collection of the Passenger Facility Charges. The Issuer will at all times comply with all of the requirements and conditions of the PFC Act, the PFC E Regulations and the PFC Authority, and take every necessary action to remain qualified to levy the Passenger Facility Charges and collect the PFC Revenues. The Issuer will not take any action which will jeopardize eligibility for receipt of such funds which may adversely affect the undertakings provided in this instrument. The Issuer will not take any action or enter into any agreement which will have the effect of reducing the level of Passenger Facility Charges received by the Issuer if such reduction shall materially adversely affect the Issuer's ability to pay the Bonds. SECTION 5.12. COMPLIANCE WITH PFC ACT, PFC REGULATIONS AND PFC AUTHORITY. The Issuer covenants that it will comply with all provisions 50 Packet Pg. 2235 1.9.a of the PFC Act and the PFC Regulations applicable to the Issuer, and all provisions of the PFC Authority, and that it will not take any action or omit to take any action with respect to the PFC Revenues, the Projects, the Airport or otherwise if such action or omission would, pursuant to the PFC Act, the PFC Regulations or the PFC Authority, cause the termination of the authority to impose Passenger Facility Charges or prevent the use of the Eligible PFC Revenues as contemplated by this Resolution and the PFC Authority. The Issuer covenants that all PFC Revenues will be used in compliance with all provisions of the PFC Act, the PFC Regulations and the PFC Authority applicable to the Issuer, and all provisions thereof. Without limiting the generality of the foregoing, the Issuer covenants that to the extent necessary to comply with the foregoing covenant: 0 (A) it (i) will impose the Passenger Facility Charges to the full extent authorized by the PFC Authority, (ii) will not unilaterally decrease the level of the Passenger Facility Charges to be collected from any passenger, (iii) will unilaterally increase the total approved Passenger Facility Charges pursuant to PFC Regulations °0 §158.37(a) to the extent necessary to pay the debt service of the Bonds, and (iv) will apply for an additional increase in total approved Passenger Facility Charges pursuant to the PFC Regulations to the extent the Issuer projects such increase may be necessary to pay the debt service of the Bonds; (B) it will not impose any noise or access restriction at the Airport not in compliance with the Airport Noise and Capacity Act of 1990, Pub. L 101-508, Title IX, Subtitle D; C14 00 (C) it will take all action reasonably necessary to cause all collecting air carriers to collect and promptly remit to the Issuer the Passenger Facility Charges at the Airport 0 required by the PFC Act, the PFC Regulations and the PFC Authority to be so collected and remitted; and 0 (D) it will contest any attempt by the FAA to terminate or suspend the authority to impose, receive or use the Passenger Facility Charges at the Airport prior to the charge U) expiration date as defined in the PFC Authority or the date total approved Passenger Facility Charge revenue has been collected. SECTION 5.13. MANAGEMENT OF AIRPORT. The Issuer shall not take any action which would cause the Administrator of the FAA, the Department of Transportation, or any successor to the powers and authority of such Administrator, to suspend or revoke operating certificates issued for the Airport under the Federal Aviation Act of 1958, or any successor statute. The Issuer shall comply with all valid acts, including the acts, rules, regulations, orders and directives of any governmental, legislative, executive, administrative or judicial body applicable to the Airport, unless the same shall be contested in good faith. 51 Packet Pg. 2236 1.9.a SECTION 5.14. OPERATION OF THE AIRPORT. The Issuer covenants that it will at all times use reasonable efforts, subject to force majeure, to keep the Airport open for landings and takeoffs of aircraft of any type using facilities similar to those at the Airport and to maintain the powers, duties and obligations now reposed in it pursuant to law, and will not at any time take or fail to take any action the effect of which could reasonably be expected to delay or imperil either the payment of the indebtedness evidenced by any of the Bonds or the performance or observance of any of the covenants herein contained. SECTION 5.15. COVENANTS WITH CREDIT BANKS AND INSURERS. The Issuer may make such covenants as it may in its sole discretion determine to be appropriate with any Insurer, Credit Bank or other financial institution a that shall agree to insure or to provide for Bonds of any one or more Series credit or liquidity support that shall enhance the security or the value of such Bonds. Such covenants may be set forth in the applicable Supplemental Resolution and shall be binding on the Issuer, the Registrar, the Paying Agent and all the Holders of Bonds the U) same as if such covenants were set forth in full in this Resolution and may not diminish the security of any of the Bonds Outstanding. SECTION 5.16 GOVERNMENT GRANTS. All Government Grants shall be utilized in accordance with the terms of such Government Grants and applicable law. N The Issuer shall comply in all respects with the conditions and provisions of all Q Government Grants. C 00 SECTION 5.17. FEDERAL INCOME TAXATION COVENANTS; 2 TAXABLE BONDS. The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds and Federal Subsidy Bonds) that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on such Series of Bonds to be or become included in gross income for purposes of federal income taxation. 0 The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series of Bonds to be "arbitrage bonds" within the meaning of the Code and neither the Issuer nor any other Person under its control shall do any act or fail to do any act which would cause the interest on such Series of Bonds (other than Taxable Bonds and Federal Subsidy Bonds) to become subject to inclusion within gross income for purposes of federal income taxation. The Issuer hereby covenants with the Holders of each Series of Bonds (other than Taxable Bonds and Federal Subsidy Bonds) that it will comply with all provisions of the Code necessary to maintain the exclusion from gross income of interest on the Bonds for purposes of federal income taxation, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. 52 Packet Pg. 2237 1.9.a The Issuer may, if it so elects, issue one or more Series of Taxable Bonds the interest on which is (or may be) includable in the gross income of the Holder thereof for federal income taxation purposes, so long as each Bond of such Series states in the body thereof that interest payable thereon is (or may be) subject to federal income taxation and provided that the issuance thereof will not cause interest on any other Bonds theretofore issued hereunder to be or become subject to federal income taxation. The covenants set forth in this Section 5.17 shall not apply to any Taxable Bonds. SECTION 5.18. HEDGE AGREEMENTS. Each Counterparty to a Qualified Hedge Agreement shall meet the Initial Rating Requirement at the time the Qualified Hedge Agreement was entered. For the period the Counterparty does not fall below "Baa2" by Moody's or "BBB" by Standard & Poor's (the "Minimum Rating Requirement"), interest on Bonds subject to a Qualified Hedge Agreement with such Counterparty shall be deemed to be the Hedge Payments for purposes of the definition of "Debt Service." For any period the Counterparty does not satisfy the Minimum Rating00 Requirement and is not replaced by a Counterparty that meets the Initial Rating Requirement, interest on Bonds subject to a Qualified Hedge Agreement with such Counterparty shall be the actual interest on such Bonds (not taking into account the Hedge Payments) for purposes of the definition of"Debt Service." The above-described requirements for a Counterparty to a Qualified Hedge Agreement and the inclusion or exclusion of Hedge Payments for purposes of the definition of "Debt Service" may be CN waived in writing by the Insurer(s) and Credit Bank(s) of the Bonds if such Bonds are all CNi secured by Bond Insurance Policies and/or Credit Facilities. C00 C SECTION 5.19. COVENANTS RELATING TO FEDERAL SUBSIDY BONDS. The Issuer covenants with respect to any Bonds issued as Federal Subsidy Bonds that it will: (A) File, on a timely basis, Internal Revenue Service Form 8038-CP or such other form or forms required by the United States Department of Treasury to receive Federal Subsidy Payments in connection with any Bonds issued as Federal Subsidy Bonds. (B) Deposit promptly the Federal Subsidy Payments received from the United E States Department of Treasury, if any, to the Interest Account of the Debt Service Fund to pay interest on the Federal Subsidy Bonds. ° (C) Comply with all provisions of the Code, all Treasury Regulations promulgated thereunder, and any applicable notice, ruling or other formal interpretation issued by the United States Department of Treasury or the Internal Revenue Service, in order for the Bonds issued as Federal Subsidy Bonds to be and to remain Federal Subsidy Bonds. 53 Packet Pg. 2238 1.9.a (D) Not take any action, or fail to take any action, if any such action or failure to take such action would adversely affect the Issuer's receipt of Federal Subsidy Payments or the status of the Bonds issued as Federal Subsidy Bonds, or any portion thereof, as Federal Subsidy Bonds. The Issuer covenants that it will not directly or indirectly use or permit the use of any proceeds of Bonds issued as Federal Subsidy Bonds or any other of its funds or take or omit to take any action that would cause the Bonds issued as Federal Subsidy Bonds to be or become "arbitrage bonds" within the meaning of Section 148(a) or to fail to meet any other applicable requirements of the Code. 0 U) [Remainder of page intentionally left blank] 0 U) i CN CN CN i CN 00 0 U) 0 U) M c� 54 Packet Pg. 2239 1.9.a ARTICLE VI SUBORDINATED INDEBTEDNESS,ADDITIONAL BONDS AND SPECIAL PURPOSE FACILITIES BONDS SECTION 6.01. SUBORDINATED INDEBTEDNESS. The Issuer will not issue any other obligations, except under the conditions and in the manner provided herein, payable from the Pledged Funds or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon in favor of the Bonds and the interest thereon. The Issuer may at any time or from time to time issue evidences of indebtedness payable in whole or in part out of Net Revenues and which may be secured by a pledge of Net Revenues; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Net Revenues created by this Resolution and provided further that the issuance of such Subordinated Indebtedness shall be subject to any provisions contained in financing documents securing outstanding Subordinated Indebtedness to the extent such provisions impact on the ability of the Issuer to issue Subordinated Indebtedness. No Subordinated Indebtedness shall be subject to acceleration. The Issuer shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the conditions, limitations and restrictions under which any Additional Bonds may be issued under the provisions of N Section 6.02 hereof. The Issuer agrees to pay promptly any Subordinated Indebtedness Q as the same shall become due. C4 00 SECTION 6.02. ISSUANCE OF ADDITIONAL BONDS. No Additional Bonds, payable on a parity with the Bonds then Outstanding pursuant to this Resolution, 0 shall be issued except upon the conditions and in the manner herein provided. The Issuer may issue one or more Series of Additional Bonds for any one or more of the following purposes: (i) financing or refinancing Costs of a Project, or the completion thereof, or (ii) refunding any or all Outstanding Bonds or of any Subordinated Indebtedness of the Issuer. No such Additional Bonds shall be issued unless the following conditions are complied with: c� (A) Except in the case of Additional Bonds issued for the purpose of refunding Outstanding Bonds, the Issuer shall certify that it is current in all deposits into the various funds, accounts and subaccounts established hereby and all payments theretofore required to have been deposited or made by it under the provisions of this Resolution have been deposited or made and it has complied with the covenants and agreements of this Resolution. (B) There shall have been filed with the Issuer a certificate of the Clerk setting forth for the last complete Fiscal Year or a period of 12 consecutive months of the 24 55 Packet Pg. 2240 1.9.a months most recently concluded prior to the issuance of the Additional Bonds (the "12-Month Period") (1) Gross Revenues received by the Issuer during the 12-Month Period; (2) the Operation and Maintenance Costs incurred during the 12-Month Period; (3) the Eligible PFC Revenues received during the 12-Month Period; (4) the Maximum Annual Debt Service including the Additional Bonds then proposed to be issued; (5) that Net Revenues and Eligible PFC Revenues received by the Issuer during the 12-Month Period were in an amount at least equal to 125% of the Maximum Annual Debt Service including the Additional Bonds then proposed to be issued; and (6) that Net Revenues and the Eligible PFC Revenues received by the Issuer during the 12-Month Period were in an amount equal to at least (a) 100% of the Maximum Annual Debt Service including the Additional Bonds then proposed to be issued, (b) 100% of any amounts required by the terms hereof to be deposited in the Reserve Account or with the issuer of any Reserve Account Letter of Credit or Reserve Account Insurance Policy during the 12-Month Period, and (c) 110% of any Subordinated Indebtedness coming due during the 12 months immediately succeeding the issuance of the proposed Additional Bonds to the extent the County reasonably expects such Subordinated Indebtedness to be paid from Net Revenues or Eligible PFC Revenues. i (C) With respect to Additional Bonds that are issued to complete a Project, the Authorized Issuer Representative shall have filed with the Clerk a certificate demonstrating that the proceeds of such Additional Bonds to be issued (net of issuance � costs and any discounts) will be not more than 10% of the original Cost of such Project �i for the completion of which such Additional Bonds are then being issued. If the C00 Authorized Issuer Representative files such certificate with the Clerk, the conditions of C Section 6.02(B) hereof shall not apply to the issuance of such Additional Bonds. 0 (D) For the purpose of determining the Debt Service under this Section 6.02, the interest rate on additional parity Variable Rate Bonds then proposed to be issued shall be deemed to be the Bond Buyer Revenue Bond Index most recently published prior to the sale of such Additional Bonds. (E) For the purpose of determining the Debt Service under this Section 6.02, the interest rate on Outstanding Variable Rate Bonds (not subject to a Qualified Hedge Agreement) shall be deemed to be (1) if such Variable Rate Bonds have been Outstanding for at least 12 months prior to the date of sale of such Additional Bonds, the highest of(a) the actual rate of interest borne by such Variable Rate Bonds on the date of < sale, and (b) the average interest rate borne by such Variable Rate Bonds during the 12- month period preceding the date of sale, or (2) if such Variable Rate Bonds have not been Outstanding for at least 12 months prior to the date of sale of such Additional Bonds, the higher of(a) the actual rate of interest borne by the Variable Rate Bonds on the date of sale, and (b) the Bond Buyer Revenue Bond Index most recently published prior to the sale of such Additional Bonds. 56 Packet Pg. 2241 1.9.a (F) Additional Bonds shall be deemed to have been issued pursuant to this Resolution the same as the Outstanding Bonds, and all of the other covenants and other provisions of this Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all Bonds issued pursuant to this Resolution. Except as provided in Sections 4.02 and 4.05 hereof, all Bonds, regardless of the time or times of their issuance, shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bonds over any other. (G) In the event any Additional Bonds are issued for the purpose of refunding any Bonds then Outstanding, the conditions of Section 6.02(B) hereof shall not apply, provided that the issuance of such Additional Bonds shall not result in an increase in Maximum Annual Debt Service. The conditions of Section 6.02(B) hereof shall apply to Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds a issued for refunding purposes which cannot meet the conditions of this paragraph. SECTION 6.03. BOND ANTICIPATION NOTES. The Issuer may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner, not inconsistent with this Resolution, as shall be provided by Supplemental Resolution of the Issuer. Such notes shall be Subordinated Indebtedness, unless the Issuer satisfies the conditions of Section 6.02 hereof relating to Additional CN CN Bonds. Q CN i CN SECTION 6.04 ISSUANCE OF OBLIGATIONS NOT SECURED 00 HEREUNDER — SPECIAL PURPOSE FACILITIES BONDS. The Issuer shall be permitted to issue Special Purpose Facilities Bonds for the purpose of financing the cost of such Special Purpose Facilities as it shall deem necessary or desirable in the operation of the Airport. Special Purpose Facilities may consist of (A) Special Purpose Facilities that are owned and/or operated by private companies and the Special Purpose Facilities Bonds are payable from and secured exclusively by payments to be made by such private companies, and (B) Special Purpose Facilities that are owned by the Issuer and the Special Purpose Facilities Bonds are payable from and secured by any source other than the Pledged Funds. The Issuer shall determine the terms and conditions under which Special Purpose Facilities Bonds may be issued without regard to any test, financial or E otherwise, contained in this Resolution. The Issuer may cause any Special Purpose Facilities to become a part of the Airport by resolution of the Governing Body, if there shall be filed with the Clerk a report of the Airport Consultant substantially in the form provided in Section 6.02 hereof relating to the issuance of Additional Bonds. 57 Packet Pg. 2242 1.9.a ARTICLE VII DEFAULTS AND REMEDIES SECTION 7.01. EVENTS OF DEFAULT. The following events shall each constitute an "Event of Default": (A) Default shall be made in the payment of the principal of, Sinking Fund Installment, redemption premium or interest on any Bond when due. In determining whether a payment default has occurred, no effect shall be given to payment made under a Bond Insurance Policy. (B) There shall occur the dissolution or liquidation of the Issuer, or the filing by 0 the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of bankruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the benefit of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter adopted. (C) The Issuer shall default in the due and punctual performance of any other of N the covenants, conditions, agreements and provisions contained in the Bonds or in this N1 CN Resolution on the part of the Issuer to be performed, and such default shall continue for a 001 period of 90 days after written notice of such default shall have been received from an 0 Insurer or the Holders of not less than 25% of the aggregate principal amount of Bonds Outstanding. Notwithstanding the foregoing, the Issuer shall not be deemed to be in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes appropriate curative action and diligently pursues such action until default has been corrected. U) SECTION 7.02. REMEDIES. Any Holder of Bonds issued under the provisions of this Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the Laws of the State of Florida, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof, provided, however, that no Holder, trustee or receiver shall have the right to declare the Bonds immediately due and payable. The Holder or Holders of Bonds in an aggregate principal amount of not less than 25% of the Bonds then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection 58 Packet Pg. 2243 1.9.a of the rights of such Bondholders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the Clerk. Notice of such appointment, together with evidence of the requisite signatures of the Holders of not less than 25% in aggregate principal amount of Bonds Outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of such appointment shall be given to all Holders of Bonds in the same manner as notices of redemption are given hereunder. After the appointment of the first trustee hereunder, no further trustees may be appointed; however, the Holders of a majority in aggregate principal amount of all the Bonds then Outstanding may remove the trustee initially appointed and appoint a successor and 0 subsequent successors at any time. 0 Upon the Issuer becoming aware of the occurrence of an Event of Default under Section 7.01 hereof, the Issuer shall promptly file a notice of such Event of Default to the Electronic Municipal Market Access. °0 U) SECTION 7.03. DIRECTIONS TO TRUSTEE AS TO REMEDIAL PROCEEDINGS. The Holders of a majority in principal amount of the Bonds then Outstanding (or any Insurer insuring any then Outstanding Bonds) have the right, by an instrument or concurrent instruments in writing executed and delivered to the trustee, to direct the method and place of conducting all remedial proceedings to be taken by the N trustee hereunder with respect to the Series of Bonds owned by such Holders or insured a by such Insurer, provided that such direction shall not be otherwise than in accordance C14 with law or the provisions hereof, and that the trustee shall have the right to decline to 00 follow any direction of the Holders which in the opinion of the trustee would be unjustly 2 prejudicial to Holders of Bonds not parties to such direction. 0 U) SECTION 7.04. REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. SECTION 7.05. WAIVER OF DEFAULT. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an ° acquiescence therein; and every power and remedy given by Section 7.02 to the Bondholders may be exercised from time to time, and as often as may be deemed expedient. SECTION 7.06. APPLICATION OF MONEYS AFTER DEFAULT. If an Event of Default shall happen and shall not have been remedied, the Issuer or a trustee or receiver appointed for the purpose shall apply all Pledged Funds (except as for amounts 59 Packet Pg. 2244 1.9.a in the subaccounts of the Reserve Account which shall be applied to the payment of the Series of Bonds for which they were established) as follows and in the following order: (A) To the payment of the reasonable and proper charges, expenses and liabilities of the trustee or receiver and Registrar hereunder; (B) To the payment of the amounts required for reasonable and necessary Operation and Maintenance Costs, and for the reasonable renewals, repairs and replacements of the Airport necessary to prevent loss of Net Revenues and Eligible PFC Revenues, as certified by the Airport Consultant; .2 (C) To the payment of the interest and principal or Redemption Price, if 0 applicable, then due on the Bonds, as follows: (i) Unless the principal of all the Bonds shall have become due and 0 payable, all such moneys shall be applied: U) FIRST: to the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of such , installments, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without N any discrimination or preference; �i i 00 SECOND: to the payment to the Persons entitled thereto of the a unpaid principal of any of the Bonds which shall have become due at maturity or upon mandatory redemption prior to maturity (other than Bonds 0 called for redemption for the payment of which moneys are held pursuant to W the provisions of Section 9.01 of this Resolution), in the order of their due dates, with interest upon such Bonds from the respective dates upon which o they became due, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the Persons entitled thereto without any discrimination or preference; and THIRD: to the payment of the Redemption Price of any Bonds called for optional redemption pursuant to the provisions of this Resolution. (ii) If the principal of all the Bonds shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, with interest thereon as aforesaid, without preference or priority of principal over interest or of interest over principal, or of 60 Packet Pg. 2245 1.9.a any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference. (D) To the payment of all amounts owed to an Insurer or a Credit Bank not covered by A, B or C above. SECTION 7.07 CONTROL BY INSURER. To the extent an Insurer makes any payment of principal of or interest on Bonds in accordance with its Bond Insurance Policy, such Insurer shall become subrogated to the rights of the recipients of such payments in accordance with the terms of its Bond Insurance Policy. Upon the occurrence and continuance of an Event of Default, an Insurer of a Series of Bonds, if such Insurer shall not be in payment default under its Bond Insurance Policy, shall be deemed to be the sole owner of such Bonds for purposes of(A) directing and controlling the enforcement of all rights and remedies with respect to such Series of Bonds, including any waiver of an Event of Default and removal of any trustee, and (B) exercising any voting right or privilege or giving any consent or direction or taking any other action that the Holders of such Bonds are entitled to take pursuant to this Article VII hereof. No provision expressly recognizing or granting rights in or to an Insurer shall be modified without the consent of such Insurer. An Insurer's rights under this Section 7.07 shall be N suspended during any period in which such Insurer is in default in its payment obligations Q under its Bond Insurance Policy (except to the extent of amounts previously paid by such C14 Insurer and due and owing to such Insurer) and shall be of no force or effect if its Bond 0 Insurance Policy is no longer in effect or if the Insurer asserts that its Bond Insurance Policy is not in effect or if the Insurer waives such rights in writing. The rights granted to an Insurer under this Section 7.07 are granted in consideration of such Insurer issuing its Bond Insurance Policy. The Issuer shall provide each Insurer immediate notice of any Event of Default described in Section 7.01(A) hereof and notice of any other Event of Default occurring hereunder within 30 days of the occurrence thereof. Each Insurer of any Bonds hereunder shall be considered a third-party beneficiary to the Resolution with respect to such Bonds. ; c� [Remainder of page intentionally left blank] 61 Packet Pg. 2246 1.9.a ARTICLE VIII SUPPLEMENTAL RESOLUTIONS SECTION 8.01. SUPPLEMENTAL RESOLUTION WITHOUT BONDHOLDERS' CONSENT. The Issuer, from time to time and at any time, may adopt such Supplemental Resolutions without the consent of the Bondholders (which Supplemental Resolution shall thereafter form a part hereof) for any of the following purposes: (A) To cure any ambiguity or formal defect or omission or to correct any 2 inconsistent provisions in this Resolution or to clarify any matters or questions arising 0 hereunder. (B) to grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders. (C) To add to the conditions, limitations and restrictions on the issuance of , Bonds under the provisions of this Resolution other conditions, limitations and restrictions thereafter to be observed. N N (D) To add to the covenants and agreements of the Issuer in this Resolution CNi other covenants and agreements thereafter to be observed by the Issuer or to surrender CNi 00 any right or power herein reserved to or conferred upon the Issuer. 9= (E) To specify and determine the matters and things referred to in Sections 2.01 0 or 2.07 hereof, and also any other matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination at any time prior to the first delivery of such Bonds. (F) To authorize Projects or to change or modify the description of any Project. (G) To specify and determine matters necessary or desirable for the issuance of E Variable Rate Bonds, Federal Subsidy Bonds or Capital Appreciation Bonds. (H) To provide for the establishment of a separate subaccount or subaccounts in the Reserve Account which shall independently secure one or more Series of Bonds. (I) To make any other change that, in the opinion of the Issuer, would not materially adversely affect the security for the Bonds. In making such determination, the Issuer shall not take into consideration any Bond Insurance Policy or Credit Facility. 62 Packet Pg. 2247 1.9.a SECTION 8.02. SUPPLEMENTAL RESOLUTION WITH BONDHOLDERS' AND INSURER AND CREDIT BANK CONSENT. Subject to the terms and provisions contained in this Section 8.02 and Section 8.01 and 8.03 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolutions hereto as shall be deemed necessary or desirable by the Issuer for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, however, that if such modification or amendment will, by its terms, not take 0 effect so long as any Bonds of any specified Series or maturity remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this Section 8.02. Any Supplemental Resolution which is adopted in accordance with the 0 provisions of this Section 8.02 shall also require the written consent of the Insurer and the ° Credit Bank of any Bonds which are Outstanding at the time such Supplemental Resolution shall take effect and for which such Insurer and Credit Bank are not in default with respect to their obligations. No Supplemental Resolution may be approved or adopted which shall permit or require (A) an extension of the maturity of the principal of or the payment of the interest on any Bond issued hereunder, (B) reduction in the principal amount of any Bond or the Redemption Price or the rate of interest thereon, (C) N the creation of a lien upon or a pledge of the Pledged Funds other than the lien and pledge �i created by this Resolution or except as otherwise permitted or provided hereby which N1 00 materially adversely affects any Bondholders, (D) a preference or priority of any Bond or C Bonds over any other Bond or Bonds (except as to the establishment of separate subaccounts in the Reserve Account provided in Section 4.05(D)(4) hereof), or (E) a U) reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Resolution. Nothing herein contained, however, shall be construed as making necessary the approval by Bondholders or the Insurer or Credit Bank of the adoption of any Supplemental Resolution as authorized in Section 8.01 hereof. Except as otherwise provided herein, if at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this Section 8.02, the Clerk shall cause the Registrar to give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books. Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the Clerk and the Registrar for inspection by all Bondholders. The Issuer shall not, however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this Section 8.02 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this Section 8.02. 63 Packet Pg. 2248 1.9.a Whenever the Issuer shall deliver to the Clerk an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof. ' Notwithstanding the foregoing, the initial purchasers of Additional Bonds shall be deemed to have consented in writing to any amendments to the Resolution that are to N become effective on or after the issuance of such Additional Bonds in accordance with Q this Section 8.02 if the proposed amendments are reasonably disclosed in the offering C documentation prepared and distributed in connection with the issuance of such 00 Additional Bonds and such offering documentation and the related Supplemental Resolution provides that such initial purchasers have so consented through their purchase. U) Upon the adoption of any Supplemental Resolution pursuant to the provisions of this Section 8.02, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the Issuer and all Holders of Bonds then Outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended. SECTION 8.03. AMENDMENT WITH CONSENT OF INSURER AND CREDIT BANK ONLY. For purposes of amending this Resolution pursuant to Section 8.02 hereof, an Insurer or Credit Bank for Bonds shall be considered the Holder of such Bonds which it has provided credit enhancement. The consent of the Holders of such Bonds shall not be required if the Insurer or Credit Bank for such Bonds shall consent to the amendment as provided by this Section 8.03 and such Insurer or Credit Bank is not in default with respect to its obligations under its Bond Insurance Policy or Credit Facility. Prior to adoption of any amendment made pursuant to this Section 8.03, notice of such amendment shall be delivered to the Rating Agencies then rating the Bonds. Upon filing with the Clerk of evidence of such consent the Insurer or Credit Bank as aforesaid, the 64 Packet Pg. 2249 1.9.a Issuer may adopt such Supplemental Resolution. After the adoption by the Issuer of such Supplemental Resolution, notice thereof shall be mailed in the same manner as notices of an amendment under Section 8.02 hereof. Notwithstanding the foregoing, the consent of all affected Bondholders shall still be required with respect to any amendment set forth in the clauses (A), (B), (C), (D) or (E) in the first paragraph of Section 8.02 hereof. [Remainder of page intentionally left blank] 0 U) 0 U) i CN CN CD CN i CN CO 0 U) 0 U) M c� 65 Packet Pg. 2250 1.9.a ARTICLE IX MISCELLANEOUS SECTION 9.01. DEFEASANCE. If (A) the Issuer shall pay or cause to be paid or there shall otherwise be paid to the Holders of any Series of Bonds the principal and interest or Redemption Price, plus accrued interest, due or to become due thereon, at the times and in the manner stipulated therein and in this Resolution, and (B) the Issuer shall pay all Policy Costs owing to any provider of a Reserve Account Letter of Credit or Reserve Account Insurance Policy and all amounts owing to the Insurers and Credit Banks, then all covenants, agreements and other obligations of the Issuer to the holders of such Series of Bonds, shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant to this Resolution which are not C required for payment or redemption of any Series of Bonds not theretofore surrendered for such payment or redemption. Any Bonds or interest installments appertaining thereto shall be deemed to have been paid within the meaning of this Section 9.01 if(i) in case any such Bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given CN or provision shall have been made for the giving of such notice, and (ii) there shall have a been deposited in irrevocable trust with a banking institution or trust company by or on N1 behalf of the Issuer either moneys in an amount which shall be sufficient, or Refunding 0� Securities verified by an independent certified public accountant or nationally recognized company that provides verification services for municipal bonds to be in such amount that the principal of and the interest on or redemption price which when due will provide moneys which, together with the moneys, if any, deposited with such banking institution or trust company at the same time shall be sufficient, to pay the principal of and interest o due and to become due on said Bonds on and prior to the maturity date thereof. Except as hereafter provided, neither the Refunding Securities nor any moneys so deposited with such banking institution or trust company nor any moneys received by such bank or trust company on account of principal of or redemption price, if applicable, or interest on said Refunding Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of or redemption price of the Bonds for the payment of which they were deposited and the interest accruing thereon to the date of maturity; provided, however, the Issuer may substitute new Refunding Securities and moneys for the deposited Refunding Securities and moneys if the new Refunding Securities and moneys are sufficient to pay the principal of and interest on or redemption price of the refunded Bonds. For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or the redemption date thereof, as the case may be, 66 Packet Pg. 2251 1.9.a by the deposit of moneys, or specified Refunding Securities and moneys, if any, in accordance with this Section 9.01, the interest to come due on such Variable Rate Bonds on or prior to the maturity or redemption date thereof, as the case may be, shall be calculated at the Maximum Interest Rate; provided, however, that if on any payment date, as a result of such Variable Rate Bonds having borne interest at less than the Maximum Interest Rate for any period, the total amount of moneys and specified Refunding Securities on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited on such date in respect of such Variable Rate Bonds in order to satisfy this Section 9.01, such excess shall be paid to the Issuer free and clear of any trust, lien, pledge or assignment 0 securing the Bonds or otherwise existing under this Resolution. 0 U) If Bonds are not to be redeemed or paid within 60 days after any such defeasance described in this Section 9.01, the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this Section 9.01 of moneys or °0 Refunding Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this Section 9.01 and stating such maturity date upon which moneys are to be available for the payment of the principal of and interest on or redemption price of said Bonds. Failure to provide said notice shall not affect the Bonds being deemed to have been paid in accordance with the provisions of this Section 9.01. CN Nothing herein shall be deemed to require the Issuer to call any of the Outstanding Q Bonds for redemption prior to maturity pursuant to any applicable optional redemption CN provisions, or to impair the discretion of the Issuer in determining whether to exercise 00 any such option for early redemption. 2 0 Notwithstanding anything herein to the contrary, in the event that the principal of or interest due on the Bonds shall be paid by an Insurer or Insurers, such Bonds shall remain Outstanding, shall not be defeased or otherwise satisfied and shall not be 0 considered paid by the Issuer, and the pledge of the Pledged Funds and all covenants, agreements and other obligations of the Issuer to the Bondholders shall continue to exist and such Insurer or Insurers shall be subrogated to the rights of such Bondholders until such time as the Insurer or Insurers have been reimbursed and paid in full. SECTION 9.02. CAPITAL APPRECIATION BONDS. For the purposes of (A) receiving payment of the Redemption Price if a Capital Appreciation Bond is redeemed prior to maturity, or (B) receiving payment of a Capital Appreciation Bond if the principal of all Bonds becomes due and payable under the provisions of this Resolution, or (C) computing the amount of Bonds held by the Holder of a Capital Appreciation Bond in giving to the Issuer or any trustee or receiver appointed to represent the Bondholders any notice, consent, request or demand pursuant to this Resolution for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value. 67 Packet Pg. 2252 1.9.a SECTION 9.03. SALE OF BONDS. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the Act, the requirements of this Resolution and other applicable provisions of law. SECTION 9.04. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, a agreements or provisions hereof or of the Bonds issued hereunder. SECTION 9.05. VALIDATION AUTHORIZED. To the extent deemed necessary by Bond Counsel or desirable by Counsel for the Issuer, the Bond Counsel is authorized to institute appropriate proceedings for validation of a Series of the Bonds herein authorized pursuant to Chapter 75, Florida Statutes. SECTION 9.06. REPEAL OF INCONSISTENT RESOLUTIONS. All resolutions, resolutions or parts thereof in conflict herewith are hereby superseded and N repealed to the extent of such conflict. CN CN i CN SECTION 9.07. EFFECTIVE DATE. This Resolution shall take effect 00 immediately upon its adoption. PASSED AND ADOPTED by the Board of County Commissioners of Monroe U) County, Florida, at a regular meeting of said Board held on the 17th day of August, 2022. 0 0 Mayor David Rice Mayor Pro Tem Craig Cates Commissioner Michelle Coldiron Commissioner Holly Raschein Commissioner James K. Scholl c� BOARD OF COUNTY COMMISSIONERS (Seal) OF MONROE COUNTY, FLORIDA Attest: Kevin Madok, Clerk By: By: Deputy Clerk Mayor MGM NROE COUNTY ATTOnI " ArPnOVE I" FORM 68 ED 0,JAERCA , E ° WU ATTORNEY A DOe 8�2�22 Packet Pg. 2253 1.9.b Draft No. 6, 07/25/2022 REPORT OF THE AIRPORT CONSULTANT Airport Revenue Bonds (Key West International Airport), Series 2022 (AMT) Prepared for MONROE COUNTY gY4 �I t, 14 0 14 1i°u l 0 U ICI "T I and the KEY WEST INTERNATIONAL AIRPORT Key West to I International AirportCL � ". as [AUGUST, 20221 0 tf 0 CL as Prepared by: a E U W"W111M.AN till 1111film lot). AV1,11010N!r DrnMr cfONSUOANrS in conjunction with �NRICONDO,:t° C-1 Packet Pg. 2254 [REPORT OF THE AIRPORT CONSULTANT COVER LETTER TO GO HERE] 0 0 0 as 0 as U tf 0 as 4- 0 tf 0 a as as E N v w I In A ss i i t",!(,I vs I I C-2 DRAFT- Report of the Airport Consultant I Packet Pg. 2255 1.9.b BACKGROUND ASSUMPTIONS AND RATIONALE FOR FINANCIAL FORECASTS REPORT OF THE AIRPORT CONSULTANT Airport Revenue Bonds (Key West International Airport), Series 2022 (AMT) c 0 Th 14 0 114 1i°" I 0 U ICY "T Key West I � f 6jv International Airport: tf CL [AUGUST 20221 4- 0 tf CL as as E Prepared By: .AVIIAMOIN VIhVYDUSTRY COPANMITANTS in conjunction with v In ssiit"'!a rs C-3 DRAFT- Report of the Airport Consultant Packet Pg. 2256 1.9.b TABLE OF CONTENTS I. INTRODUCTION ................................................................................................................................5 A. PURPOSE AND SCOPE OF THIS REPORT..................................................................................8 B. THE AIRPORT.................................................................................................................................9 C. THE BOND RESOLUTION.......................................................................................................... 15 D. THE SIGNATORY AIRLINE AGREEMENT.............................................................................. 15 II. THE 2022 PROJECT..........................................................................................................................16 ag A. NEED FOR THE 2022 PROJECT................................................................................................. 16 U) as B. DESCRIPTION OF THE 2022 PROJECT..................................................................................... 16 C. 2022 PROJECT COST AND FUNDING....................................................................................... 17 D. THE 2022 BONDS.........................................................................................................................19 U) E. AIRPORT IMPROVEMENT PROGRAM GRANTS ...................................................................20 F. COVID-19 RELIEF GRANT FUNDS...........................................................................................21 i G. INFRASTRUCTURE INVESTMENT AND JOBS ACT FUNDS................................................23 H. FLORIDA DEPARTMENT OF TRANSPORTATION GRANT FUNDS....................................23 I. PASSENGER FACILITY CHARGES...........................................................................................24 U) J. FUTURE CAPITAL IMPROVEMENTS.......................................................................................25 III. DEMOGRAPHIC AND ECONOMIC ANALYSIS...........................................................................27 tf A. DEMOGRAPHIC ANALYSIS ......................................................................................................29 B. ECONOMIC ANALYSIS ..............................................................................................................32 C. ECONOMIC OUTLOOK...............................................................................................................54 tf IV. PASSENGER DEMAND AND AIR SERVICE ANALYSIS ...........................................................56 as A. AIR CARRIERS SERVING THE AIRPORT................................................................................56 B. AIR SERVICE ANALYSIS...........................................................................................................57 C. FACTORS AFFECTING AVIATION DEMAND AT THE AIRPORT.......................................65 D. FORECAST OF PASSENGER DEMAND AND AIRLINE OPERATIONS...............................70 E. FORECAST OF PASSENGER DEMAND....................................................................................74 F. AIRCRAFT OPERATIONS FORECASTS...................................................................................74 G. LANDED WEIGHT FORECASTS................................................................................................77 V. FINANCIAL ANALYSIS ..................................................................................................................78 A. FRAMEWORK FOR THE FINANCIAL OPERATION OF THE AIRPORT..............................78 v w I&l n&A sslit",!(,IIv s„ I I C-4 DRAFT- Report of the Airport Consultant Packet Pg. 2257 1.9.b B. THE BOND RESOLUTION..........................................................................................................78 C. HISTORICAL AIRPORT REVENUE AND EXPENSES.............................................................82 D. FORECAST OF AIRPORT REVENUES AND EXPENSES........................................................90 E. PROJECTED PASSENGER FACILITY CHARGE REVENUES................................................95 F. FORECAST COVERAGE FACTOR ............................................................................................98 G. AIRLINE COST PER ENPLANED PASSENGER.......................................................................98 H. SENSITIVITY OF FORECASTS TO PASSENGER ENPLANEMENT LEVELS......................99 0 0 U) as EXHIBIT"A"Airport Layout Plan............................................................................................................14 EXHIBIT III-1 c AirTrade Area........................................................................................................................................28 U) EXHIBIT IV-1 . I DestinationsServed................................................................................................................................62 EXHIBIT IV-2 Domestic Seat Capacity Recovery..........................................................................................................67 EXHIBIT IV-3 Historical Monthly Averages of Jet Fuel and Crude Oil Prices..............................................................69 EXHIBIT IV-4 U) Enplaned Passengers From Fiscal Year 2021 Through Fiscal Year 2024..............................................72 0 tf FIGURE V-1 c Application of Revenue ..........................................................................................................................81 a a as TABLE II-1 2022 Bonds Project Cost&Funding Plan..............................................................................................18 0 TABLE II-2 tf c Estimated Series 2022 Bonds (AMT) Sources &Uses of Funds............................................................19 TABLE II-3 Federal COVID-19 Relief Funds Awards &Uses..................................................................................22 as TABLE II-4 E Future Capital Improvements..................................................................................................................26 TABLE III-1 Historical and Projected Population........................................................................................................29 TABLE III-2 PerCapita Personal Income....................................................................................................................31 TABLE III-3 Gross Regional Product and Domestic Product(GRP or GDP).............................................................33 TABLE III-4 Civilian Labor Force &Unemployment.................................................................................................35 TABLE III-5 v w 1,&l n&A sslit",!aIvs I C-5 DRAFT- Report of the Airport Consultant Packet Pg. 2258 1.9.b Major Employers In the Air Trade Area.................................................................................................37 TABLE III-6 Employment Trends by Major Industry Sector.......................................................................................39 TABLE III-7 TotalBank Deposits................................................................................................................................46 TABLE III-8 Total Retail Sales Per Capita..................................................................................................................48 TABLE III-9 Residential Building Permits & Valuation CY 2010 - CY2020.............................................................50 TABLE III-10 Forecast of Economic Variables Used in Passenger Demand Forecasts ...............................................55 0 TABLE IV-1 c U) CarriersServing the Airport....................................................................................................................56 as TABLE IV-2 'G Historical Scheduled Passenger Air Carrier Base...................................................................................57 TABLE IV-3 as Historical Enplaned Passengers..............................................................................................................58 TABLE IV-4 Historical Total Enplaned Passengers by Airline....................................................................................60 i w TABLE IV-5 Top 20 Domestic Origin&Destination Markets....................................................................................63 TABLE IV-6 Historical Origin& Destination Passengers...........................................................................................64 TABLE IV-7 Historical Aircraft Operations.................................................................................................................64 r_ TABLE IV-8 Historical Total Landed Weight by Airline ............................................................................................66 0 TABLE IV-9 " Fiscal Year to Date Enplaned Passenger Recovery................................................................................68 < TABLE IV-10 Socioeconomic Regression Analysis Outputs.........................................................................................73 0 TABLE IV-I I tf c Enplaned Passenger Forecast..................................................................................................................75 TABLE IV-12 Aircraft Operations Forecasts.................................................................................................................76 as TABLE IV-13 E LandedWeight Forecasts........................................................................................................................77 TABLE V-1 Historical Revenue, Expenses &Debt Service.......................................................................................83 TABLE V-2 Historical Cost Per Enplaned Passenger.................................................................................................84 TABLE V-3 CurrentPublic Parking Rates..................................................................................................................86 TABLE V-4 Historical Non-Airline Revenue Per Enplaned Passenger......................................................................89 v w I&l n&A sslit"'!aIvs I C-6 DRAFT- Report of the Airport Consultant Packet Pg. 2259 1.9.b TABLE V-5 Forecast Airport Revenue, Expenses & Debt Service Coverage............................................................91 TABLE V-6 Forecast Passenger Facility Charge Revenue .........................................................................................96 TABLE V-7 Passenger Facility Charge Fund Activity................................................................................................97 TABLE V-8 Forecast Airline Cost Per Enplaned Passenger.......................................................................................99 TABLE V-9 Sensitivity Analysis 25% Reduction of Enplaned Passengers..............................................................100 TABLE v-10 Sensitivity Analysis Airline Cost Per Enplaned Passenger...................................................................101 ag 0 U) as 0 as U) i U) r- 0 tf CL as 4- 0 tf CL as as E v w 1, In A ssiit"'�!iI vs I I . C-7 DRAFT- Report of the Airport Consultant Packet Pg. 2260 1.9.b I. INTRODUCTION A. PURPOSE AND SCOPE OF THIS REPORT This Report of the Airport Consultant("Report") has been prepared for Monroe County, Florida ("County")by Newton & Associates, Inc. ("NAI") in conjunction with Ricondo & Associates, Inc. ("Ricondo")' in connection with the County's proposed issuance of its Airport Revenue Bonds (Key West International Airport), Series 2022 (the "2022 Bonds") as hereinafter more particularly described and which are to be secured by and paid from Net Revenues (as defined in the hereinafter described Resolution) and the proceeds of certain eligible Passenger Facility Charges ("PFCs") derived from the operation of the Key West International Airport("Airport"). g 0 The purpose of this Report is to examine the factors which may affect, and state our opinion on, the financial feasibility of the County issuing its 2022 Bonds, the proceeds of which, together with certain Federal Aviation Administration ("FAA") grants-in-aid, State of Florida Department 0 of Transportation ("FDOT") grants-in-aid, PFC funds and other funds will be used to fund the costs of certain capital improvements at the Airport (the "2022 Project," as more particularly described in Section H hereof). The proceeds of the 2022 Bonds will also be used to: (i)pay certain outstanding interim indebtedness in full, (ii) fund the Reserve Account for the 2022 i Bonds; (iii)pay capitalized interest; and (iv)pay the costs of issuance of the 2022 Bonds. The test of feasibility is the Airport's forecast ability to generate Pledged Funds sufficient to (i) pay Operation and Maintenance Costs of the Airport; (ii)pay the debt service on the 2022 Bonds and(iii) otherwise satisfy the requirements of Resolution No. adopted by the Board of County Commissioners on August 17, 2022 as supplemented by Resolution No. adopted 0 on August 17, 2022, as the same may be subsequently amended and supplemented from time to to time, (collectively, the "Resolution") including but not limited to the rate covenant contained 0 therein. Pledged Funds are defined in the Resolution as Net Revenues, Eligible PFC Revenues, any Hedge Receipts, and all moneys (with certain exceptions) in the funds and accounts (D established under the Resolution. 4- 0 tf In applying the test of financial feasibility, NAI has considered, and this Report describes, the CL Airport, the 2022 Project, the demographic and economic characteristics of the primary geographic area served by the Airport ("Air Trade Area"), the demand for air service at the Airport and the financial performance of the Airport, all for the period from October 1, 2016 to E September 30, 2021, or the most recent five year period for which complete data were available ("Study Period"). u See Section III,Demographic and Economic Analysis,for the analysis and report on the socioeconomic characteristics of the Air Trade Area and its' ability to generate demand for air service at the Airport.Also, see Section IV,Passenger Demand and Air Service Analysis,for the analysis and report on historical passenger activity, factors which may affect future passenger activity and a forecast of passengers and airline activity over the Forecast Period. Section III and Section IV were prepared by Ricondo and incorporated herein and relied upon in preparing certain elements of the financial forecasts included in Section V herein. v w 1,&l n&A sslit",�!a I v s I C-g DRAFT- Report of the Airport Consultant Packet Pg. 2261 1.9.b This Report also examines, discusses, and forecasts the future demand for air service at the Airport,passenger enplanements at the Airport, revenues and expenses of the Airport, PFCs to be collected by the Airport, the Net Revenues of the Airport available for debt service, debt service requirements and debt service coverage for the period October 1, 2022, to September 30, 2027 ("Forecast Period"). It concludes with NAI's findings regarding the feasibility of the County proceeding with the issuance of the 2022 Bonds. All of the foregoing has been considered, analyzed, forecasted and reported in light of the unprecedented disruption to the aviation industry and the national and world economies caused by the COVID-19 pandemic (see discussions in Section IV, and Section V, herein which summarizes certain measures that Airport management took to mitigate the reduction of activity which resulted from the pandemic). 0 U) B. THE AIRPORT 1. General Description/Location and History of the Airport c as The Airport is a small-hub', commercial airport located within the city limits of Key West, U) Monroe County, Florida and covers approximately 268 acres. Of this area, 87 acres are salt i ponds and mangrove vegetation. The remaining 181 acres are usable for the Airport. See Exhibit "A", Property Map herein. w In 1920, the first international air passenger service and the first international air mail routes were established between Key West and Havana, Cuba. In 1927, the Airport was designated the first airport of entry into the United States. At that time, the Airport was a small private airport r_ owned by Palm Beach millionaire Malcolm Meacham. Pan American Airlines was established U in Key West that year and leased the Airport site from Meacham. The Airport remained a small f and privately owned strip until the start of World War H. The land was then purchased by the ` federal government and converted into what was primarily a dirigible base. A runway of < approximately 2,400 feet in length, oriented from northeast to southwest, was constructed on site. This site, named Meacham Field, was purchased by the County for $150,000 after the war 0 tf was over. as In 1954, the runway was realigned to its current east-west orientation. In 1958, a passenger terminal was built, and Meacham Field was renamed Key West International Airport. 2. The County The County was constitutionally formed in 1823. It comprises,primarily, the Florida Keys, which are a string of coral islands extending in a southwesterly arc from Biscayne Bay to the Dry Tortugas. The Florida Keys separate the Atlantic Ocean on the south and the east from the Gulf of Mexico on the north and west and extend approximately 100 miles south from the United States mainland. The County seat, the City of Key West, located on the southernmost tip of the z The FAA categorizes airports that have total enplanements of at least.05%of total U.S. enplanements as small hubs. v w 1,&l n&A sslit",!aIvs I C-9 DRAFT- Report of the Airport Consultant Packet Pg. 2262 1.9.b Florida Keys, lies 98 miles north of Cuba, approximately 160 miles southwest of Miami and 66 nautical miles north of the Tropic of Cancer. The County has a mild, subtropical climate. Over the course of the year, the temperature typically varies from 65°F to 89°F and is rarely below 56°F or above 91°F.3 Precipitation (approximately 40 inches per year) is characterized by wet and dry seasons in June through October and December through March, respectively. Within the County, there are five municipalities: the cities of Key West, Layton, Marathon, Key Colony Beach and the Village of Islamorada. 0 3. Airport Ownership and Management 0 U) The Airport is owned by the County and is operated as a separate enterprise fund of the County as by the Monroe County Board of County Commissioners ("BOCC"). The BOCC exercises r- management of the Airport through the Senior Director of Airports who reports to the County Administrator and oversees the administration, operation, development, security, environmental requirements of the Airport, in addition to the Florida Keys Marathon International Airport, a separate enterprise fund of the County. w 4. Existing Facilities w The existing facilities of the Airport are described in general below and depicted on Exhibit"A." a. Airfield U) The Airport's airfield facilities ("Airfield") include those facilities necessary to support the 0 movement and operation of aircraft, including a runway, taxiways and apron areas, along with tf associated markings, lighting systems and instrumentation. Runway 9/27, the Airport's only runway, is paved with asphalt and is 5,075 feet long and 100 feet wide. It is able to accommodate Airplane Design Group III' and smaller aircraft, including commercial jets, such as the Airbus A-320, Boeing 737-700 and EMB 190 aircraft. Airplane f Design Group III also includes turboprops, such as the ATR 42-600, military aircraft, and large C general aviation aircraft. Runway 9/27 has an engineered material arresting system, or EMAS, on each end. The runway is equipped with medium intensity runway lights located 10 feet from the edge of the runway pavement. E The Airfield has one parallel taxiway (Taxiway A)that extends the full length of Runway 9/27. Taxiway A has a width of 50 feet and is located 315 feet south of the centerline of Runway 9/27. Taxiway A is equipped with medium intensity taxiway lights. There are also several connector taxiways designated as Taxiways B through E. The taxiways' pavement consists of asphalt and concrete. 3 https://weatherspark.com/y/17561/Average-Weather-in-Key-West-Florida-United-States-Year-Round. 4 Aircraft Design Group III aircraft are defined by the FAA(Advisory Circular 150/5300-13) as aircraft having a wingspan of 79 feet to 118 feet and a tail height of 30 feet to 45 feet. v w 1,&l n t A sslit",!aIvs I C-10 DRAFT- Report of the Airport Consultant Packet Pg. 2263 1.9.b The Airfield's aprons include a commercial terminal apron and a general aviation ("GA") apron. The commercial aircraft parking apron is located east of the centerline of Taxiway E and consists of approximately 41,000 square yards of concrete pavement. The commercial aircraft apron is adjacent to the existing passenger terminal building, the U.S. Customs and Border Protection ("CBP") facility and the FedEx facility. The commercial aircraft apron is marked for ten aircraft parking spaces: eight parking positions for commercial passenger aircraft, one position reserved for CBP inspections, and one space for FedEx. The commercial apron has lighting provided by high mast floodlights. An additional 8,000 square yards of commercial apron is located in front of the FedEx facility and provides aircraft parking for up to four Cessna 208 Caravan cargo aircraft. 0 The GA aircraft parking apron comprises approximately 26,500 square yards and is located west of the commercial aircraft parking apron, south of Taxiway A and between Taxiways A6 and D. 0 It consists of asphalt and concrete pavement and has cable aircraft tie downs and lighting provided by high mast floodlights. Tie-down areas can accommodate either 29 small aircraft or 16 smaller aircraft and five larger aircraft. In addition to the main GA apron, another apron parallel to Taxiway A between Taxiways Al and A6 spans approximately 17,700 square yards and provides an aircraft tie-down area and access to T-hangars and small box hangars. i Airfield lighting and navigational aids include an airport rotating beacon, runway and taxiway edge lighting, two published Area Navigation ("RNAV") global positioning system non- precision approaches (one to each runway end) and a non-directional beacon circling approach to each runway end. b. Passenger Terminal Area Facilities U) 0 The Airport's current passenger terminal area facilities are made up of the following facilities. tf CL i. Passenger Terminal Facilities The passenger terminal facilities ("Terminal") are made up of two, two-level buildings which are — serviced by an elevated departures roadway and an at-grade arrivals roadway. The two structures f are connected by two elevated, enclosed corridors spanning the arrival roadway. The westerly C corridor is an enclosed pedestrian bridge providing passenger access between the two buildings. The easterly corridor houses a passenger baggage conveyor system. E The Terminal comprises a total of approximately 67,900 square feet. The first Terminal building, located to the south of Faraldo Circle ("Existing Landside Terminal") is elevated and comprises approximately 37,800 square feet. It contains facilities for airline ticketing and passenger check- in,public circulation and seating areas, airline offices, food and beverage and retail concessions, restrooms, Transportation Security Administration ("TSA")passenger processing and office space (Sheriff's office), and the enclosed pedestrian bridge providing access to the Existing Airside Terminal (defined below), via escalators and elevators. The second Terminal building, located to the north of Faraldo Circle ("Existing Airside Terminal"), comprises approximately 30,000 square feet. It contains the secured passenger v w 1,&l n&A sslit",!aIvs I C-11 DRAFT- Report of the Airport Consultant Packet Pg. 2264 1.9.b holdroom areas with passenger seating, six aircraft departure gates, airline offices, food and beverage and retail concession areas, and public restrooms. The Existing Airside Terminal also contains an arrivals and baggage claim area separate from and to the west of the departure gates. The Rental Car counters are also located in the Existing Airside Terminal. Airport management offices are located on the second level of the Existing Airside Terminal above the baggage claim area. ii. On-Airport Roadways Vehicular access to the Airport is provided via South Roosevelt Boulevard, which is a four-lane, undivided State Route (also known as SR AIA). Entrance to the Airport is made via Faraldo Circle, a two-lane, one-way Airport roadway. Shortly after entering the Airport, Faraldo Circle splits into the elevated departures roadway and the at-grade arrivals roadway. The departures 0 roadway provides access to the ticketing curb front as well as to employee parking on the second level of the parking garage. The arrivals roadway provides access to the public parking garage, passenger arrivals area, rental car ready/return areas, the fixed base operators ("FBO") facilities, 0 fuel farm facilities, cargo facilities, Monroe County Sheriff and CBP facilities, and airside access Gates 1 and 5. U) iii. Automobile Parking Facilities i w Automobile parking is available in three locations on the Airport including the two-level parking garage and a surface lot. The parking garage is located to the south of the Terminal and contains 150 public parking spaces and 152 rental car ready/return parking spaces on the ground level, and 99 employee parking spaces on the second level (uncovered). The surface lot is located to the west of the parking garage and contains approximately 69 parking spaces. The Airport U) operates parking at the Airport through its parking manager, Republic Parking Systems. t0 tf iv. Adam Arnold Annex C. The Adam Arnold Annex consists of approximately 6,600 square feet of space and houses the as Airport Badging Office and CBP. 4- 0 tf V. Fixed Base Operator Facilities 0 as The FBO facilities include two primary buildings comprising a small office building of approximately 2,200 square feet, an aircraft maintenance hangar having approximately 8,000 as E square feet and a fuel farm which has three 12,000 gallon above-ground fuel storage tanks two 0 for Jet A fuel and one for AVGAS. A dedicated roadway provides vehicular access to the FBO facilities. The FBO office/terminal building includes a passenger lobby,pilot lounge, flight planning center, conference room/lounges and workstations and restrooms. The FBO is operated by Piedmont Hawthorn Avigation LLC d/b/a Signature Flight Support. v w 1,&l n&A sslit",!iIIvs III.". C-12 DRAFT- Report of the Airport Consultant Packet Pg. 2265 1.9.b vi. General Aviation Aircraft Storage Facilities Aircraft storage facilities at the Airport consist of 11 nested T-Hangars, eight small box hangars and two large conventional hangars. All of these aircraft storage facilities are owned by Key West Hangar Corporation on land leased from the Airport. vii. Aircraft Rescue and Firefighting Facility An Aircraft Rescue and Firefighting ("ARFF") facility, also referred to as the Monroe County Fire Rescue/Key West Station 7 is located adjacent to the west end of the Terminal and immediately east of the Air Traffic Control Tower("ATCT") and provides fire suppression, emergency medical services and ARFF services. The ARFF facility has three vehicle bays and is equipped with two ARFF vehicles, a quick response vehicle and a backup inspections vehicle. 0 U) as viii. Air Traffic Control Tower The ATCT is temporarily located on the north side of the airfield and is operational daily, 7:00 0 a.m. to 9:00 p.m. The Airport's ATCT is part of the FAA's contract tower program and is operated by a private company. Prior to its current location, the ATCT was located immediately U) to the west of the ARFF facility. In 2017, Hurricane Irma damaged the ATCT requiring it to be reconstructed. The FAA is in the process of designing and constructing a new ATCT on the original site. Construction is estimated to be completed in the fall of 2025 at which time the new ATCT will replace the current ATCT. ix. FedEx Cargo Facility FedEx occupies a 3,000 square foot cargo building and 13,865 square feet of open land adjacent 0 to the building, in connection with its overnight parcel delivery services. tf CL X. Rental Car Facilities Of the rental car companies operating at the Airport, two lease rental car service facility buildings located on the Airport. One, which is currently leased by Avis Rent A Car System, 0 LLC., is approximately 1,180 square feet and rests on approximately 0.7 acres. The other service f facility is approximately 950 square feet, rests on approximately 0.6 acres and is leased by the Hertz Corporation. W r- as Xi. Greyhound Lines Station E The Greyhound Lines, a wholly owned subsidiary of Flixmobility GmbH, leases offices and passenger waiting area space located on Airport property. It serves as the Greyhound Lines passenger bus station for Key West. xii. Other Miscellaneous Facilities Various other buildings and weather systems located on the Airport include: the Airport mobile offices; the Island Aeroplane Tours building; the Fort East Martello Museum and Garden; and an Automated Surface Observation System ("ASOS"). v w I&l n&A sslit",!aIvs I C-13 DRAFT- Report of the Airport Consultant Packet Pg. 2266 1.9.b EXHIBIT "A"Airport Layout Plan 0 M✓ y it IJ inW 7Y 0 '1L "M I fI-, w3 � I � I1 �I c u r 1 q AT,r N CL xm If y ;u �r tf L �u�u CL �uruim rP « L 00, vlft (D E � 4 4 tb W EXISTING ,AIRPORT LAYOUT PLAN RIDA KEY WEST YNv aJ INTERNATIONAL IcC3NAL AIRPORT _ v w I In A ssiit"!(I vs I I C-14 DRAFT- Report of the Airport Consultant Packet Pg. 2267 1.9.b C. THE BOND RESOLUTION The proposed 2022 Bonds are to be issued under the terms and conditions of the Resolution. A summary of certain terms and conditions of the Resolution is provided in Section V hereof. There are no other bonds or other indebtedness outstanding under the Resolution. D. THE SIGNATORY AIRLINE AGREEMENT An agreement between the County and certain passenger airlines serving the Airport became effective October 1, 2021 ("Signatory Agreement"). Allegiant Air, American Airlines, Delta Air 0 Lines, JetBlue Airways, Silver Airways and United Airlines have executed the Signatory Agreement and are, collectively, the "Signatory Airlines" (there are currently no non-signatory airlines operating scheduled passenger air service at the Airport). The term of the Signatory Agreement extends to September 30, 2026. For the purposes of this report, we assume that the terms and conditions of the Signatory Agreement will continue in effect through the entire Forecast Period. U) The Signatory Agreement sets forth the rights and obligations of the parties as well as the i procedures for calculating airline rentals, fees and charges for the use and occupancy of the arrival's terminal and the departures terminal buildings ("Terminal Complex") and the Airfield. w The Signatory Agreement also established procedures for the establishment, review and adjustment, at least annually, of rentals, fees and charges payable by the Signatory Airlines and other airlines operating from the Terminal Complex and the Airfield("Airline Rates and U) Charges") and provides for mid-year adjustments, if necessary, and an annual settlement based t00 upon actual costs and activity. The Airline Rates and Charges are calculated under what is tf referred to as a compensatory method and are set based upon the projected activity and budgeted annual cost to the County of providing and operating the Airfield and those facilities of the Terminal Complex used by the airlines in processing their passengers through the Terminal building. The County is required to pay for the non-airline areas of the Airport with non-airline revenue. f as Each Signatory Airline is obligated to pay airline rents, fees and charges totaling a minimum annual commitment of$450,000 during the term of the Signatory Agreement. E During the Study Period and prior to the Signatory Agreement, no airline agreement which specified the approach to establishing airline rates and charges, was in effect between the County and the passenger airlines serving the Airport, however, the approach used to establish airline rates and charges was substantially similar to the methodology established in the Signatory Agreement. v w 1,&l n&A sslit",!aIvs I C-15 DRAFT- Report of the Airport Consultant Packet Pg. 2268 1.9.b II. THE 2022 PROJECT A. NEED FOR THE 2022 PROJECT The 2022 Project comprises the design and construction of a new, airside passenger concourse facility and renovations to the Existing Landside Terminal building necessary to support the movement of passengers at the Airport. The 2022 Project is needed to: (i) address inadequacies of Airport facilities to accommodate existing demand; (ii)provide additional facilities to meet projected demand; and (iii)renovate and remodel existing facilities that have deteriorated over time with usage or have otherwise become in adequate for the efficient movement of passengers at existing and anticipated future activity levels. 0 as Prior to the COVID-19 pandemic, the Airport's passenger activity had experienced significant growth in enplanements and load factors. Passenger enplanements increased by approximately 30% from 366,190 in FY 2012 to 475,034 in FY 2019, a compound annual growth rate ("CAGR") of 3.8% (See Table IV-3). i During the pandemic, enplanements initially decreased from the FY 2019 level to 340,307 in FY 2020. In FY 2021, enplanements grew to 659,321, exceeding the FY 2019 level (475,034) and representing an increase of nearly 94% over the FY 2020 level. Overall, enplanements at the Airport grew at a compound annual growth rate ("CAGR") of 6.8% from FY 2012 to FY 2021. B. DESCRIPTION OF THE 2022 PROJECT r_ 0 The 2022 Project will include a second-level concourse ("Concourse A") of approximately tf c 49,000 square feet located immediately north of the Existing Airside Terminal. Concourse A will CL contain seven gates, each equipped with passenger boarding bridges, holdrooms,passenger as circulation areas, concession areas, restrooms, and building support areas. Concourse A will be accessed from the Existing Landside Terminal by extending the existing enclosed pedestrian 0 bridge which connects the Existing Landside Terminal to the Existing Airside Terminal. The 0 aircraft parking ramp level below Concourse A will be unenclosed and will support a new airline (D baggage make-up area and device(s), airline ramp space, and ramp equipment storage and circulation space. Renovations to and remodeling of the Existing Landside Terminal and Existing Airside Terminal will be made within the existing footprints of the two buildings. Approximately 10,360 square feet of the Existing Landside Terminal will accommodate a relocated and expanded security screening checkpoint with space for a total of four lanes and added support space. The existing food and beverage concession area will be relocated to Concourse A to accommodate the new security screening checkpoint area. Approximately 11,630 square feet of the Existing Airside Terminal which currently serves as passenger holdrooms and concessions areas will be repurposed upon completion of Concourse A, allowing for the expansion of the baggage claim area and a third baggage claim device to v w 1,&l n&A sslit",!aIvs I C-16 DRAFT- Report of the Airport Consultant Packet Pg. 2269 1.9.b improve operational efficiency. Existing baggage service offices and rental car counters and offices will be renovated and expanded and, the existing airline ramp-level support offices will be centralized under Concourse A and expanded to meet airline space needs. Upon completion of the 2022 Project, the expanded and renovated Terminal Complex will comprise an estimated 103,320 square feet compared to the 67,900 square feet which makes up the total square footage of the Existing Airside Terminal and Existing Landside Terminal. C. 2022 PROJECT COST AND FUNDING The estimated costs and funding of the 2022 Project is depicted on Table 11-1. 0 As shown on Table 11-1, the total estimated project cost of the 2022 Project is approximately $113.4 million, the funding of which includes approximately $2.8 million of Airport U) Improvement Program ("AIP") grant funds, $39.8 million of FDOT grant funds, $11.4 million comprising a combination of CARES, ARPA and CRRSA grant funds ("COVID-19 Relief Funds"), an estimated' $14.8 million of Bipartisan Infrastructure Law ("BIL,") grant funds, $10 M million of an AIP grant anticipation note, $2.7 million of PFC PAYGO funds, and $31.9 million 2 of 2022 Bonds proceeds. i U) r_ 0 tf as (Remainder of Page Intentionally Left Blank) 4- 0 tf as as E 'Current FAA estimate for FY 2023 through FY 2025 based AIP Passenger Entitlement Grant apportionment formula. v w I&l n&A sslit",!aIvs I C-17 DRAFT- Report of the Airport Consultant Packet Pg. 2270 1.9.b TABLE II-1 2022 Project Cost and Funding Plan M m r r M V ro y My M t0 _ O C; M N t0 O V V O O M LLOS M M p ° c+i u'i o V m co t0' - ri LL - EA � f0 EA EA EA t0 a � � o °. o m m a f A M M ¢ 0 - U 11 f» e» e» e» > r r a Q 0 O z a o c 2- 16 U U N O Q a' o 0 LL � W � O O M LLS O N V C N V V A V O N ry M W' - N' 0 M M M Ill cli co oi oLL O � u � M N M O v . EA m e V r N M M EA M r v v m co K o o i�Dn in LL L M 0 N 9.f EA EA EA O V LLO N L LL N N LL v3 Q LL EA W N w co M m P- r M' V m y My TJ O N U M N t0 O V V O O M LLS 00 M M - Oy N LO CM oi LO LLS LOV W (D f°' Eco oi A M LL qb m N £ � CL v N o rn T o Q LL o y o d E g £ O — Q o O o ° R '� K m o m - c' mo o rn rn a d o ° m Q m 'o ° m m m a Q (ifd w+ ¢" m c = ¢ E °b _ o E m U .O w U w f m w c O m o W w . .m a z s w a m £ w a r w a a .� U Q n W O W i Ol N i i J Ol LL O - U LL O - Ol lUl O - ~ lUl O - N LL O - LLS N ° a z ° 3 a z ° rn a z ° z ° m o m o m o w o m 0 o r z r m r r r a r A - ¢ 0 v w I In A ssiit"!(I vs I C-18 DRAFT- Report of the Airport Consultant Packet Pg. 2271 1.9.b D. THE 2022 BONDS The 2022 Bonds are to be issued as Airport Revenue Bonds and will be used to finance, in part, the 2022 Project. The estimated sources and uses for the 2022 Bonds are set forth on Table II-2. TABLE II-2 Estimated Series 2022 Bonds (AMT) Sources and Uses of Funds" SOURCES: g Bond Proceeds: Par $39,680,000 Premium 40,826 TOTAL SOURCES $39,720,826 as USES: Project Fund Deposits $31,896,168 i Other Fund Deposits: Capitalized Interest Fund $4,175,850 Debt Service Reserve Fund 2,781,250 6,957,100 0 tf Cost of Issuance $867,558 CL TOTAL USES $39,720,826 as 4- 0 tf CL Source: Frasca & Associates, LLC. Market Rates as of July 21, 2022 + 75 bp. 07/24/22 as 2022 Bonds ROAC Draft 6 Financial Tables.xls as E 6 Preliminary and Subject to Change. v w I&l n&A sslit",!aIvs I C-19 DRAFT- Report of the Airport Consultant Packet Pg. 2272 1.9.b Pursuant to the Resolution,payment of debt service on the 2022 Bonds and any subsequently issued Additional Bonds (none are currently anticipated during the Forecast Period) are payable from and secured by a pledge of and lien upon the Pledged Funds. See Section V subsection B hereof for more information concerning the Resolution and Table V-5, for the Forecast Airport Revenues, Expenses and Debt Service Coverage. E. AIRPORT IMPROVEMENT PROGRAM GRANTS The AIP was established by the Airport and Airway Improvement Act of 1982-Public Law 97- 248 (the "1982 Act"). Congress amends the 1982 Act from time to time as required, to authorize funding levels on an annual or multi-federal fiscal year basis. Since its enactment, the AIP has been amended several times, most recently with the passage of the FAA Reauthorization Act of 2018'. Funds obligated for the AIP are drawn from the Airport and Airway Trust Fund, which is U) supported by user fees, fuel taxes, and other similar revenue sources. The FAA's funding and authority is extended through September 30, 2023. As the continuation of the AIP program relates to the 2022 Project, AIP grant funds anticipated to be received during and after 0 construction are included in the funding plan of the 2022 Project(Table II-1). U) The FAA uses two primary methods to distribute the AIP grants to airports: entitlement grants and discretionary grants. Entitlement grants are apportioned to airports according to a formula i w largely tied to the amount of passenger traffic at the airport. Discretionary grants are awarded by the FAA in its discretion and are usually awarded for projects that increase airport capacity or safety as further described below. Because the demand for AIP funds exceeds the availability, the FAA apportions these funds based upon national priorities and objectives. AIP funds typically are first apportioned into major r_ entitlement categories such as primary, cargo, and general aviation. Remaining funds are then to apportioned to a discretionary fund. Set-aside projects (airport noise and the Military Airport 0 Program)receive first attention from this discretionary fund distribution. The remaining funds I" are true discretionary funds that are distributed according to the national prioritization formula.$ < AIP-eligible projects include those for(i) airport planning, (ii) airport development, (iii)noise — compatibility programs, (iv) land acquisition and (v)terminal development. f CL as 1. AIP Entitlement Grants The FAA uses AIP Entitlement Grants to distribute AIP grants to commercial service airports as E based on levels of aviation activity. One of the most common types of funding available for 0 commercial service airports is Passenger Entitlement Grants, which are an allocation of certain AIP funds based upon an airport's total enplanements compared to total U.S. enplanements. 7 P.L. 115-254, signed into law October 5,2018. According to the FAA"This bi-partisan,five-year authorization of the FAA represents the first significant multi-year reauthorization since the FAA Modernization and Reform Act of 2012(P.L. 112-95), and the first five-year reauthorization since 1982. The signing of the long-term bill frees up the Agency from the uncertainty of more short-term extensions and instead authorizes the reliable,predictable funding the FAA needs to invest in these critical priorities". s Source: Federal Aviation Administration—https:!lwww.faa.gov/airports/aip/overview/#history. v w I&l n t A sslit",!aIvs I C-20 DRAFT- Report of the Airport Consultant Packet Pg. 2273 1.9.b Passenger Entitlement Grants may be carried over from one year to the next and used to pay the principal portion of debt service on bonds issued to finance eligible projects. Future AIP Entitlements may also be included in an FAA Letter of Intent("LOI"), which is a multi-year funding commitment from the FAA. Because the funding authority is established by Congress under its annual budgeting process, an LOI does not guarantee that the FAA will have the funding authority from Congress in the future years of the LOI. 2. AIP Discretionary Grants Discretionary Grants are awarded to airports on a discretionary basis to fund eligible projects as determined by the FAA based on a priority system. The priority system is designed to allocate the available funding using a point-value system that gives the highest priority to safety, security, reconstruction, standards and capacity in that order. As with future Passenger Entitlement 0 Grants, future Discretionary Grants may also be included in an FAA LOI. F. COVID-19 RELIEF GRANT FUNDS c as The Coronavirus Aid, Relief, and Economic Security ("CARES") Act(H.R. 748, Public Law U) 116-136), signed into law on March 27, 2020, included $10 billion in funds to be awarded as economic relief to eligible U.S. airports for the prevention of,preparation for, and response to the COVID-19 pandemic. w In April 2020,primary commercial service airports, including the Airport, were allocated CARES Act relief funds based upon various formulas. Under the CARES Act, an airport owner/sponsor may use these funds for any purpose for which airport revenues may be lawfully U) used as provided by the FAA's Policy and Procedures Concerning the Use of Airport Revenues 0 ("Revenue Use Policy"), which include payment of operating and maintenance expense, debt tf 0 service expense and, in certain cases, capital improvement expense. On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 ("CRRSA Act")was enacted into law as a part of the 2021 Consolidated Appropriations 0 Act. The CRRSA Act provides $2 billion in additional grant assistance to be awarded as f economic relief to eligible U.S. airports and eligible concessionaires at those airports to prevent, prepare for, and respond to the COVID-19 public health emergency. as On March 11, 2021, the American Rescue Plan Act of 2021 ("ARPA"), which provides E additional financial assistance to address the continuing impact of the corona virus and COVID- 19, was signed into law. This bill includes $8 billion in airport assistance. Under the ARPA, $6.5 billion will be shared by primary commercial service airports, including the Airport on a pro-rata share similar to the current AIP for entitlement funds. Also, under the ARPA, an additional $800 million will be provided to airports to provide rent and minimum annual guarantees ("MAGs")relief to airport concessionaires. Table II-3 sets forth the amount of COVID-19 Relief Funds awarded to the Airport and the timing and uses of those funds. v w 1,&l n&A sslit",!aIvs I C-21 DRAFT- Report of the Airport Consultant Packet Pg. 2274 1.9.b TABLE II-3 Federal COVID-19 Relief Funds Awards and Uses CARES Act Funds CRSSA Funds ARPA Funds Total Funds Total Award $21,789,697 $3,670,458 $6,246,931 $31,707,086 Total Received $14,359,299 $0 $0 $14,359,299 Uses: FY 2020 O&M Expense $5,295,800 $0 $0 $5,295,800 _ Total FY 2020 $5,295,800 $0 $0 $5,295,800 U) (D FY 2021 O&M Expense $9,063,499 $0 $0 $9,063,499 no Total FY 2021 $9,063,499 $0 $0 $9,063,499 (D U) FY 2022(subject to change) O&M Expense $640,701 $0 $0 $640,701 l W. Overflow Apron Parking 64,710 0 0 64,710 Total FY 2022 $705,411 $0 $0 $705,411 FY 2023 and Beyond (subject to change) W. Overflow Apron Parking $4,724,987 $0 $0 $4,724,987 Concessions 0 106,585 426,340 532,925 U) 2022 Project Funding 2,000,000 3,563,873 5,820,591 11,384,464 0 Total $6,724,987 $3,670,458 $6,246,931 $16,642,376 tf Total Uses $21,789,697 $3,670,458 $6,246,931 $31,707,086 CL (D Source:Airport Records. 0725/2022 Prepared by New ton&Associates,Inc. 2022 Bonds ROAC Draft 6 Financial Tables.xls tf CL (D (D E 0 v w I In A ssiit",!a vs 11.". C-22 DRAFT- Report of the Airport Consultant Packet Pg. 2275 1.9.b G. INFRASTRUCTURE INVESTMENT AND JOBS ACT FUNDS (Bipartisan Infrastructure Law) On November 15, 2021, President Biden signed the $1.2 trillion BIL,into law. Formally known as the Infrastructure Investment and Jobs Act, the law includes $25 billion of investment in the nation's air transportation system. Of this amount, $5 billion will address the physical condition of the FAA's air traffic control facilities, $15 billion will be for airport infrastructure improvements, and $5 billion will be used to improve passenger terminal facilities. Based on the same apportionment system used by the FAA to allocate AIP Passenger Entitlement Grants, the Airport expects to receive approximately $18.5 million of the $15 billion 0 component over a five-year period, commencing in federal FY 2022. Of this amount, the Airport currently has identified approximately $14.8 million as funding for the 2022 Project(see Table U) 11-1) and anticipates programming the balance of these grant funds for other eligible uses. 0 H. FLORIDA DEPARTMENT OF TRANSPORTATION GRANT FUNDS` as The aviation mission of the FDOT is to provide a secure and safe air transportation system that ensures the mobility of people and goods, enhances economic prosperity, and preserves the i quality of Florida's environment and communities. w FDOT's airport enhancement program, administered through matching grants, stand-alone grants and interest free loans,provides an important source of financial assistance for publicly owned and operated airports in the State. The program includes state funding for airport planning, s development, land acquisition, and capital improvements which are intended to help provide a r_ safe, cost-effective and efficient statewide aviation system. The state aviation grant program is to funded from Florida's Transportation Trust Fund. The aviation industry is a major contributor to 0 this fund through Florida's aviation fuel tax. as To be eligible for state funding,projects or programs must contribute to the implementation of the Florida Aviation System Plan, be consistent with and contribute to the implementation of any c tf airport master plan or layout plan. They must also be consistent, to the maximum extent 0 feasible, with the approved local government comprehensive plans of the units of government in which the airport is located. as E In general, Florida law allows FDOT to fund any capital project on airport property such as to construct and maintain runways and taxiways, eliminate airport hazards,protect the air space, and build terminals (i.e., terminal buildings,parking lots and structures, road and other access projects) and other facilities, and fund any services that lead to capital projects, such as planning and design services. The only off-airport projects allowed are the purchase of mitigation land, noise mitigation,purchase of aviation easements, and access projects for intercontinental airports. Airport capital equipment is eligible, as long as it is not closely related to day-to-day operations. In general, operational costs such as maintenance services, equipment, and supplies are not eligible for aviation grants. 9 https:!lwww.fdot.gov/aviationlfiindinginfo.shtm v w I&l n t A sslit",!aIvs I C-23 DRAFT- Report of the Airport Consultant Packet Pg. 2276 1.9.b The FDOT has established the following order of priority for eligible state airport projects: (i) Federally Funded Projects (ii) Non-Federally Funded Airside Projects: (a) Safety or security of the traveling public; (b) Preserve existing airfield infrastructure; (c) Increase capacity of Florida's airports; and (d) Projects of significant importance that cannot be fully funded by the federal government and can be funded under applicable Florida Law. (iii) Non-Federally Funded - Other: 0 (a) Airport planning projects; (b) Land acquisition for airfield infrastructure; (c) Airport terminal projects; (d) Airport access projects; and (e) Navigational Aids ("NAVAIDS")projects under certain criteria. i At commercial service airports, the FDOT provides, among other things, up to one-half of the local share of commercial service airport project costs when federal funding is available. For example, FDOT provides up to 12.5% of project costs when the FAA provides 75% funding. Since not all projects are eligible for federal funding, FDOT may provide up to 50% of project costs ineligible for federal funding. U) r_ Ultimately, the availability of funding and shares of project costs which will be paid by the c FDOT are limited to amounts appropriated annually by the Florida Legislature. The authority tf 0 for the FDOT to fund Florida airport projects comes from Florida Statutes, Sections 332.006 and 332.007. as The Airport has received a Commitment Letter from FDOT for approximately $38.9 million of 0 FDOT grant funds for the period shown below and has identified this amount for the funding of 0 the 2022 Project. Fiscal Year 2021/2022 (ending June 30) $3,737,000 Fiscal Year 2022/2023 $6,157,371 Fiscal Year 2023/2024 $9,097,000 Fiscal Year 2024/2025 $10,000,000 Fiscal Year 2025/2026 $10,000,000 L PASSENGER FACILITY CHARGES Pursuant to 14 CFR Part 158, airport sponsors (airport owners or operators) may apply to the FAA for authorization to impose a fee on every enplaning revenue passenger("Passenger Facility Charge" or"PFC") at the airport and to use the revenue derived from any such PFC to pay the allowable costs of PFC eligible airport improvements. The level of PFC which may be v w 1,&l n&A sslit",!aIvs I C-24 DRAFT- Report of the Airport Consultant Packet Pg. 2277 1.9.b charged can vary from $1.00, $2.00, $3.00, $4.00 or $4.50 depending upon the authorization requested by the sponsor and approved by the FAA. PFCs are collected by airlines on behalf of airports, less a handling charge, which the collecting airline is entitled to retain as compensation for its collecting, handling, and remitting the funds to the airports that imposed the PFC. The airline handling charge authorized by Part 158 is $0.11 per PFC. Under Part 158, PFCs may be used to fund and finance the allowable costs (project costs and bond-associated debt service and financing costs) of airport-related projects which would be eligible to receive federal grant funding under the Airport Improvement Program and which will preserve or enhance safety, capacity, or security of the national air transportation system, or which reduce aircraft noise, furnish opportunities for enhanced competition between and among airlines, and which have been approved for any such use by the FAA. On January 17, 1992, the FAA approved the County's first PFC application. The County's 0 nineteenth (19�h)PFC application ("PFC Application No. 19"), which included $2.7 million of PFC funding for design costs for the 2022 Project to be funded with PFCs, was approved by the FAA on January 25, 2022. as With respect to the construction costs of the 2022 Project costs to be funded with PFCs, the U) County received FAA approval of its twentieth (201h)PFC application ("PFC Application No. i 20") on July 12, 2022. PFC Application No. 20 received approval for approximately $106.3 million to pay approved PFC eligible costs of the 2022 Project, including financing and interest costs of the 2022 Bonds. That portion of the 2022 Project being funded with proceeds of the 2022 Bonds are approved PFC eligible costs, therefore, the debt service on the 2022 Bonds may be paid with Eligible PFC Revenues as defined in the Resolution. U) See Section V for historical and the projected PFC revenue and the application of Eligible PFC 0 Revenues to the debt service on the 2022 Bonds. tf 0 J. FUTURE CAPITAL IMPROVEMENTS as Table II-4 sets forth the capital improvements the Airport anticipates during the Forecast Period. — tf 0 CL as as (Remainder of Page Intentionally Left Blank) E v w 1, In A ssiit",!aIvs I C-25 DRAFT- Report of the Airport Consultant Packet Pg. 2278 1.9.b TABLE II-4 Capital Improvement Plan (Excluding the 2022 Project) C � � r+. [•+ � N n m � n cn N N T N N N N N N cO m'4L •r"'ri eY" N a � �Cti N Cti N Cti N Cti N Cam 2 - - - a 33 C ci F eb N � eL dNs f] Vsq Nc� rJ rJ rJ © n © c� rJ rJ rJ rJ rJ rJ rJ rJ rJ N V d Q M d a ry y LL Z a c W qb a LL a zt N zt N zt N N N ,per - c - - - �- FF c �ba � � � C� � C� � St ,H tL cfs 4 MM55 CS C W m � 2 s W N -, M. •+ cv =r -`�r 9 E, 9 �v r �v ry �v ry �v +a E w qb rn E 10 rn 2 m 1. fc rJ L. m' m' m' ro t] eT o V ¢T m e c c c ry �LL m V J'� y. � d LL C➢ � ry' [� 'o 'o 'o 'o ❑ LL G Ct Z W `T u Ct v W '2 ia• ia• ia• c'a, V N `',. OO W 6 F W n.. v In iit",!a v C-26 DRAFT- Report of the Airport Consultant Packet Pg. 2279 1.9.b 1l1111I RICO " III. DEMOGRAPHIC AND ECONOMIC ANALYSIS The demand for air transportation at an airport is, to a large degree, dependent upon the demographic and economic characteristics of the geographical area surrounding the airport, commonly referred to as the airport's air trade area. For purposes of this report, the Airport's Air Trade Area ("ATA") is defined as Monroe County, Florida, which encompasses a largely uninhabited section on the mainland which is almost entirely in Everglades National Park, as well as the inhabited and uninhabited islands in the Florida Keys from Key Largo in the northeast to the Dry Tortugas in the southwest(Exhibit III-1). The relationship between demand for air transportation and local demographic and economic characteristics is particularly true for Origin and Destination ("O&D")passenger traffic, which has historically made up virtually all g the demand at the Airport'0. Because the largest component of O&D demand is visitors to the Airport's Air Trade Area(visitors comprised 84.8 percent of total O&D passengers in FY 2021), U) the demand for air travel in the Air Trade Area is also heavily influenced by national economic conditions, including gross domestic product("GDP"), median household income, and employment. Additionally, the Air Trade Area's strong leisure and hospitality industry impacts demand for air travel. This section presents local and national demographic and economic data that indicates the Air Trade Area has an economic base capable of supporting increased demand for air travel during the Forecast Period. i w U) r- 0 tf (Remainder of Page Intentionally Left Blank) 4- 0 tf as as E 10 Based on reconciled US Department of Transportation ticket sample data, O&D passengers accounted for approximately 98.2%of total passengers at the Airport in FY 2021. imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-27 Packet Pg. 2280 1.9.b 1lll1Illl1l1 I C " EXHIBIT III-1 Air Trade Area k'L'."d L'J IE'ST INTE.RL NA%NCNAL Al KIPORT MAY 2022 (Pi r Palm hBearh International k, AirportCpe4) aµ �' rC COUNTY HENDRY COUNTY PALM BEACH COUNTY ' iM Southwest Florida �B international N�, Airport(RS Wl') i 1 Boat�. Patoril �. BROWARD COUNTY 2 N IAVP"S i I . a COLLIER COUNTY Fort Lauderdala•Hohywood v � i r International Airport(FILL) ,� 0 Qb I ' '4 Miami International �T Airport(miA) hNr tiI' ��"r IMIAMV DADE COUNTY �. it* JI m( r ty r Florida Keys Mararthora Airprarx 4MTHb 0 .W r I s h `l CL M (D Key West Internationip ��o� F y 4� � Airport(EYW) � �J FLlCYA1MCA CL L h D ... ... SrrnsrrnfYlv�rirFi�4 �I !rw, Q f,�I�. (b .PCkND nrr+FlamArer rLnr ru„u;urrm Key'halt I L) Gut—tior al ALr urt 1Mir M P'"1"r' k Xu- .p.a kfM,SJ�H '9rmorL�X/V PAA,.1' '.'Ir Y'itr°mm• p opRmt,(, rt ,rll'l"rhr' uvr`orlfinumy,o4pVrll .. (Ira,l^rf,YF'. L.i I IIh.n,/) (nI my Imrp,r7'N w ,d1<E'N t AIR TRADE AREA imloni& ssut.Iialvs� Inc. DRAFT- Report of the Airport Consultant C-28 Packet Pg. 2281 1.9.b 1l1111I RICO " A. DEMOGRAPHIC ANALYSIS 1. Population Historical population for the Air Trade Area, Florida, and the United States is presented in Table III-1. As shown,population in the Air Trade Area decreased from approximately 79,000 in CY 2000, to approximately 73,000 in CY 2010 and increased to approximately 74,000 in CY 2019. While population in the Air Trade Area decreased between CY 2000 and CY 2019 (compound annual growth rate CAGR of-0.4 percent),population growth was positive for Florida(CAGR of 1.5 percent) and the nation (CAGR of 0.8 percent) during this period. Table I11-1 also presents population projections from Woods &Poole Economics, Inc. (Woods & Poole)'1 for the Air Trade Area, Florida, and the United States for CY 2027. Population in the Air Trade Area is expected to remain at approximately 74,000 between CY 2019 and CY 0 2027.12,13 Projected population of the Air Trade Area(CAGR of-0.1 percent) is expected to decline compared to projected increases for both Florida(CAGR of 1.2 percent), and the United States (CAGR of 0.7 percent) during this period. as TABLE III-1 i Historical and Projected Population COMPOUND ANNUAL GROWLH RATE HISTORICAL PROJECrED HISTORICAL PROJECrED AREA 2000 2010 2019' 2027 2000-2010 2010-2019 2000-2019 2019-2027 Air Trade Axea2 79,470 73,220 74,228 73,806 -0.81/6 0.2016 -0.4016 -0.10/0 .............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. U) rlonda 16,047,515 18,845,537 21,477,737 23,547,044 1.6% 1.5% 1.5% 1.2% United States 282,162,374 309,321,604 328,241,432 346,074,217 0.9010 0.7010 0.80/0 0.7010 0 NOTES: U 1 2019 is the last year of historical data to the 2021 Woods&Poole database and is the basis for Woods&Poole's future projections.Therefore.it is the last year ofbistorical data displayed to this table. 2 The 2020 Census shows that the population ofthe Art Trade Area increased to 82.874.The cause ofthis growth is uncertain,and the 2032 population projection has not been adjusted to reflect the 2020 increase to population. C" All data are presented on a calendar year basis. SOURCE Woods&Poole Economics,Inc.,2021 Complete Economic and Demong2aphic Data Source(CEDDS),True 202E PREPARED BY.Ricondo&Associates.Inc..March 2022. 4- 0 0 CL E 11 Woods&Poole Economics,Inc.is an independent firm specializing in long-term county economic data and demographic data projections. 12 For variables in this Section with Woods&Poole projections, CY 2019 data are described because it is the last year of historical data in the Woods&Poole database and is the basis for Woods&Poole's future projections; additional historical data may be available from other sources. 13 The 2020 Census shows that the population of the Air Trade Area increased to 82,874. The cause of this growth is uncertain, and the 2027 population projection has not been adjusted to reflect the 2020 increase in population. imloni& ssuttialvs� h . DRAFT- Report of the Airport Consultant C-29 Packet Pg. 2282 1.9.b 1l1111I RICO " 2. Per Capita Personal Income One indicator of a region's demand for airline travel is per capita personal income (PCPI).14 PCPI marks the relative affluence of a region's residents and its allure to business and leisure travelers. Regions with higher PCPI often have strong business connections, as well as a developed market for tourism. Table III-2 presents historical PCPI for the Air Trade Area, Florida, and the United States between CY 2010 and CY 2019. As shown, PCPI for the Air Trade Area was substantially higher than equivalent measures for both Florida and the United States each year between CY 2010 and CY 2019. In CY 2010 the PCPI of the Air Trade Area was 158.5 percent of Florida and 150.4 percent of the United States. By 2019 this difference had increased to 193.2 percent and 179.3 percent, respectively. The PCPI for the Air Trade Area increased at a CAGR of 4.2 percent between CY 2010 and CY 2019, approximately double the PCPI rates of Florida and the United States (1.9 percent and 2.2 percent CAGRs, respectively) 0 over this same period. Florida and U.S. PCPI increased(1.9 percent and 2.2 percent CAGRs, respectively) over this same period. 0 Table III-2 also presents projections of PCPI through CY 2027. According to data from Woods and Poole,PCPI for the Air Trade Area is projected to increase from $92,181 in CY 2019 to $107,261 in CY 2027, a CAGR of 1.9 percent. This compares to a CAGR of 1.8 percent for i Florida and 1.7 percent for the United States. An additional indicator of the market potential for air transportation demand is the percentage of households in the higher income categories. An examination of this indicator is important in that as income increases, air transportation becomes more affordable and; therefore, is generally used more frequently. Table III-2 also presents percentages of households in selected PCPI categories for CY 2019 as expressed in 2009 dollars. As presented, 50.9 percent of households in the Air t00 Trade Area had a PCPI of$60,000 or more in CY 2019, which was higher than the percentage of tf households in these income categories for both Florida(41.2 percent) and the United States (45.8 CL percent). as M 4- 0 tf CL as r- (Remainder of Page Intentionally Left Blank) E 14 Per capita personal income is the sum of wages and salaries,other labor income,proprietors' income,rental income,dividend income,personal interest income, and transfer payments,less personal contributions for government social insurance,divided by the region's population. imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-30 Packet Pg. 2283 1.9.b 1l1111I RICO " TABLE III-2 Per Capita Personal Income (in 2012 Dollars) PER CAPITA PERSONAL INCOME YEAR AIR TRADE FLORIDA UNITED AREA STATES torical,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��. 2w010 $63,709 $40,�2w0w1 $�42,3�6�6w,��w,��w,��w,��w,��w,��w,��w,��. 2w011 $63,43w7 $408 w96 $�43w.55w3�w,��w,��w,��w,��w,��w,��w,��w,��. 2w01w,2 $69,�673 $4w11w,15 $�4460w5�w,��w,��w,��w,��w,��w,��w,��w,��. � 3 $64,416 $40 $44, w4w,��w,��w,��w,��w,��w,��w,��w,��. 155 ,w ,,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w, w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,. � 2014 $69,624 $41,953 $45,775 0 two $ w.��, o $4w ��, $�47 U) 15 936 2016 $ $ w76564 �44w � >249 48035 � 2017 $82,204 $45,765 $49,175 0 2w018 $9�03�26 $w470w85 $�5w0w.4�5w0w,��w,��w,��w,��w,��w,��w,��w,��. � 20w,19 $92,�1w,gw1 $4w7,7w2w4 $5142w4w,��w,��w,��w,��w,��w,��w,��w,��. � 2 Projectedw��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�2020 $91,047 $48,910 $52,504 i 2021 $96,357 $49,674 $53,262 w,2022, w,$9w8 '1w,50w,$50,550 w,.$5 w4w'w1 w,3w7w, 2w023 $99,95w8 $5 w1 '44w1 $55,027w,w,w,w,w,w,w,w,. 2�024 $��1w0w17w72 $52,�3w40 $�Sw592w3�w,��w,��w,��w,��w,��w,��w,��w,��. � 2,, 2025 $103,594 $53,248 $��� 56w 827 � 2026 �.$ U) 105,424 $54,165 $57,739 0 0 2027 $107,261 $55,092 $��� 58,659 C�ompound Annualw,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��. 0 Growth Rate CL w,2w0 lw,Ow,w-w,2ow1.9w, w4.,2a/o.w, w,l.,9a/ow, w,2.2% w, C 2019—2027 19% 1.8% 1.7% 4- Percentage of Households in Income Categories(2019) 0 �Income Category AIR TRADE FLORIDAUNITED 0 CL (in 2,0w09„w dollars) AREA STATES w,��w,��w,��w,��w,��w,��w,��. � Less than$29,,99923��w.4. 29�w8w, 27.8�% $30,000 to��$59,999 25.8% .29.0% 263%0 a � w,w,w,$6N0,OOOw,tow,.$7w4'��w� 12.,5%olw1.,2% lwO.,.ga/o.w,w,w,w,w,w,w,w,. 5,�OOOto$�9�9,�99w914.,�9% 12�.,2w%� 1w3w,w1%�.�w,��w,��w,��w,��w,��w,��w,��w,��. � „ 100,000 or More 23.5% 17.8% 21.9% NOTES: 1 2019 is the last year ofhistorical data in the 2021 Woods&Poole database and is the basis for Woods&Poole's future projections.Therefore,it is the last year ofhistorical data displayed in this table. All data are presented on a calendar year basis. SOURCE: Woods&Poole Economics,Inc.,2021 Complete Econonuc and Demographic Data Source(CEDDS),June 2021. PREPARED BY. Ricondo&Associates,Inc.,March 2022. 1 ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-31 Packet Pg. 2284 1.9.b 1l1111I RICO " B. ECONOMIC ANALYSIS 1. Gross Domestic Product and Gross Regional Product Gross domestic product for the United States and Florida MSA equivalent, gross regional product, are measures of the market value of all final goods and services produced within a particular area for a specific period of time. These indicators are one of the broadest measures of the economic health of a particular area, and, consequently, the area's potential air travel demand. Table III-3 presents historical gross regional/domestic product for the Air Trade Area, Florida, and the United States between CY 2010 and CY 2019 as expressed in 2012 dollars. As shown, 0 Air Trade Area gross regional product(GRP) increased from approximately $3.9 billion in CY 2010 to approximately $4.9 billion in CY 2019, a CAGR of 2.5 percent. In comparison, the GRP for Florida increased at a 3.0 percent CAGR over the same period, while the United States' c equivalent measure, GDP, grew at a 2.5 percent CAGR. Table III-3 also presents projections of gross regional/domestic product for CY 2027. Woods & Poole projects GRP for the Air Trade Area to increase from $4.9 billion in CY 2019 to $5.8 billion in CY 2027, reflecting a CAGR of 2.4 percent. GRP growth for Florida is projected to be slightly higher than the Air Trade Area at a CAGR of 2.7 percent during this period. Projected GDP growth for the nation is a CAGR of 2.1 percent during this period. U) r- 0 tf CL as (Remainder of Page Intentionally Left Blank) 0 tf 0 as as E "� � . DRAFT- Report of the Airport Consultant C-32 Packet Pg. 2285 1.9.b 1l1111I RICO " TABLE III-3 Gross Regional Product and Gross Domestic Product(GRP or GDP) (in 2012 Dollars,Amounts in Billions) YEAR AIR TRADE AREA(GRP) FLORIDA(GRP) UNITED STATES(GDP) Historical 2010 $3.90 $771.37 $15,556.29 2011 $ $ $15,725.30 20�12 $ $3gw7768.w72 $1608"�.��77w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,� 20�13 �gw4790.25 ���45�� �w,�w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,� $ $ $ ww , 2014 $3.97 $817.26 $16,934.25 0 2015 $4.22 $871.24 $17,591.05 2016 $4.39 $904.30 $17,894.52 U) 2017 $4.56 $934.19 $18,332.21 2018 $4.64 $970.35 $18,935.04 ......................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 0 2019' $4.85 $1,007.27 $19,402.22 Projected qs 2020 $4.76 $979.26 $18,728.98 2021 $5.15 $1,065.17 $20,259.08 2022 $5.27 $1,093.65 $20,683.42 2�02' 53w8 �w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��$11w,225 g��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w$2w1 1�w1 2w,1w,6w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,� $ w,w,w, 2024 $5.49 $1,152.06 $21,546.05 2025 $5.61 $1,182.06 $21,984.56 2026 $5.73 $1,212.64 $22,427.85 2027 $5.84 $1,243.75 $22,875.54 U) Compound Annual 0 Growth Rate to tf 2010-2019 2.5% 3.0% 2.5% 0 CL 2019-2027 2.4% 2.7% 2.1% qb 1 CY2019 is the last year of historical data in the 2021 Woods&Poole databas e and is the basis for Woods&Poole's future projections.Therefore,it is the last year of historical data displayed in this table. 4- All data are presented on a calendar year basis. 0 SOURCE: Woods&Poole Economics,Inc.,2021 Complete Economic and Demographic Data Source(CEDDS),June 2021. 0 PREPARED BY: Ricondo&Associates,Inc.,March 2022. qb 2. Employment Trends Recent employment trends for the Air Trade Area, Florida, and the United States are presented in Table III-4. As shown, the Air Trade Area's civilian labor force increased from approximately 42,000 workers in CY 2010 to approximately 48,000 workers in CY 2021. This increase represents a CAGR of approximately 1.2 percent in the Air Trade Area's labor force during this period, compared to an approximately 1.2 percent increase for Florida and 0.4 percent increase for the United States. The labor force was affected by the COVID-19 pandemic during CY 2020. COVID-19 was first identified in December 2019 and was declared a pandemic by the World Health Organization in March 2020. The Air Trade Area's civilian labor force declined by imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-33 Packet Pg. 2286 1.9.b 1l1111I RICO " 3.9 percent from CY 2019 to CY 2020, as workers left the labor force due to lack of childcare, fear of getting COVID-19 in the workplace, and other reasons related to the COVID-19 pandemic.is The civilian labor force of Florida and the United States declined by 2.1 percent and 1.7 percent, respectively. The civilian labor force for the Air Trade Area recovered to 47,800 workers in CY 2021, an increase of 2.7 percent over the 2019 level. This compares to a similar increase of 1.5 percent for Florida and a decrease of 1.4 percent for the United States. Table III-4 also shows that average annual unemployment rates (non-seasonally adjusted) for the Air Trade Area were consistently below the unemployment rates for Florida and the United States from CY 2010 to CY 2019. In CY 2020, the Air Trade Area's annual unemployment rate (8.1 percent)was higher than the unemployment rate for Florida and equal to that of the United States. This increase was a result of the COVID-19 pandemic. In CY 2021, the Air Trade Area saw a faster recovery from the pandemic than Florida or the United States as its unemployment rate dropped to 2.9 percent compared to 4.8 percent for Florida and 5.4 percent for the United 0 States. 0 as U) i (Remainder of Page Intentionally Left Blank) U) r_ 0 tf as 4- 0 tf as as E is Iacurci, Greg,"The pandemic pushes millions from the labor force. That's bad news," CNBC, https://www.cnbc.com/2021/02/081j anuary-jobs-report-covid-19-pushes-millions-from-the-work-force.html (accessed October 20,2021). imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-34 Packet Pg. 2287 1.9.b 1l1111I RICO " TABLE III-4 Civilian Labor Force and Unemployment Rates (in Thousands) CIVILIAN LABOR FORCE YEAR AIR TRADE AREA FLORIDA UNITED STATES 201w,0 w, w,41.9 w, 9,147 153,889 53g89w, 2011u, u, u,42u..5 9,260 u,1u53 u,6.lu,7u, 2012w, w, w,43.6 w, 9,336 w,3w3 6w, w,1w54w,975w, 2013 44.2 9,415 155,389 2014 44.9 9,546 155,922 2 2015 45.9 9,640 157,130 0 2016 46.6 9,841 159,187 as 2017 45.6 10,032 160,320 2018 45.1 10,166 162,075 0 2019 46.6 10,330 163,539 as 2020 44.8 10,114 160,742 U) 2021 t 47.8 10,484 161,204 i Compound Annual Growth Rate 2010-2019 1.2% 1.4% 0.7% 11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.2019-2021t 1.3% 0.7% -0.7% 2010-2021 i 1.2% 1.2% 0.4% U) UNEMPLOYMENT RATES c t) 2010 7.5% 10.8% 9.6% tf 0 2011 7.0% 10.0% 8.9% CL 2012 5.9/a 8.7/a 8.1/a as 2013 5.1/a 7.5/a 7.4/a 4- 2014 4.2% 6.4% 6.2% c 2015 3.5% 5.5% 5.3% CL as 2016 3.2% 4.9% 4.9% 2017 3.3% 4.3% 4.4% 2018 2.6% 3.6% 3.9% E 2019 2.2% 3.3% 3.7% U 2020 8.1% 7.9% 8.1% ��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,���u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,� 2021 2.9/a 4.8/a 5.4/a NOTES: 1 CY2021 labor force and unemployment figures for the Air Trade Area and Florida are preliminary. All data are presented on a calendar year basis. SOURCE: U.S.Department of Labor,Bureau of Labor Statistics,February 10,2022. PREPARED BY. Ricondo&Associates,Inc.,March 2022. imloni& ssu "ialvs" Mr. DRAFT- Report of the Airport Consultant C-35 Packet Pg. 2288 1.9.b 1l1111I RICO " 3. Business Climate The business climate in the Air Trade Area offers significant advantages to new, expanding, and relocating businesses. These advantages include support for small businesses; business costs that are below the national average; a state "right-to-work" law; competitive local/state tax and incentive structures; and no state income tax. Florida ranked fourth in the Tax Foundation's 2021 State Business Tax Climate Index, an indicator of which states' tax systems are the most hospitable to business and economic growth.16 Florida has the fourth largest state GDP and the third largest state workforce size, which can support business operations. Florida also has a labor union participation rate below the national average: in 2021, 5.2 percent of Florida's workforce was represented by a union, compared to the 10.3 percent national average." This in turn _ correlates with lower labor costs and a more attractive business climate. c U) as The tourism business is by far the largest industry in the Air Trade Area, with 54 percent of jobs and 60 percent of all spending tied to tourism.18 In Key West specifically, 71 percent of all jobs are sustained by tourism.19 According to the Florida Department of Revenue, since February 2021 tourism and recreation taxable sales in Monroe County have surpassed those of all previous years, going back to 2016.20 i Major employers in the Air Trade Area, as measured by the number of employees, are presented in Table III-5.As shown, there are eight private or public entities in the Air Trade Area with 500 or more employees. The largest employer in the area is the U.S. Armed Services with 2,190 local employees,21 followed by Monroe County Schools (1,701 local employees), Ocean Reef Club (850 local employees), and Publix Stores (730 local employees). U) 0 tf CL (Remainder of Page Intentionally Left Blank) as 4- 0 tf a as r_ as 16 Tax Foundation,"2021 State Business Tax Climate Index,"https://taxfoundation.org/2021-state-business-tax- E climate-index/(accessed September 28,2021). 17 U.S. Department of Labor,Bureau of Labor Statistics,"Union Members—2021," https://www.bls.gov/news.release/pdf/union2.pdf(accessed February 1,2022). "TBD Economics,LLC, The Economic Contribution of Spending in the Florida Keys National Marine Sanctuary to the Florida Economy,https://marinesanct iary.org/wp-content/tiploads/2019/07/FKNMS-Report-Final-072819.pdf (accessed January 31,2022). 19 Tourism Economics, Comparative Visitor Economic Impacts for Key West, FL,https://crLiising.org/-/media/clia--- visitor-spending-analysis---key- west#:—:text=A%20total%20of%2012%2C800%20jobs,West%20were%20sustained%20by%20tourism(accessed January 31,2022). zo Florida Department of Revenue,Florida Sales Tax Receipts,December 2021. zu Includes service members,civilians and contractors. imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-36 Packet Pg. 2289 1.9.b 1l1111I RICO " TABLE III-5 Major Employers in the Air Trade Area (Over 500 Employees) EMPLOYER DESCRIPTION #OF LOCAL EMPLOYEES US Armed Services US government 2,190w1 w, wMonroew,County Schools Public w,wschool Ndistrict 1 w,w701 NOcean Reef Club Private .wclub w/.real ,estate w,.develo w,wrrt85w0w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w, Pme u, Publix Stores Key West,Marathon,&Key Largo Grocery store chain 730 u, u, 2 Ocean Properties Hospitality consortium 550 11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.11.1 2 Monroe County Government County government 540 U) Monroe County Sherds Office Law enforcement 518 as Lower Keys Medical Center,Key West City government 500 r_ 0 NOTE: 1 US Armed Services includes civilian support and contractors SOURCE: Key West Chamber of Commerce,Monroe County Major Employers,December 2021. PREPARED BY: Ricondo&Associates,Inc.,March 2022. I �a 4. Employment by Major Industrial Sector The Air Trade Area's economy is primarily dependent on tourism; however, local government, 0 military bases and the real estate market provide a significant level of employment as well. U Sources of economic diversity in the region are discussed in this section by focusing on the 0. following nonagricultural employment sectors, listed in order of their contribution to the Air Trade Area's employment base:22 4- 0 • leisure and hospitality tf c CL • government as • financial r_ as E • trade • professional and business services • construction zz The 11 industry sectors discussed in this section and displayed in Table III-5 correspond to the 11 "supersectors" defined by the U.S. Bureau of Labor Statistics' grouping by North American Industry Classification System code, with two exceptions;due to low employment in the mining and logging supersector,it is included in the constriction sector in this Report, and the trade,transportation, and utilities supersector is divided into the trade sector and transportation/utilities sector. imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-37 Packet Pg. 2290 1.9.b �lll�Illl�li IC " • other services • education and health services • transportation/utilities • manufacturing • information An analysis of nonagricultural employment trends by major industry sector is presented in Table III-6, which compares the Air Trade Area's employment trends to those for the United States for CY 2013, CY 2019, and CY 2020.23 Overall, nonagricultural employment in the Air Trade Area increased from approximately 58,000 workers in CY 2013 to approximately 60,000 workers in CY 2020. This increase represents a growth rate slightly below that of the United States. The Air Trade Area had a CAGR of approximately 0.4 percent during this period, compared to a CAGR of approximately 0.7 percent nationwide. In CY 2020, Air Trade Area nonagricultural 0 employment was affected more by the COVID-19 pandemic than the nation, with nonagricultural employment in the Air Trade Area decreasing at a faster rate (7.8 percent between CY 2019 and CY 2020)than the nation (5.5 percent between CY 2019 and CY 2020). The number of workers listed by Woods & Poole for Monroe County constitutes approximately i 80 percent of the population of the Air Trade Area. This is due to double counting of proprietors and part-time employees, as well as the prevalence of workers who commute to jobs in the Air Trade Area from their residences in Miami-Dade County. The relatively higher wages in the Florida Keys, in particular for lower income workers, coupled with high housing costs in the Air Trade Area, lead many workers to seek employment in Monroe County while still living in Miami-Dade County.24 This in turn inflates the employment numbers for the Air Trade Area. 0 to tf CL as 4- 0 tf CL as (Remainder of Page Intentionally Left Blank) as E 23 The historical year varies from other tables because employment data by industry sector was not available for 2010.2013 is the first year with full sector breakdown data and is therefore used here. 2' Goodhue,David,"Workers ride this bus to better-paying jobs in paradise. They're a long way from home," Miami Herald,https://www.miamiherald.com/news/local/communitylflorida-keys/article234300792.html(accessed March 17,2022). imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-38 Packet Pg. 2291 1.9.b 1l1111I RICO " TABLE III-6 Employment Trends by Major Industry Sector (Employment in Thousands) AIR TRADE AREA UNITED STATES NONAGRICULTURAL EMPLOYMENT1 NONAGRICULTURAL EMPLOYMENT1 COMPOUND COMPOUND ANNUAL GROWTH RATE ANNUAL GROWTH RATE ..SECTOR..................................................2013..........201�2.........2020............. .�3...�2020.................2019.-2020............�201.3.........�2019.........2020..............2013.-.20tr20.................�2019..��.2020......... �.Leism�e and Hos�...dal1�........................................�...3................. �.3................�.4��.....................................-�..... ........................................... ...s.��....................17.143..........19.913.........19.75.....................................�.............................................�.... ............................ ..... ........................:..................:.:..............:....:................ .....:........................ ...:..... ........ .................................................... .....:............... Govemtneirt 7.1 7.7 7.6 1.0% -1.1% 24A55 24.732 24129 0.0% -2.4% .FulanciaL......................................................................7..2.................. .3.....................4.........................................0.9%............................................-i�. ......................17.872........19.6ll........�19.447.............................9.In................ ..................... �.Trade..............................................................................�..2.................. ..............................................................._.02 ..........................................- �.4.�.....................24.712........25.375........2413�7............................_�.�...3 ............................................4�l..................... .......................................................................................................................................................J............................................0....�.................................................7.....�...............................:..........................:....................................................................0.....�..................................................4.....�........................ .�. Piofesstonal utd Btumess SS,ices 6.3 7.3 7.1 1.3/0 2.5/0 26.176 22833 28.727 1.3/0 3.7/o ...........................................................................................................................................................................................................................................................................................................:.........................:..........................:...................................................................................................................................... Colistntetion2 5.1 5.8 5.6 1.2% -3.5% 11,754 13,227 12,717 1.1% -3.9% 0 ..........................3.........................................................................................................................................................................................................................................................................................................�� Other Services 3.6 4.2 3.9 0.6% -9.6% 10,513 11,576 10,511 0.0% -9.2% Education and Health Services 3.3 3.7 3.6 .0.3% .2.0% 24,833 29,041 27,061 1.2% .3.5% .....................................................................................................................................................................................................................................................................................................................................:..........................:...................................................................................................................................... Train ortation/UtiGties 1.6 2.6 2.3 5.7% -29% 6.591 2803 9,652 5.6% -1.6% U2 .....................................................................................................................................................................................................:................. ......................................................................1.................... Marn6achnu 0.4 0.6 0.5 3.3% -4.4% 12.761 13.523 12.803 0.1% .. . hffomiation4 0.6 0.5 0.5 -3.4% -5.7% 3,265 3,400 3,245 -0.1% -4.6% ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Total 58.0 64.7 59.7 0.4% -7.8% 179,680 199,043 188,186 0.7% -5.5% 0 Percent of 2020 Nonagricultural Employment (D Lemureand Husp,U za.&% °U) dai t) Gooe<nn,ent �Ay l�nandai toa� 12.a, I Trade uuiuii�lny%Iz&� Professional and Business Sea-, 115% ill@II@IIIVII@II@II@II@II@II@II@II@II 15.3 Construct-2 Other S--,3 61P0 education and Health se',Y-s GG// Tmnsportallon/UtillNes (I IIIPIIIQIIdill Manufacturing @Illu�m`Bull@II@II@II@II@II@II@II@II@II@II@II@II@II@II@II@1 6.&% mfuror at-4 iiuii�Irlfil�tHi r- QO% 5.0% 100% 15.0% 20.0% 25.0% 30.0% MAt Trade Area Ilul United States VOTES: All data are presented on a calendar year bas is. CL 1 En ply-t data include wa d salary workers.. tors.. to household er loyees..and miscellaneous workers.Ean loyment data reflect the number of Jobs..includin rt-tune and full-tune tions..and are np ge an propde privy np np � gpa porn based on the establishment surrey nflnich reviews place ofworkmtherthun residence ofworkers.As a result..some employees may be double-counted using this measure. 2 Includes mining and logging employment; Qj 3 The nonagricultural employment£orthe services sectorincludes outsourcing fromthe manufacturing sector. 4 The infnmration sector includes conmmnications,publishing motion picture and sound recording,and on-line services. 4- SOURCE:U.S.Department ofCormuerce,Bureau ofEconoruic Analysis.November 16.2021. 0 PREPARED BY:Ricondo&Associates..Inc March 2022. tf 0 CL The Air Trade Area experienced the highest growth (5.7 percent) in the transportation/utilities sector followed by manufacturing,professional and business services, and construction. Three E out of four sectors experienced higher growth in the Air Trade Area than in the United States between CY 2013 and CY 2020. The most significant impact on employment from the COVID- 19 pandemic was in the leisure and hospitality sector, though the Air Trade Area was less impacted than the nation. Between CY 2019 and CY 2020, employment declined by 17.8 percent and 20.9 percent in the Air Trade Area and the United States, respectively. Table III-6 shows that in CY 2020, employment in the Air Trade Area is concentrated in the leisure and hospitality, financial, and construction sectors compared with the United States. Contrarily, employment in professional and business services, education and health services, transportation/utilities, and manufacturing are less concentrated in the Air Trade Area than it is in the United States. imloni& ssuttialvs� Mr. DRAFT- Report of the Airport Consultant C-39 Packet Pg. 2292 1.9.b 1l1111I RICO " Changes in the Air Trade Area's nonagricultural employment sector differ from the national trends that occurred between CY 2013 and CY 2020. The Air Trade Area experienced significant growth in the government and manufacturing sectors, while the information and education and health services sectors experienced a significant decline compared to the United States. i. Leisure and Hospitality In CY 2020, the leisure and hospitality sector accounted for approximately 14,200 employees in the Air Trade Area, by far the highest employment level among all sectors. The leisure and hospitality sector accounted for 23.8 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 8.8 percent in the United States. Leisure and hospitality employment in the Air Trade Area decreased by 1.1 percent between CY 0 2013 and CY 2020, compared to a 1.2 percent decrease for the United States over the same period. Leisure and hospitality employment in the Air Trade Area was less affected in CY 2020 by the COVID-19 pandemic than leisure and hospitality employment in the United States, with the Air Trade Area leisure and hospitality employment decreasing 17.8 percent between CY 2019 and CY 2020 compared to a 20.9 percent decrease in U.S. leisure and hospitality employment over the same period. The leisure and hospitality industry is the largest service sector in the Air Trade Area; its growth is a significant driver of services-related employment and air travel demand at the Airport. According to MMGY Travel Intelligence - an integrated marketing agency specializing in hospitality, travel and tourism - in CY 2019 the Air Trade Area saw approximately 5.8 million visitors and those visitors spent approximately $3.4 billion. In CY 2020, the Air Trade Area saw U) approximately 3.6 million visitors and those visitors spent approximately $2.4 billion.25 The U decline was due to the COVID-19 pandemic and the fact that the Florida Keys were closed to tf 0 visitors in spring 2020. However, CY 2021 not only saw a recovery in total visitors to 2019 CL levels, but spending increased, including on hotel rooms, with the average monthly average daily as rate (ADR)reaching all-time highs. In Key West, the average monthly occupancy rate in CY 2021 reached 84.5 percent, surpassing the CY 2019 average monthly occupancy rate. In addition, 0 the monthly ADR in CY 2021 climbed nearly $100 from 2019 levels to $380.44.26 0 CL as The largest hotel in the Air Trade Area by number of rooms is the historic Casa Marina in Key W West, with 311 rooms. The largest hotel in the Lower Keys by land area is Oceans Edge Resort and Marina, a 20-acre property on Stock Island. Due to the Rate of Growth Ordinance ("ROGO") and nonresidential ROGO ("NROGO") implemented in Monroe County for ecological protection and safe hurricane evacuation capacity, the supply of new hotel complexes 21"2020 Monroe County Visitor Volume and Spending,"MMGY Travel Intelligence, https:!lwww.monroecounty- fl.govlDocumentCenter/View/30094/2020-Monroe-County-Domestic-Visitor-Volume9bidld=(accessed February 7, 2022). 26"Key West Chamber of Commerce-Demographic Update 2021-22," Tourist Development Council, December 2021. imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-40 Packet Pg. 2293 1.9.b 1l1111I RICO " is limited.27,28 Between CY 2009 and CY 2019 the annual rate of growth in hotel capacity was 1.4 percent, as the supply grew to over 3.6 million hotel rooms in the Florida Keys.29 However, many investors, including global hospitality brands, are renovating existing properties and demand for hotel rooms is high, as evidenced by the highest ADR in the United States, ahead of New York City.30 The hotel occupancy rate in the Florida Keys has historically been approximately 10 percentage points higher than the national average.31 The cruise industry has a strong presence at the Port of Key West(the "Port"). Cruise ships can use up to three docking facilities at the Port at one time. According to a report produced by Tourism Economics, approximately one-third of the city's more than three million visitors in 2018 were cruise ship passengers or crew.32 They collectively contributed about 7 percent of 0 total visitor spending in Key West and about 12 percent of direct visitor spending in the food and beverage, retail, and recreation sectors. In CY 2019, nearly one million cruise ship passengers 0 passed through Key West.33 After being suspended in March 2020 due to the COVID-19 pandemic, cruises resumed in November 2021 with the first two ships operated by Azamara and Crystal Cruises.34 There is an ongoing local effort to limit both the number and size of cruise ships that dock at the Port. The passing of a proposed city ordinance would ban cruise ships with a capacity over 1,300 passengers and would cap the number of passengers and crew disembarking in Key West to 1,500 people daily.35 Carnival Cruise Line has removed Key West as a stop on some of its sailings in 2022, but otherwise the Port is still receiving vessels.36 The Key West Historic District encompasses roughly the western half of the island and includes both the central business district and most of Key West's tourist attractions. Primary leisure and hospitality-related attractions located in both the Key West Historic District and throughout the Air Trade Area are discussed below: U) 0 tf CL 27 ROGO applies to residential properties and NRGO applies to non-residential properties. 28 1110 Charts That Prove the Florida Keys are Still the Best Lodging Market in the World,"Hodges Ward Elliott (D (HWE),http://hodgeswardelliott.com/wp-content/uploads/2020/08/Florida-Keys-Think-Piece-08.05.2020.pdf — (accessed February 3,2022). tf 29 Ibid. 0 30 Ibid. (D 31 Ibid. 32 Tourism Economics, Comparative Visitor Economic Impacts for Key West, FL,https://cnuising.org/-/media/clia--- visitor-spending-analysis --key- E west#:—:text=A%20total%20of%2012%2C800%20jobs,West%20were%20sustained%20by%20tourism(accessed January 31,2022). ""Cruise Ship Data," City ofKey West Port Operations,https://www.keywesttravelguide.com/key-west-tourism- statistics(accessed January 13,2022). "Miles,Mandy,"Cruise Ships Come Back to Key West on Saturday,"Keys Weekly, https://keysweekly.com/42/cruise-ships-come-back-to-key-west-on-satLirday (accessed January 13,2022). "Miles,Mandy,"Debate Continues as Cruise Ships Make a Controversial Return to Key West,"Keys Weekly, https://keysweekly.com/42/debate-continues-as-cniise-ships-make-a-controversial-return-to-key-west(accessed February 17,2022). 36 Thakkar,Emrys,"Carnival Cruise Line Removes Key West on Upcoming Sailings," Cruise Hive, https://www.cniisehive.com/carnival-cnuise-line-removes-key-west-for-upcoming-sailings/63874(accessed February 17,2022). imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-41 Packet Pg. 2294 1.9.b 1l1111I RICO " Dry Tortugas National Park and Fort Jefferson. Accessible only by boat or seaplane, this 100-square mile park is mostly open water with seven small islands. It is a popular excursion from Key West, which lies 70 miles to the east, and includes historic Fort Jefferson, abundant coral reefs and marine life, as well as many bird species.37 Fort Zachary Taylor Historic State Park. A National Historic Monument and the southernmost state park in the continental United States, this fort predates the Civil War and has the largest collection of Civil War weaponry in the world. The park also hosts what some consider to be the best beach in Key West.38 Maritime Sites and Museums. With a lot of maritime importance due to its strategic location, attractions include the Key West Lighthouse & Keeper's Quarters Museum, the Key West Shipwreck Museum and Mel Fisher Maritime Museum, and the U.S. Coast Guard Cutter Ingham 0 Maritime Museum. Duval Street and Mallory Square. Key West's primary commercial and entertainment district, Duval Street, includes institutions such as the original Jimmy Buffett's Margaritaville and Sloppy Joe's Bar. Near the north end of the mile-long corridor sits Mallory Square, a bustling plaza known for its sunset views, numerous shops, and other attractions, such as the artifact- filled Key West Museum of Art and History at the Customs House. Notable Historical Residences. Various historical figures have resided in Key West, and several corresponding homes have been converted to museums that are open to the public. These include the Truman Annex (historic building that served as the winter White House for President Truman), the Ernest Hemingway Home & Museum, the Tennessee Williams museum (with U) replica of original house), and the Audubon House and Tropical Gardens. tea tf 0 Southernmost Point of the Continental United States. Distinguished by a large concrete buoy, this point just a few blocks south of the start of U.S. Route 1 is one of the most photographed attractions in the nation and marks 90 miles from Cuba.39 4- 0 Historic Theaters and Performing Arts Venues. Key West is known for its performing arts 0 scene. Notable theaters include the Waterfront Playhouse, the Red Barn Theatre (which has hosted prominent figures such as Tennessee Williams, Jimmy Buffett and Shel Silverstein), the San Carlos, the Key West Theatre, and the Studios of Key West(cultural center for artists, creatives and the performing arts). Florida Keys National Marine Sanctuary. Protected areas throughout the Florida Keys provide opportunities for wildlife conservation, observation, and interaction. John Pennekamp Coral Reef State Park in Key Largo is the first underwater park to be established in the United States. 37 Dry Tortugas,National ParkService,https://www.nps.gov/drto/index.htm(accessed January 14,2022). 38 Fort Zachary Taylor Historic State Park,Florida State Parks,https:!lwww.floridastateparks.org/parks-and- trailslfort-zachary-taylor-historic-state-park(accessed January 14,2022). 39 Childs,Pamela,"So What's Up With the Buoy Key West's Top Photo Op,"Destination Florida Keys, https:!ldestinationfloridakeys.com/so-whats-up-with-the-buoy-key-wests-top-photo-op(accessed January 17,2022). imloni t "� � . DRAFT- Report of the Airport Consultant C-42 Packet Pg. 2295 1.9.b 1l1111I RICO " Wildlife Museums, Rehabilitation, and Educational Centers. Wildlife museum and educational centers in the Air Trade Area include the Key West Butterfly and Nature Conservatory, the Key West Aquarium, the Florida Keys Eco-Discovery Center and the Keys History and Discovery Center in Key Largo. Notable wildlife rehabilitation centers in the Air Trade Area include the Dolphin Research Center and Turtle Hospital on Marathon, and the Florida Keys Wild Bird Rehabilitation Center on Tavernier. The Theater of the Sea on Islamorada provides opportunities for marine mammal encounters. Big Pine Key. Attractions on Big Pine Key include the National Key Deer Refuge for the deer species that is endemic to the Florida Keys and wildlife observation opportunities at the trail and observation deck at Blue Hole. 0 U) Bahia Honda State Park. An island park about 12 miles south of Marathon, the Bahia Honda as State Park includes three beaches: Calusa, Loggerhead, and Sandspur (which is still undergoing r_ reconstruction after damage from Hurricane Irma in 2017).40 as In addition to the primary leisure and hospitality-related attractions, the Air Trade Area has many private club communities, the largest of which is Key Largo's Ocean Reef Club. Located on 2,000 acres, Ocean Reef Club offers a variety of lodging, two championship golf courses, a 175- slip marina, and more than a dozen restaurants and lounges. Other recreation opportunities in the Air Trade Area include the Key West Golf Club and Islamorada, dubbed the "sport-fishing capital of the world."41 Outdoor activities such as snorkeling, sailing, and biking are popular throughout the Florida Keys and contribute to the draw of leisure travelers to the Air Trade Area. Major outdoor festivals and events in the Air Trade Area include the Conch Republic c Independence Celebration, Hemingway Days, Key West Lobsterfest, the Key Lime Festival, and tf 0 the Key West Songwriters Festival. Key West's Fantasy Fest draws up to 75,000 visitors annually and since starting in 1982, the Seven Mile Bridge Run is the world's only race as completely surrounded by water from start to finish. 4- 0 tf ii. Government as In CY 2020, the government sector accounted for approximately 7,600 employees in the Air Trade Area, the second highest employment level among all sectors. The government sector accounted for 12.7 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 12.8 percent in the United States. Government employment in the Air Trade Area increased by 1.0 percent between CY 2013 and CY 2020, compared to no change for the United States over the same period. Government 41 Harrison, Carlos,`Bahia Honda State Park: Beaches, Snorkeling and Camping in the Keys," Visit Florida, https:!lwww.visitflorida.com/travel-ideas/articles/big-pine-key-bahia-honda-state-park-snorkeling-and-camping/ (accessed January 14,2022). 41"Islamorada,"Monroe County Tourist Development Council,https://fla-keys.com/islamorada(accessed February 10,2022). imloni t ssut.ialvs� h . DRAFT- Report of the Airport Consultant C-43 Packet Pg. 2296 1.9.b 1l1111I RICO " employment in the Air Trade Area was slightly less affected by the COVID-19 pandemic in CY 2020 than government employment in the United States, with the Air Trade Area government employment decreasing 1.1 percent between CY 2019 and CY 2020 compared to a 1.2 percent decrease in national government employment over the same period. As shown in Table III-5, over half of the major employers in the Air Trade Area are government- affiliated. The largest U.S. federal government employer is the U.S. Armed Services, with almost 2,200 employees when civilian employees and contractors are included. The largest public primary/secondary educational employer and the second largest employer in the Air Trade Area is the Monroe County School District(1,701 employees), and the largest local full-service government employer is the Monroe County Government(540 employees). The Air Trade Area is an important center for the U.S. military. Naval Air Station Key West 0 (NAS Key West) occupies the entirety of Boca Chica Key. The airfield is a training facility for combat aircraft due to its year-round favorable weather conditions, and it provides strategic support for national security at a variety of departmental levels. NAS Key West also includes 0 Trumbo Point; this man-made addition to Key West provides military housing and recreational facilities and is the headquarters for Coast Guard Sector Key West, which is tasked with U) patrolling 55,000 square miles of seas stretching to Cuba and the Bahamas.42 Trumbo Point also 2 includes the only bridge connection to Fleming Key, which hosts the U.S. Army Special Forces Underwater Operations School. Finally, the Truman Annex hosts a few remaining operations, including the NOAA Hurricane Forecasting Center and Joint Interagency Task Force South. iii. Financial U) The financial sector comprises financial, insurance, and real estate services. In CY 2020, the 0 financial sector accounted for approximately 7,400 employees in the Air Trade Area, the third tf highest employment level among all sectors. The financial sector accounted for 12.3 percent of CL total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 10.3 percent in the United States. 4- 0 Financial employment in the Air Trade Area increased by 0.9 percent between CY 2013 and CY tf 2020, compared to a 1.2 percent increase for the United States over the same period. Financial C employment in the Air Trade Area was slightly more affected in CY 2020 by the COVID-19 pandemic than financial employment in the United States,with the Air Trade Area financial employment decreasing by 1.7 percent between CY 2019 and CY 2020 compared to a 0.8 E percent decrease in U.S. financial employment during the same period. Table III-7 presents total bank deposits for the Air Trade Area, Florida, and the United States between the year ending June 30, 2010 and the year ending June 30, 2021. Total bank deposits are an indication of the economic activity of the financial sector. As shown, total bank deposits in the Air Trade Area increased from approximately $2.3 billion in the year ending June 30, 2010, to approximately $4.6 billion in the year ending June 30, 2021. This increase represents a ""Sector Key West," United State Coast Guard Atlantic Area,https://www.atlanticarea.uscg.mil/Our- OrganizationlDistrict-7/Units/SectorKeyWest(accessed January 28,2022). imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-44 Packet Pg. 2297 1.9.b 1lll1Illl R I C " CAGR of 6.6 percent during this period, which was higher than that for Florida but lower than that for the nation (CAGRs of 6.4 and 7.6 percent, respectively) during this same period. There has been a surge in bank deposits during the COVID-19 pandemic, which can be seen in a significant increase in bank deposits between the year ending June 30, 2019, through the year ending June 30, 2021, in Table III-7. Numerous factors contributed to the surge, including the billions of dollars the United States government provided to small businesses via Paycheck Protection Program loans and to individuals via stimulus checks and unemployment benefits; the Federal Reserve's efforts to support financial markets, including an unlimited bond-buying program; and the uncertainty that prompted everyone from households to large corporations to keep more cash on hand.43 0 0 U) as 0 as U) i (Remainder of Page Intentionally Left Blank) 0 tf as 4- 0 tf as as E a3 Son,Hugh, "U.S.banks are `swimming in money' as deposits increase by $2 trillion amid the coronavinis," CNBC,https://www.cnbc.com/2020/06/21/banks-have-grown-by-2-trillion-in-deposits-since-coronaviris-first- hit.html (accessed October 1,2021). imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-45 Packet Pg. 2298 1.9.b 1l1111I RICO " TABLE III-7 Total Bank Deposits (Dollar Amounts in Millions) TOTAL BANK DEPOSITS YEAR AIR TRADE UNITED FLORIDA AREA STATES Historical�u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,� 2010uu .�u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$2,2u5u8 .�u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$40�98 ��9�4u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,$7>6768 �78 u,��u,��u,��u,��u,��u,��u,� 2011 $2,257 $411,157 $8,249,403 g 2012 $2,305 $423,908 $8,947,244 0 2013 $2,420 $441,108 $9,433,525 as 2014 $2,531 $462,364 $10,112,724 0 2015 $2,660 $502,930 $10,657,721 2016 $2,833 $541,660 $11,280,518 2017 $2,998 $563,793 $11,859,860 2018 $3,203 $585,832 $12,307,880 201u $ $9 3u,u3u4u� 603.u,S S S $lu2 u,g 1u,3 u,u120u,u,u,u,u,u, 2020uu $3u,ugu0u3 $u,u7.1 u,0 u,549 $1 u5 5.90u,u13.9u,u,u,u,u,u, 2021 $4,560 $808,085 $17,235,511 Compound Annual Growth Rate c 2010—2019 4.5% 4.4% 5.9% 0 2019—2021 16.7% 15.7% 16.0% as 2010—2021 6.6% 6.4% 7.6% 4- NOTE: Year ending June 30. 0 tf SOURCE: Federal Deposit Insurance Corporation(FDIC),Summary of Deposits Report, CL September 2021. PREPARED BY. Ricondo &Associates,Inc.,March 2022. E �s iv. Trade In CY 2020, the trade sector accounted for approximately 7,100 employees in the Air Trade Area, the fourth highest employment level among all sectors. The trade sector accounted for 11.9 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 12.8 percent in the United States. imloni t ssu "ialvs" Mr. DRAFT- Report of the Airport Consultant C-46 Packet Pg. 2299 1.9.b 1l1111I RICO " Trade employment in the Air Trade Area decreased by 0.2 percent between CY 2013 and CY 2020, compared to a 0.3 percent decrease for the United States over the same period. Trade employment in the Air Trade Area was more affected in CY 2020 by the COVID-19 pandemic than trade employment in the United States, with the Air Trade Area trade employment decreasing 7.4 percent compared to a 4.9 percent decrease in national trade employment. Monroe County's main retail centers include the shops, restaurants and bars along Duval Street in Key West as well as Clinton Square Market, a shopping mall housed in a historic 191h-century structure. The Air Trade Area also includes the Searstown Shopping Center and smaller boutiques and independent retailers throughout the Florida Keys. 0 One indicator of growth in the trade sector is retail sales, defined as all net sales (gross sales minus refunds and allowances for returns) for establishments engaged primarily in retail trade. 0 Table III-8 presents total retail sales per capita for the Air Trade Area, Florida, and the United W States between CY 2010 and CY 2019. Figures are shown on a per capita basis because the Air r_ Trade Area consistently outperforms the national average when the small local population is factored in. This is likely due to the strong tourism industry and high leisure visitor-ship. As shown in Table III-8, between CY 2010 and CY 2019 total retail sales per capita in the Air Trade Area increased at a CAGR of 2.1 percent, higher than both Florida's growth rate (CAGR of 1.7 i percent) and the U.S. growth rate (CAGR of 1.9 percent) during this period. Table III-8 also presents projections of total retail sales through CY 2027. According to data from Woods & Poole, total retail sales per capita for the Air Trade Area are projected to increase from approximately $28.3 million in CY 2019 to approximately $31.7 million in CY 2027, reflecting a CAGR of 1.5 percent between CY 2019 and CY 2027. Growth in Florida and the U) nation's total retail sales per capita is projected to be slightly lower than the Air Trade Area, with U each one projected to experience a CAGR of approximately 1.4 percent between CY 2019 and tf 0 CY 2027. CL as 4- 0 tf CL as as E (Remainder of Page Intentionally Left Blank) "� � . DRAFT- Report of the Airport Consultant C-47 Packet Pg. 2300 1.9.b 1l1111I RICO " TABLE III-8 Total Retail Sales Per Capita (in 2012 Dollars; Amounts in Millions Per Capita.) TOTAL RETAIL SALES PER CAPITA YEAR AIR TRADE UNITED FLORIDA AREA STATES Historical,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��� 20.1.�0 $23.��4u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$151.�u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�$1u42u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��� 2011 $24.5 $15.6 $14.7 0 2012 $25.3 $15.9 $15.1 2013 $25.6 $16.1 $15.3 2014 $26.1 $16.4 $15.6 2015 $26.7 $16.7 $15.9 0 2016 $27.0 $16.8 $16.1 as 2017 $27.3 $17.0 $16.3 2018 $27.8 $17.3 $16.6 i 20191 $28.3 $17.6 $16.9 Projected w 2020 $26.8 $17.2 $16.7 2021 $29.5 $18.3 $17.6 2022 $29.9 $18.6 $17.9 0 2023 $30.3 $18.9 $18.1 2024 $30.7 $19.1 $18.3 0 C 2025 $31.1 $19.3 $18.5 2026 $31.4 $19.5 $18.7 2027 $31.7 $19.7 $18.9 c Compound 0. Annual Growth Rate °b 2010-2019 2.1% 1.7% 1.9% r- 2019-2027 1.5% 1.4% 1.4% E 1 2019 is the last year of historical data in the 2021 Woods&Poole database and is the basis for U Woods&Poole's future projections.Therefore,A is the last year of historical data displayed in this table. All data are presented on a calendar year basis. SOURCE: Woods&Poole Economics,Inc.,2021 Complete Economic and Demographic Data Source(CEDDS),June 2021. PREPARED BY. Ricondo&Associates,Inc.,March 2022. & ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-48 Packet Pg. 2301 1.9.b 1l1111I RICO " V. Professional and Business Services In CY 2020, the professional and business services sector accounted for approximately 7,100 employees in the Air Trade Area, the fifth highest employment level among all sectors. The professional and business services sector accounted for 11.9 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 15.3 percent in the United States. Professional and business services employment in the Air Trade Area increased at a CAGR of 1.8 percent between CY 2013 and CY 2020, compared to a CAGR of 1.3 percent increase for the United States over the same period. Professional and business services employment in the Air Trade Area was slightly less affected in CY 2020 by the COVID-19 pandemic than professional and business services employment in the United States, with the Air Trade Area professional and business services employment decreasing 2.5 percent between CY 2019 and CY 2020 compared 0 to a 3.7 percent decrease in national professional and business services employment. vi. Construction as In CY 2020, the construction sector accounted for approximately 5,600 employees in the Air U) Trade Area. The construction sector accounted for 9.4 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 6.8 percent in the United States. Construction employment in the Air Trade Area increased by 1.2 percent between CY 2013 and CY 2020, compared to a 1.1 percent increase for the nation over the same period. Construction employment in the Air Trade Area was slightly less affected in CY 2020 by the COVID-19 pandemic than construction employment in the United States, with the Air Trade Area U) construction employment decreasing 3.5 percent compared to a 3.9 percent decrease in national U construction employment. tf 0 CL Both building permits and housing sales and prices are indirect indicators of employment in the residential construction sector. As shown in Table III-9, Air Trade Area residential building permits and valuation experienced a smaller increase than what was experienced by the United 0 States over the CY 2010 to CY 2020 period. However, over the 5-year period prior to the 0 CL COVID-19 pandemic, the Air Trade Area experienced a much larger increase in both residential building permits and valuation than that which was experienced by Florida and the United States; from CY 2015 to CY 2019, the Air Trade Area's residential building permit units grew at a CAGR of 26.6 percent, compared to a CAGR of 8.8 percent for Florida and a CAGR of 4.0 percent for the United States over the same period. Building permit valuation increased at a CAGR of 18.5 percent(compared to a CAGR of 9.1 percent for Florida and a CAGR of 5.8 percent for the United States)between CY 2015 and CY 2019. imloni&Assut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-49 Packet Pg. 2302 1.9.b 1l1111I RICO " TABLE III-9 Residential Building Permits and Valuation CY 2010 —CY 2020 AIR TRADE AREA FLORIDA UNITED STATES YEAR UNITS VALUATION UNITS VALUATION UNITS VALUATION 679 w,7w,w824w, w604.w6.1 w,0 w, $w,lwOw1.w,943w, $ $ w,w,w,w,w,w,w,w,w,w,w,w,20w1.lw,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,l�Sw,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,wO�w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,42w,�60gw,wg.1w,5O24 N06llwOS w26�.w,w,w,w,w, $ $ $ w,w,w,w,w,w,w,w,w,w,w,w,2Ow12.w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w221w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w77 g lO1,�w,20w,182�w,wOSw,g1w4Ow425w,w,w,w,w,w, $ $ $ w,20 w13w, w,179w, w�� w,gw�w,75w2 w,.1w,gw,w1,�w,1w��0.w822w, w,1w77 w,65�.w, $ $ $ 2014 188 $65 84,075 $19,549 1,046,363 $193,243 0 2015 262 $82 1091924 $23,439 1,182,582 $223,611 2016 220 $65 116,240 $251864 1,206,642 $237,102 0 2017 247 $74 1221719 $28,095 1,281,977 $� 258,505 as � � �w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w, 2018 55_ $159 144,427 $_ 1,544 1,_28,827 $271,120 2019 672 $161 1541302 $33,210 1,386 048 $��w, 280,534 0 0 2020 377 $123 1641074 $36,884 1,471,141 $��� 307,210 Compound Annual Growth Rate 2015—2019 26.6% 18.5% 8.8% 9.1% 4.0% 5.8% I 2010-2020 3.4/0 5.5/0 15.5% 16.8% 9.3/0 11.7% NOTE: AD data are presented on a calendar year basis. SOURCE: US Department of Commerce,Bureau of the Census,December 2021. PREPARED BY: Ricondo&Associates,Inc.,March 2022. Although the third quarter of 2021 saw a slowing down of the housing market in the Air Trade 0 Area to be more in line with 2019 levels, single family home sale prices were up 54 percent year- tf over-year in September 2021, according to the Florida Keys MLS, a subsidiary of the Florida Keys Board of Realtors. Part of the reason for this spike in home prices was the reduced inventory, as 38 percent fewer properties than the previous year were placed on the market. According to Coldwell Banker Schmitt, the Air Trade Area's largest real estate agency, buyers in 2021 and 2022 are typically in higher income brackets than buyers in previous years, and in the f current environment they have more equity and attractive financing options for second homes.44 C 2022 is still projected by experts to be a seller's market as demand remains and supply is restricted, but some of the intensity will ease, especially as interest rates are expected to start increasing again.45 Due to the change in the makeup of home buyers and continued demand, E prices are not expected to drop as inventories return to normal levels. Looking further into the 44 Weld,Elliott,"Housing market began to soften in Q3,"Florida Keys Free Press, https://www.key snews.com/flkey sfreepress/btisiness/news/housing-market-began-to-soften-in-q3/article-39791124- 37fc-llec-a5e0-974c448b38e2.htm1(accessed January 28,2022). 41"Expert Insights on the 2022 Florida Keys Housing Market," Coastal Realty of the Florida Keys, https:!lcoastalrealtyofthefloridakeys.com/expert-insights-on-the-2022-florida-keys-housing-market(accessed January 28,2022). imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-50 Packet Pg. 2303 1.9.b 1l1111I RICO " future, new residential building permits are anticipated to end in 2023, at which point building rights will become even more expensive and consequently property values may climb further. 46 vii. Other Services In CY 2020, the other services sector accounted for approximately 3,800 employees in the Air Trade Area. The other services sector accounted for 6.3 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 5.6 percent in the United States. Other services employment in the Air Trade Area increased at a CAGR of 0.6 percent between CY 2013 and CY 2020, compared to no change for the United States over the same period. Other services employment in the Air Trade Area was slightly more affected in CY 2020 by the 0 COVID-19 pandemic than other services employment in the United States, with the Air Trade M Area other services employment decreasing 9.6 percent between CY 2019 and CY 2020, r- compared to a 9.2 percent decrease in national other services employment. as Other services employment includes personal services (e.g., assisting the elderly with activities U) of daily living); d� cleaning and laundry services; repair and maintenance services; religion,, i grant making, civic,professional, and similar organizations; and private household employment. Because the demand for these services is on an individual or household level, trends in other services employment do not independently drive economic growth, but rather tend to reflect growth in other industry sectors, which results in an increased demand for other services by individuals and households. U) r- viii. Education and Health Services c tf 0 In CY 2020, the education and health services sector accounted for approximately 3,600 CL employees in the Air Trade Area, 6.0 percent of total nonagricultural employment in CY 2020 in as the Air Trade Area, compared to 14.4 percent in the United States. 4- 0 tf Education and health services employment in the Air Trade Area decreased by 0.8 percent c CL between CY 2013 and CY 2020, compared to a 1.2 percent increase for the United States over the same period. Education and health services employment in the Air Trade Area was slightly less affected in CY 2020 by the COVID-19 pandemic than education and health services employment in the United States, with the Air Trade Area education and health services employment decreasing 2.0 percent compared to a 3.5 percent decrease in national education and health services employment. Higher education is provided in the Air Trade Area by the College of the Florida Keys ("CFK"). CFK has nearly 1,500 students and is divided between three campuses. Its main campus is in 46 Weld,Elliott,"Housing market began to soften in Q3,"Florida Keys Free Press, https://www.key snews.com/flkey sfreepress/business/news/housing-market-began-to-soften-in-g3larticle_39791124- 37fc-llec-a5e0-974c448b38e2.htm1(accessed January 28,2022). imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-51 Packet Pg. 2304 1.9.b 1l1111I RICO " Key West, with additional campuses on Marathon in the Middle Keys and Key Largo in the Upper Keys. The health services industry plays an important role in the Air Trade Area due to its relatively isolated location. There are three hospitals in the Air Trade Area: Lower Florida Keys Medical Center in Key West(167 beds), Mariners Hospital in Tavernier (25 beds), and the brand new 22- bed facility at Fishermen Hospital on Marathon Key. ix. Transportation/Utilities In CY 2020, the transportation/utilities sector accounted for approximately 2,300 employees in the Air Trade Area. The transportation/utilities sector accounted for 3.9 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 5.1 percent in the 0 United States. Transportation/utilities employment in the Air Trade Area increased at a CAGR of 5.7 percent c between CY 2013 and CY 2020, compared to a CAGR of 5.6 percent for the United States over the same period. Transportation/utilities employment in the Air Trade Area was more affected in CY 2020 by the COVID-19 pandemic than transportation/utilities employment in the United States, with the Air Trade Area transportation/utilities employment decreasing 9.9 percent between CY 2019 and CY 2020, compared to a 1.6 percent decrease in national transportation/utilities employment. The Airport services the air transportation demand in the Air Trade Area. The Air Trade Area is also supported by additional transportation infrastructure providing both passenger and freight U) access: c to tf • The Air Trade Area is directly connected to major U.S. markets,particularly on the east CL coast of the United States, by a critical roadway link, U.S. 1. U.S. 1, also known as the as Overseas Highway for its 113-mile run through the Florida Keys, begins in Key West and connects to Miami-Dade County and the U.S. mainland via a set of causeways and 0 bridges. This is the primary thoroughfare for residents, tourists, and trucking operations 0 alike. The only other way motorists can enter the Air Trade Area from Miami-Dade County is via the Card Sound Bridge on CR 905A, to the north of U.S. 1. as • Port Key West provides several passenger transportation facilities, including three cruise 0 ship docks (as discussed in section 4.2.4.1), the Key West Ferry Terminal for high-speed ferry services to Dry Tortugas National Park, Marco Island and Fort Myers, and Garrison Bight Marina, the only full-service marina on the island of Key West. • Public transit in the Air Trade Area is primarily provided by Key West Transit and Miami-Dade Transit. The South Line, one of Key West Transit's City Routes, serves the Airport. In addition to City Routes and the Duval Loop that serve the City of Key West, Key West Transit also provides the Lower Keys Shuttle that extends from Key West to Marathon. Miami-Dade Transit serves the Air Trade Area with two bus lines that depart imloni&Assut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-52 Packet Pg. 2305 1.9.b 1l1111I RICO " from Homestead, Florida. One of the bus lines, the 301, connects to the Lower Keys Shuttle on Marathon. Greyhound Lines also serves the Air Trade Area, with stops at Key Largo, Islamorada, Marathon, Big Pine Key and Key West. The Key West Greyhound station is adjacent to the Airport rental car facility. One of the major utility companies serving the Air Trade Area is Keys Energy Services ("KEYS"), which serves more than 28,000 customers extending from Key West to the Seven Mile Bridge. Florida Keys Electric Cooperative (FKEC)provides power to the Upper and Middle Keys, and supplies electricity to approximately 33,000 customers from the Miami-Dade County line to the Seven Mile Bridge. 0 X. Manufacturing 0 U) In CY 2020, the manufacturing sector accounted for approximately 500 employees in the Air Trade Area. The manufacturing sector accounted for 0.9 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 6.8 percent in the United States. as Manufacturing employment in the Air Trade Area increased by a CAGR of 3.3 percent between U) CY 2013 and CY 2020, compared to a CAGR of 0.1 percent increase for the United States over the same period. Manufacturing employment in the Air Trade Area was slightly less affected in CY 2020 by the COVID-19 pandemic than was manufacturing employment in the nation, with the Air Trade Area manufacturing employment decreasing 4.4 percent and national manufacturing employment decreasing 5.3 percent. Xi. Information r_ 0 The information sector combines telecommunications service providers, traditional publishing, tf c motion picture and sound recording, broadcasting, software, online services, and data processing. CL In CY 2020, the information sector accounted for approximately 500 employees in the Air Trade as Area. The information sector accounted for 0.8 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 1.7 percent in the United States. 0 tf 0 CL Information employment in the Air Trade Area decreased by 3.4 percent between CY 2013 and CY 2020, compared to a 0.1 percent decrease for the United States over the same period. Information employment in the Air Trade Area was slightly more affected in CY 2020 by the COVID-19 pandemic than information employment in the nation, with the Air Trade Area information employment decreasing 5.7 percent compared to a 4.6 percent decrease in national information employment. imloni&Assut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-53 Packet Pg. 2306 1.9.b 1l1111I RICO " C. ECONOMIC OUTLOOK 1. Short-Term Economic Outlook With respect to the national economy, the Congressional Budget Office ("CBO") outlook released in May 2022 projects a 3.8 percent year-over-year increase in real GDP for CY 2022. This would be a decline from real GDP growth in CY 2021, which was 5.7 percent.47 The real GDP growth rate is then projected to decrease to 2.8 percent in CY 2023 and then stabilize, increasing at a CAGR of 1.6 percent between CY 2024 and CY 2032 (latest year of CBO outlook available). 48 The International Monetary Fund (IMF) outlook released in April 2022 projects a 3.7 percent year-over-year increase in real GDP for CY 2022. CY 2023 is then projected to see year-over-year growth of 2.3 percent. 49 The CBO projects the national unemployment rate to fall to 3.5 percent in CY 2023 before a gradual rise and then stabilization at 4.5 percent in CY 2028 0 through CY 2032.50 �(D, At the time of this report (July 2022), the Russian invasion of Ukraine is an ongoing situation. While the economic outlooks cited here consider the Russian invasion's current and future as impact on the national and local economy, the Russian invasion is likely to further exacerbate existing economic uncertainty, which could impact both travel and commerce not only at a i transcontinental level, but also at a local level within the United States. As a result of the invasion, sanctions have been imposed on Russia, which creates regulatory barriers that can hinder economic growth. 2. Long-Term Economic Assumptions Incorporated in Passenger Demand Projections 0 to tf Section IV describes the methodologies used in developing forecasts of enplaned passengers at 0 the Airport including (among other methodologies) statistical linear regression modeling, with local, state, and national socioeconomics and demographics as independent variables and (D enplaned passengers as the dependent variable. Independent variables considered for this analysis included population, employment, earnings,personal income (per capita and total), and tf GRP/GDP for the Air Trade Area and the United States. For each socioeconomic and CL demographic variable, regression modeling produced a coefficient that is applied to the corresponding variable forecast developed by Woods & Poole to provide enplaned passenger forecasts.51 Table 111-10 presents the CY 2019 and CY 2027 figures utilized in the modeling as well as the CAGR for each independent variable in CY 2019 and CY 2027. L) 47 Bureau of Economic Analysis, Gross Domestic Product(Third Estimate), Corporate Profits, and GDP by Industry, Fourth Quarter and Year 2021,March 2022 48 Congressional Budget Office,An Overview of the Economic Outlook: 2022 to 2032,May 2022. 49 International Monetary Fund, World Economic Outlook, War Sets Back the Global Recovery,April 2022. so Congressional Budget Office, The Budget and Economic Outlook: 2022 to 2032,May 2022. s�Long-term projections are based on data from Woods&Poole released in June 2021,prior to the inflationary pressures of 2021 and 2022 and the Russian invasion of Ukraine beginning in late February 2022.As a result,the projections do not take into consideration either factor. imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-54 Packet Pg. 2307 1.9.b 1l1111I RICO " TABLE III-10 Forecast of Economic Variables Used in the Passenger Demand Forecasts COMPOUND ANNUAL GROWTH RATE VARIABLE 20191 2027 2019—2027 Air Trade Area Population 74,228 73,806 -0.1/o US Population 328,241,432 346,074,217 0.7/0 Air Trade Area Total Employment(lobs) 65,640 71,982 1.2% US Total Employment(Jobs)2 203,809,516 225,663,310 1.3% Air Trade Area Total Earnings $2,770 $3,321 2.3% -� US Total Earnings 3 $11,907,552 $14,050,453 2.1% 0 Air Trade Area Total Personal Income $6,842 $7,916 1.8% 0 US Total Personal Income3 $16,879,466 $20,300,453 2.3% Air Trade Area Per Capita Personal Income $92,181 $107,261 1.9% US Per Capita Personal Income4 $51,424 $58,659 1.7% 0 Air Trade Area Gross Regional Product(GRP) 3 $4,852 $5,844 2.4% US Gross Domestic Product(GDP)3 $19,402,219 $22,875,535 2.1% NOTES: M All data are presented on a calendar year basis. I 1 2019 is the last year of historical data in the 2021 Woods&Poole database and is the basis for Woods&Poole's future projections.Therefore,it is the last year ofhistorical data displayed in this table. 2 Employment data include wage and salary workers,proprietors,private household employees,and miscellaneous workers.Employment data reflect the number of jobs,including part-time and full-time positions,and are based on the establishment survey which reviews place ofwork rather than residence ofworkers.As a '— result,some employees may be double-counted using this measure. 3 Figures displayed in billions of2012 dollars. 4 Figures displayed in 2012 dollars. U) SOURCE:Woods&Poole Economics,Inc.,2021 Complete Economic and Demographic Data Source(CEDDS),June 2021. C: 0 PREPARED BY.Ricondo&Associates,Inc.,March 2022. tf 0 CL (D 4- 0 tf CL (D (Remainder of Page Intentionally Left Blank) E � (()"� ) ( � . DRAFT- Report of the Airport Consultant C-55 Packet Pg. 2308 1.9.b 1l1111I RICO " IV. PASSENGER DEMAND AND AIR SERVICE ANALYSIS This Section describes historical and forecast aviation activity at the Airport and discusses key factors affecting these trends. A. AIR CARRIERS SERVING THE AIRPORT As of July 2022, a total of six passenger air carriers provided scheduled service at the Airport. Two all-cargo carriers also serve the Airport. Table IV-1 lists the passenger and all-cargo carriers serving the Airport in July 2022. 0 TABLE IV-1 Carriers Serving the Airport U) PASSENGER SERVICE ' ALL-CARGO SERVICE 0 Allegiant Air Mountain,Air e,Cargo u,(dbua,.FedEx)u,u,u,u,u,u,u, American � „ Airlines SKYWAY a UPS Delta Air Lines JetB ue u,Silver Airways.u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,� United Airlines � U) NOTES: 0 dba-doing business as tf Scheduled as of July 2022,except where noted in this notes section. CL i Includes regional affiliates,where applicable. (D SOURCES:Monroe County,July 2022;Innovata,July 2022. 4- PREPARED BY: Ricondo&Associates,Inc.,July 2022. 0 tf 0 CL as as E The Airport has the benefit of a relatively stable scheduled passenger air carrier base. Of the passenger air carriers currently serving the Airport, three have continually operated at the Airport since FY 2012: American Airlines ("American"), Delta Air Lines ("Delta"), and Silver Airways ("Silver"). United Airlines ("United") served the Airport in 2012 and 2013. United suspended service in 2014 through 2016 but resumed service in 2017. Allegiant Air("Allegiant") and JetBlue Airways ("JetBlue") commenced service in 2021. Table-IV-2 presents the years that each existing scheduled passenger air carrier provided service at the Airport. imloni& ssut.ialvs� h . DRAFT- Report of the Airport Consultant C-56 Packet Pg. 2309 1.9.b 1l1111I RICO " TABLE IV-2 Historical Scheduled Passenger Air Carrier Base AIR CARRIER 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Allegiant Air American Airlines Cape Air Delta Air Lines JetBlue Airways Silver Airways SouthemAuways Express Southwest Airlines 0 United Airlines 0 NOTES: qb I Where applicable,includes affiliated,regional,and merged carriers. SOURCES:Monroe County,January 2022:Innovata,February 2022. C: 0 PREPARED BY:Ricondo&Associates,Inc.,March 2022. qb I B. AIR SERVICE ANALYSIS 1. Historical Airline Activity The Airport is classified by the FAA as a small-hub facility based on its percentage of nationwide passenger activity.12 It ranked 108th in passengers in the United States in CY 2020, r_ according to the FAA Air Carrier Activity Information System ("ACAIS") enplaned passenger to data. The Airport predominantly serves O&D passengers, with O&D passengers accounting for 0 98.2 percent of all passengers at the Airport in FY 2021. CL as Table IV-3 presents historical enplanement activity at the Airport between FY 2012 and FY 4- 2021. The Airport experienced growth between FY 2012 and FY 2014, but with the exit of 0 tf Southwest Airlines (Southwest) at the Airport in the previous year, FY 2015 enplanement 0 activity decreased 12.7 percent. Growth in enplanement activity at the Airport returned between FY 2016 and FY 2019. Traffic decreased 28.4 percent in FY 2020 due to factors related to the COVID-19 pandemic, as discussed in section 4.3.1. Traffic rebounded in FY 2021, with E enplaned passengers increasing 93.7 percent on a year-over-year-basis exceeding FY 2019 levels. Overall, total enplaned passengers grew at a CAGR of 6.8 percent between FY 2012 and FY 2021. With the exception of FY 2020, the number of enplaned passengers has grown every year since 2015, from approximately 350,000 passengers in FY 2015 to approximately 659,000 in FY 2021, an increase of 88.5 percent and a CAGR of 11.1 percent. 12 As defined by the FAA, a small-hub airport enplanes 0.05 to 0.25 percent of nationwide revenue enplaned passengers.This was equal to between approximately 184,000 and 921,000 revenue enplaned passengers in CY 2020. imloni& ssir "ialvs" Mr. DRAFT- Report of the Airport Consultant C-57 Packet Pg. 2310 1.9.b 1l1111I RICO " TABLE IV-3 Historical Enplaned Passengers (Fiscal Year Ended September 30) FISCAL YEAR ENPLANED PASSENGERS ENPLANED PASSENGER GROWTH w2012.w, w, 366,190 2013 393,906 7.6/o 2014 400,669 1.7/o 2015 349,790 -12.7/o 2016 367,254 5.0% 0 2017 398,592 8.5% 2018 416,234 4.4/o 0 2019 475,034 14.1% 2020 340,307 -28.4/o 0 2021 659,321 93.7% Compound Armual Growth Rate qs w, 2012—2019 3.8% 2012-2021 6.8% i SOURCE:Monroe County,January 2022. PREPARED BY. Ricondo&Associates,Inc.,March 2022. L!1 Notable details regarding passenger activity at the Airport between FY 2012 and FY 2021 are as r- follows: U tf FY 2012. In FY 2012, enplaned passengers increased 10.0 percent. Growth over the period was CL supported by increased seat capacity from Silver, operating at the time as United Express, Delta, as and AirTran Airways (AirTran), which was operating at the time as a subsidiary of Southwest Airlines (Southwest), AirTran's operations were fully integrated with Southwest in December 0 2014. 0 CL as FY 2013. Enplaned passengers at the Airport increased 7.6 percent in FY 2013. Southwest launched service to Louis Armstrong New Orleans International Airport (MSY) and AirTran increased capacity to Orlando International Airport (MCO) and Tampa International Airport (TPA). Additionally, Silver increased departing seat capacity on its existing service to Southwest Florida International Airport(RSW) and TPA by transitioning from 19 seat Beechcraft 1900 aircraft to 34 seat Saab 340 aircraft. FY 2014. Enplaned passengers increased 1.7 percent on a slight decrease in seat capacity of 2.6 percent. The decrease in capacity was largely driven by Southwest, which discontinued all service in June 2014. Cape Air also discontinued service to its one destination, RSW, from the Airport. These decreases were partially offset by Silver, which grew capacity on a full year of service on larger Saab 340 aircraft. imloni 1 ssu "ialvs" Mr. DRAFT- Report of the Airport Consultant C-58 Packet Pg. 2311 1.9.b 1l1111I RICO " FY 2015. With the loss of Southwest the previous year, enplaned passengers decreased 12.7 percent in FY 2015. American grew its capacity by transitioning from 44 seat regional jets to larger 76 seat regional jets on its service to Miami International Airport(MIA), resulting in a 21 percent increase in enplaned passengers. Silver enplaned passengers increased 18 percent on increased service to all destinations it served from the Airport. FY 2016. Enplaned passengers increased 5.0 percent as Delta increased seat capacity to its Atlanta hub by 16 percent. Silver decreased seat capacity to three of its four Florida destinations. FY 2017. Enplaned passengers increased 8.5 percent as United reinitiated service at the Airport in FY 2017, with flights to Newark Liberty International Airport (EWR) and Chicago-O'Hare International Airport(ORD). Silver seat capacity increased by 1 percent but its enplaned 0 passengers increased 19 percent, resulting in an 11 point increase in average load factor. FY 2018. Enplaned passengers increased 4.4 percent, benefiting from a full year of service by c United. Silver enplaned passengers increased 19 percent on a 15 percent increase in capacity and a 3 percent increase in load factor. Delta seat capacity decreased as it replaced some flights operated with Boeing 737 aircraft with smaller CRJ-700 aircraft. �a FY 2019. Growth accelerated in FY 2019, as enplaned passengers increased a further 14.1 percent. American, Delta, and United all experienced significant increases in enplaned passengers on increased seat capacity. United had the highest increase: FY 2019 enplaned passengers were 51 percent higher than FY 2018 enplaned passengers for the airline due primarily to increased seat capacity to its EWR destination. In addition to increasing seat U) capacity to its other destinations, American initiated service to Dallas Fort Worth International U Airport(DFW), ORD, and Philadelphia International Airport(PHL). tf 0 FY 2020. Enplaned passengers decreased 28.4 percent in FY 2020. After increasing capacity as during the first six months of the fiscal year,passenger volumes decreased sharply when all airlines greatly reduced capacity at the Airport because of the COVID-19 pandemic. By May 0 2020, total seat capacity at the Airport was at 27.9 percent of May 2019 levels. Seat capacity 0 quickly rebounded and in September 2020, total seat capacity was 84.5 percent of September 2019 levels. The impact of the COVID-19 pandemic is presented in more detail in Section 4.3.1. as FY 2021. Enplaned passenger volumes rebounded after the decrease in FY 2020 and reached new highs in FY 2021. Total FY 2021 enplaned passenger volumes were 93.7 percent greater than in FY 2020 as American, Delta and United rapidly reintroduced capacity at the Airport to take advantage of passenger demand for leisure destinations within the United States. Two new airlines, Allegiant and JetBlue, entered the Airport in FY 2021. Allegiant's FY 2021 activity at the Airport included service to Nashville International Airport (BNA), Cincinnati/Northern Kentucky International Airport(CVG), Pittsburgh International Airport (PIT), and Orlando Sanford International Airport(SFB). JetBlue served two destinations from the Airport, Boston Logan International Airport (BOS) and John F. Kennedy International Airport (JFK). imloni&Assut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-59 Packet Pg. 2312 1.9.b 1l1111I RICO " • Allegiant began new air service from the Airport in FY 2022 to the following destinations: o Asheville Regional Airport (AVL) -November 2021 o St. Pete-Clearwater International Airport (PIE) -November 2021 o Indianapolis International Airport(IND)-December 2021 Table IV-4 presents the historical share of enplaned passengers by carrier at the Airport between FY 2017 and FY 2021. Enplaned passengers are spread over many carriers, with no single carrier historically having more than a 50.0 percent market share over the period shown. American and Delta vied for the largest market share between FY 2017 and FY 2019. In FY 2020, American U) increased its share to 45.8 percent and nearly reached 50 percent market share in FY 2021. United's share of enplaned passengers has steadily increased since FY 2017, reaching 12.6 percent in FY 2021. Silver's share has decreased over the same period, from a high of 22.4 percent in FY 2018 to just 6.9 percent in FY 2021. JetBlue and Allegiant introduced service in FY 2021, earning a 2.9 percent and 1.9 percent share, respectively, of enplaned passengers. i TABLE IV-4 Historical Total Enplaned Passengers by Airline (Fiscal Years Ended September 30) 2017 2018 2019 2020 2021 U) ENPLANED ENPLANED ENPLANED ENPLANED ENPLANED r_ CARRIER PASSENGERS SHARE PASSENGERS SHARE PASSENGERS SHARE PASSENGERS SHARE PASSENGERS SHARE U o......................................................................................o.........................................................................................o......................................................................................o.......................................................................................o............ Alle mntAff 0 0.0% 0 0.0% 0 0.0% 0 0.0% 12,48. 1.9/0 tf ................................................................................................................................................................................................................................................................................................................................................................................................................... ..................................................................................................... AmericanArines .nl1 151,054 36.3% 45.8% .2 224 49 9% C DeltaAsLnes 16Q919 CL 40.4% 143,514 34.5% 176,775 37.2% 106,817 31.4% 169,923 25.8% I" .....................................................................................................................................................................................................................................................................��........................................................................................�............ JetBlue 0 0.0% 0 0.0% 0 0.0% 0 0.0% 19,188 2.9/0 ............................................................................................................................................................................................................................................................................................................................ ..................................................................................................... (D Silver Always 78,863 19.8% 93,257 22.4% 67,604 14.2% 42,852 12.6% 45,410 6.9% United Afflmes 11,120 2.8% 28,409 6.8% 42,921 9.0% 34,751 10.2% 83,321 12.6 ..............................................................................................................................................................................................................................9,0:........................................................................................................................................................................................... ...................................................................................................................................................o.......................................................................................o........................................................................................o.....................................................................................o........................................................................................o......... 0 Airport Total 398,592 100/0 416,234 100/0 475,034 100/0 340,307 100/0 659,321 100/o tf f NOTES: CL 1 Includes regional/co rter affiliates. SOURCES:Monroe County,Jamtary 2022. PREPARED BY.Ricondo&Associates,Inc,March 2022. E 2. Market Characteristics As of January 2022, the airlines serving the Airport operated an average of 31 daily departures with approximately 2,900 daily departing seats, which reflects an increase compared to January 2019 in which the airlines serving the Airport averaged 26 average daily departures with approximately 1,700 daily departing seats. imloni&J? ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-60 Packet Pg. 2313 1.9.b 1l1111I RICO " Scheduled nonstop service53 is provided to 23 destinations in FY 2022, as shown on Exhibit IV- 1. Of the 23 routes, two are served by more than one carrier. Table IV-5 presents the Airport's top 20 domestic O&D markets during FY 2021 and the airlines that serve those destinations nonstop from the Airport. The top 20 domestic destinations represented 61.6 percent of total O&D demand, and the top five markets combined represented 28.4 percent of total O&D demand. Due to the Air Trade Area's role as a major tourist destination, most O&D passengers are visitors residing outside the Air Trade Area. Table IV-6 depicts 10 years of historical O&D passenger volumes and the composition by resident and non-resident. There was a marginal decrease in the percentage of visiting O&D passengers between FY 2012 and FY 2019, from approximately 82 percent to 78 percent. The share of visiting passengers increased during the 0 COVID-19 pandemic, reaching 84.8 percent in FY 2021, as Key West was an attractive destination for leisure travelers during this period. 0 3. Aircraft Operations U) Table IV-7 presents historical operations (takeoffs and landings) at the Airport between FY i 2017 and FY 2021. Total aircraft operations grew in each year leading up to the COVID-19 pandemic. In FY 2021,passenger airline operations have increased compared to the prior year and compared to pre-COVID-19 pandemic levels due to the resumption and expansion of services that were suspended during FY 2020. Cargo aircraft operations grew steadily until FY 2020 as the demand for e-commerce grew, and then reached all time high levels in FY 2021. U) r_ 0 tf CL as 4- 0 tf (Remainder of Page Intentionally Left Blank) c as as E s3 Includes destinations served seasonally. imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-61 Packet Pg. 2314 1.9.b 1l1111I RICO " EXHIBIT IV-1 Destinations Served t 1� Mrp q@@ry L4" f rc qry � Mid 0 0 CL wCL x e' E v w "� � . DRAFT- Report of the Airport Consultant C-62 Packet Pg. 2315 1.9.b 1l1111I RICO " TABLE IV-5 TOP 20 DOMESTIC ORIGIN AND DESTINATION MARKETS (Fiscal Year 2021) RANK MARKET O&D PASSENGERS PERCENTAGE OF AIRLINES (PDEV�) O&D PASSENGERS uuuuuuuuuuuuuuuaaaaaaaaaaaaaaaaalaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaauuuuuuuu 1 New York City 157 9.1% Delta,JetBkie,United zw,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�.w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w.��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� 2 Washington,DC 89 5.2% American,United 3 Philadelphia 85 5.0/o American 4 Atlanta 84 4.9/o Delta 5 Chicago3 72 4.2% American,United 0 6 Tampa 65 3.8% Silver 0 7 Boston 64 3.7% JetBkie 8 3% American Charlotte 57 3. 9 Dallas 57 3.3% American u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,ou,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u, 10 Detroit 43 2.5/o 11 Orlando6 41 2.4% Silver U) 12 Houston 33 1.9% United 13 Minneapolis 28 1.7% �w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,���w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�.w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,� 14 Pittsburgh 28 1.6/o Allegiant 15 h... asville 28 1.6% Allegiant la1 16 Cincinnati 27 1.6/o Allegiant w,w 17 ClevelandN N 26 1.5% ..w,..w,..w,..w,..w,��w,��w,��w,..w,..w,..w,..w,��w, w,��.,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�.w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,� � 18 Indianapolis 25 1.5% Allegiant U) 19 Denver 24 1.4% 0 20 Cohunbus 24 1.4% tf Other O&D Markets 661 38.4% CL 0 Total Domestic O&D Passengers 1,720 100.0% NOTES:Figures may not add due to rounding. PDEW—Passengers Daily Each Way 4— O&D—Origin and Destination 0 tf Scheduled service operated during Fiscal Year2021. 0 CL 1 Includes John F.Kennedy International(JFK),Newark Liberty International(EWR),and LaGuardia(LGA)Airl qb 2 Includes Ronald Reagan Washington National(DCA),Washington Dulles International(IAD),and Baltimore/Washington International Thurgood Marshall(BWI)Airports. 3 Includes O'Hare(ORD)and Midway(MDW)International Airports. E 4 includes Boston Logan International(BOS),Manchester-Boston Regional(MIFF),and T.F.Green International(PVD)Airports,as well as Portland International Jetport(PWM). 5 Includes Dallas Fort Worth International Airport(DEW)and Dallas Love Field(DAL). 6 Includes Orlando International(MCO)and Orlando Sanford International(SFB)Airports. 7 includes George Bush Intercontinental Airport/Houston(IAH)and WilharnP.Hobby(HOU)Airports. SOURCES:US Department of Transportation,DB1B Survey,February 2022. PREPARED BY: Ricondo&Associates,Inc.,March 2022. imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-63 Packet Pg. 2316 1.9.b 1l1111I RICO " TABLE IV-6 Historical Origin and Destination Passengers (Fiscal Year Ended September 30) FISCAL YEAR TOTAL ENPLANED O&D ENPLANED PERCENTAGE OF RESIDENT O&D PERCENTAGE of VISITOR O&D PERCENTAGE of PASSENGERS PASSENGERS O&D PASSENGERS PASSENGERS RESIDENT O&D PASSENGERS VISITOR O&D ...............................................................................................................................................................................�.........5 5.........................................................o................................................................5........................................................50...................................................................5......................................................50.................... 2012 _66,190 _6Q,4__ 98.4/0 67,74_ 18._/0 298,44_ .......................................................................................................................................................................... ..5:................................................................o........................................................:.......5........................................................o.......................................................................................o.................... 20L _2,906 _8_,92_ 98.0% 72,08_ 18_/0 _21,427 ................................................................................................................................................................................. ....:.......5.........................................................o........................................................:....5...........................................................o.............................................................5.........................................................o.................... 2014 400669 _91,17_ 97.6/0 8Q,9__ 20.2/0 _2Q,L_ .........................................................................................................................a...............................................................:.............................................................................................................................:........................................................................................................................................................................................... 2015 349,790 345,417 98.7% 77,653 22.2% 272,486 .............................................................................................................................................................................. .....................................................................o...........................................................................................................................o..............................................................................................................................o.................... 2016 _67,2.4 _6_,990 99.1/0 78,_92 21.4/0 288,662 .............................................................................................................................................................................. ..:...................................................................o........................................................:.....................................................................o......................................................................................................................o.................... 2017 _98,_92 _9_,468 99.2/0 88,089 22.1/0 _1Q,_0_ 7..9/0 .......................................................................................................................................................................................:...................................................................o........................................................:.....................................................................o..............................................................................................................................o................... 2018 416,234 412,224 99.0% lOQ,729 24.2/0 315,505 75.8/0 ......................................................................................................................................................................................:....................................................................................................................................................................................................................................................................................................................................................... 2019 475,034 468,757 98.7% 106,408 22.4% 368,626 77.6% .........................................................................................................................................................................................:...............................................................................................................................:....................................................................................................................................................................................................................... 2020 34Q,307 333,491 98.0% 65,339 19.2% 275,308 80.T .......................................................................................................................................................................................:...................................................................o........................................................:.....................................................................o..............................................................................................................................o................... 2021 659 i21 647,617 98.2/0 lOQ,217 15.2/o SSQ104 84.8/0 _ ........Con.............GrowthRate.....................................................................................................:....................................................................................................................................................................................................................................................................................................................................................... .................. ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ 2012-2019 3.8% 3.8% 6.7% 3.1% U) ...................................................................................................................................................... (D 2012-2021 6.8% 6.7% 4.4% 7.2% NOTES:O&D-Oogin and Destviation .� SOURCES:Monroe County,January 2021:US Department of Transportation,DB1B San-ey,February 202. PREPARED BY:Ri-d.&Associates,I.c.,M-1i 2022. pq0ry Mid U) TABLE IV-7 Historical Aircraft Operations (Fiscal Year Ended September 30) FISCAL YEAR PASSENGER ALL CARGO GENERAL AVIATION MILITARY TOTAL ANNUAL GROWTH U) AIRLINE /OTHER AIR TAXI 2017 15,814 1,348 33,626 750 51,538 ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... U 2018 16,818 1,448 33,413 459 52,138 1.2 2019 16,280 1,43tf 0 34,822 520 53,052 1.8% ..................................................................................................................................................................................................................................................................................................................... 0 2020 13,278 1,645 29,564 442 44,929 -15.3% CL ........................................................................................................................................................................................................................................................................................................................................................................................................................................................1-5.................................... � 2021 22,598 1,923 39,168 439 64,128 42.7% ..........Con.....otnid Atnnaal.....................................................................................................................................................................................................................................................................................................................64,......................................................................................................... P Growth Rate 2017-2021 9.3% 9.3% 3.9% -12.5% 5.6% 4- SOURCES Monroe County,January 2022:US Department of Transportation,FederalAviation Administration,Operations Network February 2022. 0 PREPARED BY.Ricondo&Associates.Inc..March 2022. tf 0 a 4. Landed Weight E i. Table IV-8 presents the share of landed weight by passenger airlines and all-cargo carriers at the Airport between FY 2017 and FY 2021. Landed weight is distributed among several carriers, with no carrier having more than half of annual landed weight at the Airport during the period shown. American and Delta accounted for 75.0 percent of landed weight at the Airport in FY 2021. The other four passenger airlines combined accounted for an additional 24.2 percent of landed weight during this same period and cargo carriers contributed 0.8 percent of the total landed weight. In total, between FY 2017 and FY 2019, landed weight for passenger airlines increased approximately 13 percent. As a result of the COVID-19 pandemic, imloni& ssuttialvs� Mr. DRAFT- Report of the Airport Consultant C-64 Packet Pg. 2317 1.9.b 1l1111I RICO " passenger airline landed weight decreased by 10.0 percent between FY 2019 and FY 2020 while cargo airline landed weight increased by 15.0 percent. In FY 2021, cargo airline landed weight increased by an additional 16.9 percent over FY 2020 levels at the Airport and passenger airline landed weight increased by 10 1.1 percent. C. FACTORS AFFECTING AVIATION DEMAND AT THE AIRPORT This section discusses the qualitative factors that may influence future aviation activity at the Airport. These factors were considered, either directly or indirectly, in developing the aviation activity forecasts for the Airport. 0 1. Impact of the COVID-19 Pandemic 0 U) as The impact to air travel began in East Asia in December 2019 and rapidly accelerated to other regions of the world in March and April 2020. Airlines responded by reducing capacity across their networks due to decreased demand, travel restrictions, and border closures. Several large international foreign-flag airlines suspended all operations for a period in March and April 2020. By May 2020, which represented the low point in terms of passenger airline capacity offered, scheduled departing seats decreased to 24.0 percent of May 2019 capacity for all US airports and i 27.5 percent of May 2019 capacity at the Airport. Airline capacity started to recover in June 2020 nationwide and at the Airport, when the essential personnel only flying restriction previously in effect was lifted. As presented in Exhibit IV-2, scheduled departing seat capacity recovered to pre-COVID-19 levels at the Airport much faster than the total United States and small hub average. By December 2020, departing seats at the Airport represented approximately 121 percent of December 2019 departing seats, compared to approximately 60 percent for the r_ total United States. In June 2021, departing seats from the Airport represented 241 percent of U June 2019. 0 c CL The increase in activity at the Airport has been driven in part by factors that are specific to the as COVID-19 pandemic: 4- 0 tf • Leisure destinations like Key West with an abundance of outdoor activities where visitors 0 can remain socially distanced, have been popular with leisure travelers during the COVID- 19 pandemic. • International travel restrictions and quarantine requirements have suppressed demand for as E travel to competing international leisure destinations. • With the broader downturn in demand for air travel, airlines have more aircraft and crew availability to add service to destinations like Key West where there is strong demand for leisure travel. Table IV-9 presents the monthly enplaned passenger recovery at the Airport. In February 2021 enplaned passengers exceeded 2019 levels for the first time and remained above 2019 levels through June 2022. imloni& ssu "ialvs" Mr. DRAFT- Report of the Airport Consultant C-65 Packet Pg. 2318 1.9.b 1l1111I RICO " 2. National Economy Historically, trends in airline travel have been closely correlated with national economic trends, most notably changes in GDP. Section III of this Report presents an analysis of the general economic trends, both national and local, that may influence demand for air service over time. As noted in the conclusion to Section III, national GDP is expected to increase approximately 2.0 percent annually through the Forecast Period, which should support generally increasing demand for air service over the Forecast Period. Actual economic activity may differ from this forecast, especially on a year-to-year basis. Demand for air service may be impacted by changes in economic performance. 0 U) TABLE IV-8 as Historical Total Landed Weight by Airline (Fiscal Years Ending September 30, in 1,000 Pound Units) as 2017 2018 2019 2020 2021 U) 1 LANDED LANDED LANDED LANDED LANDED CARRIER WEIGHT SHARE WEIGHT SHARE WEIGHT SHARE WEIGHT SHARE WEIGHT SHARE i Alle ant As 15,158 1.5% ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................� American Airlines 183,934 37.2% 177,873 35.9% 218,425 39.1% 226,778 45.0% 487,619 48.4% Delta Air Lmes 189,957 38.4% 165,820 33.5% 202,045 36.2% 154,233 30.6% 267,795 26.6% 7etBlue 40,256 4.0% Silver Airways 97,869 19.8% 108,300 21.9% 77,671 13.9% 63,348 12.6% 62,760 6.2% g� United Airlines 17,063 3.5% 37,247 7.5% 54,115 9.7% 52,825 10.5% 126,025 12.5% :3 Passen erAirluie Total 488,822 98.8% 489,240 98.8% 552,256 98.9% 497,184 98.6% 999,612 99.2% Mountain Air Cargo(dba FedEx) 3,511 0.7% 3,953 0.8% 3,876 0.4% 3,808 0.6% 3,851 0.4% 0 o........................................................................o........................................................................o........................................................................o................................................................................o.......... SKY A1AY(dba UPS) 2,219 0.4% 2,202 0.4% 2,202 0.7/0 3,183 0.8/0 4,322 0.4% Ca o Airluie Total 5,729 1.2/0 6,154 1.2/0 6,078 1.1/0 6,991 1.4/0 8,173 0.8/o 0 CL Total 494,551 100.0% 495,394 100.0% 558,333 100.0% 504,175 100.0% 1,007,785 100.0% I" NOTES: qb dba-doing business as Totals may not add due to rounding. - 1 Includes regionat/commuter affiliates. ,f SOURCE:Monroe County,January 2022. 0 CL PREPAREDBY. Ricondo&Associates,Inc.,March2022. Qy qb E (Remainder of Page Intentionally Left Blank) imloni&Assut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-66 Packet Pg. 2319 1111111l 6 RICONDO" EXHIBIT IV-2 Domestic Seat Capacity Recovery Key West, Small Hubs, and the United States 2 0 0 E 1.5011X1 .0 -2 .5 1 c)o%� 0 U) (D owl%% ru M 0 (D U) o I= C 4"'� 4"4 4 4"'� �j r"I "j 1�4 f�j f-j �"j f�j f-j 1�j �4 I-j 1'j I f 4 Q N 1. c,d f. I•j 1 4,'j c Z? > c 0 b �g Q, m— :�-� 3 z r < z r —Fyw ............................... ........ I j 1,1 t I I cd S alcrs NOTE:Scheduled s eats indexed to the s ame month in 2019. SOURCE:Innovata,July 2022. PREPARED BY. Ricondo&Associates,Inc.,July 2022. U) r- 0 U tf 0 CL qb — 0 tf 0 CL qb (Remainder Of Page Intentionally Left Blank) as & DRAFT- Report of the Airport Consultant C-67 I Packet Pg. 2320 1.9.b 1l1111I RICO " TABLE IV-9 Fiscal Year to Date Enplaned Passenger Recovery (Fiscal Years Ended September 30) Month Fiscal Year2019 Fiscal Year202O 2020 vs.2019 Fiscal Year2021 2021 vs.2019 Fiscal Year 2022 2022 VS.2019 October 31,148 33,034 106/0 28,709 92/0 53,525 172/0 November 32,855 37,836 115/0 31,844 97/0 60,901 185/0 December 39,463 43,701 111/0 36,818 93/0 67,332 171/o Janua 46,450 56,694 122/0 44,312 95/0 67,826 146/0 Februa 44,968 56,381 125% 47,057 105% 64,290 143% March 56,129 38,826 69% 67,097 120% 78,310 140% April 45,442 1,219 3% 68,489 151% 71,766 158% May 41,282 2,506 6% 72,160 175% 66,802 162% 0 Jtme 38,347 13,946 36% 74,928 195% 57,095 149% 0 July 38,163 21,442 56% 73,950 194% N/A N/A (D August 32,571 16,108 49% 63,689 196% N/A N/A ......................................................................................................................................................................................................................................................................................... September 28,216 18,614 66/0 50,268 178/o N/A N/A Total 475,034 340,307 72% 659,321 139% N/A N/A 0 NOTE: N/A-Not Applicable U) SOURCE:Monroe County,July 2022. PREPARED BY.Ricondo&Associates,Inc.,July 2022. I 3. Mergers and Acquisitions U.S. airlines have merged or acquired competitors to achieve operational and commercial synergies and to improve their financial performance. A wave of consolidation began in 2005 t0a when America West Airlines merged with US Airways,retaining the US Airways brand. In f 2009, Delta acquired Northwest Airlines. In 2010, United acquired Continental Airlines. In 2011, CL Southwest acquired AirTran. In 2013, US Airways and American merged, with the consolidated airline retaining the American brand. In 2016 Alaska Airlines acquired Virgin America and the two airlines completed their integration in 2018. On February 7, 2022, Spirit Airlines and 0 Frontier Airlines announced their intention to merge in the second half of 2022,pending f CL government approvals. On March 29, 2022, JetBlue made an unsolicited offer to acquire Spirit, and subsequently launched a tender offer and a proxy contest in connection with Spirit's proposed merger with Frontier. JetBlue and Spirit are currently in discussions concerning the offer to acquire Spirit. Neither Spirit nor Frontier currently serves the Airport. Consolidation E across the industry has resulted in the realignment of several airline route networks as airlines have sought efficiencies in their service. Further consolidation of the U.S. airline industry could affect the capacity offered at the Airport and could alter the competitive landscape. 4. Airline Labor Constraints At the onset of the COVID-19 pandemic, many airlines reduced staffing levels, including pilots, flights attendants, mechanics, and airport agents, through early retirement programs and involuntary furloughs. As demand has returned, some airlines have faced challenges sourcing imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-68 Packet Pg. 2321 1.9.b 1lll1Illl RICIC " sufficient levels of staffing to operate increased levels of capacity. Airlines have responded by accelerating hiring and training of new staff. Ongoing airline staffing shortages may constrain airlines' ability to grow capacity across their networks while maintaining capacity in markets like the Airport that have grown in recent years. 5. Cost of Aviation Fuel As of the third quarter of CY 2021,jet fuel accounted for 16.3 percent of total airline operating costs, second only to labor, according to Airlines for America.54 In April 2022, the average price of jet fuel was $3.59 per gallon, having grown steadily since May 2020. Exhibit IV-3 shows the monthly averages for jet fuel and crude oil prices from January 2014 through April 2022. Fluctuating fuel costs will continue to affect airline 0 profitability. This could lead to changes in air service as airlines adjust capacity and pricing to address increases or decreases in the cost of fuel_ 0 as EXHIBIT IV-3 U) Historical Monthly Averages of Jet Fuel and Crude Oil Prices w $120 $4.00 ^...............Average crude dill Pikes „� "k $3.50 �$100 i��a ��� ��t —Average Jet Fluiell Prices U) �'r�t t� $3.00 r_ $80 U m $2.50 �F t uwre J ,,,h�t 0 't $60.... l mm�e $2.JJ....-`—L' v ire.iomuma�;� Ny.M" 7 k � CL r����� 110 110 W 0,11N $1.00 4— $20 0 $0.50 f CL $0 $t 00 (D V w2 u11 W2 W2 v2 2 F. rSV r r r SV tV N KV KV fV SV SV f'J SV SV Month-Year E Lb SOURCE:US Bureau of Transportation Statistics,US Energy Information Administration,July 2022. PREPARED BY.Ricondo&Associates,Inc.,July 2022. "Airlines for America,Passenger Airline Cost Index(PACT)Q3 2021. (https://www.airlines.org/dataset/a4a- quarterly-passenger-airline-cost-index-u-s-passenger-airlines/)accessed February 2022. imloni&Assutil Mr. DRAFT- Report of the Airport Consultant C-69 Packet Pg. 2322 1.9.b 1lll1Illl R I C " 6. Threat of Terrorism Since September 11, 2001, the recurrence of terrorism incidents against either domestic or world aviation has remained a risk to achieving forecast levels of activity. Tighter security measures have restored the public's confidence in the integrity of the U.S. and global aviation security systems. However, any terrorist incident targeting aviation could have an immediate and significant impact on the demand for air travel. 7. Other Airports in the Region Activity at the Airport could be affected by the availability and quality of air service at nearby airports. Passengers in the region consider factors such as availability of nonstop service and the price of service when making travel decisions resulting in passenger leakage if passengers in the 0 Air Trade Area choose a competing airport over the Airport. The closest airports with commercial service are MIA and Fort Lauderdale-Hollywood International Airport (FLL), which are 158 miles and 187 miles from the Airport, respectively. Although some visitors fly into FLL or MIA and drive down U.S. 1 to the Florida Keys, which takes about 3.5 hours, those airports are not considered direct competitors of the Airport due to their distance, size, and destinations served. i D. FORECAST OF PASSENGER DEMAND AND AIRLINE OPERATIONS w 1. Activity Forecast Methodology Forecasts of Airport activity were developed for FY 2022 through FY 2027. The short-term r_ forecast through FY 2024 was based on estimates of airline capacity and passenger load factors tea by route during the recovery from the COVID-19 pandemic. The long-term forecast, from FY 0 2025 through FY 2027, was based on a socioeconomic regression analysis that identified CL predictive statistical relationships between historical passenger volumes and independent P P P g � socioeconomic variables. The assumptions, techniques, and results of the forecast process are described in the following subsections. 0 tf 0 CL i. COVID-19 Pandemic Recovery Period Forecast Methodology The COVID-19 pandemic has temporarily disrupted the relationships between passenger volumes and drivers traditionally used to forecast demand, such as GDP, employment, and other socioeconomic factors. Passenger travel has more recently been influenced by factors such as travel restrictions, fear of illness, or work policies that have emerged since the onset of the COVID-19 pandemic. As the effects of the COVID-19 pandemic subside,passenger demand is expected to be influenced again by traditional drivers. However, the return to that point will not be immediate, and the timing will likely be different based on factors such as regional economic recoveries, seat capacity allocation decisions by airlines, and local or national travel restrictions. The return to traditional drivers of growth will likely be uneven across markets and passenger types. As such, imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-70 Packet Pg. 2323 1.9.b 1l1111I RICO " the path back to a point where demand is influenced by traditional factors rather than COVID-19 pandemic-related concerns has been modeled using a methodology that considers both qualitative and quantitative factors at the passenger level. The methodology considered the following: • Airline capacity and load factor at the Airport • Airline capacity recovery in the industry overall • Historical revenue produced by passengers in the individual markets served from the g Airport 0 U) as • The FAA Terminal Area Forecast 0 Based on a combination of these factors, the return to traditional influences was estimated on an airline and route level basis. Published airline schedules served as an input to the forecast through June 2022. The forecast is based on estimates of departing seat capacity and load factor by airline by month through the end of FY 2024. As modeled, COVID-19 pandemic-related i influences continue to impact passenger activity during this period, with traditional influences primarily driving activity throughout the remainder of the Forecast Period. Exhibit IV-4 depicts the recovery for enplaned passengers to FY 2019 volumes. Enplaned passengers surpassed FY 2019 volumes in FY 2021. Enplaned passengers are forecast to increase in FY 2022, in line with scheduled capacity growth. A slight decrease in enplaned passengers is r_ forecast to occur in FY 2023 due to airlines rebalancing capacity across their route networks as to COVID-19 pandemic related factors diminish and demand for business travel and long-haul 0 international travel returns. Enplaned passengers are forecast to increase starting in FY 2024. CL Activity levels are expected to remain significantly higher than 2019 levels through the Forecast Period, as it is expected that growth that has occurred in recent years is sustainable due to 4- increased awareness of the Key West market and airlines' continued service levels even as c tf demand has returned in other leisure markets. c CL as The following factors were also considered in the development of the recovery period forecast: as E • While the widespread deployment of effective vaccines to inhibit COVID-19 infection and treatments for illness have mitigated the severity of the COVID-19 pandemic, new variants of the COVID-19 virus may emerge and the full duration of the global COVID- 19 pandemic and the resulting impact on air travel remains unknown. It is assumed that the emergence of any new variants of the COVID-19 virus would not result in as severe a reduction in air service as that experienced at the onset of the COVID-19 pandemic. • Transborder travel restrictions have impacted demand for international travel and in some cases has shifted demand to domestic markets. The timeline for lifting these restrictions is unknown and the United States and other countries may impose new restrictions (or reinstate restrictions that have been lifted) if new surges of COVID-19 infections emerge. imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-71 Packet Pg. 2324 1.9.b 1l1111I RICO " It is assumed a progressive reduction in travel restrictions will occur, or the efficiency and availability of approaches to meet travel requirements will advance. • Airlines have retired certain aircraft types from their operating fleets since the onset of the COVID-19 pandemic. Changes in fleet mix and average aircraft size could influence airline allocations of capacity to markets and change the number of operations required to accommodate passenger demand. • Supply side factors, including slower than anticipated delivery of new aircraft as well as labor shortages, may limit airlines' ability to quickly restore capacity as demand returns. • A prolonged contraction of demand for air travel increases the likelihood of structural changes to the airline industry. These structural changes may include airline bankruptcies and failures, consolidations, and hub closures or other network changes. These types of g changes are not assumed in the forecast. 0 U) as EXHIBIT IV-4 Enplaned Passengers From Fiscal Year 2021 Through Fiscal Year 2024 0 as U) Y 0011 r.. ti 011 x � U) CL SOURCES: Monroe County,January 2022(historical);Ricondo&Associates,Inc.,February 2022(analysis). qy PREPARED BY: Ricondo &Associates,Inc.,March 2022. tf 0 a as ii. Long Term Activity Forecast Methodology as As the COVID-19 pandemic's influences on passenger demand diminishes, it is expected that the E traditional relationships between demand and socioeconomics will drive long-term passenger growth. Longer-term O&D passenger activity was forecast using socioeconomic regression analysis techniques that identified predictive statistical relationships between the Airport's historical O&D passenger volumes and several independent socioeconomic variables (such as population, employment, and PCPI).ss "woods&Pool Economics,Inc.,2021 Complete Economic and Demographic Data Source(CEDDS),June 2021. imloni& ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-72 Packet Pg. 2325 1.9.b 1l1111I RICO " The resulting regression equations were populated with independent projections of the relevant socioeconomic variables,56 yielding a range of potential O&D passenger growth. Table IV-10 shows the relationships selected for use in this forecast of O&D passengers and their 12-year CAGRs. Passenger growth was then forecast using these relationships beginning in FY 2024, by which time travel is expected to emerge from the COVID-19 pandemic-driven demand environment. TABLE IV-10 Socioeconomic Regression Analysis Outputs IMPLIED FY 2024 — 0 SOCIOECONOMIC VARIABLE FY 2027 CAGR 0 Total Population- US 1.8% a Total Employment- US 2.4/o Total Earnings - US 2.6% u, Total Personal Income Per Capita - US 2.5% U) Gross Regional Product- US 2.4% u, Total Population- Florida 1.9% Total Employment- Florida 2.2/o Total Employment- Monroe County 2.2% Average 2.3% U) NOTES: U t) FY—Fiscal Year tf CAGR—Compound Annual Growth Rate CL ATA—Air Trade Area � as SOURCES:Woods &Poole Economics,Inc.,June 2021;US Department of — Transportation,DB1B Survey,February 2022,Ricondo&Associates,Inc.,February 2022. tf 0 CL PREPARED BY. Ricondo &Associates,Inc.,May 2022. as as E Between FY 2012 and FY 2021, connecting passengers were less than 2.5 percent of total passengers at the Airport. Due to the Airport's role as a spoke serving airline hubs, it is not expected that connecting passengers will compose any significant portion of passenger traffic during the Forecast Period. The connections that do occur at the Airport will continue to be incidental in nature, rather than the result of efforts by airlines to connect traffic through the Airport. As a result, the forecast assumes that connecting passengers as a percentage of total passengers will remain constant throughout the Forecast Period. 56 Ibid. imloni t ssut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-73 Packet Pg. 2326 1.9.b 1l1111I RICO " iii. Other Assumptions Incorporated Into the Activity Forecast The following assumptions were also incorporated into the passenger forecast: For these analyses, and as with the FAA's assumptions for its nationwide forecasts, it is assumed that no terrorist incidents that materially impact U.S. air traffic demand during the Forecast Period will occur. • Economic disturbances will occur in the Forecast Period causing year-to-year traffic variations; however, a long-term increase in nationwide traffic is expected to occur. 0 • It is assumed no major"Acts of God"which may disrupt the national and/or global airspace system will occur during the Forecast Period that negatively impact aviation 0 demand. 0 E. FORECAST OF PASSENGER DEMAND as Table IV-11 presents the forecast of passenger activity at the Airport based upon the methodology described previously. As shown, total annual enplaned passengers are forecast to i grow from 739,504 in FY 2022 to 781,909 by FY 2027. This represents a CAGR of 2.9 percent from FY 2021. To reflect the expected rebalancing of airline capacity as COVID-19 pandemic- related factors diminish and the demand for business travel and long-haul international travel returning, enplaned passengers are forecast to decrease from the FY 2022 level to 704,628 in FY 2023 (4.7 percent). Thereafter, enplaned passengers are forecast to rebound by 3.8 percent in FY 2024 (731,316) and then reach 781,909 in FY 2027, representing a CAGR of 1.1 percent from r_ FY 2022 to FY 2027. to tf 0 CL F. AIRCRAFT OPERATIONS FORECASTS as Passenger volume growth at the Airport is expected to be accommodated through a combination 4- of larger aircraft, new flights, and increasing load factors. tf 0 CL Table IV-12 presents historical and forecast aircraft operations at the Airport through FY 2027. as As shown,passenger aircraft operations are forecast to be 20,545 operations by FY 2027, a CAGR of-1.6 percent from FY 2021, or 3.0 percent from FY 2019. E (Remainder of Page Intentionally Left Blank) imloni&Assut.ialvs� Mr. DRAFT- Report of the Airport Consultant C-74 Packet Pg. 2327 1.9.b 1l1111I RICO " TABLE IV-11 Enplaned Passenger Forecasts (Fiscal Years Ended September 30) FISCAL YEAR ENPLANED PASSENGERS ANNUAL GROWTH Historicalu,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,� 2u0.�1u,23u6u61u,9�0 N/A u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,� u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,uo u,u,u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u, 2013 393,906 7.6/o 2014 400,669 1.7% 2015 349,790 -12.7% 2 2016 367,254 5.0% 0 2017 398,592 8.5% °b 2018 416,234 4.4% 0 2019 475,034 14.1% 2020 340,307 -28.4% 2021 659,321 93.7% Forecast u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,uou,u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u, 2022 739,504 12.2/o 2023 704,628 -4.7/o 2024 731,316 3.8% 2025 748,069 2.3% 0 2026 764,962 2.3% u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,uo u,u,u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u, 2027 781,909 2.2 CL /o Compound Annual Growth Rate 2012—2021 6.8% 4- 2021 —2027 2.9% c tf NOTES:N/A-Not Applicable CL as SOURCES: Monroe County,January 2022(historical);Woods&Poole Economics,Inc.,June 2021;Ricondo & Associates,Inc.,February 2022(forecast). r- PREPARED BY. Ricondo&Associates,Inc.,March 2022. E U imloni& ssu "ialvs" Mr. DRAFT- Report of the Airport Consultant C-75 Packet Pg. 2328 1.9.b 1l1111I RICO " TABLE IV-12 Aircraft Operations Forecasts AVERAGE GENERAL FISCAL YEAR PASSENGER SEATS PER AVERAGE ALL-CARGO AVIATION/ MILITARY TOTAL AIRCRAFT DEPARTURE LOAD FACTOR AIRCRAFT OTHER AIR TAXI ..................Historical.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................... .................................................................................................................................................................................o..................................................................................................................................................................................................................................................................................... 2012 18,530 51.4 76.8/o N/A 43,843 459 62,832 2013 17,294 57.7 78.9/o N/A 40,833 685 58,812 2014 15,380 64.1 81.3/o N/A 37,848 597 53,825 2015 15,548 59.7 75.4/o N/A 38,272 595 54,415 2016 14,954 64.1 76.6% N/A 36,404 798 52,156 2017 15,814 66.6 75.6/0 1,348 33,626 750 51,538 2 2018 16,818 61.5 80.5% 1,448 33,413 459 52,138 _� 2019 16,280 69.9 83.5% 1,430 34,822 520 53,052 2020 13,278 82.2 62.4% 1,645 29,564 442 44,929 2021 22,598 88.2 66.2/0 1,923 39,168 439 64,128 Forecast 0 2022 20,733 94.5 75.5% 1,954 39,834 439 62,959 2023 19,296 94.6 77.2% 1,985 40,511 439 62,231 qy 2024 19,444 95.3 79.0% 2,017 41,200 439 63,099 t!2 2025 19,811 95.3 79.2/0 2,049 41,900 439 64,199 2026 20,179 95.4 79.5/0 2,082 42,612 439 65,312 I 2027 20,545 95.5 79.7% 2,115 43,337 439 66,436 ..0 o.........oundAnnual�Growth Rate........................................................................................................................................................................................................................................................................................................................................................................................................................ 2012-2021 2.2% 6.2% N/A N/A -1.2% -0.5% 0.2% W 2021-2027 -1.6/0 1.3/0 3.2/0 1.6/0 1.7/0 0.0% 0.6/0 NOTES:N/A-Not Applicable or Not Ai ailable 6� SOURCES:Monroe County,January 2022:FAA OPSNEL February 2022(historical);Ricondo&Associates,Inc.,February 2022(forecast). PREPAREDBY.Ricondo&Associates,Inc.,March 2022. �g 0 tf CL Average seats per departure at the Airport have increased from 51.4 in FY 2012 to 88.2 in FY 2021. During this time, average seats per departure at the Airport varied from FY 2012 to FY 2019 as airline market share at the Airport varied. The introduction of the Airbus A319 by Delta - and American in FY 2020 led to a higher average seats per departure in FY 2020 and again in f FY 2021, when a full year of A319s were operated by both airlines. C The average seats per departure is expected to increase due in large part to the forecast growth in market share of Allegiant. Allegiant operates the Airbus A319 on all routes serving the Airport E with a dense, all-economy configuration of 156 seats, which is 77 percent higher than the average 88.2 seats per departure for all flights departing the Airport in FY 2021. Average seats per departure are forecast to increase from 88.2 in FY 2021 to 95.5 in FY 2027 which represents a 1.3 percent CAGR. All-cargo operations grew rapidly between FY 2019 and FY 2020 as e-commerce growth led to increased cargo aircraft activity at the Airport. Cargo aircraft operations are forecast to continue to grow during the Forecast Period; from FY 2021 to FY 2027, cargo aircraft operations are imloni&Assu "ialvs" Mr. DRAFT- Report of the Airport Consultant C-76 Packet Pg. 2329 1.9.b 1l1111I RICO " forecast to grow from 1,923 to 2,115, a CAGR of 1.6 percent, the same rate as forecast by the FAA in its FAA Aerospace Forecast 20212041. General aviation operations at the Airport were modeled to grow at the same rate as forecast by the FAA in its FAA Aerospace Forecast 20212041. As a result, general aviation operations are forecast to grow from 39,168 in FY 2021 to 43,337 in FY 2027, a CAGR of 1.7 percent. Military aircraft operations are a relatively small component of traffic at the Airport. It is assumed that military operations will remain constant throughout the Forecast Period at 439 operations. Overall, total Airport operations are forecast to increase to 66,436 operations in FY 2027, a CAGR of 0.6 percent from FY 2021. 0 G. LANDED WEIGHT FORECASTS Table IV-13 presents historical and forecast landed weight at the Airport. As shown, total landed c weight forecast for FY 2027 is 993 thousand, thousand-pound units, which represents a CAGR of-0.2 percent from FY 2021. i TABLE IV-13 Landed Weight Forecasts (Fiscal Years Ended September 30, in 1,000 Pound Units) PASSENGER ALL-CARGO FISCAL YEAR AIRLINES AIRLINES TOTAL U) 0 Historical to 2017 488,822 5,729 494,551 tf 0 2018 489,240 6,154 495,394 C` 2019 552,256 6,078 558,334 < (D 2020 497,184 6,991 504,175 4- 2021 999,612 8,173 1,007,785 0 Forecast 0 CL 2022 982,305 8,303 990,608 as 2w0239.1w,5w,aw,4688 ww,w,436923.aw,w904 w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,ww,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w, w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w, w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w 2024 929,072 8,571 937,643 as E 2025 947,355 8,708 956,064 U 2026 965,702 8,848 974,550 2027 984,001 8,989 992,990 CwooundAnnualw,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w Growth Rate 2017-2021 19.6/0 9.3/0 19.5/0 2021 -2027 -0.3/0 1.6/o -0.2/o SOURCES: Monroe County,January 2022(historical);Ricondo&Associates,Inc.,February 2022(forecast). PREPARED BY. Ricondo&As sociates,Inc.,March 2022. imloni 1 ssu "ialvs" Mr. DRAFT- Report of the Airport Consultant C-77 Packet Pg. 2330 1.9.b V. FINANCIAL ANALYSIS A. FRAMEWORK FOR THE FINANCIAL OPERATION OF THE AIRPORT Monroe County is established under the Constitution and the laws of the State of Florida. In addition to the BOCC, there are five (5) offices elected County wide, which are as follows: Clerk of Circuit Court; Property Appraiser; Sheriff, Supervisor of Elections; and Tax Collector. The BOCC is the legislative body of Monroe County and as such budgets and provides funding used by the separate Constitutional Offices with the exception of fees collected by the Clerk of Circuit Court & Comptroller("Clerk") and the Tax Collector. Under the direction of the Clerk the Monroe County Finance Department maintains the accounting system for the County's operations, including those of the Clerk, which is included in the General Fund, but excluding 0 those of the Property Appraiser, Sheriff, Tax Collector and Supervisor of Elections, each of which maintains its own accounting system. The Airport is not a legally separate or fiscally independent unit of the County. Accordingly, it is considered a part of Monroe County's primary government and is included as such in the Monroe County Comprehensive Annual Financial Reports. i B. THE BOND RESOLUTION As stated in Section II hereof, the proposed 2022 Bonds are to be issued under the terms and conditions of the Resolution describing the terms for the sale of the 2022 Bonds and to be adopted by the County on [August 17, 20221. 0 Pursuant to the Resolution, the County agrees that for the Fiscal Year commencing October 1 tf 2022, and for each Fiscal Year thereafter, the County shall fix, establish, maintain and collect 0 such rates, fees, rentals and charges for the services and facilities of the Airport, and revise the same from time to time, whenever necessary, so as always to provide in each Fiscal Year: 4- (i)Net Revenues, together with the Eligible PFC Revenues and the Transfer Amount, c tf equal to at least 125% of the Debt Service becoming due in such Fiscal Year; provided 0 as (ii) the Net Revenues, together with Eligible PFC Revenues and the Transfer Amount, shall be adequate at all times to pay in such Fiscal Year at least 100% of(1)the Debt Service becoming due in such Fiscal Year, (2) any amounts required by the terms hereof to be deposited in the Reserve Account or with any issuer of a Reserve Account Letter of Credit or Reserve Account Insurance Policy in such Fiscal Year, (3) any amounts required by the terms hereof to be deposited in the Renewal and Replacement Fund and the Operation and Maintenance Reserve Account in such Fiscal Year, and (4) any Subordinated Indebtedness coming due in said Fiscal Year. Such rates, fees, rentals and other charges shall not be so reduced so as to be insufficient to provide adequate Net Revenues, Eligible PFC Revenues and the Transfer Amount for the purposes provided therefor by this Resolution. If, in any Fiscal Year, the County shall fail to comply with the foregoing requirements, it is v w 1,&l n&A sslit",�!a I v s I C-78 DRAFT- Report of the Airport Consultant Packet Pg. 2331 1.9.b required to cause the Airport Consultant to review its rates, fees, rentals, charges, income, Gross Revenues, Eligible PFC Revenues, Operation and Maintenance Costs and methods of operation and to make written recommendations as to the methods by which the County may promptly seek to comply with the foregoing requirements. The County shall forthwith commence to implement such recommendations to the extent required so as to cause it to thereafter comply with said requirements. So long as the County implements such recommendations within 120 days of the receipt thereof, the County's failure to comply with the foregoing requirements shall not be considered an Event of Default. The Resolution defines "Gross Revenues" or "Revenues" to mean for any period all moneys paid or accrued for the use of and for services and facilities furnished by, or in connection with the ownership or operation of, the Airport, or any part thereof or the leasing or use thereof calculated in accordance with generally accepted accounting principles applicable to publicly owned 0 airports similar to the Airport, including, but not limited to (1)rentals, (2) concession fees, (3) use charges, (4) landing fees, (5) license and permit fees, (6) service fees and charges, (7) moneys from the sale of fuel, and/or other merchandise, and (8) Investment Earnings;provided, however, that Gross Revenues shall not include (A)proceeds received from the sale of Bonds, Subordinated Indebtedness or Special Purpose Facilities Bonds, (B)proceeds from the sale or taking by eminent domain of any part of the Airport, (C) gifts or Government Grants, (D) ad valorem tax revenues, (E) any insurance proceeds received by the County (other than insurance proceeds paid as compensation for business interruption), (F) amounts received which are required to be paid to any other governmental body, including, but not limited to taxes and impact fees, (G)PFC Revenues, and(H) any noise abatement charges received for disbursement to others. U) r- "Net Revenues shall mean Gross Revenues less Operation and Maintenance Costs." c tf 0 "Operation and Maintenance Costs" shall mean any and all costs incurred by the County in CL operating, maintaining and administering the Airport, including, but not limited to, the general as administrative and legal costs of the County related to operation, maintenance, management, security and development of the Airport; costs associated with equipment, vehicles, supplies, 0 materials, services and support for the operation, maintenance, management, security and 0 CL development of the Airport; any costs of litigation or a legal judgment against the County; all costs incurred in planning or applying for, obtaining, maintaining and defending permits; accounting, legal and engineering expenses; ordinary and current rentals of equipment or other property; refunds of moneys lawfully due to others;payments to pension, retirement, health and hospitalization funds; payments in lieu of taxes or franchise fees or impact fees; and fees for management of the Airport or any portion thereof, all to the extent properly attributable to the Airport in accordance with generally accepted accounting principles applicable to publicly owned airports similar to the Airport; but does not include any costs or expenses in respect of original construction or improvement other than expenditures necessary to prevent an interruption or continuance of an interruption of service or of Gross Revenues or minor capital expenditures necessary for the proper and economical operation or maintenance of the Airport, or any accruals required to be recognized with respect to pension, retirement, health and hospitalization funds that do not require or result in the expenditure of cash, or any provision for interest, depreciation, amortization or similar charges, or any loss resulting from the valuation of v w 1,&l n&A sslit",!aIvs I C-79 DRAFT- Report of the Airport Consultant Packet Pg. 2332 1.9.b investment securities, Hedge Agreements at market value and any other loss that does not require or result in the expenditure of cash." Creation of Funds and Accounts Under the Resolution, the County covenants to establish the certain funds and accounts. The resolution also establishes the priority, timing and amounts for which Gross Revenues and Eligible PFC Revenues are to be deposited into those funds and accounts. Figure 1 illustrates the disposition of Gross Revenues and Eligible PFC Revenues under the Resolution. 0 0 U) as 0 as U) i U) r— (Remainder of Page Intentionally Left Blank) c tf 0 as 4- 0 tf a as as E v w 1, In A ssiit",!a vs I C-80 DRAFT- Report of the Airport Consultant Packet Pg. 2333 1.9.b FIGURE V-1 Disposition of Gross Revenues and Eligible PFC Revenues Under the Resolution Monroe County,Florida Flow of Funds Revenue Account PFC Account County shall deposit,promptly upon receipt,all Gross Revenues into the County shall deposit,promptly upon receipt,all PFC Revenues into the Revenue Account of the Monroe County,Florida Key West International PFC Account of the Monroe County,Florida Key West International Airport Revenue Fund Airport Revenue Fund Moneys in the PFC Account shall be deposited or credited on or before the 25th day of each month to the following accounts in such amounts as the County determines pursuant to its Annual Budget: Z U) Operation and Maintenance Payment Account Moneys in the Revenue Account shall first be used each month to deposit in the Operation and Maintenance Payment Account of the Monroe County Florida,Key West International Airport Operation and no Maintenance Fund such sums as are necessary to pay Operation and Maintenance Costs for the ensuing month I Monroe County,Florida Key West International Airport Sinking Fund Subsequent to payment of moneys to the Operation and Maintenance Payment Account,remaining moneys in the Revenue Account shall be applied in the following order of priority: (1)Interest Account (2)Principal Account (3)Term Bonds Redemption Account(on parity with payments to the Principal Account) (4)Reserve Account tf CL Payment of Subordinated Indebtedness tf Deposits to Operation and Maintenance Reserve Account of Monroe County,Florida Key West International Airport Operation and CL Maintenance Fund Monroe County,Florida PFC Capital Improvement Fund Key West International Airport Surplus Fund The remainder of moneys in the PFC Account shall be deposited The balance of any moneys remaining in the Revenue Account into the PFC Capital Improvement Fund and shall be utilized in shall be deposited into the Airport Surplus Fund and applied for accordance with the terms of Section 4.06 of the Resolution any lawful purpose relating to the Airport For more information concerning the flow of funds and the particular provisions and restrictions with respect to the funds and accounts under the Resolution,see the copy of the Resolution attached to the Official Statement for the 2022 Bonds. Source:Monroe County,Florida Airport Revenue Bond Resolution. 7/18/2022 Compiled by Newton&Associates,Inc. 2022 Bonds ROAC Draft 5 Financial Tables v w I In&A sslit",!aIvs 11.". C-81 DRAFT- Report of the Airport Consultant Packet Pg. 2334 1.9.b C. HISTORICAL AIRPORT REVENUE AND EXPENSES An analysis of the Airport's historical financial activity is a useful guide in projecting the future financial activities at the Airport. Table V-1 depicts historical Revenues and Operation and Maintenance Costs, (as defined in the Resolution) at the Airport during the Study Period. These historical Revenues and Operation and Maintenance Costs were compiled from Airport operating statements and reconciled to the County's Annual Comprehensive Financial Reports for each year depicted on Table V-1. The impact of the pandemic on airlines, rental car companies and airport concessionaires has been severe at airports worldwide, including the Airport. Enplanements reported at the Airport for FY 2020 decreased approximately 28%to 340,307, down from 475,034 in FY 2019. In FY 2021, enplanements reported by the Airport showed a strong recovery, increasing to 607,540 and 0 exceeding the pre-pandemic levels in FY 2019. In response to the passenger activity reductions caused by the pandemic, Airport management c took certain steps to mitigate the effects of the lost activity including: U) • Closely monitoring expenditure levels while maintaining safe Airport operations; i • Closely coordinating with airlines and other Airport tenants to maximize efficiencies in passenger processing and travel services; • Implementation of COVID-19 safety protocols to encourage passenger confidence; and • Applying federal COVID-19 relief grants authorized by Congress to offset FY 2020 and FY 2021 eligible operating expenses, the details of which are set forth on Table II-3 in Section 11 and Table V-1 in this Section V. 0 tf The impacts of the pandemic on the Airport are reflected on Table II-1, and particularly in the c Airport's total non-airline revenue reported for FY 2020, when CARES funds reported for the ` year are excluded. In FY 2021, however, total non-airline revenues reported(excluding CARES funds) rebounded and exceeded the pre-pandemic FY 2019 level. 0 tf CL as r_ as E (Remainder of Page Intentionally Left Blank) v w 1, In A ssiit",!aIvs I C-82 DRAFT- Report of the Airport Consultant Packet Pg. 2335 1.9.b TABLE V-1 Historical Revenues, Operation and Maintenance Costs and Net Revenue AIRPORT OPERATING REVENUES&EXPENSES CAGR Actual Actual Actual Actual Actual Fiscal Years FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 2017-2021 REVENUES: Airline Revenues: Landing Fees $2,019,358 $1,544,296 $2,210,141 $1,903,899 $3,335,948 13.4% Airline Terminal Rents 1,820,649 1,784,141 1,988,022 1,967,945 1,639,351 -2.6% Airline Secunty Charges 443,106 342,184 529,122 411,378 594,213 7.6% Total Airline Revenues $4,283,113 $3,670,621 $4,727,284 $4,283,222 $5,569,512 6.8% Non-Airline Revenues: Rental Car Concessions $1,524,597 $1,417,653 $1,605,229 $1,446,639 $2,597,076 14.2% mq Rental Car Rents 426,992 393,801 398,111 384,344 607,713 9.2% Public Parking 419,381 447,326 438,609 290,968 420,034 0.0% General Aviation 221,824 222,586 228,214 229,407 307,142 8.5% Ground Transportation 262,193 258,110 389,853 203,220 405,516 11.5% Advertising 189,699 212,665 261,406 162,408 172,540 -2.3% Restaurant 280,876 277,295 353,860 256,568 499,930 15.5% Gift Shop 195,299 210,495 215,136 156,581 241,918 5.5% Air Cargo landing Fees 34,936 17,754 21,929 32,804 25,032 -8.0% Imestment Income 22,168 36,871 96,717 59,747 18,331 -4.6% Other Rents 298,234 421,823 452,480 460,234 444,387 10.5% CARES z 0 0 0 5,295,800 9,063,499 N/A no Other Miscellaneous Revenue a 2,680 931 11,744 11,231 280,465 219.8% Total Non-Airline Revenues $3,878,879 $3,917,310 $4,473,288 $8,989,950 $15,083,583 40.4% TOTAL REVENUES $8,161,992 $7,587,931 $9,200,573 $13,273,173 $20,653,095 26.1% OPERATIONS&MAINTENANCE COSTS: Personnel Services $3,053,037 $3,155,980 $3,394,307 $3,990,131 $3,089,416 0.3% Contractual Svcs,Supplies/Materials&Other4 2,173,798 1,825,169 2,393,946 2,295,026 3,252,871 10.6% Secunty Services-MCSO(Net) 2,198,441 2,364,910 2,402,040 2,384,817 3,068,832 8.7% TOTAL OPERATIONS&MAINTENANCE COSTS: $7,425,276 $7,346,059 $8,190,294 $8,669,974 $9,411,119 6.1% NET REVENUES s $736,716 $241,871 $1,010,279 $4,603,199 $11,241,976 97.6% DEBT SERVICE NIA NIA NIA NIA NIA DEBT SERVICE COVERAGE NIA NIA NIA NIA NIA U Revenues and Operations and Maintenance Costs data was provided by the Airport for the purposes of the Report of the Airport Consultant. z CARES amounts shown were applied to Operations and Maintenance Costs. tf 'FY 2021 includes contract settlement amount of$150,000 and an intergovernmental revenue amount of$124,899. 4 Includes amounts for County Allocated Overhead. CL s Amount for FY 2018 Net Revenues reflects the negative impact of Hurricane Irma on Airport operations.Amounts for FY 2020 and FY 2021 reflect the receipt of CARES funds. RECONCILIATION OF AIRPORT OPERATING STATEMENTS TO COUNTY ACFRS FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Revenues: Monroe County Annual Comprehensive Financial Reports $8,139,824 $7,551,059 $9,103,856 $7,917,626 $11,421,265 tf Airport Operating Statements 8,161,992 7,587,931 9,200,573 13,273,173 20,653,095 Variance $22,168 $36,872 $96,717 $5,355,547 $9,231,830 CL Reconciliation CARES $0 $0 $0 $5,295,800 $9,063,499 Settlement 0 0 0 0 150,000 ,per Imestment Income 22,168 36,871 96,717 59,747 18,331 Total Revenues Reconciliation $22,168 $36,871 $96,717 $5,355,547 $9,231,830 Expenses: Monroe County Annual Comprehensive Financial Reports $12,717,387 $13,688,499 $15,929,258 $20,263,862 $16,535,996 ICU Airport Operating Statements 7,425,276 7,346,059 8,190,294 8,669,974 9,411,119 Variance $5,292,111 $6,342,440 $7,738,964 $11,593,888 $7,124,877 Reconciliation Capital Outlays 848,547 $3,117,061 $259,826 $63,317 $41,498 PFC Expenditures 336,892 0 0 0 0 Misc./Other 318,598 706,792 715,139 928,734 0 Noise Improvements 1,401,795 23,680 4,335,305 7,401,773 4,598,794 Depreciation 2,386,278 2,494,910 2,428,693 3,200,064 2,484,585 Total Expenses Reconciliation $5,292,110 $6,342,443 $7,738,963 $11,593,888 $7,124,877 Note:Totals may not add due to rounding. Compllod by Newton&Assoc Pales,Inc. T25/2022 2022 Bonds ROAC Oraft 6 Tables v In I siit",!aIv �� ���� C-83 DRAFT- Report of the Airport Consultant Packet Pg. 2336 1.9.b 1. Airline Revenues Airline revenues comprise landing fees', Terminal rents, and security charges, airline reimbursements, if any, and any other revenues which may be derived from the passenger airlines serving the Airport. As depicted on Table V-1, airline revenues increased from $4,283,113 in FY 2017 to $5,569,512 in FY 2021, representing an average annual growth rate of 6.8%. Airline cost per enplaned passenger ("CPEP") is a ratio that measures the cost to an airline or group of airlines serving an airport. This ratio is useful to both airports and airlines in evaluating one airport's cost relative to another airport. 0 U) Table V-2 sets forth the Airport's historical airline CPEP during the Study Period. As depicted as on Table V-2, the airline CPEP decreased at a CAGR of 5.8% during the Study Period, from r- $10.75 in FY 2017 to $8.45 in FY 2021. as U) TABLE V-2 Historical Cost Per Enplaned Passenger i CAG R Actual Actual Actual Actual Actual Fiscal Years FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 2017-2021 Airline Payments Landing Fees $2,019,358 $1,544,296 $2,210,141 $1,903,899 $3,335,948 13.4% 0 Ailine Terminal Rents 1,820,649 1,784,141 1,988,022 1,967,945 1,639,351 -2.6 tf Airline Security Charges 443,106 342,184 529,122 411,378 594,213 7.6% 0 Total Airline Payments $4,283,113 $3,670,621 $4,727,284 $4,283,222 $5,569,512 6.8% CL Enplaned Passengers 398,592 416,234 475,034 340,307 659,321 13.4% (D Airline Cost per Enplaned Passenger $10.75 $8.82 $9.95 $12.59 $8.45 -5.8% tf CL (D Source:Airport Revenues and Enplanements provided by Airport Records. 07/24/22 Compiled by Newton&Associates,Inc. 2022 Bonds ROAC Draft 6 Financial Tables.xis (D E 2. Rental Car Revenues Revenues received from the rental car companies operating at the Airport collectively comprise 57 Although landing fees are paid by cargo and passenger airlines,passenger airlines comprise the overwhelming proportion of landed weight at the Airport and pay the majority of landing fees at the Airport. Historically cargo airline landing fee revenue has been less than 1%of total landing fee revenue. v w 1,&l n&A sslit",!aIvs I C-84 DRAFT- Report of the Airport Consultant Packet Pg. 2337 1.9.b the second largest source of revenue at the Airport. Currently, eight rental car brands operate from the Airport ("On-Airport RACs") and occupy space in the Airside Terminal. The On- Airport RACs include Alamo, Avis, Budget, Dollar, Enterprise, Hertz, and National. Under substantially similar concession agreements ("RAC Agreements")with the County,these companies pay the greater of a 10% of gross receipts or concession fee MAG, and fixed space rentals and fees for use and occupancy of counters and offices located in the Airside Terminal, and ready return parking spaces located in the parking garage. The RAC Agreements expire on December 31, 2022. Airport management anticipates that the new rental car concession agreements will be executed concurrent with the expiration of the RAC Agreements and will have substantially similar fees and rental terms to the current RAC Agreements. If new concession agreements are not made effective upon the expiration of the RAC Agreements, according to Airport management, the terms of the RAC Agreements will remain in effect until 0 new agreements are put into place. Two of the On-Airport RACs, Avis and Hertz occupy and pay land lease rental for service c facilities which are located on the Airport. There is currently one "off-site"rental car company (KWJA, Inc.)permitted by the County to pick up and drop off customers in exchange for payment of a concession fee of 8.0% of its gross rental car receipts. As shown on Table V-1, during the Study Period, rental car concession revenues increased at a CAGR of 14.2%, from $1,524,597 in FY 2017 to $2,597,076 in FY 2021. Rental car rent revenues increased from $426,992 in FY 2017 to $607,713 in FY 2021, a CAGR of 9.2%. This increase in total rental car concession revenues over the Study Period are primarily attributable to U) strong enplanement growth over the Study Period. U tf 0 3. Public Parking Revenues CL as The public parking facilities at the Airport are managed by Republic Parking System, LLC. under a management agreement with the County. Under the management agreement, the Airport 0 pays all expenses,plus a management fee and an incentive fee, if any, to Republic Parking 0 Systems, LLC. The current agreement is for a period of five years and terminates June 30, 2024. The County has a single option to extend the term of the management agreement for an additional two-year period which will keep the agreement in place until June 30, 2026. As shown on Table V-1, Public Parking revenues remained relatively flat during the Study Period at$419,381 in FY 2017 down to $290,968 in FY 2020 (reflecting impacts of the COVID- 19 pandemic), and up to $420,035 in FY 2021. Table V-3, below, depicts the current parking rates at the Airport. v w 1,&l n&A sslit",!aIvs I C-85 DRAFT- Report of the Airport Consultant Packet Pg. 2338 1.9.b TABLE V-3 Current Public Parking Rates Short Term -Surface Long Term -Garage 0-60 Minutes Free 0-60 Minutes $3.00 1 to 2 Hours $6.00 1 to 2 Hours $6.00 2 to 3 Hours $9.00 2 to 3 Hours $9.00 3 to 4 Hours $12.00 3 to 4 Hours $12.00 Daily Maximum $15.00 Daily Maximum $19.00 Weekly Maximum $84.00 Weekly Maximum $84.00 Lost Ticket Minimum $15.00 Lost Ticket Minimum $19.00 The Airport plans to increase the Long Term Daily Maximum rate to$21.00 effective October 1,2022. as U) Source:Airport Records. 07/24/22 i Prepared by Newton&Associates, Inc. 2022 Bonds ROAC Draft 6 Financial Tables.xls 4. General Aviation Revenues 0 tf General Aviation revenues include FBO rentals, hangar rentals, and other revenues related to c general aviation activity at the Airport. As shown on Table V-1, during the Study Period, the CL Airport's general aviation revenue increased at a CAGR of 8.5% from $221,824 in FY 2017 to $307,142 in FY 2021. The increase in General Aviation revenues shown in FY 2021 is primarily 4- attributable to a FBO fair market value rental adjustments implemented by the Airport. c tf 0 CL 5. Ground Transportation as In addition to rental car companies, ground transportation providers operating at the Airport a include taxis, transportation network companies ("TNCs"), limousines, and courtesy vans for hotels and other miscellaneous ground transportation operators. The TNCs include Lyft and Uber which operate under agreements which provided for a charge of$3.50 (effective January 1, 2022 and July 1, 2022 and respectively)per pick-up at the Airport. The County requires that the other ground transportation providers obtain a permit and pay a permit fee for the right to transport passengers arriving or departing the Airport. As shown on Table V-1, Ground Transportation revenue increased from $262,193 in FY 2017 to $405,516 in FY 2021, a CAGR of 11.5%. This increase reflects the growth in enplanement activity and enhanced ground transportation services experienced during the Study Period. v w 1,&l n t A sslit",!aIvs I C-86 DRAFT- Report of the Airport Consultant Packet Pg. 2339 1.9.b 6. Advertising Advertising revenues are concession revenues received by the County from the Airport's advertising concessionaire. Under an agreement which became effective May 21, 2014, Anderson Outdoor Advertising, Inc. pays the County monthly, the greater of 60.0% of the prior month's gross revenue, or $9,000. This agreement expires on November 30, 2024. As shown on Table V-1, Advertising revenue decreased during the Study Period from $189,699 in FY 2017 to $172,540 in FY 2021, a CAGR of-2.3%. This reduction in Advertising revenue reflects an adjustment to advertising space rentals implemented by the Airport in response to the pandemic. 7. Food, Beverage, and Retail Concession Revenues 0 as Food, beverage and retail concession revenues (Restaurant and Gift Shop) generated by the Airport's food and beverage operator and retail operator represent percentage fees on gross revenues and other fees paid to the County in exchange for the privilege of conducting its food and beverage, or retail business at the Airport. The food and beverage concession is operated by Conch Flyer Concessions LLC ("Lessee")under an agreement it assumed in April 2016 and which originated in 1984 and expires on January 22, 2030. The Airport is currently negotiating an amendment to this agreement, which is expected to include, among other things, an extension of the term of the agreement, relocation of premises to Concourse A upon completion of the 2022 Project and provide for Lessee's investment in build-out of the new Concourse A premises. As shown on Table V-1, Restaurant concession revenues increased from $280,876 in FY 2017 to U) $499,930 in FY 2021, representing a CAGR of 15.5% during the Study Period. U tf 0 Also shown on Table V-1, Gift Shop concession revenues increased from $195,299 in FY 2017 to $241,918 in FY 2021, representing a CAGR of 5.5% during the Study Period. < The increase in food, beverage and retail concession revenues during the Study Period is 0 tf attributable to the enplanement growth experienced during the Study Period. c a as 8. Air Cargo Revenues as Air Cargo revenues at the Airport comprise revenues for air cargo facility rentals and landing fees paid by airlines engaged in the business of air cargo transport at the Airport. As shown on Table V-1, Air Cargo revenues experienced a CAGR of-8.0% over the Study Period, decreasing from $34,936 in FY 2017 to $25,032 in FY 2021. According to the Airport, this reduction in Air Cargo revenue is reflective of an unusual delay in payment of cargo facility rentals resulting from a change in one of the air cargo operators. v w 1,&l n&A sslit",!iII sI I C-87 DRAFT- Report of the Airport Consultant Packet Pg. 2340 1.9.b 9. Investment Income Investment income represents interest earned on the County's Key West International Airport Fund bank deposits. As shown on Table V-1, Investment Income decreased during the Study Period from $22,168 in FY 2017 to $18,331 in FY 2021, representing a CAGR of-4.6%. 10. Other Rents Other Rents are another important element of Revenue at the Airport. These revenues comprise various rentals and fees paid by tenants and other companies which are permitted by the County to conduct commercial activities at the Airport. 0 as As shown on Table V-1, Other Rents revenues increased from $298,234 in FY 2017 to $444,387 in FY 2021, representing a CAGR of 10.5%. This increase in Other Rents is primarily attributable to various rental increases experienced in FY 2018 compared to FY 2017. The CAGR for this category is 1.8% from FY 2018 to FY 2021. i 11. CARES Funds CARES Funds are federal grant amounts received by the Airport, for COVID-19 relief and certain amounts have been applied to offset Operation and Maintenance Costs. Under the Resolution, grants received which may be used to fund Operation and Maintenance Costs and debt service are considered Gross Revenues. CARES funds applied during the Study Period U) were $5,295,800 in FY 2020 and $9,063,499 in FY 2021. See Table 11-3 and Table V-1. c tf 0 12. Other Miscellaneous Revenues CL as Other Miscellaneous Revenues increased from $2,680 in FY 2017 to $280,465 in FY 2021. The increase in FY 2021 reflects a contract settlement amount of$150,000 and an intergovernmental 0 revenue amount of$124,899. 0 CL as Table V-4 shows the revenue per enplaned passenger generated by those revenue categories which are driven by passenger activity at the Airport. An evaluation of the revenue per enplaned passenger by these passenger sensitive revenue producing activities is useful in considering revenue performance over the Forecast Period, taking into consideration the forecast of enplaned passengers over the Forecast Period. v w 1,&l n&A sslit",�!a I v s I C-88 DRAFT- Report of the Airport Consultant Packet Pg. 2341 1.9.b TABLE V-4 Historical Non-Airline Revenue Per Enplaned Passenger Actual Actual Actual Actual Actual Estimated FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Enplanements 398,592 416,234 475,034 340,307 659,321 739,504 Non-Airline Revenue: Rental Car Concessions $1,524,597 $1,417,653 $1,605,229 $1,446,639 $2,597,076 $2,900,000 Rental Rents 426,992 393,801 398,111 384,344 607,713 $661,266 Public Parking 419,381 447,326 438,609 290,968 420,034 550,000 Ground Transportation 262,193 258,110 389,853 203,220 405,516 450,000 Advertising 189,699 212,665 261,406 162,408 172,540 200,000 Restaurant 280,876 277,295 353,860 256,568 499,930 649,768 Gift Shop 195,299 210,495 215,136 156,581 241,918 244,474 U) Total Select Non-Airline Revenues $3,299,037 $3,217,344 $3,662,204 $2,900,727 $4,944,727 $5,655,508 Non-Airline Revenue Per Enplaned Passenger: Rental Car Concessions $3.82 $3.41 $3.38 $4.25 $3.94 $3.92 Rental Rents $1.07 $0.95 $0.84 $1.13 $0.92 $0.89 Public Parking $1.05 $1.07 $0.92 $0.86 $0.64 $0.74 qy Ground Transportation $0.66 $0.62 $0.82 $0.60 $0.62 $0.61 U2 Advertising $0.48 $0.51 $0.55 $0.48 $0.26 $0.27 Restaurant $0.70 $0.67 $0.74 $0.75 $0.76 $0.88 I Gift Shop $0.49 $0.51 $0.45 $0.46 $0.37 $0.33 Total Revenue Per Enplaned Passenger $8.28 $7.73 $7.71 $8.52 $7.50 $7.65 Source:Airport Records. 07/24/22 Prepared by Newton&Associates,Inc. 2022 Bonds BOAC Draft 6 Financial Tables xis U) 0 tf CL 13. Airport Operation and Maintenance Costs as 4- Operation and Maintenance Costs are incurred for operation and maintenance of the Airport c tf grounds and facilities as previously described in Section I of this Report. Historical Operations 0 and Maintenance Costs are also depicted on Table V-1. The primary components of these costs comprise the categories of personal services (salaries and benefits), contractual services, supplies and materials, other, and security services provided by the Monroe County Sheriff's Department. Also included is an allocation of County general administrative services and overhead expenses to the Airport. Currently, the County employs 34 Airport employees on a full-time basis. In addition, the County contracts with the Monroe County Sheriff Department to provide law enforcement personnel to perform federally mandated security functions at the Airport. During the Study Period, Operation and Maintenance Costs experienced a CAGR of 6.1% increasing from $7,425,276 in FY 2017 to $9,411,119 in FY 2021. This increase in Operation and Maintenance Costs during the Study Period is reflective of varying factors including v w 1,&l n&A sslit",!aIvs I C-89 DRAFT- Report of the Airport Consultant Packet Pg. 2342 1.9.b necessary staffing, utilities, insurance, supplies and materials, maintenance and repairs, security services and other operating and maintenance requirements of the Airport. 14. Net Revenues Net Revenues increased during the Study Period from $736,716 in FY 2017 to $11,241,976 in FY 2021, representing a CAGR of 97.6%, which is primarily attributed to the receipt of CARES funds in FY 2020 and FY 2021. D. FORECAST OF AIRPORT REVENUES AND EXPENSES 0 A financial forecast has been prepared and presented in a pro-forma projection of Airport revenues and expenses, which is depicted on Table V-5. This pro-forma sets forth a projection U) of Gross Revenues, Operation and Maintenance Costs, Net Revenues, and Eligible PFC Revenues and Debt Service arising from the 2022 Bonds and tests the sufficiency of Net Revenues and Eligible PFC Revenues to pay the estimated Debt Service during the Forecast Period to otherwise satisfy the requirements of the Resolution. Based on the analyses set forth in this Report, Net Revenues and Eligible PFC Revenues in each year of the Forecast Period are expected to be sufficient to comply with the requirements of the rate covenant established in the i Resolution. w w U) r- 0 tf CL as 4- 0 tf CL as (Remainder of Page Intentionally Left Blank) as E v w 1, In A ssiit",!a vs 11.". C-90 DRAFT- Report of the Airport Consultant Packet Pg. 2343 1.9.b TABLE V-5 Forecast Airport Revenue, Expenses & Debt Service Coverage In developing this forecst,NAI has relied upon certain information from the sources stated in the body oft he Report and adopted certain assumptions believed to be reasonable fort his purpose.Variations to some oft he assumptions are inevitable,and unanticipated factors which may affect these forecasts may occur.Consequently,actual results will vary from those forecast and the variations could be material. FORECAST PERIOD CAGR Estimated (Est.DBO) Fiscal Years FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 2022-2027 GROSS REVENUES: Airline Revenues: �w Airline Landing Fees $3,037,971 $3,169,334 $3,321,744 $3,439,755 $3,826,219 $3,797,274 4.6% � Airline Terminal Rents 2,166,949 2,229,335 2,352,541 4,165,652 4,592,685 4,516,469 15.8% _0 Airline Security Charges 1,076,770 1,524,153 1,630,844 1,745,003 1,411,426 1,510,226 7.0% Passenger Boarding Bridge Charges 0 0 0 245,000 262,150 490,501 N/A Total Airline Revenues $6,281,689 $6,922,823 $7,305,129 $9,595,410 $10,092,479 $10,314,469 10.4% 0 W) Non-Airline Revenues: Rental Car Concessions $2,900,000 2,763,233 $2,867,891 $2,933,587 $2,999,836 $3,066,295 1.1% Rental Car Rents $661,266 914,101 $914,101 $914,101 $914,101 $914,101 6.7% Public Parking 550,000 633,561 657,558 672,621 687,810 703,048 5.0% 0 General Auation 309,000 318,270 327,818 337,653 347,782 358,216 3.0% 16- Ground Transportation 450,000 428,778 445,018 455,212 465,492 475,804 1.1% Advertising 200,000 190,568 197,786 202,316 206,885 211,469 1.1% ($g Restaurant 649,768 619,124 642,574 788,752 806,564 824,433 4.9% Gift Shop 244,474 232,944 241,767 296,766 303,468 310,191 4.9% Air Cargo 25,679 29,206 30,645 31,619 35,055 34,689 6.2% Other Rents 538,734 554,896 571,543 588,689 606,350 624,540 3.0% CARES 640,701 0 0 0 0 0 -100.0% Other Miscellaneous Revenue 1,500 1,500 1,500 1,500 1,500 1,500 0.0% Total Non-Airline Revenues $7,171,122 $6,686,181 $6,898,200 $7,222,816 $7,374,845 $7,524,286 1.0% TOTAL GROSS REVENUES $13,452,812 $13,609,004 $14,203,328 $16,818,225 $17,467,324 $17,838,755 5.8% 3.00% 3.00% 3.00% 3.00% 3.00% OPERATION&MAINTENANCE COSTS: U) Personnel Services $3,881,961 $4,076,059 $4,279,862 $4,493,855 $4,718,548 $4,954,475 5.0% r- Contractual Sws,Supplies/Materials&Other 3,096,262 3,313,000 3,544,910 3,793,054 4,058,568 4,342,668 7.0% 0 Security Ser-es-MCSO(Net) 2,284,733 2,444,664 2,615,791 2,798,896 2,994,819 3,204,456 7.0% U Transfers-County Overhead 477,280 510,690 546,438 584,689 625,617 669,410 7.0% Subtotal $9,740,236 $10,344,413 $10,987,001 $11,670,494 $12,397,551 $13,171,009 6.2% CL Estimated Incremental O&M Costs-2022 Project $0 $0 $0 $1,216,461 $1,346,452 $1,429,137 TOTAL OPERATION AND MAINTENANCE COSTS $9,740,236 $10,344,413 $10,987,001 $12,886,955 $13,744,003 $14,600,146 8.4% NET REVENUES [A] $3,712,576 $3,264,591 $3,216,327 $3,931,271 $3,723,321 $3,238,609 -2.7% ELIGIBLE PFC REVENUES [B] $0 $0 $0 $2,600,000 $2,600,000 $2,600,000 tf CL AMOUNT AVAILABLE FOR DEBT SERVICE [A+B] $3,712,576 $3,264,591 $3,216,327 $6,531,271 $6,323,321 $5,838,609 SERIES 2022 DEBT SERVICE [C] $0 $0 $0 $2,612,000 $2,458,250 $2,455,750 ,per r- SUBORDINATE DEBT SERVICE' [D] $0 $12,000 $12,000 $167,500 $323,000 $323,000 E REMAINING REVENUE [A+B]-[C+D] $3,712,576 $3,252,591 $3,204,327 $3,751,771 $3,542,071 $3,059,859 DEBT SERVICE COVERAGE' [A+B]/[C] n/a n/a n/a 2.50 2.57 2.38 'Debt Service is PRELIMINARY. Source:Frasca&Associates,LLC.Market Rates as of July 21,2022+75 bp. z Esturnated payments becoming due on rewlving line of credit.See Table II-2 Grant Anticipation Note funding source. 'Under the Resolution,each year Net Revenues plus Eligible PFC Revenues must be at least 1.25%of Debt Service payable for each such year. Source.Estimated FY 2022-Airport Records. 07/24/22 Prepared by Newton&Associates,Inc. 2022 Bonds BOAC Draft 6 Financial Tables.xls v In ssiit",!aIr �� ���� C-91 DRAFT- Report of the Airport Consultant Packet Pg. 2344 1.9.b 1. Airport Revenues a. Airline Revenues Airline revenues comprise revenues derived from landing fees, Terminal rents, security fees and apron rentals paid by the passenger airlines operating at the Airport. Collectively, airline revenues are projected to continue to represent the largest source of revenue generated at the Airport. Airline revenues are based on a combination of airline activity levels and the airline rates and charges imposed by the County and paid by the airlines pursuant to the Signatory Agreement. As stated in Section I, the Signatory Agreement prescribes a rate setting methodology which is a compensatory, cost recovery based methodology. Therefore,projected airline revenues over the Forecast Period are based, in part, on anticipated increases in Operation and Maintenance Costs and capital improvements made to airline facilities including the 0 Terminal and Airfield. Anticipated Operations and Maintenance Costs increases would include general price level c increases over existing Operation and Maintenance Costs levels and increases resulting from the larger Terminal facility produced by the 2022 Project. Capital improvements which would impact the airline facilities would include the 2022 Project(debt service on the 2022 Bonds) and any other improvements which may be completed by the County during the Forecast Period. However, because the County anticipates paying the majority of 2022 Bonds debt service with PFC Revenue, airline rates and charges are not expected to increase significantly as a result of financing the 2022 Project with the 2022 Bonds. If in any year, however, PFCs are insufficient to pay the 2022 Bonds debt service in full, airline rates and charges may be adjusted by the County to include the amount of 2022 Bonds debt service allocable to the airline rate base. U) 0 Airline revenues are projected to increase at a CAGR of 10.4%, from $6,281,689 in FY 2022 tf c (estimated)to $10,314,469 in FY 2027. CL as b. Forecast of Non-Airline Revenues 4- 0 tf Rental car,public parking, ground transportation, food and beverage and retail and advertising c CL are generated,primarily, by the amount of passenger traffic experienced at the Airport in a fiscal year. Passenger traffic is made up of enplaned passengers and deplaned passengers. Enplanements and deplanements typically mirror each other in volume. Enplanements drive food and beverage, retail revenues, and parking revenues while deplanements drive rental car, and ground transportation revenues. Both enplanements and deplanements drive (indirectly) advertising revenues. Because of this correlation of passenger activity and non-airline revenues, these non-airline revenues have been forecast based upon the revenue per enplaned passenger estimated to be generated in FY 2022. v w 1,&l n&A sslit",!aIvs 11.". C-92 DRAFT- Report of the Airport Consultant Packet Pg. 2345 1.9.b i. Rental Car Revenues Rental car revenues at the Airport are largely attributable to concession fees paid to the County by the rental car operators serving the Airport. On-Airport RACs also pay for ticket counters, office rentals, ready return parking spaces and land rentals on the two on-airport rental car service facility rentals. Total rental car concession revenues have been projected to increase over the Forecast Period from an estimated $2,900,000 in FY 2022 to $3,066,295 in FY 2027, a CAGR of 1.1%. Rental car rent revenues are forecast to increase in FY 2023 to reflect an increase in ready/return parking space rentals resulting from additional spaces rented and an increase in the per space rate from $10 to $12. Rental car rent revenues are forecast to remain flat from FY 2024 to FY 2027. 0 0 ii. Public Parking Revenues °' Public parking revenues are forecast to increase from $550,000 in FY 2022 to $703,048 in FY c 2027, a CAGR of 5.0%. This increase reflects an FY 2023 increase in the long term maximum daily rate from $19.00 per space to $21.00 per space. No additional parking rate increases are assumed during the Forecast Period. iii. General Aviation Revenues w General aviation revenues at the Airport include hangar rentals, and other FBO rentals and fuel flowage fees. Over the Study Period the revenues increased at a CAGR of 8.5%. As a measure of conservatism, total general aviation revenues are projected to increase from $309,000 in FY U) 2022 to $358,216 in FY 2027, a CAGR of 3.0%. U tf 0 iv. Ground Transportation Revenues C. as Ground transportation revenues are projected to increase from $450,000 in FY 2022 to $475,804 in FY 2027, a CAGR of 1.1%. No ground transportation rate increases are assumed during the 0 Forecast Period. 0 CL as V. Advertising Concession Revenues as Advertising concession revenue is projected to increase from $200,000 in FY 2022 to $211,469 in FY 2027, a CAGR of 1.1%. vi. Restaurant and Gift Shop Concession Revenues Upon its completion, the 2022 Project will provide additional and enhanced food, beverage and retail facilities at the Airport. Most notably the majority of the food, beverage and retail offerings will be located on the secure side (beyond the passenger security checkpoint) of the Terminal. The new food, beverage and retail facilities will be located adjacent to the passenger boarding holdrooms and therefore will provide travelers additional opportunities to purchase and consume food and beverage and purchase merchandise. According to the Airport, the number of food, v w 1,&l n&A sslit",!iIIvs III.". C-93 DRAFT- Report of the Airport Consultant Packet Pg. 2346 1.9.b beverage and retail locations will be increased within the new passenger concourse, and product offerings will be significantly enhanced. As a result, and based on discussions with its food and beverage, and retail operators, the Airport expects that total food, beverage and retail concession revenues will experience at least 20% increase in FY 2025, the first year the new facilities are expected to be operational. Based on the FY 2021 revenue per enplaned passenger generated by food, beverage and retail concession and the increase anticipated as a result of the new concession facilities opening in FY 2025, restaurant concession revenues are projected to grow from $649,768 in FY 2022 to $824,433 in FY 2027, a CAGR of 4.9% over the Forecast Period, and Gift Shop concession revenues are projected to increase from $244,474 in FY 2022 to $310,191 in FY 2027, also a CAGR of 4.9%. 0 0 as vii. Air Cargo Revenues 0 Total air cargo revenues, which are aircraft landing fees paid by cargo airlines, are projected to increase from $25,679 in FY 2022 to $34,689 in FY 2027, a CAGR of 6.2%. This increase is U) based on the forecast of cargo airline landed weight and the projected landing fee rates over the 2 Forecast Period. i viii. Other Rents Other Rents revenue, which experienced a CAGR of 10.5% over the Study Period is projected to increase conservatively at a CAGR of 3.0% over the Forecast Period from $538,734 in FY 2022 to $624,540 in FY 2027. 0 to tf ix. CARES Funds CL CARES funds in the amount of$640,701 is estimated to be allocated to Operation and as Maintenance Costs in FY 2022. tf X. Other Miscellaneous Revenues CL as Total Other Miscellaneous Revenues are projected to remain flat at$1,500 (estimated FY 2022 revenue) over the Forecast Period. E 2. Airport Operation and Maintenance Costs Overall, Operation and Maintenance Costs increased at a CAGR of 6.2% during the Study Period. As a measure of conservatism, however, Operation and Maintenance Costs have been forecast to increase at a CAGR of 8.4%. This rate of increase reflects the expectation of additional costs that will be incurred due to the new, larger facility (2022 Project). It is anticipated that the new facility will require additional utility consumption,janitorial services, supplies, equipment maintenance services and other general maintenance services. v w 1,&l n&A sslit",!iIIvs III.". C-94 DRAFT- Report of the Airport Consultant Packet Pg. 2347 1.9.b As a result, total Operation and Maintenance Costs are projected to increase from $9,740,236 in FY 2022 to $14,600,146 in FY 2027, a CAGR of 8.4%. E. PROJECTED PASSENGER FACILITY CHARGE REVENUES As described in Section 11, the County received approval from, the FAA to impose a PFC of $4.50 to be collected by airlines and to apply those collections to payment of PFC eligible projects including portions of debt service on the 2022 Bonds. The net proceeds of the PFC will be $4.50 less $0.11 in airline processing charges, or $4.39 per revenue passenger. It should be noted that only revenue passengers are required to pay the PFC, and therefore non-revenue passengers including passengers who are redeeming frequent flyer 0 miles and pay no fare do not pay a PFC. Because of the profile of passengers visiting the Air Service Area and using the Airport, this Report assumes that 88% of the total enplaned passengers reported by the airlines operating at the Airport are considered revenue enplaned 0 passengers for the purpose of projecting PFC revenues. Based upon the projected level of revenue passengers during the Forecast Period, the County is expected to collect an estimated U) $2,856,852 in PFCs during FY 2022, growing to an estimated $2,889,939 in FY 2025 (date of beneficial occupancy of the 2022 Project) and then to an estimated $3,020,672 in FY 2027, a i �a CAGR of 2.64% over the Forecast Period. w Table V-6 presents the forecast of PFC collections. Table V-7 shows the PFC fund activity during the Study Period and a projection of PFC fund activity over the Forecast Period. U) r_ 0 tf as 4- 0 (Remainder of Page Intentionally Left Blank) tf 0 CL as as E v w 1, In A ssiit",!a vs 11.". C-95 DRAFT- Report of the Airport Consultant Packet Pg. 2348 1.9.b TABLE V-6 Forecast Passenger Facility Charge Revenue Fiscal %PFC Net PFC PFC Year Enplanements Enplanements Level Collections STUDY PERIOD 2017 398,592 87% $4.39 $1,519,096 2018 416,234 87% $4.39 1,589,189 2019 475,034 89% $4.39 1,859,426 2020 340,307 113% $4.39 1,681,104 2021 659,321 92% $4.39 2,648,832 O U) (D FY 2022 Estimated 2022 739,504 88% $4.39 $2,856,852 FORECAST PERIOD 2 2023 704,628 88% $4.39 $2,722,120 2024 731,316 88% $4.39 2,825,221 2025 748,069 88% $4.39 2,889,939 I 2026 764,962 88% $4.39 2,955,202 2027 781,909 88% $4.39 3,020,672 CAGR FY 2023-FY 2027 2.64% 2.64% U) $4.50 PFC level less$0.11 airline handling fee per enplaned PFC charge. 2 Source for% PFC Enplanements is PFC Application#20. tf CL Estimated by Newton&Associates,Inc. 07/24/22 (D 2022 Bonds ROAC Draft 6 Financial Tables.xls 4- 0 tf CL (D qb E (Remainder of Page Intentionally Left Blank) v w 1, In A ssiit",!a vs 11.". C-96 DRAFT- Report of the Airport Consultant Packet Pg. 2349 1.9.b TABLE V-7 Passenger Facility Charge Fund Activity Fiscal PFC Interest Total PFC PFC Year End Year Income Earnings Revenue Expenditures Balance PFC Receipts Available for Approved Projects, End of Year9130120161 $5,861,477 STUDY PERIOD 2 2017 $1,519,096 $61,725 $1,580,821 $517,413 $6,924,885 2018 1,589,189 160,764 1,749,953 2,029,795 6,645,043 2019 1,859,426 190,171 2,049,597 663,028 8,031,612 0 2020 1,681,104 70,704 1,751,808 4,763,782 5,019,638 (D 2021 3 2,648,832 8,307 2,657,139 3,123,782 4,552,995 0 FY 2022 ESTIMATED 2022 Estimated $2,856,852 17,517 $2,874,369 $4,708,239 $2,719,125 U) FORECAST PERIOD 2023 $2,722,120 - $2,722,120 $2,319,663 $3,121,581 2024 2,825,221 - 2,825,221 615,153 5,331,649 2025 2,889,939 - 2,889,939 2,600,000 5,621,587 2026 2,955,202 - 2,955,202 2,600,000 5,976,790 2027 3,020,672 - 3,020,672 2,600,000 6,397,462 U) K/Ionroe County Report on Schedule of Passenger Facility Charges and Reports on Compliance and Internal Control. 2 K/Ionroe County Report on Schedule of Passenger Facility Charges and Reports on Compliance and Internal Control:FY 2017-FY 2020. tf 3 Year End Balance for FY 2021 is not stated on K/Ionroe County Report on Schedule of Passenger Facility Charges and Reports on CL Compliance and Internal Control for year ended September 30,2021.Amount is calculated based on previous year end balance and current year PFC Revenue and Expenditures. qy °Forecast PFC Expenditures provided by Airport.Includes amounts for existing PAYGO PFC projects and 2022 Bonds debt service commencing FY 2025. tf CL (D Prepared by Newton&Associates,Inc. 07/24/22 2022 Bonds ROAC Draft 6 Financial Tables.xls (D E U PFCs received by the County are not included in the definition of"Gross Revenues"under the Resolution, rather PFCs that are legally available to pay Debt Service on the Series 2022 Bonds are defined as "Eligible PFC Revenues" and are included in Pledged Funds. Under the Resolution, all PFC Revenues, when received by the County, will be deposited in the PFC Account within the Revenue Fund. Only Eligible PFC Revenues may be deposited from the PFC Account to the Sinking Fund. v w 1,&l n&A sslit",!aIvs I C-97 DRAFT- Report of the Airport Consultant Packet Pg. 2350 1.9.b In its PFC application (Application 420)to the FAA, the County has stated that it intends to use Eligible PFC Revenues for the payment of PFC eligible Debt Service on the 2022 Bonds. See Table V-5 for the estimated amounts of PFCs applied to the payment of debt service on the 2022 Bonds over the Forecast Period. The actual amount of PFCs collected by the County each year will correlate directly with the number of revenue passengers boarding aircraft at the Airport in each such year. F. FORECAST COVERAGE FACTOR 0 Under the provisions of the Resolution, Net Revenues, together with Eligible PFC Revenues and the Transfer Amount shall be at least equal to 125% of annual Debt Service due in such Fiscal U) Year. Table V-5 resents the projections of: i Net Revenues ii Eligible PFC Revenues and iii the c p p J O � O g O Coverage Factor over the Forecast Period. As shown, the Coverage Factor is forecast to exceed the coverage requirements of the Resolution in each year of the Forecast Period. i G. AIRLINE COST PER ENPLANED PASSENGER w Airline CPEP is a measure that reflects total airline costs paid to operate an airport. At the Airport, CPEP is determined by dividing the sum of airline terminal rentals, landing fees and security costs for a fiscal year by total enplanements for such fiscal year. s 0 The projected airline revenues during the Forecast Period, forecasted enplaned passengers as described in Section IV, and the projected passenger airline CPEP are depicted on Table V-8. 0 As shown on the Table V-8, the passenger airline CPEP is projected to increase from $8.49 in FY 2022 to $12.83 in FY 2025 and $13.19 in FY 2027, a CAGR of 9.2%. as 4- NAI believes that this range of CPEP is reasonable, considering historical CPEP levels, the c tf physical scope and cost of the 2022 Project, and forecast Operation and Maintenance Expenses 0 estimated to be required after completion of the 2022 Project. as E v w I In A ssiit",!aIvs 11.". C-98 DRAFT- Report of the Airport Consultant Packet Pg. 2351 1.9.b TABLE V-8 Forecast Airline Cost Per Enplaned Passenger FORECAST PERIOD CAGR Estimated (Est.DBO) Fiscal Years FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 2022-2027 Airline Revenues: Airline Landing Fees 2 $3,037,971 $3,169,334 $3,321,744 $3,439,755 $3,826,219 $3,797,274 4.6 Airline Terminal Rents 2,166,949 2,229,335 2,352,541 4,165,652 4,592,685 4,516,469 15.8 Security Reimbursements 1,076,770 1,524,153 1,630,844 1,745,003 1,411,426 1,510,226 7.0% Passenger Boarding Bridge Charges 0 0 0 245,000 262,150 490,501 N/A Subtotal Airline Revenues $6,281,689 $6,922,823 $7,305,129 $9,595,410 $10,092,479 $10,314,469 10.4% Enplaned Passengers 3 739,504 704,628 731,316 748,069 764,962 781,909 1.1% Estimated Airline Cost per Enplaned Passenger $8.49 $9.82 $9.99 $12.83 $13.19 $13.19 9.2% 0 U) (D Source:Key West International Airport. 2 Excludes cargo airline landing fees. 3 Source:Ricondo&Associates,Inc. 0 (D Prepared by:Newton&Associates,Inc. 07/24/22 2022 Bonds ROAD Draft 6 Financial Tables.xls H. SENSITIVITY OF FORECASTS TO PASSENGER ENPLANEMENT LEVELS As depicted on Table V-9, a reduction of 15% in the number of enplaned passengers from the estimated 739,504 in FY 2022 to 628,578 enplanements in FY 2023 has been prepared to test the U sensitivity of passenger activity on the County's ability to pay the debt service on the 2022 f Bonds, and otherwise meet its obligations under the Resolution during the Forecast Period. CL Under this sensitivity analysis, enplanements have been assumed to decrease by approximately (D 111,000 in FY 2023 and then increase at the annual rate of 2% from FY 2024 to FY 2027. 4- 0 tf As shown on Table V-9, Net Revenues are forecast to remain sufficient to cover Debt Service by c CL more than the required 1.25 times, after taking into account a reduction on the airline terminal rents, certain passenger sensitive, non-airline revenues and Eligible PFCs available to pay Debt Service. E (Remainder of Page Intentionally Left Blank) v w 1,&l n&A ssiit",!a vs I C-99 DRAFT- Report of the Airport Consultant Packet Pg. 2352 1.9.b TABLE V-9 Sensitivity Analysis: Reduction of Enplaned Passengers In developing this forecst,NAI has relied upon certain information from the sources stated in the body oft he Report and adopted certain assumptions believed to be reasonable fort his purpose.Variations to some oft he assumptions are inevitable,and unanticipated factors which may affect these forecasts may occur.Consequently,actual results will vary from those forecast and the variations could be material. FORECAST PERIOD CAGR Estimated (Est.DBO) Fiscal Years FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 2022-2027 ENPLANEMENT FORECAST-SENSITIVITY 739,504 628,578 641,150 653,973 667,052 680,393 -1.7% Annual Rate of Increase/(Decrease) -15.00% 2.00% 2.00% 2.00% 2.00% �w GROSS REVENUES: Airline Revenues: Airline Landing Fees $3,037,971 $3,169,334 $3,321,744 $3,439,755 $3,826,219 $3,797,274 4.6% Airline Terminal Rents 2,166,949 2,229,335 2,352,541 4,218,021 4,609,087 4,496,185 15.7% 0 Airline Security Charges 1,076,770 1,524,153 1,630,844 1,745,003 1,411,426 1,510,226 7.0% (D Passenger Boarding Bridge Charges 0 0 0 245,000 262,150 490,501 MA Total Airline Revenues $6,281,689 $6,922,823 $7,305,129 $9,647,778 $10,108,882 $10,294,186 10.4% Non-Airline Revenues: 0 Rental Car Concessions $2,900,000 2,465,000 $2,514,300 $2,564,586 $2,615,878 $2,668,195 -1.7% Rental Car Rents $661,266 914,101' $914,101 $914,101 $914,101 $914,101 6.7% (D Public Parking 550,000 577,000 646,233 659,157 672,340 685,787 4.5% () General Auation 309,000 318,270 327,818 337,653 347,782 358,216 3.0% Ground Transportation 450,000 382,500 390,150 397,953 405,912 414,030 -1.7% Advertising 200,000 170,000 173,400 176,868 180,405 184,013 -1.7% Restaurant 649,768 552,303 563,349 689,539 703,330 717,396 2.0% Gift Shop 244,474 207,803 211,959 259,438 264,627 269,919 2.0% Air Cargo 25,679 29,206 30,645 31,619 35,055 34,689 6.2% Other Rents 538,734 554,896 571,543 588,689 606,350 624,540 3.0% CARES 640,701 0 0 0 0 0 -100.0% Other Miscellaneous Revenue 1,500 1,500 1,500 1,500 1,500 1,500 0.0% Total Non-Airline Revenues $7,171,122 $6,172,578 $6,344,997 $6,621,103 $6,747,280 $6,872,388 -0.8% TOTAL GROSS REVENUES $13,452,812 $13,095,401 $13,650,126 $16,268,881 $16,856,162 $17,166,573 5.0% ) r- 0 OPERATION&MAINTENANCE COSTS: Personnel Services $3,881,961 $4,076,059 $4,279,862 $4,493,855 $4,718,548 $4,954,475 5.0% tf Contractual Secs,Supplies/Materials&Other 3,096,262 3,313,000 3,544,910 3,793,054 4,058,568 4,342,668 7.0% 0 Security Seruces-MCSO(Net) 2,284,733 2,444,664 2,615,791 2,798,896 2,994,819 3,204,456 7.0% I^ Transfers-County Overhead 477,280 510,690 546,438 584,689 625,617 669,410 7.0% Subtotal $9,740,236 $10,344,413 $10,987,001 $11,670,494 $12,397,551 $13,171,009 6.2% Estimated Incremental O&M Costs-2022 Project $0 $0 $0 $1,216,461 $1,346,452 $1,429,137 4- 0 TOTAL OPERATION AND MAINTENANCE COSTS $9,740,236 $10,344,413 $10,987,001 $12,886,955 $13,744,003 $14,600,146 8.4% tf 0 NET REVENUES [A] $3,712,576 $2,750,988 $2,663,125 $3,381,926 $3,112,159 $2,566,427 -7.1% CL ELIGIBLE PFC REVENUES [B] $0 $0 $0 $2,526,428 $2,576,957 $2,628,496 AMOUNT AVAILABLE FOR DEBT SERVICE [A+B] $3,712,576 $2,750,988 $2,663,125 $5,908,354 $5,689,116 $5,194,923 SERIES 2022 DEBT SERVICE' [C] $0 $0 $0 $2,612,000 $2,458,250 $2,455,750 SUBORDINATE DEBT SERVICE' [D] $0 $12,000 $12,000 $167,500 $323,000 $323,000 , REMAINING REVENUE [A+B]-[C+D] $3,712,576 $2,738,988 $2,651,125 $3,128,854 $2,907,866 $2,416,173 DEBT SERVICE COVERAGE° [A+B]/[C] n/a n/a n/a 2.26 2.31 2.12 'For the pusposes of this Sensi ms,Analysis,Eligible PFC Revenues are assumed at 100%of estimated PFC collections. Debt Service is PRELIMINARY. Source:Frasca&Associates,LLC.Market Rates as of July 21,2022+75 bp. 'Esturnated payments becoming due on reeclving line of credit.See Table II-2 Grant Anticipation Note funding source. 4 Under the Resolution,each year Net Revenues plus Eligible PFC Revenues must be at least 1.25%of Debt Service payable for each such year. Source.Estimated FY 2022-Airport Records. 01/21/22 Prepared by Newton&Associates,Inc. 2022 Bonds BOAC Draft 6 Financial Tables-S.S,V Fry xAs v In ssiit",!aIv �� ���� C-100 DRAFT- Report of the Airport Consultant Packet Pg. 2353 1.9.b Table V-10 sets forth the estimated airline cost per enplaned passenger over the Forecast Period as a result of this sensitivity analysis. As shown, the estimated cost per enplaned passenger for FY 2023 is $11.01 and estimated cost per enplaned passenger for FY 2027 is $15.13, resulting in a 12.2% CAGR from FY 2022 to FY 2027. TABLE V-10 Sensitivity Analysis: Airline Cost Per Enplaned Passenger FORECAST PERIOD CAGR Estimated (Est.DBO) Fiscal Years FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 2022-2027 Airline Revenues: Airline Landing Fees z $3,037,971 $3,169,334 $3,321,744 $3,439,755 $3,826,219 $3,797,274 4.6 Airline Terminal Rents 2,166,949 2,229,335 2,352,541 4,218,021 4,609,087 4,496,185 15.7 Security Reimbursements 1,076,770 1,524,153 1,630,844 1,745,003 1,411,426 1,510,226 7.0% (D Passenger Boarding Bridge Charges 0 0 0 245,000 262,150 490,501 N/A Subtotal Airline Revenues $6,281,689 $6,922,823 $7,305,129 $9,647,778 $10,108,882 $10,294,186 10.4% 0 Enplaned Passengers 3 739,504 628,578 641,150 653,973 667,052 680,393 -1.7% (D Estimated Airline Cost per Enplaned Passenger $8.49 $11.01 $11.39 $14.75 $15.15 $15.13 12.2% Source:Key West International Airport. I 2 Excludes cargo airline landing fees. 3 Source:Ricondo&Associates,Inc.:FY 2022.Newton&Associates,Inc.:Forecast Period. Prepared by:Newton&Associates,Inc. 07/24/22 2022 Bonds ROAD Draft 6 Financial Tables-SENSITIVITY.xls U) r- 0 tf CL M 4- 0 tf CL E v w 1, In A ssiit",!a vs 11.". C-101 DRAFT- Report of the Airport Consultant Packet Pg. 2354