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1.1 Preliminary Official Statement dated August 18, 2022 „ lei ifiRii;i.iMWARY OFFICIAL I'A TEME1 "I' DA TED I� G'I1S 1` 18,2022 ”; + NEW ISSUE-BOOK-ENTRY ONLY RATINGS: See"RATINGS"herein g "0 In the at of Bond Counsel,under cxisting statutes, rcgulatiois,rulings and court decisions, and subject to the conditions described herein under"TAX MATTERS,"interest on the Series 2022 Bonds(as hereinafter defined)is excluded from gross income of the holders of such Series 2022 Bonds for federal income tax purposes, except that such exclusion shall not apply during any period such Series 2022 Bonds are held by a "substantial user"of the facilities financed or refinanced with proceeds of the Series 2022 Bonds or a"related person"within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as amended, and such interest is an item of tax preference for purposes of the federal alternative minimum tax and, with respect to certain corporations, interest on the Series 2022 Bonds is taken into account in determining the annual adjusted financial statement income for the purpose of computing the alternative minimum tax imposed on corporations for tax years beginning after December 31,2022. Such interest maybe subject to other federal income tax consequences referred to herein under"TAX MATTERS." n " $36,670,000* MONROE COUNTY, FLORIDA " o AIRPORT REVENUE BONDS (KEY WEST INTERNATIONAL AIRPORT), SERIES 2022 (AMT) Dated:Date of Delivery Due:October 1 n o (as shown on the inside cover) 3 01 I�" I3 6, Monroe County,Florida(the"County")will be issuing its$36,670,000"Monroe County,Florida Airport Revenue Bonds(Key West International Airport), Series 2022 (AMT) (the"Series 2022 Bonds") as fully registered bonds and, when issued,will be registered in the name of Cede&Co., 2 I' as registered owner and nominee of The Depository Trust Company,New York,New York("DTC"). DTC will act as securities depository for the u u Series 2022 Bonds. Purchasers of the Series 2022 Bonds will not receive certificates representing their interests in the Series 2022 Bonds purchased. II' Ownership by the beneficial owners of the Series 2022 Bonds will be evidenced by book-entry only. Principal of,premium,if any,and interest on the Series 2022 Bonds will be paid by The Bank of New York Mellon Trust Company,N.A.,Dallas,Texas,as Registrar and Paying Agent,to DTC,which in turn will remit such principal,premium,if any,and interest payments to its participants for subsequent disbursement to the beneficial owners of :, the Series 2022 Bonds. As long as Cede&Co.is the registered owner as nominee of DTC,payments on the Series 2022 Bonds will be made to such 01 registered owner,and disbursal of such payments to beneficial owners will be the responsibility of DTC and its participants. See"DESCRIPTION OF 111 g P ym P t3 P P THE SERIES 2022 BONDS-Book-Entry Only System"herein. Interest on the Series 2022 Bonds is payable on April 1 and October 1 of each year,with h the first interest payment date being April 1,2023. °^ti�' The Series 2022 Bonds will be issued pursuant to the Constitution and laws of the State of Florida,particularly Chapter 125,Part I,and Chapter V 1 IW"V 1 V Y > 332,Florida Statutes,and other applicable provisions of law(collectively,the"Act"),and Resolution No.206A-2022 adopted by the Board of County 2 Commissioners of the County(the"Board")on August 17,2022,as supplemented by Resolution No.20613-2022 adopted by the Board on August 17,2022 2 (collectively,the"Bond Resolution"). The proceeds received by the County from the sale of the Series 2022 Bonds,together with other legally available funds,will be used to:(1)finance and refinance various costs of certain capital improvements to the Airport,as more particularly described herein(see"THE SERIES 2022 PROJECT I I, "",,, AND PLAN OF FINANCE"herein), (2)refinance all amounts outstanding,if any,under an existing line of credit,(see"INTERIM INDEBTEDNESS" herein),(3)fund the Reserve Account,(4)pay capitalized interest and(5)pay the costs of issuance of the Series 2022 Bonds. "7 a7 The payment of the principal of or Redemption Price,if applicable,and interest on the Bonds is secured equally and ratably by a pledge of and I lien upon the Pledged Funds. "Pledged Funds"is defined in the Bond Resolution as(1)the Net Revenues,(2)Eligible PFC Revenues,(3)any Hedge Receipts,and(4)until applied in accordance with the provisions of the Bond Resolution,all moneys,including investments thereof,in the funds and I"ij accounts established thereunder,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 ey ", pay the Operation and Maintenance Costs in accordance with the terms of the Bond Resolution,and(C)moneys on deposit in a subaccount of the Reserve Account to the extent moneys on deposit therein shall be pledged solely for the payment of the Series of Bonds for which it was established ^7 'i'C "" in accordance with the provisions of the Bond Resolution. See"SECURITY AND SOURCES OF PAYMENT FOR THE BONDS"herein. The Series 2022 Bonds and any Additional Bonds hereafter issued under the Bond Resolution are collectively referred to hereunder as the"Bonds." "n:nh n The Series 2022 Bonds are subject to optional and mandatory sinking fund redemption as more particularly described herein. See"DESCRIPTION OF THE SERIES 2022 BONDS—Redemption"herein. THE SERIES 2022 BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS "BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY, PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF THE PLEDGED "" 2 "I", FUNDS,IN THE MANNER AND TO THE EXTENT PROVIDED IN THE BOND RESOLUTION. NO HOLDER OF ANY SERIES 2022 BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH SERIES 2022 7 BOND OR BE ENTITLED TO PAYMENT OF SUCH SERIES 2022 BOND FROM ANY MONEYS OF THE COUNTY EXCEPT FROM THE i ";.,,r 0 PLEDGED FUNDS IN THE MANNER AND TO THE EXTENT PROVIDED IN THE BOND RESOLUTION. THE SERIES 2022 BONDS AND :1:: THE OBLIGATIONS EVIDENCED THEREBY SHALL NOT CONSTITUTE A LIEN UPON THE AIRPORT OR ANY OTHER PROPERTY 2 " OF THE COUNTY,BUT SHALL CONSTITUTE A LIEN ONLY ON,AND SHALL BE PAYABLE SOLELY FROM,THE PLEDGED FUNDS. 16 0 This cover page contains certain information for quick reference only. It is not a summary of the transaction or the underlying transaction documents. Investors must read the entire Official Statement, including PP the appendices, to obtain information essential to making g an informed ` investment decision. See "CERTAIN INVESTMENT CONSIDERATIONS" herein for a discussion of certain factors that should be considered by I^7, prospective purchasers of the Series 2022 Bonds. w The Series 2022 Bonds are offered in book-entry form when,as and if issued and received,subject to the approving legal opinion of Nabors, Giblin&Nickerson,P.A., Tampa,Florida,Bond Counsel, and certain other conditions. Certain legal matters will be passed on for the County Cn "r by Pedro I.Mercado Esq.,Senior Assistant County Attorney. Certain legal matters will be passed on for the County by Bryant Miller Olive P.A., ` "",,0 Tampa,Florida,Disclosure Counsel.Frasca&Associates,LLC, Orlando,Florida, is serving as Financial Advisor to the County. Certain legal I,r) matters will be passed on or the Underwriters b Gra Robinson,P.A.,Tampa,Florida, Counsel to the Underwriters. It is expected that the Series Ie" p f y y p p 2022 Bonds will be available for delivery through the facilities of DTC on or about ,2022. 0lu al " BofA Securities PNC Capital Markets LLC Dated 2022 :, II I +,:,I� "`Preliminary,subject to change. $36,670,000" MONROE COUNTY,FLORIDA AIRPORT REVENUE BONDS (KEY WEST INTERNATIONAL AIRPORT),SERIES 2022(AMT) MATURITIES,PRINCIPAL AMOUNTS,INTEREST RATES,YIELDS,PRICES AND INITIAL CUSIP NUMBERS $17,040,000*Serial Series 2022 Bonds Maturity Principal Interest Initial CUSIP (October 1) Amount* Rate Yield Price Numbers** 2025 $525,000 2026 395,000 2027 415,000 2028 435,000 2029 780,000 2030 820,000 2031 860,000 2032 900,000 2033 945,000 2034 995,000 2035 1,045,000 2036 1,095,000 2037 1,150,000 2038 1,210,000 2039 1,270,000 2040 1,330,000 2041 1,400,000 2042 1,470,000 $8,570,000* %Term Series 2022 Bonds due on October 1,2047*--Yield %--Price -Initial CUSIP Number ** $11,060,000* %Term Series 2022 Bonds due on October 1,2052*--Yield %--Price -Initial CUSIP Number ** * Preliminary,subject to change. ** Neither the County nor the Underwriters are responsible for the use of CUSIP numbers,nor is any representation made by the County or the Underwriters as to their correctness. The CUSIP numbers provided herein are included solely for the convenience of the readers of this Official Statement. MONROE COUNTY,FLORIDA The Historic Gato Cigar Factory 1100 Simonton Street Key West,Florida 33040 MEMBERS OF THE BOARD OF COUNTY COMMISSIONERS David Rice,Mayor Craig Cates,Mayor Pro Tem Michelle Coldiron, Commissioner Holly Merrill Raschein, Commissioner James K.Scholl, Commissioner CLERK OF THE CIRCUIT COURT AND COMPTROLLER IN AND FOR MONROE COUNTY, FLORIDA AND EX OFFICIO CLERK OF THE BOARD OF COUNTY COMMISSIONERS Kevin Madok, CPA COUNTY ADMINISTRATOR Roman Gastesi COUNTY ATTORNEY Bob Shillinger, Esq. BUDGET DIRECTOR Tina Boan SENIOR DIRECTOR OF AIRPORTS Richard Strickland AIRPORT CONSULTANT Newton&Associates,Inc. Charlotte,North Carolina Ricondo&Associates,Inc. Cincinnati,Ohio BOND COUNSEL Nabors,Giblin&Nickerson,P.A. Tampa,Florida FINANCIAL ADVISOR Frasca&Associates,LLC Orlando,Florida DISCLOSURE COUNSEL Bryant Miller Olive P.A. Tampa,Florida No dealer, broker, salesman or other person has been authorized by the County or the Underwriters to give any information or to make any representations in connection with the offering of the Series 2022 Bonds, other than as contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the County or the Underwriters. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2022 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the County, The Depository Trust Company ("DTC") and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by,and is not to be construed as a representation by,the Underwriters. The Underwriters listed on the cover page hereof have reviewed the information in this Official Statement in accordance with and as part of their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction,but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change, and neither the delivery of this Official Statement nor any sale made hereunder shall create, under any circumstances,any implication that there has been no change in the matters described herein since the date hereof. The Underwriters have reviewed the information in this Official Statement in accordance with,and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction,but the Underwriters do not guarantee the accuracy or completeness of such information. All summaries herein of documents and agreements are qualified in their entirety by reference to such documents and agreements, and all summaries herein of the Series 2022 Bonds are qualified in their entirety by reference to the form thereof included in the aforesaid documents and agreements. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2022 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE COUNTY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2022 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS OFFICIAL STATEMENT CONTAINS STATEMENTS WHICH, TO THE EXTENT THEY ARE NOT RECITATIONS OF HISTORICAL FACT, CONSTITUTE "FORWARD-LOOKING STATEMENTS."IN THIS RESPECT,THE WORDS"ESTIMATE,""PROJECT,""ANTICIPATE,""EXPECT," "INTENT," "BELIEVE" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD- LOOKING STATEMENTS. A NUMBER OF FACTORS AFFECTING THE COUNTY'S BUSINESS AND FINANCIAL RESULTS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE STATED IN THE FORWARD-LOOKING STATEMENTS. THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS IN EITHER BOUND OR PRINTED FORMAT ("ORIGINAL BOUND FORMAT"), OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITES: WWW.MUNIOS.COM AND WWW.EMMA.MRSB.ORG. THIS OFFICIAL STATEMENT MAY BE RELIED ON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT, OR IF IT IS PRINTED OR SAVED IN FULL DIRECTLY FROM THE AFOREMENTIONED WEBSITES. TABLE OF CONTENTS Page INTRODUCTION.......................................................................................................................................................1 General...................................................................................................................................................................1 Purpose...................................................................................................................................................................1 TheCounty and the Airport................................................................................................................................1 MarathonAirport..................................................................................................................................................2 Authorization........................................................................................................................................................2 Securityfor the Bonds..........................................................................................................................................2 Impactof COVID-19 on the Airport...................................................................................................................3 Environmental,Social, and Governance(ESG)Factors for the Series 2022 Project.....................................4 InvestmentConsiderations..................................................................................................................................4 Summaries.............................................................................................................................................................4 INTERIM INDEBTEDNESS......................................................................................................................................4 THE SERIES 2022 PROJECT AND PLAN OF FINANCE.....................................................................................5 General...................................................................................................................................................................5 Series 2022 Project Funding Sources..................................................................................................................5 Advanceon Grant Funding.................................................................................................................................7 DESCRIPTION OF THE SERIES 2022 BONDS.......................................................................................................7 General...................................................................................................................................................................7 Redemption............................................................................................................................................................8 Book-Entry Only System......................................................................................................................................9 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS.......................................................................12 General.................................................................................................................................................................12 Definitions............................................................................................................................................................12 Fundsand Accounts...........................................................................................................................................14 ConstructionFund..............................................................................................................................................14 Disposition of Gross Revenues and Eligible PFC Revenues.........................................................................14 PFCCapital Improvement Fund.......................................................................................................................20 ReserveAccount..................................................................................................................................................20 RateCovenant.....................................................................................................................................................21 Issuanceof Additional Bonds............................................................................................................................22 SubordinatedIndebtedness...............................................................................................................................23 No Mortgage or Sale of the Airport..................................................................................................................23 Enforcementof Collections................................................................................................................................25 NoCompeting Facilities.....................................................................................................................................25 Maintenanceof PFC Revenues..........................................................................................................................25 Compliance with PFC Act,PFC Regulations and PFC Authority................................................................25 Managementof the Airport...............................................................................................................................26 Operationof the Airport....................................................................................................................................26 GovernmentGrants............................................................................................................................................26 Insurance..............................................................................................................................................................26 APPLICATION OF REVENUES.............................................................................................................................27 ESTIMATED SOURCES AND USES OF FUNDS ................................................................................................29 DEBTSERVICE SCHEDULE..................................................................................................................................30 THE COUNTY AND THE AIRPORT....................................................................................................................31 General.................................................................................................................................................................31 AirTrade Area.....................................................................................................................................................31 Managementand Administration....................................................................................................................32 Description of the Airport's Existing Facilities...............................................................................................34 Enplaned Passengers at the Airport.................................................................................................................37 AirlinesServing the Airport..............................................................................................................................40 HistoricalLanded Weight..................................................................................................................................41 HistoricalAir Service..........................................................................................................................................41 HistoricalAircraft Operations...........................................................................................................................44 FinancialInformation.........................................................................................................................................44 Management Discussion and Analysis............................................................................................................47 Capital Improvement Program and Funding Sources(Excluding the Series 2022 Project)......................48 Environmental,Social, and Governance("ESG")Factors for the Series 2022 Project...............................51 PassengerFacility Charges................................................................................................................................52 Federaland State Grants....................................................................................................................................54 Retirement Plan and Other Post-Employment Benefits................................................................................55 INFORMATION CONCERNING THE SIGNATORY AIRLINES.....................................................................56 General.................................................................................................................................................................56 SignatoryAgreement..........................................................................................................................................57 REPORT OF THE AIRPORT CONSULTANT......................................................................................................57 Scopeof the Report.............................................................................................................................................57 Summary of Financial Analysis and Assumptions........................................................................................58 COVID-19 Recovery...........................................................................................................................................60 Projected Net Revenues and Debt Service Coverage.....................................................................................62 Conclusions of the Airport Consultant............................................................................................................63 CERTAIN INVESTMENT CONSIDERATIONS..................................................................................................63 General.................................................................................................................................................................63 LimitedObligations............................................................................................................................................63 Factors Affecting Air Transportation Industry...............................................................................................64 AirlineLabor Constraints..................................................................................................................................64 AirlineEconomic Considerations.....................................................................................................................64 The Federal Budget and Sequestration............................................................................................................67 PFCCollections...................................................................................................................................................67 FederalLegislation..............................................................................................................................................68 AirportSecurity Requirements.........................................................................................................................68 Cost and Schedule of Capital Improvements Program.................................................................................69 Growth of Transportation Network Companies............................................................................................70 Cyber-Security.....................................................................................................................................................70 ClimateChange...................................................................................................................................................71 Coronavirus(COVID-19)...................................................................................................................................71 Demand for Air Travel,Aviation Activity and Related Matters..................................................................74 Airport Capacity Considerations......................................................................................................................74 Assumptions in the Report of the Airport Consultant;Actual Results May Differ from Projections andAssumptions..........................................................................................................................................74 FINANCIALADVISOR...........................................................................................................................................75 FINANCIALSTATEMENTS...................................................................................................................................75 UNDERWRITING....................................................................................................................................................75 TAXMATTERS.........................................................................................................................................................76 General.................................................................................................................................................................76 InternalRevenue Code of 1986.........................................................................................................................77 Collateral Tax Consequences.............................................................................................................................77 OtherTax Matters...............................................................................................................................................78 OriginalIssue Discount......................................................................................................................................78 OriginalIssue Premium.....................................................................................................................................79 CERTAIN LEGAL MATTERS.................................................................................................................................79 RATINGS...................................................................................................................................................................80 LITIGATION.............................................................................................................................................................80 EXPERTSAND CONSULTANTS..........................................................................................................................80 CONTINGENTFEES...............................................................................................................................................80 CONTINUINGDISCLOSURE................................................................................................................................81 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS...........................................................81 AUTHORIZATION OF OFFICIAL STATEMENT...............................................................................................82 APPENDIX A GENERAL INFORMATION REGARDING MONROE COUNTY,FLORIDA APPENDIX B-1 AUDITED FINANCIAL STATEMENTS OF THE COUNTY FOR THE YEAR ENDED SEPTEMBER 30,2021 APPENDIX B-2 KEY WEST INTERNATIONAL AIRPORT FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 2021 AND REPORT OF THE INDEPENDENT AUDITOR APPENDIX C REPORT OF THE AIRPORT CONSULTANT APPENDIX D FORM OF THE BOND RESOLUTION APPENDIX E PROPOSED FORM OF BOND COUNSEL OPINION APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE [THIS PAGE INTENTIONALLY LEFT BLANK] $36,670,000- MONROE COUNTY,FLORIDA AIRPORT REVENUE BONDS (KEY WEST INTERNATIONAL AIRPORT),SERIES 2022 (AMT) INTRODUCTION General This Official Statement, including the cover page and the Appendices, is provided to furnish certain information regarding the Key West International Airport(the"Airport"and also known as"EYW") in connection with the issuance and sale by Monroe County, Florida (the "County"), of its $36,670,000* aggregate principal amount of Airport Revenue Bonds(Key West International Airport),Series 2022(AMT) (the "Series 2022 Bonds"). Certain capitalized terms used in this Official Statement, unless otherwise defined herein, are defined in 'FORM OF THE BOND RESOLUTION," included as Appendix D attached hereto. Purpose The Series 2022 Bonds are being issued for the purpose of providing a portion of the funds necessary to(1)finance and refinance various costs of certain capital improvements to the Airport,as more particularly described herein (see "THE SERIES 2022 PROJECT AND PLAN OF FINANCE" herein), (2) refinance all amounts outstanding,if any,under an existing line of credit(as further described herein, the "Interim Indebtedness") (see "INTERIM INDEBTEDNESS" herein), (3) fund the Reserve Account, (4) pay capitalized interest and (5)pay the costs of issuance of the Series 2022 Bonds. The County and the Airport The County was constitutionally formed in 1823. It is comprised primarily of 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 southeast from the Gulf of Mexico to the northwest, and extend approximately 100 miles south from the United States mainland. The County seat, Key West, located on the southernmost of the 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 five-member Board of County Commissioners elected for staggered terms of four years. The Mayor(Chairman)and the Mayor Pro-Tem (Vice Chairman)are elected by the Board. The Airport is a small-hub, commercial airport located within the city limits of Key West,Monroe County, Florida and covers approximately 268 acres. Of this area, 87 acres are salt ponds and mangrove vegetation. The remaining 181 acres are usable for the Airport. See"THE COUNTY AND THE AIRPORT"herein for more information. Preliminary,subject to change. 1 Marathon Airport In addition to the Airport,the County owns and operates the Florida Keys Marathon International Airport (the "Marathon Airport"), a general aviation airport. See "THE COUNTY AND THE AIRPORT" herein. Revenues received by the County from the operation of Marathon Airport are not part of the Pledged Funds. Similarly, the operating expenses of Marathon Airport are not part of the Airport's Operation and Maintenance Costs. Authorization The Series 2022 Bonds will be issued pursuant to 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.206A-2022 adopted by the Board of County Commissioners of the County (the 'Board") on August 17, 2022, as amended and supplemented from time to time, and as particularly supplemented by Resolution No. 20613-2022 adopted by the Board on August 17, 2022 (collectively, the 'Bond Resolution"). A form of the Bond Resolution is provided in Appendix D attached hereto. Security for the Bonds The payment of the principal of or Redemption Price,if applicable, and interest on the Series 2022 Bonds is secured equally and ratably by a pledge of and lien upon (1) the Net Revenues, (2) Eligible PFC Revenues, (3) any Hedge Receipts, and (4) until applied in accordance with the provisions of the Bond Resolution, all moneys, including investments thereof, in the funds and accounts established thereunder, 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 Series 2022 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 the terms of the Bond Resolution, and (C) moneys on deposit in a subaccount of the Reserve Account to the extent moneys on deposit therein shall be pledged solely for the payment of the Series of Bonds for which it was established in accordance with the provisions of the Bond Resolution. The Series 2022 Bonds together with any Additional Bonds hereafter issued are referred to herein as the "Bonds." The Series 2022 Bonds are secured by the Reserve Account in an amount equal to the Reserve Account Requirement for the Series 2022 Bonds (each as further defined and described herein). See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS—Reserve Account"herein. THE BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS 'BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY,PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF THE PLEDGED FUNDS, IN THE MANNER AND TO THE EXTENT PROVIDED IN THE BOND 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 COUNTY EXCEPT FROM THE PLEDGED FUNDS IN THE MANNER AND TO THE EXTENT PROVIDED IN THE BOND RESOLUTION. THE BONDS AND THE OBLIGATIONS EVIDENCED THEREBY SHALL NOT CONSTITUTE A LIEN UPON THE AIRPORT OR ANY OTHER PROPERTY OF THE COUNTY,BUT 2 SHALL CONSTITUTE A LIEN ONLY ON, AND SHALL BE PAYABLE SOLELY FROM, THE PLEDGED FUNDS. Impact of COVID-19 on the Airport The worldwide outbreak of novel coronavirus SARS-CoV-2 (together with all variants thereof "COVID-19")has caused significant disruption to domestic and international air travel,including passenger operations, and has had significant negative and adverse effects on the economies of the nation and the world. The effects of COVID-19 and actions taken to halt its spread had a significant adverse effect on the revenues,the financial condition and the operations of the Airport. 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. By May 2020, which represented the low point in terms of passenger airline capacity offered, scheduled departing seats decreased to 24.0%of May 2019 capacity for all U.S.airports and 27.5%of May 2019 capacity at the Airport. Airline capacity started to recover in June 2020 nationwide and at the Airport. As presented in the table below,enplaned passenger activity declined sharply beginning in March 2020, reaching a low in April and May 2020. However, enplaned passenger activity recovered to pre- COVID-19 levels at the Airport by February 2021. For Fiscal Year 2021,enplanements were 139%of Fiscal Year 2019 levels. This higher level of activity has continued through the first ten months of Fiscal Year 2022.Fiscal year-to-date,enplanements were 18.9%above the prior year and 56.5% above Fiscal Year 2019 for the first ten months,respectively. Fiscal Year to Date Enplaned Passenger Recovery (Fiscal Years Ended September 30) Fiscal Year Fiscal Year Fiscal Year Fiscal Year Month 2019 2020 2020 vs.2019 2021 2021 vs.2019 2022 2022 vs.2019 October 31,148 33,034 106% 28,709 92% 53,525 172% November 32,855 37,836 115 31,844 97 60,901 185 December 39,463 43,701 111 36,818 93 67,332 171 January 46,450 56,694 122 44,312 95 67,826 146 February 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 June 38,347 13,946 36 74,928 195 57,095 149 July 38,163 21,442 56 73,950 194 60,526 159 August 32,571 16,108 49 63,689 196 N/A N/A September 28,216 18,614 66 50,268 178 N/A N/A Total 475,034 340,307 72% 659,321 139% N/A N/A Source: Monroe County,Florida. The recovery and increase in activity at the Airport has been driven in part by factors that are specific to the Airport and the COVID-19 pandemic: 3 • Leisure destinations like Key West,with an abundance of outdoor activities where visitors can remain socially distanced, were popular with leisure travelers during the COVID-19 pandemic. • International travel restrictions and quarantine requirements suppressed demand for travel to competing international leisure destinations. • With the broader downturn in demand for air travel, airlines had more aircraft and crew availability to add service to destinations like Key West where there is strong demand for leisure travel. See"CERTAIN INVESTMENT CONSIDERATIONS"herein for more information about COVID-19 and its impact on the Airport and the County. Environmental,Social,and Governance (ESG) Factors for the Series 2022 Project The Series 2022 Project will address a number of ESG issues and is designed to provide a highly efficient, economically prosperous, environmentally responsible, healthy, and safe facility. The primary floor of the new concourse is raised 14 feet 6 inches above grade to avoid potential overland flooding as well as sea level rise and storm surges and the Series 2022 Project will be built to withstand up to 200 mile per hour winds. Additionally,the design considers energy efficiency,energy use reduction;potable water use reduction, demolition and construction waste reduction, operational waste reduction with increased recycling, increased interior environmental air quality through selection of durable, low maintenance, low/no volatile organic compound materials,increased daylighting, glare reduction,and efficient building systems management. These considerations make the building more energy efficient, reduce operational water consumption, while improving indoor environmental quality, occupant comfort, and building operations leading to a reduction of net operational and embodied carbon, CO2 emissions and pollutants. See "THE COUNTY AND THE AIRPORT — Environmental Social Governances" herein for more information. Investment Considerations The purchase and ownership of the Series 2022 Bonds involve investment risks. Prospective purchasers of the Series 2022 Bonds should read this Official Statement in its entirety. For a discussion of certain risks relating to the Series 2022 Bonds, see"CERTAIN INVESTMENT CONSIDERATIONS"herein. Summaries This Official Statement contains summaries of the Bond Resolution, the hereinafter defined Signatory Agreement and the terms of and security for the Bonds,together with descriptions of the Airport and its operations. All references herein to agreements and documents are qualified in their entirety by references to the definitive forms of each such agreement or document. All references to the Series 2022 Bonds are further qualified by references to the information with respect to them contained in the Bond Resolution. See"APPENDIX D—FORM OF THE BOND RESOLUTION'attached hereto. INTERIM INDEBTEDNESS The County previously issued the Interim Indebtedness,entering into a Line of Credit Agreement with PNC Bank, National Association("PNC") on July 1,2021 for up to$10,000,000 to fund,on an interim 4 basis,portions of the Series 2022 Project. The Interim Indebtedness is currently outstanding in the principal amount of $3,208,000. It is possible the County will draw additional proceeds from the Interim Indebtedness prior to the closing date of the Series 2022 Bonds. The County has determined, through the issuance of the Series 2022 Bonds and/or other available funds,to refinance all amounts outstanding,if any, under the Interim Indebtedness. Provision for payment will be accomplished through the issuance of the Series 2022 Bonds or the use of a portion of the proceeds thereof and other available funds. The Interim Indebtedness is expected to be prepaid prior to its maturity,on or before the closing date of the Series 2022 Bonds ( , 2022) at a repayment price of 100% of the principal amount thereof, plus accrued interest to the redemption date. At that time,the Interim Indebtedness will be terminated. THE SERIES 2022 PROJECT AND PLAN OF FINANCE General The "Series 2022 Project" includes, but is not limited to, the development, construction and equipping of a new second-level concourse of approximately 48,805 square feet("Concourse A")consisting of: (1)seven gates all fitted with passenger boarding bridges,hold-room 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 (2) a ground (apron) level below Concourse A to support a new baggage make-up area and devices, tug lanes, airline ramp space, ramp equipment storage and circulation space. The construction manager (NV2A and Gulf-Keystar) of the Series 2022 Project has agreed to a guaranteed maximum price which includes: an escalation of 4%, Series 2022 Project contingency of 4% and cost overruns being the responsibility of general contractor (with the exception of pre-existing conditions). The County/Airport has a 3% owner's contingency. The Airport expects construction to begin in September 2022 with substantial completion of apron related project construction by February 2024, substantial completion of Concourse A related project construction by November 2024, and substantial completion of terminal related project construction by October 2025. The Final Certificate of Occupancy is expected to be received by November 2025. Construction of the Series 2022 Project is not expected to have any material adverse impacts on Airport operations. The lead architect for the Series 2022 Project is Mead & Hunt and the owner's representative is McFarland Johnson. Series 2022 Project Funding Sources The total estimated project cost of the Series 2022 Project is approximately $113.4 million, the funding of which includes approximately $2.8 million of Airport Improvement Program ("AIP") grant funds, $39.8 million of Florida Department of Transportation ("FDOT") grant funds, $11.4 million comprising a combination of Coronavirus Aid, Relief, and Economic Security Act ("CARES"), American Rescue Plan ("ARP") and Coronavirus Response and Relief Supplemental Appropriations Act ("CRRSA") grant funds, an estimated $14.8 million of Bipartisan Infrastructure Law ("BIL") grant funds, $10 million Grant Anticipation Note (as hereinafter defined) proceeds (on an interim basis as described below in"— Advance on Grant Funding"), $2.7 million of PFC PAYGO funds, and $31.9 million of Series 2022 Bond proceeds. See "CERTAIN INVESTMENT CONSIDERATIONS - Coronavirus (COVID-19)" herein for more information about the award of grants. 5 m m �o m N n O d d rn N o 0 0 0 M m d N cm rn N rn o o M co rn m co m N m o 0 0 0 o\ -t dtz r-i dtz N N dtz N �6 06 O O V� N + rn N N N N N 00 t.n O �o I'o O O 9 V F tmri clr 06 0 e C: oe dt a\ 00 06 en � w � � � N 00 N 0 0 O 00 O 00 O O O O O O O O O 00 cq o oo°o o°o W v • H o � o n � n or" ° wU 0 0 ° o � o � o 0 0 � o � � o � � o � o •� '" `oA '-' o 0 o 0 0 o Q w W O O O N O N O O O O O O O O O N M C7 QCA c Q N M > CA as o o O O M U o 0 o to o to o 0 o rn o rn o 0 0 tri ° co °�° °�° o 0 0 o 000 a C w p w C11 cq r w v N O m m N N m O N C\l C C � N 0000 0000 M M dt dt N dt t> N cV C/� p N N -t N tr) 00 00 � � M N W �1 N N to dt rn O O to to 00 -t ° ° 4 w C7 w c N N d �tz � � M No 4 ° U o z d tmn tmn N N 00 m ° W N m dm N m N U-) C) N �t rn o) o O o M C CD u No , ° 00 rn r rl m 00 N C) a d d d CI d' Ci 06 0 0 �r ° cn rn N N N L" 00 U-) O \.o \.o O O m to 00 m cm cl U-)U tri cl 06 tri tri o tri d' a 6 6 00 00 M ° v ° to N 00 r n � w � uwt � ors - bn " � ors � °' ors � � �•� v � � � •° � o U o T" U U U oAU H oAU v a w v w w oA w Q w N v w U w o ' m > w F w w o -� o 3 ;� Z Z y � Q H � Haste HRH 0m 0 See"THE COUNTY AND THE AIRPORT—Capital Improvement Program and Funding Sources" herein for more information about additional capital improvements projects anticipated at the Airport during the Forecast Period (as hereinafter defined)and their funding sources. Advance on Grant Funding The County plans to enter into a line of credit with PNC(the"Grant Anticipation Note")which will serve as interim indebtedness for financing a portion of the costs of the Series 2022 Project. The Grant Anticipation Note will bear interest at a variable rate and shall be secured by and payable from a senior lien on and pledge of the Grant Proceeds and a junior and subordinate lien on the Net Revenues and Eligible PFC Revenues. "Grant Proceeds" means certain of the grant funds expected to be received in the next 5-6 years. The pledge of and lien on the Net Revenues and Eligible PFC Revenues shall be junior and subordinate in all respects to the pledge and lien granted with respect thereto for the benefit of the Series 2022 Bonds and any Additional Bonds that are subsequently issued pursuant to the Bond Resolution,all in the manner and to the extent provided in the Bond Resolution. With respect to the Net Revenues and Eligible PFC Revenues, the Grant Anticipation Note and all draws made thereunder shall be considered Subordinated Indebtedness. The County anticipates paying principal on the Grant Anticipation Note from Grant Proceeds,upon receipt, and interest on the Grant Anticipation Note from other sources. DESCRIPTION OF THE SERIES 2022 BONDS General The Series 2022 Bonds will mature on October 1 of the years and in the amounts shown on the inside cover page hereof. The Series 2022 Bonds will be initially dated as of their date of delivery and will bear fixed rates of interest until their final maturity or earlier redemption, payable on April 1, 2023 and semiannually after that date on October 1 and April 1 in each year, at the rates per annum set forth on the inside cover page hereof. The Bank of New York Mellon Trust Company,N.A.,Dallas,Texas,will serve as Registrar and Paying Agent pursuant to the terms of the Bond Resolution. The Series 2022 Bonds will be issued only as fully registered bonds in denominations of$5,000 or any integral multiples thereof. The Series 2022 Bonds will be initially registered through a book-entry only system operated by The Depository Trust Company,New York,New York("DTC"). Details of payment of the Series 2022 Bonds and the book-entry system are described below under the subcaption "Book-Entry Only System." Except as described under the subcaption "Book-Entry Only System" below, beneficial owners of the Series 2022 Bonds will not receive or have the right to receive physical delivery of Series 2022 Bonds, and will not be or be considered under the Bond Resolution to be the registered owners thereof. Accordingly,beneficial owners must rely upon(1) the procedures of DTC and, if such beneficial owner is not a Participant (as defined herein), the Participant who will act on behalf of such beneficial owner to receive notices and payments of principal of and interest on the Series 2022 Bonds, and to exercise voting rights, and(2)the records of DTC and,if such beneficial owner is not a Participant, such beneficial owner's Participant, to evidence its beneficial ownership of the Series 2022 Bonds. So long as DTC or its nominee is the registered owner of the Series 2022 Bonds,references herein to Series 2022 Bondholders or registered owners of such Series 2022 Bonds shall mean DTC or its nominee and shall not mean the beneficial owners of such Series 2022 Bonds. 7 Redemption Optional Redemption. The Series 2022 Bonds maturing on or prior to October 1, are not subject to optional redemption prior to their respective maturities. The Series 2022 Bonds maturing on and after October 1, may be redeemed prior to their respective maturities, at the option of the County, either in whole or in part,from any monies that may be available for such purpose,on any date on or after October 1, , at a redemption price equal to 100% of the principal amount of the Series 2022 Bonds to be redeemed,plus accrued interest to the redemption date,without premium. Mandatory Redemption. The Series 2022 Bonds maturing on October 1, are subject to mandatory redemption at the redemption price of par plus accrued interest on the dates and in the amounts of the Sinking Fund Installments set forth below: Date Sinking Fund (October 1) Installments Maturity Notice of Redemption. Notice of such redemption shall specify the Series 2022 Bond or Series 2022 Bonds (or portions thereof) to be redeemed and the date and place for redemption, shall be given by the Registrar on behalf of the County,and (A)shall be filed with the Paying Agents of such Series 2022 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 Series 2022 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 Series 2022 Bonds to be redeemed, or any defect therein, shall not affect the proceedings for redemption of Series 2022 Bonds as to which no such failure or defect has occurred. Failure of any Holder to receive any notice mailed as herein provided shall not affect the proceedings for redemption of such Holder's Series 2022 Bonds. The County 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 above to all affected Bondholders as soon as practicable. Selection of Series 2022 Bonds to be Redeemed. The Series 2022 Bonds shall be redeemed only in authorized denominations each and integral multiples thereof. The County 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 Series 2022 Bonds or portions of Series 2022 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 Series 2022 Bonds of the maturity or maturities designated by the County by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Series 2022 Bonds or portions of Bonds in principal amounts of$5,000 and integral multiples thereof. 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 County,in its discretion, designates a different allocation. 8 If less than all of the Outstanding Series 2022 Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the County and Paying Agent (if the Registrar is not the Paying Agent for such Bonds) in writing of the Series 2022 Bonds or portions of Series 2022 Bonds selected for redemption and,in the case of any Series 2022 Bond selected for partial redemption,the principal amount thereof to be redeemed. Redemption of Portions of Series 2022 Bonds. Any Series 2022 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 instrument of transfer in form satisfactory to the Registrar duly executed by,the Holder thereof or his attorney duly authorized in writing) and the County shall execute and the Registrar shall authenticate and deliver to the Holder of such Series 2022 Bond,without service charge, a new Series 2022 Bond or Series 2022 Bonds, of any authorized denomination, as requested by such Holder in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Series 2022 Bonds so surrendered. Purchase in Lieu of Optional Redemption. Notwithstanding anything in the Bond Resolution to the contrary, at any time the Series 2022 Bonds are subject to optional redemption pursuant to the Bond Resolution,all or a portion of the Series 2022 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 County,on the date which would be the redemption date if such Series 2022 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 Series 2022 Bonds on the redemption date for the account of and at the direction of the County who shall give the Paying Agent,as trustee,notice at least 10 days prior to the scheduled redemption date accompanied by an opinion of Bond Counsel to the effect that such purchase will not adversely affect the exclusion from gross income for federal income tax purposes of interest on such Series 2022 Bonds or any other Outstanding Bonds. In the event the Paying Agent, as trustee, is so directed to purchase Series 2022 Bonds in lieu of optional redemption,no notice to the holders of the Series 2022 Bonds to be so purchased (other than the notice of redemption otherwise required under the Bond 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 Series 2022 Bonds if such Series 2022 Bonds had been redeemed rather than purchased. Each Series 2022 Bond so purchased shall not be canceled or discharged and shall be registered in the name of the County. Series 2022 Bonds to be purchased under the Bond 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. Book-Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BOOK-ENTRY ONLY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE COUNTY AND UNDERWRITERS BELIEVE TO BE RELIABLE. THE COUNTY AND UNDERWRITERS TAKE NO RESPONSIBILITY FOR THE ACCURACY THEREOF. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2022 BONDS, AS NOMINEE OF DTC, CERTAIN REFERENCES IN THIS OFFICIAL STATEMENT TO THE SERIES 2022 BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2022 BONDS SHALL MEAN CEDE&CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2022 BONDS. THE DESCRIPTION WHICH FOLLOWS OF THE PROCEDURES AND RECORD KEEPING WITH RESPECT TO BENEFICIAL 9 OWNERSHIP INTERESTS IN THE SERIES 2022 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2022 BONDS TO DTC PARTICIPANTS(AS HEREINAFTER DEFINED)OR BENEFICIAL OWNERS OF THE SERIES 2022 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2022 BONDS, AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC,THE DIRECT PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2022 BONDS IS BASED SOLELY ON INFORMATION FURNISHED BY DTC. ACCORDINGLY,THE COUNTY AND UNDERWRITERS NEITHER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. DTC will act as securities depository for the Series 2022 Bonds. The Series 2022 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee)or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2022 Bond certificate will be issued for each maturity of the Series 2022 Bonds as set forth in the inside cover of this Official Statement in the aggregate principal amount thereof, and will be deposited with DTC. DTC,the world's largest securities depository,is a limited-purpose trust company organized under the New York Banking Law, a"banking organization"within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S.and non-U.S.securities brokers and dealers,banks,trust companies,clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,either directly or indirectly("Indirect Participants"). The Direct Participants and the Indirect Participants are collectively referred to herein as the"DTC Participants." DTC has an S&P Global Ratings ("S&P")rating of AA+. The DTC Rules applicable to its DTC Participants are on file with the Securities and Exchange Commission(the "SEC"). More information about DTC can be found at www.dtcc.com. Purchases of Series 2022 Bonds under the DTC system must be made by or through Direct Participants,which will receive a credit for the Series 2022 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2022 Bondholder ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants'records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2022 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2022 Bonds, except in the event that use of the book-entry system for the Series 2022 Bonds is discontinued. 10 To facilitate subsequent transfers,all Series 2022 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Series 2022 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2022 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2022 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2022 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2022 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2022 Bonds may wish to ascertain that the nominee holding the Series 2022 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2022 Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede&Co. (nor any other DTC nominee)will consent or vote with respect to the Series 2022 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures,DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede& Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2022 Bonds are credited on the record date(identified in a listing attached to the Omnibus Proxy). Redemption proceeds and distributions on the Series 2022 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants'accounts upon DTC's receipt of funds and corresponding detail information from the County or the Paying Agent,on the payment date in accordance with their respective holdings shown on DTC's records. Payments by DTC Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in"street name," and will be the responsibility of such DTC Participant and not of DTC,the Paying Agent,or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and distributions to Cede&Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County and/or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2022 Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances,in the 11 event that a successor depository is not obtained,the Series 2022 Bond certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor depository)upon compliance with any applicable DTC rules and procedures. In that event, Series 2022 Bond certificates will be printed and delivered to DTC. SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General The payment of the principal of or Redemption Price, if applicable, and interest on the Bonds is secured equally and ratably by a pledge of and lien upon the Pledged Funds. 'Pledged Funds"is defined in the Bond Resolution as(1)the Net Revenues, (2)Eligible PFC Revenues, (3) any Hedge Receipts,and (4) until applied in accordance with the provisions of the Bond Resolution, all moneys,including investments thereof, in the funds and accounts established thereunder, 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 the terms of the Bond Resolution, and (C) moneys on deposit in a subaccount of the Reserve Account to the extent moneys on deposit therein shall be pledged solely for the payment of the Series of Bonds for which it was established in accordance with the provisions of the Bond Resolution. THE BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY AS 'BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE COUNTY,PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF THE PLEDGED FUNDS, IN THE MANNER AND TO THE EXTENT PROVIDED IN THE BOND 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 COUNTY EXCEPT FROM THE PLEDGED FUNDS IN THE MANNER AND TO THE EXTENT PROVIDED IN THE BOND RESOLUTION. THE BONDS AND THE OBLIGATIONS EVIDENCED THEREBY SHALL NOT CONSTITUTE A LIEN UPON THE AIRPORT OR ANY OTHER PROPERTY OF THE COUNTY,BUT SHALL CONSTITUTE A LIEN ONLY ON, AND SHALL BE PAYABLE SOLELY FROM, THE PLEDGED FUNDS. Definitions "Net Revenues" is defined in the Bond Resolution as Gross Revenues less Operation and Maintenance Costs. "Gross Revenues"or'Revenues"are defined in the Bond Resolution 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 12 (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. "Operation and Maintenance Costs"is defined in the Bond Resolution as any and all costs incurred by the County in operating, maintaining and administering the Airport, including,but not limited to, the general administrative and legal costs of the County related to operation, maintenance, management, security and development of the Airport; costs associated with equipment, vehicles, supplies, materials, services and support for the operation, maintenance, management, security and 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 investment securities, Hedge Agreements at market value and any other loss that does not require or result in the expenditure of cash. "PFC Revenues" is defined in the Bond Resolution as all revenues received by the County from time to time from the Passenger Facility Charges imposed by the County 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 such revenues have been remitted to the County as provided in the PFC Regulations. "Passenger Facility Charges"or "PFCs"is defined in the Bond Resolution as the passenger facility charges relating to the Airport authorized to be charged by the County from time to time under the PFC Act and the PFC Regulations. "Eligible PFC Revenues"is defined in the Bond Resolution as 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 County may identify Eligible PFC Revenues with respect to any particular Series of Bonds in a Supplemental Resolution. The County has determined, by Supplemental Resolution, that the Series 2022 Bonds will be secured by Eligible PFC Revenues in addition to Net Revenues. "PFC Act"is defined in the Bond Resolution as the Aviation Safety and Capacity Expansion Act of 1990(now codified as 49 U.S.§40117), as amended or replaced from time to time. 13 "PFC Authority"is defined in the Bond Resolution as 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 Regulations"is defined in the Bond Resolution as 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. Funds and Accounts The Bond Resolution establishes various Funds and Accounts,including the following: (1) The Revenue Fund,which includes the Revenue Account and the PFC Account. (2) The Operation and Maintenance Fund,which includes the Operation and Maintenance Payment Account and Operation and Maintenance Reserve Account. (3) The Sinking Fund,which includes an Interest Account, a Principal Account, a Reserve Account and a Term Bonds Redemption Account. (4) The Surplus Fund. (5) The PFC Capital Improvement Fund. (6) The Rebate Fund. Moneys in the aforementioned funds and accounts (except for moneys in the Rebate Fund), until applied in accordance with the provisions of the Bond Resolution, shall be subject to a lien and charge in favor of the Holders of the Bonds and for the further security of such Holders in accordance with the terms of the Bond Resolution. The County 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 by the Bond Resolution. Such depositary or depositaries shall perform at the direction of the County the duties of the County in depositing, transferring and disbursing moneys to and from each of such funds or accounts as set forth in the Bond Resolution,and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the County 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 state authority,of good standing, and be qualified under applicable State law. Construction Fund The Bond Resolution established a special fund called "Monroe County, Florida Key West International Airport Construction Fund." A separate account shall be established in the Construction Fund for each Series of Bonds. Proceeds of the Series 2022 Bonds to be used to pay Costs of the Series 2022 Project shall be deposited into the Series 2022 Bonds Account in the Construction Fund and used solely for the purpose of paying Costs of the Series 2022 Project as provided in the Bond Resolution. Disposition of Gross Revenues and Eligible PFC Revenues (A) Revenue Fund.Into the Revenue Account,the County shall deposit promptly,as received, all Gross Revenues. Into the PFC Account, the County shall deposit promptly, as received, all PFC Revenues. 14 (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 County 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 Payment Account shall be paid out from time to time by the County for Operation and Maintenance Costs. (C) PFC Account. Moneys in the PFC Account shall be applied on or before the 251h day of each month in the following order of priority: (1) Sinking Fund. The County 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 PFC Account shall be deposited into the PFC Capital Improvement Fund and shall be utilized in accordance with the terms of the Bond Resolution. (D) Subsequent to the payment described in (B) above, moneys on deposit in the Revenue Account shall be applied by the County on or before the 251h day of each month in the following order of priority: (1) Interest Account. The County 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 interest on all Bonds Outstanding(except as to Capital Appreciation Bonds) accrued and unpaid and to accrue to the end of the then current calendar month. All Hedge Receipts and Federal Subsidy Payments shall be deposited directly to 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 County(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 County 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 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- 15 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) Principal Account. Commencing no later than the month which is one year prior to the first principal due date,the County 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(D)(3)below,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 County for deposit with the Paying Agents to pay the principal of the Bonds on or prior to the date the same shall mature, and for no other purpose. Serial Capital Appreciation Bonds shall be payable from the Principal Account in the years in which such Bonds mature and 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 County 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 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 provided in the Bond Resolution, 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 County shall adjust the amount 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 shall be on parity with payments to the Principal Account. 16 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 County,on or prior to the 60th day preceding the due date of such Sinking Fund Installment, (a) to the purchase of Term Bonds of the Series and maturity for which such Sinking Fund Installment was established, or (b)to the redemption at the applicable Redemption Prices of such Term Bonds, if then redeemable by their 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 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 County shall proceed to call for redemption on such due date,by causing notice to be given as provided in the Bond Resolution, 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 County 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 redemption of Term Bonds shall be paid by the County from the Operation and Maintenance Payment Account. (4) Reserve Account. There shall be deposited to the Reserve Account an amount which would enable the County 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 earlier than the 251h day of the month next preceding such payment date),moneys in the Reserve Account shall be applied by the County 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 the Bond Resolution, shall be inadequate to fully provide for such insufficiency. Whenever there shall be surplus moneys in the Reserve Account by reason of a decrease in the Reserve Account Requirement or as a result of a deposit in the Reserve Account Letter of Credit or a Reserve Account Insurance Policy, such surplus moneys, to the extent practicable, shall be deposited by the County into the Revenue Account of the Revenue Fund. The County shall promptly inform each Insurer of any draw upon the Reserve Account for purposes of paying the principal of and interest on the Bonds. Upon the issuance of any Series of Bonds under the terms, limitations and conditions as provided in the Bond Resolution,the County shall fund the Reserve Account in an amount at least 17 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 in the Bond Resolution shall be construed to require the County 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 County shall determine whether such Series of Bonds shall be secured by the Reserve Account or any subaccount therein and,if the County determines that the Series of Bonds will be secured by a separate subaccount therein, the County 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 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 County 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 County 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 the Bond Resolution. Such Reserve Account Insurance Policy and/or Reserve Account Letter of Credit shall be payable to the Paying Agent (upon the 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 or account held pursuant to the Bond 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 rated in one of the three highest rating categories by at least two of the Rating Agencies (without regard to gradations,such as"plus"or"minus"or"I,""T'or"3"),or(b)a commercial bank, insurance company or other financial institution which has been assigned a rating in one of the two highest rating categories by at least one of the Rating Agencies(without regard to gradations, such as"plus"or"minus"or"1,""T'or"3"). Any Reserve Account Insurance Policy and/or Reserve Account Letter of Credit shall equally secure all Bonds secured by the Reserve Account or subaccount into which such Policy or Letter of Credit is deposited. 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 payment of the Bonds. The County may also establish a separate subaccount in the Reserve Account 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 in the Bond Resolution. 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 Bonds secured by the subaccount;provided the Supplemental Resolution authorizing such Series of Bonds may establish the Reserve Account Requirement relating to such separate subaccount of 18 the Reserve Account at such level as the County deems appropriate. In the event the County 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 County 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 County for the payment of any debt service on and other required deposits with respect to Subordinated Indebtedness incurred by the County in connection with Improvements to the Airport and in accordance with the proceedings authorizing such Subordinated Indebtedness. (6) Operation and Maintenance Reserve Account. There shall be deposited to the Operation and Maintenance Reserve Account an amount which would enable the County 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 County 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 251h day of the month next preceding such payment 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 Bonds Redemption Account when the moneys therein are insufficient to pay the principal of and interest on the Bonds coming due,but only to the extent moneys transferred from the Airport Surplus Fund and the PFC Capital Improvement Fund for such purpose pursuant to the requirements of the Bond Resolution, 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 any lawful purpose relating to the Airport. Moneys in the Airport Surplus Fund shall be applied to the payment, on or prior to each principal and interest payment date for the Bonds(in no event earlier than the 25th day of the month next preceding such payment date), into the Interest Account, the Principal Account 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 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. 19 The County, 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 County'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 County shall issue a Series of Bonds secured by a Credit Facility, the County may establish separate subaccounts in the Interest Account, the Principal Account and the Term Bonds Redemption Account to provide for payment of 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 County may also deposit moneys in such subaccounts at such other times and in such other amounts from those provided in(D) above 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 source of and security for payment to the extent provided in the Supplemental Resolution relating thereto. PFC Capital Improvement Fund The County 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 maturity or in satisfaction of the Sinking Fund Installments) and interest on the Bonds when due, whenever and to the extent that the money on deposit in the Interest Account, the Principal Account and the Term Bonds Redemption Account and moneys transferred from the Airport Surplus Fund to said Accounts pursuant to the Bond Resolution are insufficient for such purposes. The County,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 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 any other lawful Airport purpose. Reserve Account The Bond Resolution requires the County to maintain the Reserve Account within the Sinking Fund in an amount equal to the Reserve Account Requirement for the Bonds. The Reserve Account Requirement is defined in the Bond Resolution as the lesser of (1) the Maximum Annual Debt Service, (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 20 Taxable Bonds) to be included in gross income for purposes of federal income taxation or otherwise violating applicable provisions of the Code; provided, however, the County may establish, by Supplemental Resolution, a different Reserve Account Requirement for a subaccount of the Reserve Account which separately secures a Series of Bonds, which Reserve Account Requirement may be $0.00. Amounts in the Reserve Account are required to be used to pay the principal of, premium, if any, and interest on the Bonds when the money in the other Accounts within the Sinking Fund is insufficient therefor. Increases in the Reserve Account Requirement caused by the issuance of Additional Bonds can be funded, at the discretion of the County, from the proceeds policy thereof, over a period of months not exceeding 36 months or by a Reserve Account Insurance or Reserve Account Letter of Credit, or a combination thereof. The County may, at any time, substitute a Reserve Account Insurance Policy or Reserve Account Letter of Credit for all or a portion of the moneys in the Reserve Account in accordance with the terms of the Bond Resolution. Upon the issuance of the Series 2022 Bonds, the Reserve Account will have on deposit an amount equal to the Reserve Account Requirement, calculated in accordance with the provisions above, ($ ) and is fully funded with cash and/or investments. See "ESTIMATED SOURCES AND USES OF FUNDS" herein. See also "APPENDIX D - Form of the Bond Resolution" attached hereto. Rate Covenant For the Fiscal Year commencing October 1,2022 and for each Fiscal Year thereafter,the County has covenanted in the Bond Resolution to 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 (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 of the Bond Resolution 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 of the Bond Resolution 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. 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 the Bond Resolution. If,in any Fiscal Year,the County shall fail to comply with the rate covenant contained in the Bond Resolution, 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 County may promptly seek to comply with the rate covenant set forth in the Bond Resolution. The County shall forthwith commence to implement such recommendations to the extent required so as to cause it to thereafter comply with said rate covenant. So long as the County implements such recommendations within 120 days of the receipt thereof, the 21 County's failure to comply with the rate covenant shall not be considered an Event of Default under the provisions of the Bond Resolution. Issuance of Additional Bonds No Additional Bonds,payable on a parity with the Bonds then Outstanding pursuant to the Bond Resolution,shall be issued except upon the conditions and in the manner provided in the Bond Resolution. The County 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 County. No such Additional Bonds shall be issued unless the following conditions are complied with: (A) Except in the case of Additional Bonds issued for the purpose of refunding Outstanding Bonds, the County 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 the Bond Resolution have been deposited or made and it has complied with the covenants and agreements of the Bond Resolution. (B) There shall have been filed with the County a certificate of the Clerk setting forth for the last complete Fiscal Year or a period of 12 consecutive months of the 24 months most recently concluded prior to the issuance of the Additional Bonds(the"12-Month Period") (1)Gross Revenues received by the County 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 County 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 County 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 of the Bond Resolution 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. (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 for the completion of which such Additional Bonds are then being issued. If the Authorized Issuer Representative files such certificate with the Clerk,the conditions of(B)above shall not apply to the issuance of such Additional Bonds. (D) For the purpose of determining the Debt Service under the Bond Resolution, 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. 22 (E) For the purpose of determining the Debt Service under the Bond Resolution, 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. (F) Additional Bonds shall be deemed to have been issued pursuant to the Bond Resolution the same as the Outstanding Bonds, and all of the other covenants and other provisions of the Bond 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 the Bond Resolution. Except as provided in the Bond Resolution, 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 (B) above 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(B)above shall apply to Additional Bonds issued to refund Subordinated Indebtedness and to Additional Bonds issued for refunding purposes which cannot meet the conditions of this paragraph. Subordinated Indebtedness The County will not issue any other obligations, except under the conditions and in the manner provided in the Bond Resolution, 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 County 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 the Bond 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 County to issue Subordinated Indebtedness. No Subordinated Indebtedness shall be subject to acceleration. The County agrees to pay promptly any Subordinated Indebtedness as the same shall become due. See "THE SERIES 2022 PROJECT AND PLAN OF FINANCE—Advance Grant Funding"herein. No Mortgage or Sale of the Airport In the Bond Resolution, the County 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 the Bond Resolution. 23 The foregoing provision notwithstanding,pursuant to the Bond Resolution,the County shall have and 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 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 above have been met;or(2) if the amount to be received from such sale,lease or other disposition of said property shall be in excess of five percent (5.00%)of the market value of the gross plant of the Airport, (a) an Authorized Issuer Officer shall first make a finding in writing determining that one or more of the conditions for sale,lease or other disposition of property provided for in the second paragraph above have been met, (b)the Board shall,by resolution, duly adopt, approve and concur in the finding of the Authorized Issuer Officer, and (c) the County 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 not otherwise affect the status of any Outstanding Bonds issued as Federal Subsidy Bonds or the County'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 Board 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 the Bond Resolution and such successor board or authority shall fall within the definition of "Issuer" in the Bond Resolution and such successor board or authority shall adopt a resolution or take such other action to evidence its obligations hereunder. Notwithstanding the foregoing provisions,the County 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 above. Notwithstanding provisions of this section, the County 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 the Airport Consultant, as evidenced by a certificate to that effect filed with the County,impede or restrict the operation by the County of the Airport,but any payments to the County under or in connection with any such contract,license,easement or right in respect of the Airport or any part thereof shall constitute Gross Revenues and shall be deposited in the Revenue Account. 24 Enforcement of Collections The County will diligently enforce and collect the rates, fees, rentals and other charges for the services and facilities of the Airport pledged pursuant to the Bond Resolution;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 pledged in the Bond Resolution shall, as collected,be held in trust to be applied as provided in the Bond Resolution and not otherwise. No Competing Facilities To the full extent of the law and other than Marathon Airport,the County 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 County. Maintenance of PFC Revenues The County covenanted in the Bond Resolution 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 County will at all times comply with all of the requirements and conditions of the PFC Act, the PFC 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 County 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 County 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 County if such reduction shall materially adversely affect the County's ability to pay the Bonds. Compliance with PFC Act,PFC Regulations and PFC Authority The County covenants that it will comply with all provisions of the PFC Act and the PFC Regulations applicable to the County, 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 the Bond Resolution and the PFC Authority. The County 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 County, and all provisions thereof. Without limiting the generality of the foregoing,the County covenants that to the extent necessary to comply with the foregoing covenant: (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§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 County projects such increase may be necessary to pay the debt service of the Bonds; 25 (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; (C) it will take all action reasonably necessary to cause all collecting air carriers to collect and promptly remit to the County the Passenger Facility Charges at the Airport required by the PFC Act,the PFC Regulations and the PFC Authority to be so collected and remitted;and (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 expiration date as defined in the PFC Authority or the date total approved Passenger Facility Charge revenue has been collected. Management of the Airport The County 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 County 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. Operation of the Airport The County 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. Government Grants All Government Grants shall be utilized in accordance with the terms of such Government Grants and applicable law. The County shall comply in all respects with the conditions and provisions of all Government Grants. Insurance The County 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 County shall determine to be sufficient and such other insurance against loss or damage by fire,explosion,hurricane,tornado or other hazards and risks, and said property loss or damage insurance shall at all times be in an amount or amounts equal to the fair appraisal value of 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 County shall engage an Insurance Consultant from time to time to assist it with obtaining and maintaining such insurance. 26 The County may establish minimum levels of insurance for which the County 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 County,shall be used to repair or replace the damaged portion of the Airport; provided, however, if the County makes a determination in accordance with the Bond Resolution 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 the Bond Resolution,provided the County 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 any Outstanding Bonds issued as Federal Subsidy Bonds or the County'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. APPLICATION OF REVENUES The following diagram presents a summary of the application of Gross Revenues and Eligible PFC Revenues to various funds and accounts as governed by the provisions of the Bond Resolution. A more complete description of the application of Gross Revenues and Eligible PFC Revenues is described in "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Disposition of Gross Revenues and Eligible PFC Revenues" and- in APPENDIX D attached hereto. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" for the definitions of Gross Revenues and Eligible PFC Revenues. [Remainder of page intentionally left blank] 27 KEY WEST INTERNATIONAL AIRPORT SERIES 2022 BONDS DIS OStT'ION OF GROSS REVENUE AND ELIGIBLE PFC REVENUES Monroe County„Florida Flow of Funds' Revenue Account i PFC Account County shall depastt,promptly upon receipt all Gross Revenues into the County shah deposd,promptly upon recept,all PFC Revenues into the Revenue Account of the Monroe County,Florida Key West hiternational PFC Account of the Monroe County,Florida Key West Intemalional Airport Revenue Fund Airport Revenue Fund Moneys in Lie PFC k.count shall to cleposRed or credited out or before the 25Ih(fay of each month to the followwang accounts in such arrnounts as the County determines pursuant to its Annual Budget: Operation and Maintenance Payment Account Moneys un the Revenue Amount shall first be used each month to deposit in the Operation and Maintenance Payment Account of the Monroe County Florida,Key West trnternational Airport Operation and Maintenance Fond such sums as are necessary to pay Operation and Maintenance Costs for the ensuing nmrith Monroe County,Florida Key West International Airport Sinking Fund' bUbSeqLlent to payment ot moneys to the Operatbri and Mainenarce Payruent.Account,remaining moneys"in the Reveiwe Account shalt be appl ed in the following,order of priority: (t',�Interest.Account. (2)Principal Account (3)Term Bonds RedenapWn Account(on parity with payments to the PrcndpaiJ Amount) (4)Reserve Account Payment of Subordmaled Indebtedness Deposits to Operaborn and Mairlenance Reserve Account of Monroe County,Ronida Key West International Airport Operation and Maintenance Fond Monroe Country,Florida PFC Capital(improvement Fund Key West International Airport Surplus Fund Time remainder of nnon eys in the PFC Account shall be deposited The balance of any moneys romainhig in the Revenue Account into the PFC Capital Improvement Fund and shaVl he utilized in shall be deposited into the Airport Surplus Fund and applied for accordance with the tennis of S tion+4.06 of the Resolution any lawful purpose relating to the Airport. For more informafion conceinin,gp t;he flow of funds and the Ipartic;ufar provisions and rest!tctions wutln respect to,the funds and arcounts under the Bond Resolution,see the Form of the(pond ResoiuVon attached hereto as FxNbit D, F, ,CS�,,,.r.c,e:Monroe County,Florida Airport Revenuie Bond ResOoIioan, mPiBed Buy Newton&Associates,Inc. 28 ESTIMATED SOURCES AND USES OF FUNDS The table that follows summarizes the estimated sources and uses of funds to be derived from the sale of the Series 2022 Bonds: SOURCES: Series 2022 Par Amount Plus/Less Premium/Discount TOTAL SOURCES USES: Deposit to Series 2022 Bonds Account in Construction Fund Repay Outstanding Interim Indebtedness Deposit to Reserve Account Deposit to Interest Account for Capitalized Interest Cost of Issuance(') TOTAL USES l> Includes Underwriters' discount, rating agencies' fees, financial advisory fees, legal fees and any other miscellaneous costs of issuance. [Remainder of page intentionally left blank] 29 DEBT SERVICE SCHEDULE The following table sets forth the net debt service requirements for the Series 2022 Bonds. Period Ending Total Debt October 1 Principal Interest Service 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 TOTAL 30 THE COUNTY AND THE AIRPORT General The Airport is a small-hub, commercial airport located within the city limits of Key West,Monroe County, Florida and covers approximately 268 acres. Of this area, 87 acres are salt ponds and mangrove vegetation. The remaining 181 acres are usable for the Airport. 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 owned by Palm Beach millionaire Malcolm Meacham. Pan American Airlines was established in Key West that year and leased the Airport site from Meacham. The Airport remained a small and privately owned strip until the start of World War II. 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. 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. Air Trade Area The Airport's Air Trade Area is defined as the County, 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. [Remainder of page intentionally left blank] 31 KEY W WEST IN4TERNA1 O NAL At R.WORT MAY 2,13'$ I7 RA,H. R1I� __ _ ____ _ 1 wl°yal; r� Palm Beach u cape CoC� Airport(PRI) ' r ,l PL COUNTY HENDRY COUNTY I PALM BEACH COUNTY "tr Southwest rlorida �" i.,,d +� Inte rroek4nnal I 9Airpart(9 SW) �tlfar, 4 , Ratory BROWARD COUNTY Na aI s COLLIER COUNTY � Port Lauderdale-Hotlywrood � International Alrport(FLL) L s Mia mi international � A.irport YMIA) VsN N�a 1L ! 'r MiIAMI-DAIDE aaa . � COUNTY u fig r�rrIN„, .� . Florida Keys�Marrytrvarir: 'sr'f Airport(MTH) Key W'.stp ,t t� �5"10 ( Key Wiest I niter national Airport(EYGAI),, FVy194)4rA' n - � ------------------------ •Terra d ,t �IV u,r, tdr;tiir a it irrr#r Ar°r:� lnt¢rnatlom l PAregarn -PPG. VA0, ,.)AA, %1,rp trru rulroor, rd t1e ,t,4, o- ,xmrr riy Apt ll eGrn:Cr . on.a.i,Wan z, L'J177 h.e ,�M.i cri la },Fri.arr Iti n,v..1k.............. J.'r,(tvrir< xNi. � 9 n AIR TRADE ARIA Management and Administration The Airport is owned by the County and is operated as a separate enterprise fund of the County by the Board. The Board exercises management of the Airport through the Senior Director of Airports who reports to the County Administrator and oversees the administration, operation, development, security, 32 environmental requirements of the Airport in addition to the Florida Keys Marathon International Airport, a separate enterprise fund of the County. The Senior Director of Airports is recommended by the County Administrator and ratified by the Monroe County Board of County Commissioners.The Senior Director of Airports oversees a staff of 34 full- time employees. Brief biographies of the Senior Director of Airports,Assistant Director of Airports,Deputy Director Airport Finance and Administration and Deputy Director of Airport Operations and Security are set forth below. Richard Strickland, Senior Director of Airports was born and raised in San Diego, California, and earned his Bachelor of Science Degree in Finance from San Diego State University. Mr.Strickland has over 26 years of extensive experience and knowledge in Airport Management, having worked at San Diego International Airport, Detroit International Airport, Palm Springs International Airport, Kern County Department of Airports at Meadows Field, and the past 4 years as the Senior Director of Airports for the Key West International and Florida Keys Marathon International Airports. Erick D'Leon,Assistant Director of Airports joined Key West International Airport in October 2019 as the Assistant Director.Previously Mr. D'Leon worked with TBI Airport Management, a privatized airport management company, serving airport management contracts with the Orlando Sanford International Airport, and the Middle Georgia Regional Airport in management and operational roles. Mr. D'Leon also worked for the City of New Bedford at the New Bedford Regional Airport in Massachusetts. Mr. D'Leon holds a Master's of Aeronautical Science degree with a specialization in safety and also holds a Bachelor of Science in Professional Aeronautics with a minor in Safety and Management. Both undergraduate and graduate degrees were earned from Embry-Riddle Aeronautical University. Beth Leto, Deputy Director Airport Finance and Administration was born in Kentucky and raised in Key West,Florida when her family moved to the Keys in 1966. A graduate of Key West High School,Mrs. Leto earned an Associates of Science and an Associates of Arts degrees from the Florida Keys Community College and graduated Summa Cum Laude from Saint Leo University with a Bachelor of Administration Degree in Management. A Certified Public Manager since 2003,Mrs.Leto has worked for Monroe County, Florida for 39 years. Mrs.Leto has worked at the Key West International Airport since 2015. Luis Garay, Deputy Director of Airport Operations & Security was employed with United Express Airlines from 1996-2004 as a Customer Service and Ramp Agent,Lead Agent. From 2000-2005,Mr.Garay was employed with Port Hueneme Police department enforcing State laws and Municipality Code Enforcement. From 2005-2010, Mr. Garay was an Airport Police Officer I, enforcing State laws, Municipality Code Enforcement,TSA Guidelines 1542 and FAA Guidelines Part 139. From 2010-2014,Mr. Garay was promoted to Airport Police Officer II to enforce State laws, Municipality Code Enforcement, TSA Guidelines 1542, FAA Guidelines Part 139 and he supervised APO I and Security Attendants. From 2014-2019,Mr.Garay was an Airport Police Manager enforcing State laws,Municipality Code Enforcement, TSA Guidelines 1542,FAA Guidelines Part 139,he supervised APO I and Security Attendants and was the Direct Liaison with TSA FSD and FAA inspectors. From 2019-present,Mr.Garay has been employed with the Key West International Airport and is the Direct Liaison with TSA FSD and FAA Inspectors, the Primary TSA ASC, and he supervisors the Airport Operations and Security team. 33 Description of the Airport's Existing Facilities Airfield. The Airport's airfield facilities include those facilities necessary to support the movement and operation of aircraft,including a runway, taxiways and apron areas, along with 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 IIP and smaller aircraft,including commercial jets, such as the Airbus A-319, Boeing 737-700 and EMB 190 aircraft, Airplane Design Group III also includes turboprops, such as the ATR 42-600,military aircraft,and large general aviation aircraft. Runway 9/27 has an engineered material arresting system ("EMAS") on each end. The runway is equipped with medium intensity runway lights located 10 feet from the edge of the runway pavement. On August 15, 2022, the Airport closed due to a small section of asphalt failure on the runway and inbound and outbound flights were postponed. The issue was resolved and flights resumed in the morning on August 16,2022. 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. 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. The main general aviation ("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. 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. 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. Terminal BuildinZ. The Airport's current passenger terminal facilities are made up of the following facilities. 1 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. 34 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 are connected by two elevated, enclosed corridors spanning the arrival roadway. The westerly corridor is an enclosed pedestrian bridge providing passenger access between the two buildings. The easterly corridor houses a passenger baggage conveyor system. The Terminal comprises a total of approximately 67,900 square feet. The first Terminal building, located to the south of the 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 circulations 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 37,800 square feet.It contains the secured passenger 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. 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 A1A). 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 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,fuel farm facilities, cargo facilities,Monroe County Sheriff and CBP facilities, and airside access Gates 1 and 5. Automobile Parking Facilities. 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 operates parking at the Airport through its parking manager, Republic Parking Systems. The current agreement expires June 30,2024. 35 Parking Rates Short Term Lot Long-Term Garage��> 0-60 Minutes Free $3.00 1-2 Hours $6.00 6.00 2-3 Hours 9.00 9.00 3-4 Hours 12.00 12.00 >4 Hours/Daily Maximum 15.00 19.00 Weekly Maximum 84.00 84.00 Lost Ticket Minimum 15.00 19.00 l> Long term daily max parking rates increase to$21 on October 1,2022. Adam Arnold Annex. The Adam Arnold Annex consists of approximately 6,600 square feet of space and houses the Airport Badging Office and CBP. Fixed Base Operator Facilities. The Fixed Base Operator ("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 square feet and a fuel farm which has three 12,000 gallon above-ground fuel storage tanks, two 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 Aviation LLC d/b/a Signature Flight Support. General Aviation Aircraft Storage Facilities. Aircraft storage facilities at the Airport consist of eleven(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. 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 (3) vehicle bays and is equipped with two ARFF vehicles, a quick response vehicle and a backup inspections vehicle. Air Traffic Control Tower. The ATCT is temporarily located on the north side of the airfield and is operational daily, 7:00 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 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. FedEx Cargo Facility. FedEx occupies a 3,000 square foot cargo building and 13,865 square feet of open land adjacent to the building,in connection with its overnight parcel delivery services. 36 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, LLC, is approximately 1,180 square feet and rests on approximately 0.7 acres. The other service facility is approximately 950 square feet,rests on approximately 0.6 acres and is leased by the Hertz Corporation. Enplaned Passengers at the Airport The Airport is classified by the FAA as a small-hub facility based on its percentage of nationwide passenger activity. The Airport ranked 102nd in passengers in the United States in calendar year 2021 (previously ranked 133rd in calendar year 2019),according to FAA Air Carrier Activity Information System ("ACAIS") enplaned passenger data. The Airport predominantly serves origin and destination ("O&D") passengers, with O&D passengers accounting for 98.2% of all passengers at the Airport in the Fiscal Year 2021. The Airport experienced growth between the Fiscal Years, 2012 and 2014, but with the exit of Southwest Airlines at the Airport in 2014, Fiscal Year September 30, 2015 enplanement activity decreased 12.7%.Growth in enplanement activity at the Airport returned between Fiscal Years 2016 and 2019.Traffic decreased 28.4% in Fiscal Year 2020 due to factors related to the COVID-19 pandemic. Traffic rebounded in Fiscal Year 2021, with enplaned passengers increasing 93.7% on a year over year basis and exceeding Fiscal Year 2019 levels. With the exception of Fiscal Year 2020, the number of enplaned passengers has grown every year since 2015,from approximately 350,000 passengers in Fiscal Year 2015 to approximately 659,000 in Fiscal Year 2021, an increase of 88.5%. [Remainder of page intentionally left blank] 37 Domestic Seat Capacity Recovery—COVID-19 Key West,Small Hubs,and the United States 2 0 11" �M f..T ..tip 0 Id .C..�::b0% fr Cm? .C.1 0000 rr t I n.r 0 CD /��y u�Y +.,:.Y ✓D +.,:.Y +.,:.Y +.,:.Y +,"".5 CD v^i v^i v^i z--4 v^i u^^i ,--f w^^f v^4 v^4 v^4 v^4 C'MJ a'MJ r'3 4,J 4 4 4i a'M# a'MJ P'iJ f";d !'•.1 C"�J C"^iJ C^J C"�J P'i# C"�J fed ril c."# E..,J c-�J c-'J c'�J rj fed r,J c.`iJ rj c-�J PiJ PiJ PiJ rid c-.a c...�a c-�a fC GA! Ra 1 "fd id1 4} ,y?, GL! iCi S.k. r GA! C...M (A? tt" GU Ra 5 6'G .:.5 GAJ mmi � .. NOTE:Scheduled seats indexed to the same month in 2019. SOURCE:Innovata,July 2022. PREPARED BY: Ricondo&Associates,Inc.,July 2022. See"CERTAIN INVESTMENT CONSIDERATIONS—Coronavirus(COVID-19)"herein. [Remainder of page intentionally left blank] 38 Historical Enplaned Passengers (Fiscal Year Ended September 30) Fiscal Year Enplaned Passengers Enplaned Passenger Growth 2012 366,190 -- 2013 393,906 7.6% 2014 400,669 1.7 2015 349,790 (12.7) 2016 367,254 5.0 2017 398,592 8.5 2018 416,234 4.4 2019 475,034 14.1 2020G) 340,307 (28.4) 2021 659,321 93.7 Compound Annual Growth Rate 2012-2019 3.8% 2012-2021 6.8 l> COVID-19, which began impacting the U.S. in March, 2020, and the resultant government measures and changes in passenger travel behavior resulted in significant reductions in passenger traffic in Fiscal Year 2020 when compared to prior Fiscal Years. See "CERTAIN INVESTMENT CONSIDERATIONS—Coronavirus(COVID-19)"herein for more information. Source: Monroe County,Florida. As shown in the table above, the Airport has experienced significant enplaned passenger growth since Fiscal Year 2012 until Fiscal Year 2020 when enplaned passengers decreased 28.4%.After increasing capacity during the first six months of Fiscal Year 2020, passenger volumes decreased sharply when all airlines greatly reduced capacity at the Airport because of the COVID-19 pandemic.By May 2020,total seat capacity at the Airport was at 27.9%of May 2019 levels. Seat capacity quickly rebounded,and in September 2020, total seat capacity was 84.5% of September 2019 levels and, in August 2022, total seat capacity was approximately 144.9% August 2019 levels. See "CERTAIN INVESTMENT CONSIDERATIONS — Coronavirus(COVID-19)"herein. Enplaned passenger volumes rebounded after the decrease in Fiscal Year 2020 and reached new highs in Fiscal Year 2021. Total Fiscal Year 2021 enplaned passenger volumes were 93.7% greater than in Fiscal Year 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 Fiscal Year 2021. Allegiant's Fiscal Year 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). Allegiant began new air service from the Airport in Fiscal Year 2022 to the following destinations: • Asheville Regional Airport(AVL)-November 2021 39 • St.Pete-Clearwater International Airport(PIE)-November 2021 • Indianapolis International Airport(IND)-December 2021 The Airport's carrier mix continues to diversify with enplaned passengers spread over many carriers,with no single carrier historically having more than a 50.0%market share over the period shown. American and Delta vied for the largest market share between Fiscal Years 2017 and 2019. In Fiscal Year 2020 American increased its share to 45.8% and nearly reached 50% market share in Fiscal Year 2021. United's share of enplaned passengers has steadily increased since Fiscal Year 2017, reaching 12.6% in Fiscal Year 2021.Silver's share has decreased over the same period,from a high of 22.4%in Fiscal Year 2018 to 6.9%in Fiscal Year 2021.JetBlue and Allegiant introduced service in Fiscal Year 2021,earning 2.9% and 1.9% share,respectively,of enplaned passengers. Historical Total Enplaned Passengers by Airline (Fiscal Years Ended September 30) 2017 2018 2019 2020 2021 Enplaned Enplaned Enplaned Enplaned Enplaned CarrierM Passengers Share Passengers Share Passengers Share Passengers Share Passengers Share Allegiant Air 0 0.0% 0 0.0% 0 0.0% 0 0.0% 12,485 1.9% American Airlines 147,690 37.1 151,054 36.3 187,734 39.5 155,887 45.8 328,994 49.9 Delta Air Lines 160,919 40.4 143,514 34.5 176,775 37.2 106,817 31.4 169,923 25.8 JetBlue 0 0.0 0 0.0 0 0.0 0 0.0 19,188 2.9 Silver Airways 78,863 19.8 93,257 22.4 67,604 14.2 42,852 12.6 45,410 6.9 United Airlines 11,120 2.8 28,409 6.8 42,921 9.0 34,751 10.2 83,321 12.6 Airport Total 398,592 100.0% 416,234 100.0% 475,034 100.0% 340,307 100.0% 659,321 100.0% (1) Includes regional/commuter affiliates. Source: Monroe County,Florida. Airlines Serving the Airport As of July 2022, a total of six passenger air carriers provided scheduled service at the Airport and two all-cargo carriers also serve the Airport. Passenger ServiceG) All-Cargo Service Allegiant Air Mountain Air Cargo(d/b/a FedEx) American Airlines SKYWAY(d/b/a UPS) Delta Air Lines JetBlue Airways Silver Airways United Airlines l> Includes regional affiliates,where applicable. Source: Monroe County,Florida. Of the passenger air carriers currently serving the Airport,three have continually operated at the Airport since Fiscal Year 2012: American Airlines, Delta Air Lines, and Silver Airways. United Airlines served the Airport in Fiscal Years 2012 and 2013. United suspended service in Fiscal Years 2014 40 through 2016 but resumed service in Fiscal Year 2017. Allegiant Air and JetBlue Airways commenced service in Fiscal Year 2021. Historical Landed Weight 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%of landed weight at the Airport in Fiscal Year 2021.The other four passenger airlines combined accounted for an additional 24.2% of landed weight during this same period and cargo carriers contributed 0.8% of the total landed weight. In total, between Fiscal Years 2017 and 2019, landed weight for passenger airlines increased approximately 13%. As a result of the COVID-19 pandemic, passenger airline landed weight decreased by 10.0% between Fiscal Years 2019 and 2020 while cargo airline landed weight increased by 15.0%. In Fiscal Year 2021, cargo airline landed weight increased by an additional 16.9% over Fiscal Year 2020 levels at the Airport and passenger airline landed weight increased by 101.1%. Historical Air Service An airport's air service is often measured through the distribution of its O&D markets, which is a function of air travel demands and the airport's available nonstop service (International service does not currently make up any of the Airport's air service). The following table presents data on the Airport's top 20 O&D airports for Fiscal Year 2021 followed by a historical table of origin and destination passengers. [Remainder of page intentionally left blank] 41 Top 20 Domestic Origin and Destination Markets (Fiscal Year 2021) O&D Percentage of Rank Market Passengers(8) O&D Passengers Airlines 1 New York CityG) 157 9.1% Delta,JetBlue,United 2 Washington,DC(2) 89 5.2 American,United 3 Philadelphia 85 5.0 American 4 Atlanta 84 4.9 Delta 5 Chicago(3) 72 4.2 American,United 6 Tampa 65 3.8 Silver 7 Boston(4) 64 3.7 JetBlue 8 Charlotte 57 3.3 American 9 Dallas(5) 57 3.3 American 10 Detroit 43 2.5 -- 11 Orlando(6) 41 2.4 Silver 12 Houston(7) 33 1.9 United 13 Minneapolis 28 1.7 -- 14 Pittsburgh 28 1.6 Allegiant 15 Nashville 28 1.6 Allegiant 16 Cincinnati 27 1.6 Allegiant 17 Cleveland 26 1.5 -- 18 Indianapolis 25 1.5 Allegiant 19 Denver 24 1.4 -- 20 Columbus 24 1.4 -- Other O&D Markets 661 38.4% -- Total Domestic O&D Passengers 1,720 100.0% -- (1) Includes John F.Kennedy International(JFK),Newark Liberty International(EWR),and LaGuardia (LGA)Airports. (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. (4) Includes Boston Logan International(BOS),Manchester-Boston Regional(MHT),and Rhode Island T.F.Green International (PVD)Airports, as well as Portland International Jetport (PWM). (5) Includes Dallas Fort Worth International Airport(DFW)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 William P. Hobby (HOU) Airports. (8) Passengers daily each way. Source: Monroe County,Florida. 42 Q O o � �o rn rn � rn co � rn co C � w 0 Q � d N m co 0 0 o c� o 0 0 0 ul c6 � o c-i 0 o r m cc ul rn C-Am C-Amm � co m m � L c m � m c� c� m m m c� �n o Q �Oo C � � Q � 00 rn coo 000 � � 0000 o e Cl d R" m cnto1.0 Cl-60 Q v O co 00 00 rn rn a; 00 00 00 m ^C v � rn rn rn rn rn rn rn rn rn rn � � ro W o O bA � 10 >+ co d+ � � O O 00 rn d rn N an d c o � W � mmmmmmd+ d+ m �o x a o o rn o d N d d rn o o rn N rn N � N H � � �ornod+ �orn � � d+ Ln cYi �o � O � w o j cq md+ Ln �o � x 'a, CNN U cq cq �; 0000000000 � � 0 � v U o Historical Aircraft Operations Historical aircraft operations are defined as the arrival or departure of an aircraft. The following table presents historical data on the Airport's aircraft operations. Historical Aircraft Operations (Fiscal Year Ended September 30) General Aviation/ Passenger Other Air Annual Fiscal Year Airline All-Cargo Taxi Military Total Growth 2017 15,814 1,348 33,626 750 51,538 2018 16,818 1,448 33,413 459 52,138 1.2% 2019 16,280 1,430 34,822 520 53,052 1.8 2020 13,278 1,645 29,564 442 44,929 (15.3) 2021 22,598 1,923 39,168 439 64,128 42.7 Compound Annual Growth Rate 2017-2021 9.3% 9.3% 3.9% (12.5)% 5.6% Source: Monroe County,Florida. Financial Information PFCs. The Airport also receives PFCs from certain Collecting Carriers (as hereinafter defined), at a rate of$4.50 per enplaned passenger at the Airport. PFCs are restricted to certain authorized amounts and uses. See"THE COUNTY AND THE AIRPORT—Passenger Facility Charges"herein. The Eligible PFC Revenues are a source of security for the Series 2022 Bonds. Non-Airline Revenues. In addition to generating revenues from airlines, the County receives moneys from non-airline sources. The principal concessions and consumer services at the Airport are automobile parking, rental cars and terminal concessions from food, beverage and sundries sales. The County also derives revenues from advertising and ground transportation services. Each of the foregoing constitute "Revenues"for purposes of the Bond Resolution. The County has a written policy for publicly procuring and awarding concession and consumer service privileges at the Airport. Airport management specifies performance and operating standards in its agreements with concessionaires in furtherance of its public service and revenue goals. Revenues received by the County in connection with rental car services for Airport passengers are the second largest source of Revenues at the Airport. The County receives privilege fees and rents (associated with ready/return spaces,terminal counter space, and quick turnaround facilities)from rental car companies serving Airport customers. Onsite Airport rental car brands currently 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, or, minimum annual guarantee 44 ("MAG"), plus 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 new agreements are put into place. Two of the On-Airport RACs,Avis and Hertz occupy and pay land lease rental for service 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 gross rental car receipts. Automobile parking is available in three locations on the Airport including the two-level parking garage and a surface lot. The parking garage 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 public parking facilities at the Airport are managed by Republic Parking System,LLC (the 'Parking Manager") under a management agreement with the County. Under the management agreement,the Airport pays all expenses,plus a management fee and an incentive fee,if any,to the Parking Manager. The current management 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 management agreement in place until June 30,2026. 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 Series 2022 Project and provide for Lessee's investment in upfitting the new Concourse A premises. The Airport collects trip fees paid by taxi,limousine, and transportation network companies such as Uber and Lyft ("TNCs") that connect paying passengers with drivers who provide the transportation using their own commercial and non-commercial vehicles.The TNCs include Lyft and Uber which operate under agreements which provide for a charge of $3.50 (in effect as of January 1, 2022 and July 1, 2022, 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. The Airport does not have an agreement with Turo. In the Fiscal Years 2020 and 2021, Revenues derived from rental cars were $1,446,639 and $2,597,076,respectively,automobile parking totaled$290,968 and$420,034,respectively,and total revenues from terminal concessions and restaurant were$413,149 and$741,848,respectively.Revenues from sources other than signatory airlines represented over 73% (with CARES funds) and 52% (without CARES funds) of total Revenues received by the County in Fiscal Years 2020 and 2021. 45 Historical Operating Results. The Audited financial statement of the County and the Airport for Fiscal Year 2021 are set forth in Appendix B-1 and Appendix B-2,respectively, attached hereto. The following table sets forth historical revenues, expenses and debt service determined in accordance with the Bond Resolution for Fiscal Years 2017 through and including 2021. Historical Revenues,Expenses and Debt Service Fiscal Years Ended September 30,2017-2021 (Unaudited)(') 2017 2018 2019 2020 2021(2) GROSS REVENUES: Airline Revenues: Airline Landing Fees $2,019,358 $1,544,296 $2,210,141 $1,903,899 $3,335,948 Airline Terminal Rents 1,820,649 1,784,141 1,988,022 1,967,945 1,639,351 Airline Security Charges 443,106 342,184 529,122 411,378 594,213 Total Airline Revenues $4,283,113 $3,670,621 $4,727,284 $4,283,222 $5,569,512 Non-Airline Revenues: Rental Car Concessions $1,524,597 $1,417,653 $1,605,229 $1,446,639 $2,597,076 Rental Car Rents 426,992 393,801 398,111 384,344 607,713 Public Parking 419,381 447,326 438,609 290,968 420,034 General Aviation 221,824 222,586 228,214 229,407 307,142 Ground Transportation 262,193 258,110 389,853 203,220 405,516 Advertising 189,699 212,665 261,406 162,408 172,540 Restaurant 280,876 277,295 353,860 256,568 499,930 Gift Shop 195,299 210,495 215,136 156,581 241,918 Air Cargo Landing Fees(3) 34,936 17,754 21,929 32,804 25,032 Investment Income 22,168 36,871 96,717 59,747 18,331 Other Rents 298,234 421,823 452,480 460,234 444,387 CARES 0 0 0 5,295,800 9,063,499 Other Miscellaneous Revenue 2,680 931 11,744 11,231 280,465 Total Non-Airline Revenues $3,878,879 $3,917,310 $4,473,288 $8,989,950 $15,083,583 TOTAL GROSS REVENUES $8,161,992 $7,587,931 $9,200,573 $13,273,173 $20,653,095 OPERATION AND MAINTENANCE COSTS: Personal Services $3,053,037 $3,155,980 $3,394,307 $3,990,131 $3,089,416 Contractual Services, Supplies/Materials&Other(4) 2,173,798 1,825,169 2,393,946 2,295,026 3,252,871 Security Services-MCSO(Net) 2,198,441 2,364,910 2,402,040 2,384,817 3,068,832 TOTAL OPERATION AND MAINTENANCE COSTS(5) $7,425,276 $7,346,059 $8,190,294 $8,669,974 $9,411,119 NET REVENUEW $736,716 $241,871 $1,010,279 $4,603,199 $11,241,976 DEBT SERVICE(') N/A N/A N/A N/A N/A DEBT SERVICE COVERAGE N/A N/A N/A N/A N/A [Footnotes on following page] 46 1> Revenues in the table above do not match those in the County's audited financial statements since CARES funds, investment income related to the Airport's operations, and monies received from court settlements were not classified as operational revenue for accounting purposes but are considered a source of operational revenue pursuant to the Bond Resolution. Additionally, Operation and Maintenance Costs do not match those in the County's audited financial statements since depreciation and amortization are not considered an Operation and Maintenance Cost for purposes of the Bond Resolution as well as expenditures incurred for the Airport's Noise Improvement Program and other Airport-related miscellaneous operating and capital outlay expenditures. (2) The increase in general aviation revenues shown in Fiscal Year 2021 is primarily attributable to fixed base operators fair market value rental adjustments implemented by the Airport. (3) According to the Airport, the 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. (4) Includes amounts for County allocated overhead. (5) The increase in Operation and Maintenance Costs is reflective of varying factors including necessary staffing, utilities, insurance, supplies and materials, maintenance and repairs, security services and other operating and maintenance requirements of the Airport. (6) Amounts for Fiscal Year 2018 reflect negative impacts of Hurricane Irma on Airport operations. Increases in Net Revenues in Fiscal Years 2020 and 2021 is a result of receipt of CARES funds. Without such funds, Net Revenues would have been ($692,601) for the Fiscal Year 2020 and $2,178,477 for the Fiscal Year 2021. (7) The County issued the Interim Indebtedness on July 1, 2021. However, the County did not draw on the Interim Indebtedness until August 11, 2021. The Interim Indebtedness is currently outstanding in the amount of$3,208,000 and expected to be repaid prior to or at the closing of the Series 2022 Bonds. See "INTERIM INDEBTEDNESS"herein for more information. Source: Report of the Airport Consultant attached as APPENDIX C hereto. Management Discussion and Analysis The table of Historical Revenues, Expenses and Debt Service above was prepared in accordance with the Bond Resolution and includes only the Revenues and Operation and Maintenance Costs for the Airport. The Airline and Non-Airline Agreements provide stability and diversification of revenue for the Airport. The Airport actively monitors and controls expenses. The County Board of Commissioners has approved an Airport management policy to target days cash on hand minimum of at least 365 days. For Fiscal Year 2021 the total days cash on hand equaled 385. As of June 30,2022,the total days cash on hand was 557. The Airport's estimated budget for Fiscal Year 2022 reflects total Revenues of approximately$12.2 million (excluding CARES funds) compared to actual Revenues of $11.6 million in the Fiscal Year 2021 (excluding CARES funds). Budgeted Operation and Maintenance Costs are estimated at approximately $9.7 million for Fiscal Year 2022 compared to actual$9.4 million in Fiscal Year 2021. The budgeted cost per enplaned passenger for Fiscal Year 2022 is$8.49 compared to a budgeted amount of$13.19 in Fiscal Year 2027. The actual cost per enplaned passenger for Fiscal Year 2021 is competitive and was$8.45. The actual cost per enplaned passenger for Fiscal Years 2017 through and including 2021 is shown in the table below. 47 Historical Airline Cost Per Enplaned Passenger FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Airline Payments Landing Fees $2,019,358 $1,544,296 $2,210,141 $1,903,899 $3,335,948 Airline Terminal Rents 1,820,649 1,784,141 1,988,022 1,967,945 1,639,351 Airline Security Charges 443,106 342,184 529,122 411,378 594,213 Total Airline Payments $4,283,113 $3,670,621 $4,727,284 $4,283,222 $5,569,512 Enplaned Passengers 398,592 416,234 475,034 340,307 659,321 Airline Cost per Enplaned Passenger $10.75 $8.82 $9.95 $12.59 $8.45 Source: Monroe County,Florida Airport Records. Capital Improvement Program and Funding Sources (Excluding the Series 2022 Project) The County has a five-year Capital Improvement Program (the "CIP")which is updated annually with new projects added and existing projects reevaluated,prioritized,rescheduled or omitted depending upon the current situation and predicted future needs of the Airport. The County's CIP for Fiscal Years 2023 through and including 2027 (the "Forecast Period") includes approximately $54 million in projects, excluding the Series 2022 Project, and approximately $167 million in projects, including the Series 2022 Project. Except for the Series 2022 Bonds and the Grant Anticipation Note, the County does not expect to issue any additional debt to finance the CIP, as outlined below. The CIP is re-evaluated annually, and projects could be included/excluded based on demand and other factors. The Airport believes there are sufficient funding sources, as outlined below,to fund the CIP. Key components of the County's CIP(excluding the Series 2022 Project)expected to be undertaken during the Forecast Period and the estimated costs of such key components are as follows: [Remainder of page intentionally left blank] 48 O d+ 0 O O O r Orn Ln Ln 0 0 O O Lf) 0 0 Ln O N O O O O �o L() 00 dt [� N O O O L() O O P O m 0 O O O 00 r� O d+ eH O O O cV C C 00 y O N O O O O � � �tz M 00 O O O O N O O N zs Ln O O O Ln O rn O R L-1 O �o O O O O O Ln H N dt m m N N dt N 00 00 dt rn �o N O N H H 06 clr N C N N N w 0 0 0 0 0 0 d+ d+ O eH m 0 O O m 0 0 Ln 00 O a� LO O O O N O �.o O O O O O 00 N O O O N O N N O O L(') O d^ O\ �c 00 L(') O O O O O Lr "o L() L() L, O N 00 m 00 N L() L() O N O N QN N N N r-i �o dt m m Lr) a\ O O cq� m m r Lf) r 6T* CA w 00 Lr) m 00 � 00 o o )00 o o 0 0 0 0 o O W A ,� rn C\ Hcs p 9 T � O U °� u" w dt O et to O O O m 0 0 00 O a 00 o 0 0 0 0 o 0 0 0 0 0 0 o � H � o 0 000 �ocoL� O Lri o oeCodtz � 6 r o0 0 000 0 N Ln L() Ll O N 00 m Ln m L() L() O N O et m A N N N N � N N N dt m m L� Ln � _ w w w H � Ufa o o o0 00 W w = o o p I � N N O Q m � N O i w Lf) CA A N CA � oo Q w a a06 W o O O o O 0 0 0 0 Qw o00 OI 000 O� W N eq N eq � W H H O d+ O O O O r"I rn Ln Ln O O O O Ln O O Ln Ln x t r� O d+ eM O O O cV C C 00 f O N O O O O � � �tz M 00 O O O O N O O N Ln O O O Ln O rn O Ln H " N dt m m N N d+ N 00 00 dt rn �o N O N H U 00 I N N N N U v as � •� � •� �� •� � •� � � � m o O fa N R; O O ONi O u N4 (n O [� W U F. 0 O U c!) O U W U U O fa H H U W. w O O O 00 00 O O O 00 00 O O O O O M O N O N O N H � N W 0 0 0 0 0 0 0 0 0 0 V) N O �W M N F4 � H 0 0 0 0 0 0 0 0 0 0 V) W a� O v � O O O O O O O O O O O O O O O N O O o o O O r C 0 0 0 0 0 0CZ N N N N N N 00 ll 06 00 I�t CZ o Q N Q 0 0 0 o c o 0 0 0 0 � o 0 0 o M � •� � '� O O O O v ON N O N O N N N N ull LP c Z cn W CZ v on on on o .", 7� .� w w N N M fa N N m t~C N t~C w N f p w w w E�- Environmental,Social,and Governance MSG")Factors for the Series 2022 Project The Series 2022 Project is designed to provide a highly efficient, economically prosperous, environmentally responsible,healthy,and safe facility. The design considers energy efficiency,energy use reduction, potable water use reduction, demolition and construction waste reduction, operational waste reduction with increased recycling, increased interior environmental and air quality through selection of durable, low maintenance, low/no volatile organic compound materials, increased daylighting, glare reduction, and efficient building systems management. These considerations make the building more energy efficient,reduce operational water consumption, improve indoor environmental quality, occupant comfort, and building operations leading to a reduction of net operational and embodied carbon, CO2e emissions and pollutants. The following is a summary of the sustainable strategies intended to be included in the Series 2022 Project. • Sensitive Land Protection:The Series 2022 Project is located on previously developed land. The primary floor of the new concourse is raised 14 feet 6 inches above grade to avoid potential overland flooding as well as sea level rise and storm surges. • Access to Quality Transit: The Airport is served by ride share services such as taxis, Lyft, Uber, Courtesy Shuttles, Key West Transit and Greyhound Transit. This reduces the number of individual automobile trips to and from the Airport. • Reduced Parking Footprint: No new parking is being added as part of the Series 2022 Project.The Series 2022 Project rather utilizes existing parking facilities. • Construction Activity Pollution Prevention: The Series 2022 Project will create and implement an erosion and sedimentation control plan for all construction activities. The plan must conform to the erosion and sedimentation requirements of the 2017 U.S. Environmental Protection Agency ("EPA") Construction General Permitor local equivalent,whichever is more stringent. • Site Assessment:The Series 2022 Project design has been informed by and is responsive to assessments of the site's topography,hydrology,climate,vegetation,soils,human use,and health. • Rainwater Management: The Series 2022 Project has been designed to meet the stringent rainwater management requirements of the site. • Heat Island Reduction: The Series 2022 Project reduces heat island effect as it provides shading by the new concourse building onto the paved portions of the immediate site.The rooftops of the new concourse buildings have high solar reflectance values and thereby reduce heat island effect. • Light Pollution Reduction: The Series 2022 Project intends to meet the maximum uplight and trespass ratings for exterior lighting zone 4. • Outdoor Water Use Reduction: The Series 2022 Project does not include an outdoor irrigation system. The site area contains no vegetation or landscaping. 51 • Indoor Water Use Reduction: The predicted water use intensity for the Series 2022 Project is reduced by 44%below the calculated baseline by using low flow fixtures appropriate for the use of the facility. • Optimize Energy Performance: The predicted energy use intensity for the Series 2022 Project has been reduced by 26%from the calculated baseline through the use of efficient equipment and systems. • Energy Metering: All whole building energy sources and individual energy end uses that represent more than 10%of the total annual consumption of the building will be metered separately. These would include lighting, cooling, power to passenger boarding bridges and concessionaires. • Renewable Enera: The project has considered the potential use of on-site renewable energy to produce a portion of the facility's electrical energy needs. The south facing concourse roof has been designed structurally to accommodate a potential installation of a roof mounted photo voltaic solar panel array. • Refrigerant Management:The Series 2022 Project intends to select Low Impact refrigerants having an ozone depletion potential of zero and a global warming potential of less than 50. • Construction and Demolition Waste Management:The Series 2022 Project is committed to reducing construction and demolition waste by a minimum of 60%. This requirement is included in the outline specifications. The plan will be developed by the construction manager at risks' construction waste manager. • Windstorm Resiliency: The Series 2022 Project will be built to withstand up to 200 mile per hour winds. Passenger Facility Charges As part of the PFC Act, as implemented by the FAA pursuant to the PFC Regulations, the United States Congress has authorized commercial service airports such as the Airport to collect passenger facility charges from each paying passenger enplaned at such airport in the amount of$1.00,$2.00,$3.00,$4.00 or $4.50, subject to certain limitations. Airport-related projects eligible for funding with passenger facility charges are those that(a)preserve or enhance capacity, safety or security of the national air transportation system, (b) reduce noise from an airport that is part of the system, or (c) provide an opportunity for enhanced competition between or among air carriers or foreign air carriers. "Eligible airport-related projects" include airport development or planning, terminal development, airport noise compatibility measures and planning and construction of gates and related areas (other than restaurants, rental car facilities,automobile parking or other concessions)for the movement of passengers and baggage. In order to be eligible to impose passenger facility charges at levels of $4.00 or $4.50 a project must meet certain additional requirements provided in the PFC Regulations. The PFC Act is subject to amendment and to repeal by the United States Congress. The FAA may also amend the PFC Regulation. PFCs are collected on behalf of airports by air carriers, certain foreign air carriers and their agents("Collecting Carriers"). The Collecting Carriers are authorized to withhold,as a collection fee(a)eleven cents per enplaning passenger from whom passenger facility charges is collected and(b)any investment income earned on the 52 amount collected prior to the due date of the remittance. The Collecting Carriers remit passenger facility charges to the Airport on a monthly basis. The PFC Act was amended in 1996 to provide that PFCs that are held by a Collecting Carrier constitute a trust fund that is held for the beneficial interest of the eligible agency imposing the fee and that the Collecting Carrier holds neither a legal nor equitable interest in the PFCs, except for any handling fee or retention of interest collected on unremitted proceeds. In addition, PFC Regulations require Collecting Carriers to account for PFCs collections separately and to disclose the existence and amount of funds regarded as trust funds in financial statements. The Collecting Carriers, however, are permitted to commingle PFCs collections with the carriers'other sources of revenue. PFC Revenues may be used, subject to applicable regulations,either to pay debt service on all or a portion of bonds secured by, or payable from, PFC Revenues or to pay for eligible capital improvements on a year-to-year basis, as specified in the applicable approval from the FAA. PFC applications for specific projects are approved by the FAA in specific total amounts and the County may impose the designated passenger facility charges only until it collects the authorized total amount. Interest earnings on the collections are treated as collections for purposes of the authorized total. The Airport has imposed PFCs since January 1992. The Airport has received approval from the FAA to collect and use PFCs under twenty applications for a total of$142,983,806 in collection authority. Through September 30, 2021, PFC Revenues received by the Airport, including investment earnings, totaled $29,731,843 (unaudited), of which$27,507,404 (unaudited)had been expended on approved project costs. The Airport is currently authorized to collect PFCs at a rate of $4.50 per enplaned passenger. PFC Application No. 19, approved January 2022, included $2.7 million for design costs for the Series 2022 Project. On July 11, 2022, the Airport received FAA approval for PFC Application #20, providing $106.3 million in collection authority to fund debt service for the Series 2022 Project at the$4.50 level. Currently,the Airport's PFC approvals authorize (but do not require)the use of PFCs to pay debt service on any bonds issued to finance PFC approved projects. The following table sets forth the PFCs collected at the Airport Fiscal Years ended 2017 through and including 2021 and 10 months of collections for Fiscal Year 2022: Passenger Facility Charges Fiscal Year Ended PFCs September 30 Collected 2017 $1,519,096 2018 1,589,189 2019 1,859,426 2020G) 1,681,104 2021 2,648,832 2022(2) 2,856,852 (1) COVID-19, which began impacting the U.S. in March, 2020, and the resultant government measures and changes in passenger travel behavior resulted in significant reductions in passenger traffic in Fiscal Year 2020 when compared to Fiscal Year 2019. See "CERTAIN INVESTMENT CONSIDERATIONS—Coronavirus(COVID-19)"herein for more information. (2) Includes collections for the first 10 months of the fiscal year. Source: Report of the Airport Consultant attached as APPENDIX C hereto. 53 Federal and State Grants The Airport and Airway Improvement Act of 1982 created the AIP, which is administered by the FAA and funded by the Airport and Airway Trust Fund. This fund is financed by various federal aviation user taxes. Grants are available to airport operators across the country in the form of"entitlement" funds and "discretionary" funds. Entitlement funds are apportioned annually based upon cargo volume and enplaned passengers, and discretionary funds are available at the discretion of the FAA based upon a national priority system. Actual entitlement funds will vary with the actual number of passenger enplanements and cargo volume,with total appropriations for the AIP and with any revision of the existing statutory formula for calculating such funds. The AIP grant program is subject to periodic reauthorization and appropriation by Congress. Congress passed the FAA Reauthorization Act of 2018 in October 2018 reauthorizing the FAA for Fiscal Years 2019 to 2023 and providing a total of$97 billion in funding. If not reauthorized in 2023, the AIP could be affected by automatic across-the-board spending cuts, known as sequestration. As a result,there can be no assurance that the FAA will receive spending authority and the Authority is unable to predict the level of available AIP funding it may receive. Pursuant to the PFC Act (as defined herein) and the Aviation Investment and Reform Act for the 21st Century, an airport's annual federal entitlement grants are reduced by 50% following the imposition of PFCs at the$3.00 level and by 75%following imposition at the$4.00 or$4.50 level. TSA has implemented congressionally mandated security fees to help finance the increased cost of securing the nation's aviation transportation system. The revenue generated from these security fees is utilized to help ensure the safe and efficient flow of people and commerce. The passenger fee, also known as the September 11 security fee, is collected by air carriers from passengers at the time air transportation is purchased. Air carriers then remit the fees to TSA. The fee is currently $5.60 per one-way trip in air transportation that originates at an airport in the U.S.,except that the fee imposed per round trip shall not exceed$11.20. FDOT implemented the Aviation Grant Program for certain aviation projects. FDOT matches FAA AIP grants at 12.5%for large hub airports and may match airport expenditures for projects not funded by FAA AIP at 50%. The Florida Legislature first used aviation fuel taxes imposed on aviation fuel sales to fund airport projects in 1983. The Florida Aviation Grant program was established to assist with aviation related projects. The Florida Strategic Intermodal System program funds projects that enhance the rail, road, airport and seaport systems. As the aviation fuel sales are dependent upon the industry as a whole, revenues generated and subsequent grants awarded are subject to a variety of potential conditions that may impact the annual fees generated. The Airport has received a Commitment Letter dated May 27,2022 from FDOT in the approximate amount of$38.9 million of FDOT grant funds for the period shown below and has identified this amount to fund a portion of the Series 2022 Project. Amounts to be received include the following: FDOT Funding-Series 2022 Project (State Fiscal Year Ending June 30,) 2022 2023 2024 2025 2026 $3,737,000 $6,157,371 $9,097,000 $10,000,000 $10,000,000 54 The County may receive "contributed capital" for projects from governmental and non-governmental sources that are typically non-recurring. The following table presents other contributed capital received by the County during Fiscal Years 2017 through and including 2021 (unaudited). Contributed Capital Received by County During Fiscal Years 2017-2021 (unaudited) 2017 2018 2019 2020 2021 Federal Sources $5,372,403 $19,448,877 $5,724,581 $16,702,137 $17,256,989 State Sources 894,107 2,454,975 829,941 1,747,040 5,054,071 Source: Monroe County,Florida. No assurance can be given that federal or state sources of funds will actually be received in the amounts or at the time contemplated by the County. See "CERTAIN INVESTMENT CONSIDERATIONS—The Federal Budget and Sequestration" herein for more information regarding federal grants. Retirement Plan and Other Post-Employment Benefits Retirement Plan. The County participates in the Florida Retirement System (the "FRS"), a cost sharing, multiple-employer public employee retirement system which covers all full-time and part-time employees. The FRS is contributory and is administered by the State of Florida. The FRS also provides for early retirement at reduced benefits and death and disability benefits. These benefit provisions and all other requirements are established by Chapters 112 and 121, Florida Statutes. Beginning in 2002, the FRS became one system with two primary plans, a defined benefit pension plan(the"FRS Pension Plan") and a defined contribution plan alternative to the defined benefit plan known as the Public Employee Optional Retirement Program (the "FRS Investment Plan"). Since year 2012, the State mandated that employees contribute 3% of pay to the FRS Pension Plan. The FRS offers several other plan and/or investment options that may be elected by the employee. Each offers specific contribution and benefit options. The FRS plan documents should be referenced for complete details of these options and benefits. See"APPENDIX A-GENERAL INFORMATION REGARDING MONROE COUNTY,FLORIDA"attached hereto. Participating employers must comply with the statutory contribution requirements. Section 121.031(3), Florida Statutes, requires an annual actuarial valuation of the FRS Pension Plan, which is provided to the Florida Legislature as guidance for funding decisions. Employer contribution rates under the uniform rate structure (a blending of both the FRS Pension Plan and FRS Investment Plan rates) are recommended by the actuary but set by the Florida Legislature. For Fiscal Year 2021, the Airport's contributions totaled$318,603. See Note 6 to the Airports Financial Statement for the year ended September 30, 2021 for more information regarding the FRS plans. Additional information is also provided in "APPENDIX A - GENERAL INFORMATION REGARDING MONROE COUNTY,FLORIDA." A copy of the FRS's June 30, 2021 annual report can be obtained by writing to the Division of Retirement, P.O. Box 9000, Tallahassee, Florida 32315-9000,or by phone(850)488-5706. 55 Other Post-Employment Benefits. The County provides post-retirement health care benefits, through participation in the GHPLC Plan, to all employees who retire from the County. The GHPLC provides medical,dental,vision and life insurance benefits("OPEB")to County retirees and their spouses. As of September 30, 2021, the date of the latest actuarial valuation, plan participation consisted of 550 current active plan members and 425 retirees and beneficiaries receiving postemployment health care benefits. The Actuary determined the Airport's actuarial accrued liability related to OPEB, which approximates the present value of all future expected postretirement life and medical premiums and administrative costs which are attributable to the past service of those retired and active employees, at $597,000 as of Fiscal Year 2021. The Actuary also determined the Airport's annual required contribution ("ARC"), which is the portion of the total accrued actuarial liability allocated to the current Fiscal Year needed to pay both normal costs(current and future benefits earned)and to amortize the unfunded accrued liability (past benefits earned, but not previously provided for), to be $45,700 as of Fiscal Year 2021. The calculation of the accrued actuarial liability and the ARC is, by definition and necessity, based upon a number of assumptions, including interest rate on investments, average retirement age, life expectancy, healthcare costs per employee and insurance premiums, many of which factors are subject to future economic and demographic variations. See Note 5 to the Airport's Financial Statement for the year ended September 30, 2021 for more information regarding the other post-employment benefits. See "APPENDIX B-2 - KEY WEST INTERNATIONAL AIRPORT FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 2021 AND REPORT OF THE INDEPENDENT AUDITOR" attached hereto. Additional information is also provided in "APPENDIX A - GENERAL INFORMATION REGARDING MONROE COUNTY,FLORIDA." INFORMATION CONCERNING THE SIGNATORY AIRLINES General Each Signatory Airline (or its respective parent corporation) serving the Airport is subject to the information reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, must file reports and other information with the Securities and Exchange Commission (the "Commission"). Certain information, including financial information as of particular dates concerning each such Signatory Airline or its respective parent corporation, is disclosed in reports and statements filed with the Commission. In addition,certain non-signatory airlines may also file reports and information with the Commission. Such reports and statements can be inspected in the Public Reference Section at the SEC Headquarters, 100 F Street, N.E., Washington, DC 20549, and copies of such reports and statements can be obtained from the Public Reference Section at prescribed rates. The SEC also maintains a website that contains reports,proxy and information statements and other written information regarding companies that file electronically with the SEC. The address of the website is httl2://www.sec.go . In addition, each domestic airline is required to file periodic reports of financial and operating statistics with the United States Department of Transportation. Such reports can be inspected at the following location: DOT Dockets Office,Research and Innovative Technology Administration,Bureau of Transportation Statistics, 1200 New Jersey Avenue, S.E., Room W12-140, Washington, D.C. 20590 and copies of such reports can be obtained from the United States Department of Transportation at prescribed rates. Foreign flag airlines are not required to file financial reports or operating statistics with the United States Department of Transportation. THE COUNTY HAS NO RESPONSIBILITY FOR THE 56 COMPLETENESS OR ACCURACY OF INFORMATION AVAILABLE FROM THE ABOVE-MENTIONED SOURCES. Signatory Agreement An agreement between the County and all passenger airlines serving the Airport became effective October 1, 2021 ("Signatory Agreement"). Allegiant Air, American Airlines, Delta Air 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 (unless earlier terminated as provided for in the Signatory Agreement). Failure to enter into an extended or new Signatory Agreement will not relieve the County from any of its obligations under the Bond Resolution, including the rate covenant. The Signatory Agreement sets forth the rights and obligations of the parties as well as the procedures for calculating airline rentals, fees and charges for the use and occupancy of the arrivals terminal and the departures terminal buildings and the Airfield. The Signatory Agreement also sets forth 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 Charges") and provides for mid-year adjustments,if necessary,and an annual settlement based upon actual costs and activity.The Airline Rates and Charges are calculated under what is 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 Complex.The County is required to pay for the non-airline areas of the Airport with non-airline revenue. Each Signatory Airline is obligated to airline rents, fees and charges totaling a minimum annual commitment of$450,000 during the term of the Signatory Agreement. Pursuant to the Signatory Agreement,JetBlue has an obligation to maintain flight status six days per week annually. However, JetBlue had some internal changes (in addition to its possible acquisition) and they dropped a flight to the Airport for approximately 90 days,which put them out of compliance with the six days per week annually requirement. The Airport notified JetBlue immediately once the deficiency was discovered and have been working with JetBlue to correct this error in compliance with the terms of the Signatory Agreement. The Airport believes a solution is likely and JetBlue will return to compliance with the Signatory Agreement. REPORT OF THE AIRPORT CONSULTANT Scope of the Report The Report presents the analysis undertaken by Newton & Associates, Inc. in conjunction with Ricondo&Associates,Inc. (collectively,the"Airport Consultant")to demonstrate the ability of the County to comply with the requirements of the Bond Resolution on a pro forma basis for the Forecast Period based on the assumptions regarding the issuance of the Series 2022 Bonds and funding of the 2022 Project. In developing its analysis,the Airport Consultant has reviewed historical trends and formulated projections, based on the assumptions put forth in the Report,which have been reviewed and agreed to by the County, 57 regarding the ability of the County to generate demand for air service, the trends in air service and passenger activity at the Airport, and the financial performance of the Airport. To develop the pro forma analysis of the County's financial performance, the Airport Consultant reviewed the agreements that establish the business arrangements between the Airport and its various tenants, including but not limited to the commercial airlines serving the Airport. The Airport generates the majority of its Revenues from commercial airlines and private aircraft operators through airfield usage fees and various rentals for terminal and other spaces;fees and rents assessed to concessionaires providing various goods and services to passengers and other users of Airport facilities; fees and rents assessed to rental car operators serving the Airport;and fees for public parking and commercial vehicle access to Airport facilities. These Revenues are in large measure driven by passenger demand for air service from the Airport,which is a function of national and local economic conditions,and the ability and willingness of the commercial airlines to supply service at a level commensurate with this demand. Thus, the Airport Consultant reviewed the historical relationships between economic activity and demand for air service and the financial performance of the Airport based on forecasted demand. In 2020, the airline industry and the Airport experienced significant changes resulting from the COVID-19 pandemic and efforts to contain it. The Airport Consultant's review of activity included considerations on the effect of the COVID-19 pandemic on airline travel, and the airlines' provision of air service going forward after COVID-19. Based on this historical review, the Airport Consultant developed assumptions regarding these factors and relationships through the Forecast Period, which provide the basis for the forecasts of passenger activity and the projections of financial performance presented in the Report attached hereto as APPENDIX C. The financial analysis described in the Report includes a Forecast Period through Fiscal Year 2027. The techniques and methodologies used by the Airport Consultant in preparing the Report are consistent with industry practices for similar studies in connection with the issuance of airport revenue bonds. While the Airport Consultant believes that the approach and assumptions used are reasonable, some assumptions regarding future trends and events discussed in the Report, including, but not limited to, the implementation schedule of the 2022 Project, the forecasts of passenger-related activity, and the projections of financial performance, may not materialize. Therefore, actual performance will likely differ from the projections set forth in the Report, and the variations may be material. See APPENDIX C attached hereto. Summary of Financial Analysis and Assumptions Results of the financial analysis presented in the Report are summarized below: Total annual enplaned passengers are forecast to grow from 739,504 in Fiscal Year 2022 to 781,909 by Fiscal Year 2027.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 Fiscal Year 2022 level to 704,628 in Fiscal Year 2023 (- 4.7%). Thereafter, enplaned passengers are forecast to rebound by 3.8%in Fiscal Year 2024 (731,316) and then reach 781,909 in Fiscal Year 2027. 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 with a dense, all-economy configuration of 156 seats, which is 77%higher than the average 88.2 seats per 58 departure for all flights departing the Airport in Fiscal Year 2021.Average seats per departure are forecast to increase to 95.9 in Fiscal Year 2027. Revenues from airlines comprise revenues derived from landing fees,Terminal rents, and security fees, paid by the passenger airlines operating at the Airport. Collectively, airline revenues are projected to continue to represent the largest source of Revenues 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. 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 Terminal and Airfield. Anticipated Operation and Maintenance Costs increases would include general price level increases over existing Operation and Maintenance Costs levels and increases resulting from the larger Terminal facility produced by the Series 2022 Project. Capital improvements which would impact the airline facilities would include the Series 2022 Project(debt service on the 2022 Bonds)and any other improvements which may be completed by the County during the Forecast Period. Because the County, however, anticipates paying the majority of Series 2022 Bonds debt service with Eligible PFC Revenues, airline rates and charges are not expected to increase significantly as a result of financing the Series 2022 Project with the Series 2022 Bonds. If in any year, however, Eligible PFC Revenues are insufficient to pay the Series 2022 Bonds debt service in full, airline rates and charges may be adjusted by the County to include the amount of Series 2022 Bonds debt service allocable to the airline rate base. Upon its completion, the Series 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 relocated to the secure side (beyond the passenger security checkpoint)of the Terminal. The new food and beverage 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. This should increase the level of revenue per enplanement generated by these concessions. According to the Airport,the number of food,beverage and retail locations will be increased in the new passenger concourse, and product offerings will be significantly enhanced. As a result, the Airport expects that total food,beverage and retail concession revenues will experience a 20%increase in Fiscal Year 2025, the first year the new facilities are expected to be operational. Based on the estimated Fiscal Year 2022 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 Fiscal Year 2025,restaurant concession revenues are projected to grow from $649,768 in Fiscal Year 2022 to $824,433 in Fiscal Year 2027,and Gift Shop concession revenues are projected to increase from$244,474 in FY 2022 to$310,191 in Fiscal Year 2027. Based upon the projected level of revenue passengers during the Forecast Period, the County is expected to collect an estimated $2,856,852 in PFCs during Fiscal Year 2022, growing to an estimated$2,889,939 in Fiscal Year 2025 (date of beneficial occupancy of the Series 2022 Project) and then to an estimated$3,020,672 in Fiscal Year 2027. The projections of enplaned passengers and aircraft operations in the Report were based on several underlying assumptions,including the following: Activity at the Airport will not be constrained by facilities,or lack thereof. 59 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. No bankruptcies, or consolidations are incorporated into the projections. New airline alliances, should they develop, would be restricted to code- sharing and joint frequent flyer programs,and they would not reduce airline competition at the Airport. For the analyses, and like the FAA's nationwide forecasts,it was assumed that there will be no terrorist incidents during the Forecast Period that would have significant,negative,or prolonged effects on aviation activity at the Airport or nationwide. Additional economic disturbances will occur during the Forecast Period, causing year-to- year variations in airline traffic. However,traffic at the Airport and nationwide is projected to increase over the long-term. It is assumed that no additional major"acts of God"that may disrupt the local, national or global airspace system or negatively affect aviation activity will occur during the Forecast Period. Long-term growth was modeled on pre—COVID-19 socioeconomic variables with long-term economic growth estimates assumed to return to projected socioeconomic performance as enplaned passengers return to pre-COVID-19 activity levels(i.e.,Fiscal Year 2019). COVID-19 Recovery The severity and duration of the downturn in air travel demand, as well as the timing, pace, and length of the recovery, are uncertain. Enplaned passengers surpassed Fiscal Year 2019 volumes in Fiscal Year 2021. Enplaned passengers are forecast to increase in Fiscal Year 2022,in line with scheduled capacity growth. A slight decrease in enplaned passengers is forecast to occur in Fiscal Year 2023 due to airlines rebalancing capacity across their route networks as COVID-19 pandemic related factors diminish and demand for business travel and long-haul international travel returns. Enplaned passengers are forecast to increase starting in Fiscal Year 2024. Activity levels are expected to remain significantly higher than 2019 levels through the Forecast Period, as it is expected that growth which occurred in recent years is sustainable due to increased awareness of the Key West market and airlines' continued service levels even as demand has returned in other leisure markets. The development of the recovery projections incorporated the following assumptions and factors in the Report: • While the widespread deployment of effective vaccines to inhibit COVID-19 infection and treatments for illness have recently 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. It is assumed a progressive reduction in travel restrictions will occur, or the efficiency and availability of approaches to meet travel requirements will advance. In June 2022,the U.S.lifted testing restrictions for incoming travelers. 60 • 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 changes are not assumed in the forecast. [Remainder of page intentionally left blank] 61 Projected Net Revenues and Debt Service Coverage Using the assumptions described above and in APPENDIX C attached hereto, the Airport Consultant developed projections of revenues, expenses, debt service and debt service coverage for the Forecast Period as shown in the table below. Estimated FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 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 Airline Terminal Rents 2,166,949 2,229,335 2,352,541 4,165,652 4,592,685 4,516,469 Airline Security Charges 1,076,770 1,524,153 1,630,844 1,745,003 1,411,426 1,510,226 Passenger Boarding Bridge Charges 0 0 0 245,000 262,150 490,501 Total Airline Revenues $6,281,689 $6,922,823 $7,305,129 $9,595,410 $10,092,479 $10,314,469 Non-Airline Revenues: Rental Car Concessions $2,900,000 2,763,233 $2,867,891 $2,933,587 $2,999,836 $3,066,295 Rental Car Rents $661,266 914,101 $914,101 $914,101 $914,101 $914,101 Public Parking 550,000 633,561 657,558 672,621 687,810 703,048 General Aviation 309,000 318,270 327,818 337,653 347,782 358,216 Ground Transportation 450,000 428,778 445,018 455,212 465,492 475,804 Advertising 200,000 190,568 197,786 202,316 206,885 211,469 Restaurant 649,768 619,124 642,574 788,752 806,564 824,433 Gift Shop 244,474 232,944 241,767 296,766 303,468 310,191 Air Cargo 25,679 29,206 30,645 31,619 35,055 34,689 Other Rents 538,734 554,896 571,543 588,689 606,350 624,540 CARES 640,701 0 0 0 0 0 Other Miscellaneous Revenue 1,500 1,500 1,500 1,500 1,500 1,500 Total Non-Airline Revenues $7,171,122 $6,686,181 $6,898,200 $7,222,816 $7,374,845 $7,524,286 Total Gross Revenues $13,452,812 $13,609,004 $14,203,328 $16,818,225 $17,467,324 $17,838,755 OPERATION AND MAINTENANCE COSTS: Personal Services $3,881,961 $4,076,059 $4,279,862 $4,493,855 $4,718,548 $4,954,475 Contractual Services, Supplies/Materials&Other 3,096,262 3,313,000 3,544,910 3,793,054 4,058,568 4,342,668 Security Services-MCSO(Net) 2,284,733 2,444,664 2,615,791 2,798,896 2,994,819 3,204,456 Transfers-County Overhead 477,280 510,690 546,438 584,689 625,617 669,410 $9,740,236 $10,344,413 $10,987,001 $11,670,494 $12,397,551 $13,171,009 Estimated Incremental Operation and Maintenance 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 NET REVENUES $3,712,576 $3,264,591 $3,216,327 $3,931,271 $3,723,321 $3,238,609 PFC Eligible Revenues $0 $0 $0 $2,600,000 $2,600,000 $2,600,000 Amount Available for Debt Service $3,712,576 $3,264,591 $3,216,327 $6,531,271 $6,323,321 $5,838,609 Debt ServiceM $0 $0 $0 $2,612,000 $2,458,250 $2,455,750 Debt Service Coverage(2) N/A N/A N/A 2.50x 2.57x 2.38x Subordinate Debt Service(') $0 $12,000 $12,000 $167,500 $323,000 $323,000 Remaining Revenue $3,712,576 $3,252,591 $3,204,327 $3,751,771 $3,542,071 $3,059,859 [Footnotes on following page] 62 1> Interest on the Series 2022 Bonds is capitalized through October 1,2024. Principal payments on the Series 2022 Bonds do not begin until Fiscal Year 2025. (2) See"SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Rate Covenant"herein. (3) Estimated payments on the Grant Anticipation Note. See"THE SERIES 2022 PROJECT AND PLAN OF FINANCE"herein for more information. Source: Report of the Airport Consultant attached hereto as APPENDIX C. Conclusions of the Airport Consultant 1. Based on the analyses set forth in the 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 Resolution. 2. The Airport Consultant believes that the range of cost per enplaned passenger throughout the Forecast Period included within the Report is reasonable, considering historical cost per enplaned passenger levels, the physical scope and cost of the Series 2022 Project, and the forecast of Operation and Maintenance Costs to be required upon completion of the Series 2022 Project. CERTAIN INVESTMENT CONSIDERATIONS General This section provides a general overview of certain investment considerations that should be taken into account,in addition to the other matters set forth in this Official Statement,in evaluating an investment in the Series 2022 Bonds and the sufficiency of the Pledged Funds expected to be generated by the Airport. This section is not meant to be a comprehensive or definitive discussion of the risks associated with an investment in the Series 2022 Bonds, and the order in which this information is presented does not necessarily reflect the relative importance of the investment considerations. Potential investors in the Series 2022 Bonds are advised to consider the following factors, among others, and to review this entire Official Statement to obtain information essential to the making of an informed investment decision. Any one or more of the investment considerations discussed below, among others, could lead to a decrease in the market value and/or the marketability of the Series 2022 Bonds. There can be no assurance that other investment considerations not discussed herein will not become material in the future. Limited Obligations The Series 2022 Bonds,together with any Additional Bonds,when and if issued,are limited special obligations of the County payable from,and equally and ratably secured by,a lien on(1)the Net Revenues, (2)Eligible PFC Revenues, (3)any Hedge Receipts, and (4)until applied in accordance with the provisions of the Bond Resolution, all moneys, including investments thereof, in the funds and accounts established thereunder, 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 Series 2022 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 the terms of the Bond Resolution, and (C) moneys on deposit in a subaccount of the Reserve Account to the extent moneys on deposit therein shall be pledged solely for the payment of the Series of Bonds for which it was established in accordance with the provisions of the Bond Resolution. No mortgage of any of the physical properties forming a part of the Airport or any lien thereon 63 or security interest therein has been given. The Series 2022 Bonds are not general obligations of the County, and neither the taxing power of the County nor the State is pledged as security for the Series 2022 Bonds. See"SECURITY FOR THE BONDS"in this document. Factors Affecting Air Transportation Industry The generation of Revenues is heavily dependent on the volume of the commercial flights, the staffing of available pilots and air traffic controllers, flight cancellations, the number of passengers, and the amount of cargo processed at the Airport. All are dependent upon a wide range of factors including: (1) local, national and international economic conditions, including international trade volume, (2) regulation of the airline industry, (3) passenger reaction to disruptions and delays arising from security concerns and government shutdowns, (4) airline operating and capital expenses, including security,labor and fuel costs, (5)environmental regulations, (6) the capacity of the national air traffic control system, (7) currency values and (8) world-wide infectious diseases (e.g., Ebola, SARS and COVID-19). The airline industry has faced and will continue to face economic challenges,reflecting both increased costs and overall economic conditions. As a result,airlines have faced major financial losses and,in some cases,bankruptcy. See "Airline Economic Considerations Airline Bankruptcies" under this caption. Increased costs and other factors arising from the September 11, 2001 terrorist attacks and related regulatory reaction are discussed separately below in"Security Requirements."Other particular factors are discussed below. 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 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. Airline Economic Considerations Overview The financial strength and stability of airlines serving the Airport will affect future airline traffic. In the nine years prior to 2020,the U.S.airline industry has been profitable,following 10 years of stagnation during which carriers accumulated combined losses of $50 billion. To mitigate such losses, U.S. carriers merged, reduced their route networks and flight schedules, and negotiated with employees, lessors, and vendors to cut costs. These cost mitigation tactics have often occurred within the context of certain carriers' Chapter 11 federal bankruptcy proceedings.In the last 15 years,the mega-mergers have consisted of Delta and Northwest in 2008, Southwest and AirTran in 2010 and United and Continental in 2010. The most recent mega-merger is that between American Airlines and U.S.Airways in December 2013 and on a lesser scale,Virgin America and Alaska Airlines merged in 2018. On February 7,2022,Spirit Airlines and Frontier Airlines announced their intention to merge in the second half of 2022,pending 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. On July 27, 2022, Frontier and Spirit called off the proposed merger and on July 28, 2022, JetBlue and Spirit reached an agreement for JetBlue to purchase Spirit. Spirit does not serve the Airport,but JetBlue does currently serve the Airport. JetBlue and Spirit will continue to operate as independent airlines until after the transaction 64 closes. Consolidation 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 US airline industry could affect the capacity offered at the Airport and could alter the competitive landscape. Largely as a result of consolidations, U.S. scheduled air carriers' overall domestic capacity, as measured by available seat miles,declined 10.3%from 2007 to 2009 with the 2007 measurement as the high and the 2009 measurement as the low.By 2015,domestic capacity by U.S.scheduled carriers had recovered back to the 2007 level and by June 2019 domestic capacity had increased to 18.1%above 2007, as measured by available seat miles. By comparison, international capacity for U.S. air carriers has increased 20.3% between 2007 and June 2019, as measured by available seat miles. The price and availability of jet fuel are critical and uncertain factors affecting airline operating economics. The price of oil and the associated cost of jet fuel is the largest single cost affecting the airline industry. The volatility in jet fuel prices and the recent and sustained, significant increase in jet fuel prices in part due to geopolitical conflict,which track just above crude oil prices,has significantly affected airlines' operating costs over the past several years. In April 2022,the average price of jet fuel was$3.59 per gallon, having grown steadily since May 2020. Fuel costs are expected to remain volatile and may affect future increases in passenger traffic, which depend on stable international conditions as well as national and global economic growth. Any resumption of financial losses could force airlines to further retrench,merge,consolidate, seek bankruptcy protection,discontinue marginal operations,or liquidate.The restructuring,merging,or liquidation of one or more of the large network airlines could drastically affect air service at many connecting hub airports, offer business opportunities for the remaining airlines, and change air travel patterns throughout the U.S. and the world aviation system. Although fuel cost is of major importance to the airline industry,future prices and availability are uncertain and fluctuate based on numerous factors. These can include supply-and-demand expectations, geopolitical events,fuel inventory levels,monetary policies,regulatory efforts to reduce aircraft emissions and economic growth estimates. Historically,certain airlines have also employed fuel hedging as a practice to provide some protection against future fuel price increases. While fuel hedging has generally not been used by airlines in recent years,it remains as a potential option to mitigate fuel cost risk. Airline Bankruptcies Airlines using the Airport may file for protection under U.S.or foreign bankruptcy laws, and any such airline (or a trustee on its behalf) would usually have the right to seek rejection of any executory airport lease or contract, including a Signatory Agreement, within certain specified time periods after the filing, unless extended by the bankruptcy court. In addition, during the pendency of a bankruptcy proceeding, a debtor airline using the Airport typically may not, absent a court order,make any payments to the County either on account of services provided to the airline prior to the bankruptcy filing date or the airline's use of airport facilities prior to the bankruptcy filing date(such services or use being referred to as "pre-petition"items). Thus, the County's stream of payments from a debtor airline may be interrupted to the extent such payments are for pre-petition items,including any accrued rent,landing fees,aviation fees, and PFCs. For any domestic or foreign airline not intending to continue operating at the Airport,the airline will likely reject all contracts, including a Signatory Agreement, with the Airport, and the Airport's recovery of amounts owed to it under the contracts prior to the filing date will typically be limited to the 65 security deposits on hand for that airline and the percentage distribution of the airline's assets that all creditors receive at the conclusion of the bankruptcy proceeding. An airline that has executed a Signatory Agreement or other executory contract with the County and seeks protection under the U.S. bankruptcy laws must assume or reject (a) its Signatory Agreement within 120 days after the bankruptcy filing (subject to court approval, a one-time 90-day extension is allowed(further extensions are subject to the consent of the County and approval of the Bankruptcy Court), and (b)its other executory contracts with the County prior to the confirmation of a plan of reorganization. In the event of assumption and/or assignment of any agreement to a third party,the airline would be required to cure any pre-and post-petition monetary defaults and provide adequate assurance of future performance under the applicable Signatory Agreement or other agreements. Rejection of a Signatory Agreement or other agreement or executory contract will give rise to an unsecured claim by the County for damages,the amount of which in the case of a Signatory Agreement or other agreement is limited by the United States Bankruptcy Code generally to the amounts unpaid prior to bankruptcy plus the greater of(i)one year of rent or(ii) 15%of the total remaining lease payments,not to exceed three years. However, the amount ultimately received in the event of a rejection of a Signatory Agreement or other agreement could be considerably less than the maximum amounts allowed under the United States Bankruptcy Code. Certain amounts unpaid as a result of a rejection of a Signatory Agreement or other agreement in connection with an airline in bankruptcy, such as airfield, terminal, concourse and ramp costs would be passed on to the remaining airlines under their respective Signatory Agreements, thereby increasing such airlines' cost per enplanement, although there can be no assurance that such other airlines would be financially able to absorb the additional costs. In addition, pre-petition payments made by an airline in bankruptcy within 90 days of filing a bankruptcy case could be deemed to be an"avoidable preference" under the United States Bankruptcy Code and thus subject to recapture by the debtor or its trustee in bankruptcy. In general, risks associated with bankruptcy include risks of substantial delay in payment or of reduced or non-payment and the risk that the County may be delayed or prohibited from enforcing any of its remedies under the agreements with a bankrupt airline. With respect to an airline in bankruptcy proceedings in a foreign country,the County is unable to predict what types of orders and/or relief could be issued by foreign bankruptcy tribunals,or the extent to which any such orders would be enforceable in the United States. 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 sufficient levels of staffing to operate at continued increased levels of capacity. Airlines have responded by accelerating hiring and training of new staff and, in some instances, have had to cancel flights due to staffing shortages at a higher than historical average. 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. 66 The Federal Budget and Sequestration Another factor that has affected the airline industry in the last several years is the federal deficit reductions enacted through implementation of the sequestration provisions of the Budget Control Act of 2011 ("BCA"), which established automatic cuts to the federal legislation's discretionary budget authority based upon certain spending thresholds. The sequestration provisions were first triggered in 2013,cutting the budgets of federal agencies,including the FAA, Customs and Border Patrol Agency("CBP") and TSA. While reductions have continued in some form in every year since, Congress has acted several times to prevent "sequester" cuts to discretionary programs by lifting the discretionary spending caps. The most recent of these actions was the Bipartisan Budget Act of 2019("BBA 2019")that increased the spending caps for federal Fiscal Years 2020 and 2021 and should prevent automatic discretionary sequester cuts for these two years.These are the final two years for which discretionary spending caps are scheduled to be in effect under the BCA. Per the Congressional Budget Office, federal agencies did not have to cut their spending because of sequestration in Fiscal Year 2020. Should sequestration be triggered in Fiscal Year 2022 (i.e.,exceed the increased spending caps), it could adversely affect FAA, CBP and TSA budgets and operations and the availability of certain federal grant funds typically received annually by the Airport. Such budget cuts could also lead to the FAA, CBP and TSA being forced to implement furloughs of their employees and freeze hiring, and could result in flight delays and cancellations. PFC Collections Termination of PFCs The County's legal authority to impose and use PFCs is subject to certain terms and conditions provided in the PFC Act,the PFC Regulations and each PFC application. If the County fails to comply with these requirements, the FAA may take action to terminate or to reduce the County's legal authority to impose or to use PFCs. Some of the events that could cause the County to violate these provisions are not within the County's control. In addition, failure to comply with the provisions of certain federal noise pollution acts may lead to termination of the County's authority to impose PFCs. Amendments to PFC Act or PFC Regulations There is no assurance that the PFC Act will not be repealed or amended or that the PFC Regulations or any PFC application will not be amended in a manner that would adversely affect the County's ability to collect and use PFCs. Collection of the PFCs The ability of the County to collect PFCs depends upon a number of factors including the operation of the Airport by the County,the use of the Airport by Collecting Carriers,the efficiency and ability of the Collecting Carriers to collect and remit PFCs to the County and the number of enplanements at the Airport. The County relies upon the Collecting Carriers' collection and remittance of PFCs, and both the County and the FAA rely upon the airlines' reports of enplanements and collection statistics. Notwithstanding provisions of the PFC Act and the FAA Regulations requiring Collecting Carriers to account for PFC collections separately and indicating that those PFC collections are to be regarded as funds held in trust by the Collecting Carriers for the beneficial interest of the public agency imposing the PFC,recent bankruptcy court decisions suggest that in a bankruptcy proceeding involving a Collecting Carrier,the PFC collections 67 in the Collecting Carrier's custody may not be treated as trust funds and that the County may not be entitled to any priority over other creditors of the collecting airline to such funds. Possible Bankruptcy Effects Applicable federal legislation and regulations provide that PFCs collected and held by an airline constitute a trust fund for the benefit of the applicable airport and create additional protections intended to ensure the regular transfer of PFCs to airports in the event of an airline bankruptcy. There can be no assurance,however,that during the bankruptcy of any airline,payment to the Airport of PFCs will not be delayed or reduced. Federal Legislation Federal legislation affects the AIP grant funding that the County and the Airport receives from the FAA, the County's PFC collections, and the operational requirements imposed on the County. The FAA operates under an authorization-appropriation process created by Congress in which the authorization bill continues an agency's operation and the appropriation bill provides the funding for the activity under the authorization bill.Most authorization bills are for multiple years while the appropriation bills are done on an annual basis.In some cases,the bills can be combined as noted below. The FAA Reauthorization Act of 2018 (the "2018 Reauthorization Act") was signed into law on October 5, 2018. The 2018 Reauthorization Act extends general expenditure authority for the Airport and Airway Trust Fund from September 30, 2018, through September 30, 2023, and extends aviation taxes funding the Airport and Airway Trust Fund for the same period. In addition,the 2018 Reauthorization Act removes obsolete restrictions on the PFCs, improves the aircraft certification process, improves aviation safety, prohibits involuntary bumping of passengers once they have already boarded the plane, and addresses miscellaneous provisions relating to air travel and the FAA. The 2018 Reauthorization Act also contained authority for an additional $1 billion in annual discretionary AIP grants subject to annual appropriations during the Fiscal Years 2019 through and including 2023 with not less than 50 percent of supplemental discretionary funds to be used at nonprimary,nonprimary commercial service,reliever,non- hub primary, and small hub primary airports. There is no assurance that the FAA will receive spending authorization, and the FAA could be impacted by sequestration, as previously discussed. The Airport cannot predict the level of available AIP funding it may receive. Airport Security Requirements General Legislative and regulatory requirements since 2001,relating to security,have imposed substantial costs on the Airport and its airlines.The most significant ones are discussed below. Federal legislation created the TSA, an agency within the Department of Homeland Security ("DHS"). Mandates of federal legislation and federal agencies such as TSA and DHS have imposed extensive new requirements related to screening of baggage and cargo (including explosive detection), screening of passengers,employees and vehicles,and airport buildings and structures,among other things. 68 The Federal Aviation and Transportation Security Act ("ATSA") makes airport security the responsibility of TSA. The Homeland Security Act of 2002 and subsequent directives issued by DHS have mandated stronger cockpit doors on commercial aircraft,an increased presence of armed federal marshals on commercial flights,establishment of 100%checked baggage screening and replacement of all passenger and baggage screeners with federal employees who must undergo criminal history background checks and be U.S. citizens, among other things. ATSA also mandates airport security measures that include: (1) screening or inspection of all individuals, goods, property, vehicles and equipment before entry into secured and sterile areas of the airport, (2) security awareness programs for airport employees, (3) screening all checked baggage for explosives with explosives detection systems ("EDS") or other means of technology approved by the Undersecretary of the United States Department of Transportation, (4)deployment of sufficient EDS for all checked baggage, and (5) operation of a system to screen, inspect or otherwise ensure the security of all cargo to be transported in all-cargo aircraft.Due to a lack of TSA funding, airports have borne some or all of the cost of designing, constructing, and installing automated in-line baggage screening systems and passenger screening checkpoints to meet the specifications that the TSA screening process requires for operation at full design capacity. Airport security programs have also been affected by an additional requirement for the Airport to control access at the TSA passenger screening checkpoint exit lanes during TSA non-operational hours and on a 24 hours/7 days a week basis for exit lanes that are not co-located next to the passenger screening checkpoints. This function was previously performed by TSA personnel. Additionally, TSA continues to pressure airports to increase the rate of required random inspections of employees and vehicles accessing the restricted areas of the Airport. Thus far, the Airport has not only been able to meet but also to exceed TSA's expectations in this regard with its long-standing static and random employee screening program. Cargo Security Both federal legislation and TSA rules have imposed additional requirements relating to air cargo. These include providing information for a central database on shippers,extending the areas of the Airport subject to security controls, and criminal background checks on additional employees, which inhibits the ability of operators to hire temporary workers during peak periods. TSA also requires carriers to screen 100%of all loaded cargo on passenger and on all-cargo aircraft. TSA has developed a Certified Cargo Screening Program ("CCSP") for a "supply chain-wide solution" to cargo security that will certify cargo shippers so that they are able to screen cargo earlier in the chain. The Airport currently is actively participating in the CCSP program. Cost and Schedule of Capital Improvements Program The estimated costs and schedule of the Series 2022 Project and other CIP projects described herein under the captions "THE SERIES 2022 PROJECT AND PLAN OF FINANCE" and "THE COUNTY AND THE AIRPORT - Capital Improvement Program and Funding Sources" depend on various sources of funding and are subject to a number of uncertainties. Ability to complete the Series 2022 Project and the CIP may be adversely affected by various factors including: (i) estimating variations, (ii) design and engineering variations, (iii)changes to the scope of the projects, (iv)delays in contract awards, (v)material and/or labor shortages, (vi) unforeseen site conditions, (vii) casualty events or adverse weather and environmental conditions, (viii)contractor defaults, (ix)labor disputes, (x)unanticipated levels of inflation 69 and (xi) additional security improvements and associated costs mandated by the federal government. A delay in the completion of the Series 2022 Project and certain projects under the CIP could delay the collection of Revenues in respect to such projects, increase costs for such projects, and cause the rescheduling of other projects. There can be no assurance that the cost of construction of the Series 2022 Project and other CIP projects will not exceed the currently budgeted dollar amount or that the completion of the projects will not be delayed beyond the currently projected completion dates. Any schedule delays or costs increases could result in the need to issue additional bonds beyond those currently projected as a funding source for the Series 2022 Project and other CIP projects. Growth of Transportation Network Companies A significant source of non-airline revenues is generated from ground transportation activity, including use of on-Airport parking facilities,rental car transactions, and trip fees paid by taxi,limousine, and transportation network companies such as TNCs that connect paying passengers with drivers who provide the transportation using their own commercial and non-commercial vehicles. In 2017,the Airport negotiated licenses with Uber and Lyft. The Airport receives $3.50 per TNC passenger pickup at the Airport. There is currently no drop-off fee. There can be no assurance that there will not be further declines in the revenues that the Airport receives from other ground transportation activities. Cyber-Security Computer networks and systems used for data transmission and collection are vital to the efficient operations of the County. County systems provide support to departmental operations and constituent services by collecting and storing sensitive data, including intellectual property, security information, proprietary business process information, information applying to suppliers and business partners, and personally identifiable information of customers, constituents and employees. The secure processing, maintenance and transmission of this information is critical to departmental operations and the provision of citizen services. Increasingly,entities in every sector are being targeted by cyberattacks seeking to obtain confidential data or disrupt critical services. A rapidly changing cyber risk landscape may introduce new vulnerabilities that attackers/hackers can exploit in attempts to effect breaches or service disruptions. Employee error and/or malfeasance may also contribute to data loss or other system disruptions. Any such breach could compromise networks and the confidentiality, integrity and availability of systems and the information stored there. Additionally, during the 2022 Florida Legislative session, CS/HB 7055 was passed which requires State agencies and local governments, such as the County, to report all ransomware incidents and high severity level cybersecurity incidents to the Cybersecurity Operations Center("CSOC")and the Cybercrime Office within the Florida Department of Law Enforcement as soon as possible but no later than 48 hours after discovery of the cybersecurity incident and no later than 12 hours after discovery of a ransomware incident. Local governments must also report to the sheriff. CS/HB 7055 requires state agencies to report low level cybersecurity incidents and provides that local governments may report such incidents. It also requires state agencies and local governments to submit after-action reports to FLDS following a cybersecurity or ransomware incident. CS/HB 7055 requires the CSOC to notify the Legislature of high severity level cybersecurity incidents. State agency and local government employees are required to undergo certain cybersecurity training within 30 days of employment and annually thereafter. Further, 70 local governments are required to adopt cybersecurity standards that safeguard the local government's data,information technology("IT"), and IT resources. The effective date of CS/HB 7055 was July 1,2022. Climate Change The State, Monroe County and Key West in particular are naturally susceptible to the effects of extreme weather events and natural disasters including floods, droughts, and hurricanes, which could result in negative economic impacts on coastal and island communities within the County. Such events over long periods of time can be exacerbated by rising sea levels. The occurrence of such weather events could damage the local infrastructure that provides essential services to the County.The economic impacts resulting from such weather events could include a short-term loss of property values,a decline in revenue base,and escalated recovery costs.No assurance can be given as to whether future extreme weather events will occur that could materially impair the financial condition of the County or the Airport. The Airport has a long term development plan to raise runways, taxiways, aprons, etc. over time. The Series 2022 Project will be built to withstand up to 200 mile per hour winds. Additionally,the primary floor of the new concourse is raised 14 feet 6 inches above grade to avoid potential overland flooding as well as sea level rise and storm surges. See"THE COUNTY AND THE AIRPORT—Environmental,Social and Governance (ESG)Factors for the Series 2022 Project"for additional information about the Series 2022 Project as it relates to climate change and weather events. Coronavirus (COVID-19) General The outbreak of the highly contagious COVID-19 pandemic in the United States in March 2020 has generally had a disruptive financial impact on local, state and national economies around the country, including without limitation fueling inflation and creates supply chain issues. COVID-19 is considered a Public Health Emergency of International Concern by the World Health Organization. This led to quarantine and other"social distancing"measures throughout the United States. These measures included recommendations and warnings to limit non-essential travel and promote telecommuting. The Governor has made public statements indicating the State will not shut down as it did in 2020 as a result of COVID-19. There can be no guarantee that State and/or local shut downs or closures similar to those implemented in 2020 will not happen in the future. It is possible the United States, including the State and the County, may experience increased COVID-19 cases, hospitalizations, and deaths as a result of current or future variants which could, in turn, impact State and local government finances. See "INTRODUCTION — COVID-19" herein and APPENDIX C attached hereto for more information. CARES Act On March 27,2020,the federal CARES Act became law,which among other things, allocates funds to eligible airports,provided they take particular steps,including with respect to keeping their workforces intact. The CARES Act included approximately$10 billion of assistance to U.S.commercial airports,which was apportioned among such airports based on various formulas. 71 Airport operators can use their awarded CARES Act grants to pay for any purpose for which airport revenues can lawfully be used, including, but not limited to, the payment of maintenance and operation expenses on or after January 20,2020,and the payment of debt service on or after March 27,2020. CARES Act grants must be used within four years from the date on which the agreement between the airport operator and the FAA is executed,and airport operators using CARES Act grants must comply with certain other obligations, including,but not limited to, employing at least 90.0%of their staff as of March 27,2020 through December 31,2020. The Airport was awarded$21,789,697 in CARES Act grants,of which$14,359,299 has been utilized by the Airport through September 30, 2021 as reimbursement of Operation and Maintenance Costs and $640,701 is planned to be utilized by the Airport in Fiscal Year 2022 to reimburse Operation and Maintenance Costs. The Airport set aside $4,789,697 for a Commercial Apron project and anticipates to draw down the funds over Fiscal Years 2022 and 2023. The Airport plans to utilize the remaining$2 million in Fiscal Years 2023 through and including 2025 within the allowable four year period to reimburse Operation and Maintenance Costs and/or to pay debt service on the Series 2022 Bonds and/or the Grant Anticipation Note. Coronavirus Response and Relief Supplemental Appropriations Act("CRRSA") The CRRSA, enacted on December 27, 2020, was the second round of federal stimulus relief provided in response to COVID-19. This legislation included$2 billion in funds to be awarded as economic relief to eligible U.S.airports and eligible concessions at those airports to prevent,prepare for,and respond to COVID-19. These funds will be distributed by the FAA as part of the Airport Coronavirus Response Grant Program. The Airport was allocated $3,563,873 plus an additional $106,585 for rent relief to in- terminal concessionaires at the Airport. At this time, no CRRSA funds have been used, and the Airport plans to utilize the funds to pay Series 2022 Project costs and reimburse Operation and Maintenance Costs and debt service within the allowable four year period provided by the CRRSA. American Rescue Plan ("ARP") A third round of federal stimulus related to COVID-19 was signed into law on March 11,2021. The ARP includes$8 billion in relief for U.S. airports. The Airport was allocated$5,820,591 and an additional $426,340 for rent relief to in-terminal concessionaires at the Airport.At this time,no ARP funds have been used, and the Airport plans to utilize the funds to pay Series 2022 Project costs and reimburse Operation and Maintenance Costs and debt service within the allowable four year period provided by the ARP. [Remainder of page intentionally left blank] 72 COVID-19 Relief Funds CARES(1) CRRSA(2) ARP(3) Amount Allocated to Airport $21,789,697 $3,670,458 $6,246,931 Funds Spent 14,359,299 0 0 Amount Remaining $7,430,398 $3,670,458 $6,246,931 l> For Fiscal Year 2020, the Airport used $5,295,800 to reimburse for Operation and Maintenance Costs. For Fiscal Year 2021, the Airport has used $9,063,499 to reimburse for Operation and Maintenance Costs. (2) Includes$106,585 to be reserved for rent relief to in-terminal concessionaires at the Airport. (3) Includes$426,340 to be reserved for rent relief to in-terminal concessionaires at the Airport. Source: Monroe County,Florida. 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 component over a five-year period,commencing in federal Fiscal Year 2023.Of this amount, the Airport has identified approximately$14.8 million as funding for the Series 2022 Project and anticipates programming the balance of these grant funds for other eligible uses. As of the date hereof, the timing of the award of such funds is uncertain. In addition, since these funds have not been allocated to the Airport yet,there is no guarantee the Airport will receive any or all such funds. Hertz Bankruptcy One of the rental car companies operating at the Airport, Hertz Corporation (which includes Thrifty Car Rental and Dollar Rent-A-Car, collectively, "Hertz"), recently filed for Chapter 11 bankruptcy protection. Hertz/DTG represented approximately 23% of the rental car gross revenue market share for the 12-month period ending September 30, 2021. The Airport has had consistent communication with outside legal counsel and Hertz bankruptcy representatives.Hertz continues to operate at the Airport and is current on payments owed for operations at the Airport. Actions Taken in Response to COVID-19 The Airport implemented a number of cost savings initiatives to reduce operating expenses and mitigate the impacts of COVID-19.The Airport took the following actions: • Furloughed 20%of the Airport Security Technician positions and deferred maintenance projects; • Suspended employee travel and other non-essential expenses; • Implemented a hiring freeze on non-critical positions;and • Purchased a pathogen fighting Robot using FDOT and CARES funds to reduce the spread of COVID-19 and saved costs of manual sanitization. • Value-engineered a construction project to reduce the match funding required. • Offered a deferment of tenants'rent and concession fees for 60 days. 73 Demand for Air Travel,Aviation Activity and Related Matters Air travel demand has historically correlated to the national economy, generally, and consumer income. The long-term implications of recent economic,public health and political conditions are unclear. A lack of sustainable economic growth or unexpected events could negatively affect, among other things, financial markets, commercial activity and consumer spending. An economic slowdown throughout the world and in the United States and the State influences the demand for passenger and cargo services to the Airport. Consequently, economic assumptions that underlie projections of enplaned passengers in this Official Statement and the Report are based on a review of global,national,State and regional economic projections, as well as analysis of historical socioeconomic trends and airline traffic trends. See"APPENDIX C-Report of the Airport Consultant"attached hereto. The current United States gross domestic product is volatile and unpredictable. Further, trade tensions and slowing global economic growth are reflected in a drop in business confidence and decelerating business investment. Decreases in face-to-face meetings and conferences with suppliers, customers and partners of many major employers is also having a negative effect on demand for airline business travel. The level of aviation activity and enplaned passenger traffic at the Airport depends upon and is subject to a number of factors including those discussed above and other economic and political conditions; international hostilities;world health concerns;aviation security concerns including criminal and terrorist incidents; federal government mandated security measures that may result in additional taxes and fees, longer passenger processing and wait times and other inconveniences; accidents involving commercial passenger aircraft; airline service and routes; airline airfares and competition; airline industry economics, including labor relations,labor supply,fuel prices, aging aircraft fleets and other factors discussed in more detail under "—Financial Condition of the Airlines" below; capacity of and changes to (including any privatization of) the national air traffic control and airport systems; competition from other airports; reliability of air service; business travel substitutes, including teleconferencing, videoconferencing and web-casting;consumer price sensitivity;environmental consciousness;changes in law and the application thereof and the capacity, availability and convenience of service, among others. An outbreak of a disease or similar public health threat that affects travel demand or travel behavior, or travel restrictions or reduction in the demand for air travel caused by an outbreak of a disease or similar public health threat in the future,could have a material adverse impact on the airline industry and result in substantial reductions in and/or cancellations of, bookings and flights, such as is being experienced as a consequence of the COVID-19 pandemic. Airport Capacity Considerations Beyond the completion of the Series 2022 Project,there will be room for two more gates. If demand increases in the future, there may be some limitations in terms of growth capacity absent unforeseen technological advancements. Assumptions in the Report of the Airport Consultant;Actual Results May Differ from Projections and Assumptions The Report included in APPENDIX C incorporates numerous assumptions and states that the projections in the Report is subject to uncertainties. See 'REPORT OF THE AIRPORT CONSULTANT" 74 above and APPENDIX C attached hereto for more information regarding the assumptions of the Airport Consultant. The Report is an integral part of this Official Statement and it should be read in its entirety for an understanding of all of the assumptions used to prepare the projections made therein. No assurances can be given that the projections discussed in the Report of the Airport Consultant will be achieved or that the assumptions upon which the projections are based will be realized. Inevitably, some assumptions used to develop the projections will not be realized and unanticipated events and circumstances will occur. Therefore, actual results achieved during the Forecast Period may vary from those set forth in APPENDIX C and the variations may be material and adverse. Additionally,the debt service projections in the Report are not expected to be updated to reflect the sale,issuance or final terms of the Series 2022 Bonds. FINANCIAL ADVISOR The County has retained Frasca & Associates, LLC, Orlando, Florida, as Financial Advisor in connection with the County's financing plans and with respect to the authorization and issuance of the Series 2022 Bonds.The Financial Advisor is not obligated to undertake and has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in the Official Statement. The Financial Advisor is an independent municipal advisor and does not underwrite bonds.An affiliate of the Financial Advisor may receive a fee for bidding investments for certain proceeds of the Series 2022 Bonds. FINANCIAL STATEMENTS The County's Audited Financial Statements for Fiscal Year 2021 and a report thereon of a firm of independent certified public accountants engaged by the County is attached hereto as "APPENDIX B-1 — AUDITED FINANCIAL STATEMENTS OF THE COUNTY FOR THE YEAR ENDED SEPTEMBER 30, 2021."Such financial reports, including the auditors' report, have been included in this Official Statement as public documents. The Audited Financial Statements of the County attached hereto as APPENDIX B-1 are presented for general information purposes only. The Airport's Audited Financial Statements for Fiscal Year 2021 and a report thereon of a firm of independent certified public accountants engaged by the Airport is attached hereto as "APPENDIX B-2— KEY WEST INTERNATIONAL AIRPORT FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED SEPTEMBER 30,2021 AND REPORT OF THE INDEPENDENT AUDITOR."Such financial reports, including the auditors' report, have been included in this Official Statement as public documents. The Audited Financial Statements of the Airport attached hereto as APPENDIX B-2 are presented for general information purposes only. The Series 2022 Bonds are payable solely from the Pledged Funds as described in the Bond Resolution and herein and the Series 2022 Bonds are not otherwise secured by,or payable from,the general revenues of the County. UNDERWRITING BofA Securities, Inc., on behalf of itself and PNC Capital Markets LLC (collectively, the "Underwriters") have agreed, subject to certain conditions set forth in a bond purchase contract with the County,to purchase the Series 2022 Bonds from the County, at a price of$ ($ par amount, [plus/less] original issue [premium/discount] of$ and less Underwriters' discount of 75 $ ). The Underwriters have committed to purchase all of the Series 2022 Bonds, if any are purchased. The Underwriters'obligation to make such purchase is subject to certain conditions precedent set forth in the bond purchase contract. The Series 2022 Bonds may be offered and sold to certain dealers and others at yields higher than the yields stated on the inside cover of this Official Statement, and such public offering yields may be changed from time to time, after the initial offering to the public,by the Underwriters. The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory,investment management,principal investment,hedging,financing and brokerage activities. The Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the County for which it received or will receive customary fees and expenses. In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps)for its own account and for the accounts of its customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the County. BofA Securities, Inc., an Underwriter of the Series 2022 Bonds, has entered into a distribution agreement with its affiliate Merrill Lynch,Pierce,Fenner&Smith Incorporated("MLPF&S").As part of this arrangement,BofA Securities,Inc.may distribute securities to MLPF&S,which may in turn distribute such securities to investors through the financial advisor network of MLPF&S. As part of this arrangement, BofA Securities,Inc.may compensate MLPF&S as a dealer for their selling efforts with respect to the Series 2022 Bonds. PNC Capital Markets LLC and PNC Bank, National Association are both wholly-owned subsidiaries of PNC Financial Services Group,Inc. PNC Capital Markets LLC is not a bank,and is a distinct legal entity from PNC Bank, National Association. PNC Bank, National Association is the holder of the Interim Indebtedness which is expected to be repaid with a portion of the proceeds of the Series 2022 Bonds and has or may have other banking and financial relationships with the County, such as the anticipated Grant Anticipation Note. PNC Capital Markets LLC may offer to sell to its affiliate, PNC Investments, LLC ("PNCI"), securities in PNC Capital Markets LLC's inventory for resale to PNCI's customers. TAX MATTERS General The Internal Revenue Code of 1986, as amended (the"Code"), contains a number of requirements and restrictions which apply to the Series 2022 Bonds, including investment restrictions, a requirement of periodic payments of arbitrage profits to the Treasury of the United States of America, requirements regarding the timely and proper use of bond proceeds and the facilities financed therewith, and certain other matters. The County has covenanted to comply with all requirements of the Code that must be satisfied in order for the interest on the Series 2022 Bonds to be excluded from gross income for federal 76 income tax purposes. Failure to comply with certain of such requirements could cause interest on the Series 2022 Bonds to be included in gross income retroactive to the date of issuance of the Series 2022 Bonds. In rendering its opinion,Bond Counsel has assumed continuing compliance with such covenants. Subject to the condition that the County will comply with the pertinent requirements of the Code, in the opinion of Bond Counsel,under present law, (a)interest on the Series 2022 Bonds is excluded from the gross income of the holders thereof for federal income tax purposes, except that such exclusion shall not apply during any period while a Series 2022 Bond is held by a"substantial user"of the facilities financed or refinanced by the Series 2022 Bonds or a "related person" within the meaning of Section 147(a) of the Code, and (b) interest on the Series 2022 Bonds is an item of tax preference for purposes of the federal alternative minimum tax and,with respect to certain corporations,interest on the Series 2022 Bonds is taken into account in determining the annual adjusted financial statement income for the purpose of computing the alternative minimum tax imposed on corporations for tax years beginning after December 31,2022. As to questions of fact material to the opinion of Bond Counsel, Bond Counsel will rely upon representations and covenants made on behalf of the County in the Bond Resolution, other finance documents, certificates of appropriate officers of the County and certificates of public officials (including certifications as to the use of Series 2022 Bond proceeds and of the property refinanced thereby), without undertaking to verify the same by independent investigation. The Code contains numerous provisions which could affect the economic value of the Series 2022 Bonds to certain Series 2022 Bondholders. Prospective Series 2022 Bondholders,however, should consult their own tax advisors with respect to the impact of such provisions on their own tax situations. Internal Revenue Code of 1986 The Code contains a number of provisions that apply to the Series 2022 Bonds, including, among other things,restrictions relating to the use or investment of the proceeds of the Series 2022 Bonds and the payment of certain arbitrage earnings in excess of the "yield" on the Series 2022 Bonds to the Treasury of the United States of America. Noncompliance with such provisions may result in interest on the Series 2022 Bonds being included in gross income for federal income tax purposes retroactive to their date of issuance. Collateral Tax Consequences Except as described above,Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of,receipt or accrual of interest on,or disposition of,the Series 2022 Bonds. Prospective purchasers of Series 2022 Bonds should be aware that the ownership of Series 2022 Bonds may result in other collateral federal tax consequences. For example, ownership of the Series 2022 Bonds may result in collateral tax consequences to various types of corporations relating to(1)denial of interest deduction to purchase or carry such Series 2022 Bonds, (2) the branch profits tax, and (3) the inclusion of interest on the Series 2022 Bonds in passive income for certain Subchapter S corporations. In addition, the interest on the Series 2022 Bonds may be included in gross income by recipients of certain Social Security and Railroad Retirement benefits. PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE SERIES 2022 BONDS AND THE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSE FEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL AND CORPORATE BONDHOLDERS, INCLUDING, 77 BUT NOT LIMITED TO, THE CONSEQUENCES REFERRED TO ABOVE. PROSPECTIVE SERIES 2022 BONDHOLDERS SHOULD CONSULT WITH THEIR TAX ADVISORS FOR INFORMATION IN THAT REGARD. Other Tax Matters Interest on the Series 2022 Bonds may be subject to state or local income taxation under applicable state or local laws in some jurisdictions. Purchasers of the Series 2022 Bonds should consult their own tax advisors as to the income tax status of interest on the Series 2022 Bonds in their particular state or local jurisdiction. The Inflation Reduction Act, H.R. 5376 (the IRA), has been passed by both houses of the U.S. Congress and was signed by the President on August 16,2022. As enacted,the IRA includes a 15 percent alternative minimum tax to be imposed on the "adjusted financial statement income", as defined in the IRA,of certain corporations for tax years beginning after December 31, 2022.Interest on the Series 2022 Bonds will be included in the"adjusted financial statement income"of such corporations for purposes of computing the corporate alternative minimum tax. Prospective purchasers that could be subject to this minimum tax should consult with their own tax advisors regarding the potential tax consequences of owning the Series 2022 Bonds. During recent years, legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2022 Bonds. In some cases, these proposals have contained provisions that altered these consequences on a retroactive basis. Such alterations of federal tax consequences may have affected the market value of obligations similar to the Series 2022 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2022 Bonds and their market value. No assurance can be given that additional legislative proposals will not be introduced or enacted that would or might apply to,or have an adverse effect upon, the Series 2022 Bonds. Original Issue Discount Certain of the Series 2022 Bonds(the"Discount Bonds")may be offered and sold to the public at an original issue discount, which is the excess of the principal amount of the Discount Bonds over the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at which price a substantial amount of the Discount Bonds of the same maturity was sold. Original issue discount represents interest which is excluded from gross income for federal income tax purposes to the same extent as interest on the Discount Bonds.Original issue discount will accrue over the term of a Discount Bond at a constant interest rate compounded semi- annually. An initial purchaser who acquires a Discount Bond at the initial offering price thereof to the public will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period he holds such Discount Bonds and will increase its adjusted basis in such Discount Bonds by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such Discount Bonds. The federal income tax consequences of the purchase, ownership and prepayment, sale or other disposition of Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those above. Owners of Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest 78 accrued upon sale, prepayment or other disposition of such Discount Bonds and with respect to the state and local tax consequences of owning and disposing of such Discount Bonds. Original Issue Premium Certain of the Series 2022 Bonds(the"Premium Bonds")may be offered and sold to the public at a price in excess of the principal amount of such Premium Bond, which excess constitutes to an initial purchaser amortizable bond premium which is not deductible from gross income for Federal income tax purposes. The amount of amortizable bond premium for a taxable year is determined actuarially on a constant interest rate basis over the term of the Premium Bonds which term ends on the earlier of the maturity or call date for each Premium Bond which minimizes the yield on said Premium Bonds to the purchaser. For purposes of determining gain or loss on the sale or other disposition of a Premium Bond, an initial purchaser who acquires such obligation in the initial offering to the public at the initial offering price is required to decrease such purchaser's adjusted basis in such Premium Bond annually by the amount of amortizable bond premium for the taxable year. The amortization of bond premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining various other tax consequences of owning such Premium Bonds. The federal income tax consequences of the purchase, ownership and sale or other disposition of Premium Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. Owners of the Premium Bonds are advised that they should consult with their own advisors with respect to the state and local tax consequences of owning such Premium Bonds. CERTAIN LEGAL MATTERS Certain legal matters in connection with the issuance of the Series 2022 Bonds are subject to an approving legal opinion of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel, whose approving opinion (a form of which is attached hereto as "APPENDIX E—PROPOSED FORM OF BOND COUNSEL OPINION")will be available at the time of delivery of the Series 2022 Bonds. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of this Official Statement or otherwise shall create no implication that subsequent to the date of the opinion Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion subsequent to its date. Certain legal matters will be passed upon by Pedro I. Mercado Esq., Senior Assistant County Attorney, and by Bryant Miller Olive P.A., Tampa, Florida, Disclosure Counsel to the County, who also represents an affiliate of PNC Capital Markets LLC with respect to the Grant Anticipation Note. Certain legal matters will be passed on for the Underwriters by GrayRobinson, P.A., Tampa, Florida, Counsel to the Underwriters.GrayRobinson,P.A. also represents the County in unrelated matters. Bond Counsel has not been engaged to, nor has it undertaken to, review (1) the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Series 2022 Bonds;provided,however,that Bond Counsel will render an opinion to the Underwriters of the Series 2022 Bonds (upon which opinion only the Underwriters may rely) relating to the fairness of the presentation of certain statements contained herein under the heading "TAX MATTERS" and certain statements which summarize provisions of the Bond Resolution,the Series 2022 Bonds and federal tax law, and (2) the compliance with any federal or state law with regard to the sale or distribution of the Series 2022 Bonds. 79 The legal opinions to be delivered concurrently with the delivery of the Series 2022 Bonds express the professional judgment of the attorneys rendering the opinions regarding the legal issues expressly addressed therein as of the date of such opinions. By rendering a legal opinion,the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. RATINGS Fitch Ratings, Inc. and Moody's Investors Service, Inc. is expected to assign their municipal bond rating of "A-" (stable outlook) and "Baal" (stable outlook), respectively, to the Series 2022 Bonds. The ratings reflect only the views of said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn entirely by the rating agencies, or any of them, if in their judgment, circumstances so warrant. A downward change in or withdrawal of any of such ratings may have an adverse effect on the market price of the 2022 Bonds. An explanation of the significance of the ratings can be received from the rating agencies at the following addresses: Moody's Investors Service, Inc.,7 World Trade Center,250 Greenwich Street,23rd Floor,New York,New York 10007 and Fitch Ratings, Inc.,One State Street Plaza,New York,New York 10004. LITIGATION No litigation or inquiry of any kind in or by any judicial or administrative court or agency is pending or, to its knowledge, threatened against the County with respect to (i) the organization and existence of the County, (ii) the County's authority to adopt or deliver the Bond Resolution, the Purchase Contract or the Series 2022 Bonds, (iii) the validity or enforceability of the Bond Resolution, or the Series 2022 Bonds, or the transactions contemplated thereby, (iv) the title of any officer of the County who executed the Bond Resolution or the Series 2022 Bonds or (v) any authorization or proceedings related to the adoption of the Bond Resolution or the Series 2022 Bonds, on behalf of the County, and no such authorization or proceedings have been repealed,revoked,rescinded or amended but are in full force and effect. EXPERTS AND CONSULTANTS The references herein to the Airport Consultant have been approved by said firms. The Report has been included as APPENDIX C attached to this Official Statement. References to and excerpts herein from such Report does not purport to be an adequate summary of such Report or complete in all respects. Such Report is an integral part of this Official Statement and should be read in its entirety for complete information with respect to the subjects discussed therein. CONTINGENT FEES The County has retained Bond Counsel, Disclosure Counsel, the Financial Advisor, the Underwriters (who in turn retained Underwriters' Counsel) and the Paying Agent with respect to the authorization, sale, execution and delivery of the Series 2022 Bonds. Payment of each fee of such professionals is each contingent upon the issuance of the Series 2022 Bonds. 80 CONTINUING DISCLOSURE The County has covenanted for the benefit of the Series 2022 Bondholders to provide certain financial information and operating data relating to the County and the Series 2022 Bonds in each year,and to provide notices of the occurrence of certain enumerated material events. The County has agreed to file annual financial information and operating data and the audited financial statements with each entity authorized and approved by the SEC to act as a repository(each a'Repository")for purposes of complying with Rule 15c2-12 adopted by the SEC (the 'Rule"). Effective July 1, 2009, the sole Repository is the Municipal Securities Rulemaking Board. The County has agreed to file notices of certain enumerated events,when and if they occur,with the Repository. The specific nature of the financial information, operating data, and of the type of events which trigger a disclosure obligation,and other details of the undertaking are described in"APPENDIX G-FORM OF CONTINUING DISCLOSURE CERTIFICATE" attached hereto. The Continuing Disclosure Certificate shall be executed by the County upon the issuance of the Series 2022 Bonds. These covenants have been made in order to assist the Underwriters in complying with the continuing disclosure requirements of the Rule. With respect to the Series 2022 Bonds,no party other than the County is obligated to provide,nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The County has entered into a contract with Digital Assurance Certification, LLC to provide continuing disclosure dissemination agent services for all of its outstanding bond issues. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Pursuant to Section 517.051, Florida Statutes, as amended, no person may directly or indirectly offer or sell securities of the County except by an offering circular containing full and fair disclosure of all defaults as to principal or interest on its obligations since December 31, 1975, as provided by rule of the Office of Financial Regulation within the Florida Financial Services Commission(the"FFSC"). Pursuant to administrative rulemaking,the FFSC has required the disclosure of the amounts and types of defaults, any legal proceedings resulting from such defaults, whether a trustee or receiver has been appointed over the assets of the County,and certain additional financial information,unless the County believes in good faith that such information would not be considered material by a reasonable investor. The County is not and has not been in default on any bond issued since December 31, 1975 that would be considered material by a reasonable investor. The County has not undertaken an independent review or investigation of securities for which it has served as conduit issuer. The County does not believe that any information about any default on such securities is appropriate and would be considered material by a reasonable investor in the Series 2022 Bonds because the County would not have been obligated to pay the debt service on any such securities except from payments made to it by the private companies on whose behalf such securities were issued and no funds of the County would have been pledged or used to pay such securities or the interest thereon. 81 AUTHORIZATION OF OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized and approved by the County. At the time of delivery of the Series 2022 Bonds, the County will furnish a certificate to the effect that nothing has come to their attention which would lead it to believe that the Official Statement (other than information herein related to the DTC, the book-entry only system of registration and the information contained under the caption"TAX MATTERS" as to which no opinion shall be expressed), as of its date and as of the date of delivery of the Series 2022 Bonds,contains an untrue statement of a material fact or omits to state a material fact which should be included therein for the purposes for which the Official Statement is intended to be used, or which is necessary to make the statements contained therein, in the light of the circumstances under which they were made,not misleading. MONROE COUNTY,FLORIDA By Mayor,Board of County Commissioners By Senior Director of Airports 82 APPENDIX A GENERAL INFORMATION REGARDING MONROE COUNTY,FLORIDA [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX A GENERAL INFORMATION REGARDING MONROE COUNTY,FLORIDA The following information concerning Monroe County, Florida (the "County"), is included only for the purposes of supplying general information regarding the primary community served by the County. The Series 2022 Bonds are payable solely from the Pledged Funds described herein, and are not payable or secured by other properties of the County or any other political subdivision of the State of Florida. General Information Monroe County, Florida, was constitutionally formed in 1823. It is comprised primarily of 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, Key West, located on the southernmost of the 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,sub-tropical climate. The average annual temperature is 77.7 degrees,with an average temperature during the winter of 69.9 degrees and a summer average of 83.9 degrees. The highest temperature recorded was 95 degrees in 1957,and the lowest temperature recorded was 41 degrees in 1981. Precipitation (39-40 inches per year) is characterized by wet and dry seasons in June through October and December through March,respectively. History Initial European contact with the Florida Keys, then occupied by the Calusa Indians, occurred in 1513 with Ponce de Leon's exploration of the Straits of Florida. As a consequence of an Indian war in which the remains of the slain were left to the elements, the island was named Cayo Hueso, or Bone Key, which was later anglicized to Key West. In 1815,the Florida Keys were granted to Juan Pablo Salas by the Spanish governor of Florida. In 1821,Florida became a United States territory. Nevertheless,Salas sold the island to John Simonton of Mobile,Alabama,for$2,000. In 1823, Commodore David Porter established a United States naval base on the island. During the period immediately following, in excess of 120 vessels, many from the Bahamas, were employed in the wrecking business in direct competition with emigrants from New England. The City of Key West was incorporated in 1828. Federal legislation permitting salvaging of property from wrecked ships was the principal reason Key West grew by the 1890's to the wealthiest city, per capita,in the United States. In 1831,the first cigar factory was established in Key West,and by 1869,the City became the largest clear-Havana cigar manufacturing city in the United States. The strategic importance of Key West was demonstrated in 1823,when the West Indian Anti-Piracy Squadron established its base there. Key West's connection with the military dates from this period, and its fortunes were thereafter linked to federal decisions concerning military presence in the Gulf of Mexico. The economic importance of Key West was affected by the excellence of its harbor at the time of the completion of the Panama Canal,and its proximity to Cuba. In 1912,the Overseas Railway from Miami to Key West was completed. This constituted building a railroad 128 miles out to sea, spanning 29 islands A-1 of the Florida Keys, and connecting Key West and Havana, Cuba, by train-ferry with the rest of Florida. An estimated average of 3,000 men labored approximately seven years,at a total cost of approximately$50 million to complete the railroad that for the next 22 years would provide a round trip from Miami to Havana,including meals for$24. In 1938,the State of Florida completed a modern highway on the bed of the railroad tracks, permitting motorists to drive from Miami to Key West. That highway and its series of bridges have recently undergone renovation. In 1920, the first international air passenger service and the first international air mail routes for the United States were established between Key West and Havana,Cuba;and in 1927,the Key West airport was designated the first Airport of Entry in the United States. Pan American Airlines was established at Key West in 1927. In 1942,a fresh water pipeline from the mainland was opened. A new pipeline from the mainland, as well as new mainland water treatment facilities and pumping stations, were completed in 1982. Those facilities have substantially increased the quantity of water which can be delivered to the Keys. These facilities are currently administered by the Florida Keys Aqueduct Authority. In 1946,President Truman created the"Little White House"in Key West on the Naval Annex that bears his name. Recent development has resulted in substantial historic renovation and restoration and continuing growth of tourist activity. Government The County has a five-member Board of County Commissioners elected for staggered terms of four years. The Mayor (Chairman) and the Mayor Pro-Tem (Vice Chairman) are elected by the Board. The Board apportions and levies County taxes and controls the expenditure of all County funds, except for schools, which are controlled by The School Board of Monroe County (the "School Board"). The budget year of the County runs from October 1 to the following September 30. Operating revenue is raised mainly from ad valorem real and personal property taxes, with supplements from state and federal sources for county roads, welfare and health. The Board operates the county road system and has the power to establish,build,maintain,repair,protect and preserve these facilities. The County may issue bonds for all lawful purposes. The Board is responsible for various types of elections in the County. Other elected officials serving county-wide are a five-member School Board, a Property Appraiser, a Tax Collector, a Supervisor of Elections, a Sheriff, and a Clerk of the Circuit Court who is also ex officio Clerk of the Board of County Commissioners. The Board appoints a County Administrator who serves at the pleasure of the Board. The Military The United States Naval Station at Key West(the"Naval Station")was established in 1823 with the formation of the West Indian Anti-Piracy Squadron. Some construction began in 1823,and the permanent construction of the Naval Building began in 1856. In 1974, the Naval Station was disestablished, though military operations still exist within the City,including a medical facility,substantial barracks and military housing for Boca Chica Air Station and numerous federal agencies such as the United States Coast Guard and the Department of Agriculture. A-2 The present mission of the various U.S.Military and Coast Guard commands in the Key West area include both air and surface functions. The major military activities center around the Boca Chica Naval Air Station on Boca Chica Key(located immediately to the east of Stock Island and Key West)and Truman Annex. Health Care There are three hospitals located throughout the County: Lower Keys Medical Center(167 beds), Fisherman's Community Hospital(22 Beds)and Mariner's Hospital(25 beds). Population From 1930 to 1970, the population of the County increased by 38,962 or 286%. From 1970 to 1980, the population increased by 20%; from 1980 to 1990, by 23%; and from 1990 to 2000, the population increased by 2%.From 2000 to 2010,the population decreased by 8%,and from 2010 to 2020,the population increased by 13%. Population Statistics Monroe County and State of Florida 1930-2021 Percentage State of Percentage Year Monroe County Changes Florida Changes 1930 13,624 -- 1,468,211 -- 1940 14,078 3.3% 1,897,414 28.0% 1950 29,957 112.8 2,771,305 46.1 1960 47,921 60.0 4,951,560 78.7 1970 52,586 9.7 6,791,418 37.2 1980 63,188 20.2 9,746,961 43.5 1990 78,024 23.5 12,938,071 32.7 2000 79,589 2.1 15,982,378 23.5 2010 73,090 (8.2) 18,801,332 17.6 2020 82,874 13.4 21,538,187 14.6 2021 83,411 0.6 21,898,945 1.7 Source: Florida Estimates of Population,Bureau of Economic and Business Research,University of Florida. A-3 The following tables show the population summary for Monroe County for the years 2017 through 2021 and the Monroe County projected population by age for the years 2025,2035 and 2045. Monroe County Population Summary 2017-2021 2017 2018 2019 2020 2021 Monroe County 76,889 73,940 76,212 77,823 83,411 Islamorada(l) 6,326 5,990 6,211 6,400 7,116 Key Colony Beach 803 758 760 795 793 Key West 24,597 24,509 25,171 24,868 26,687 Layton 186 182 183 186 211 Marathon(2) 8,775 8,235 8,593 9,097 9,915 Unincorporated 36,202 34,266 35,294 36,477 38,689 Source: Florida Estimates of Population,Bureau of Economic and Business Research,University of Florida. Population Projections By Age Monroe County,Florida 2025,2035 and 2045 Year Total Less than 18 18-64 65 and Over 2025 78,799 11,838 45,818 21,143 2035 79,793 12,210 44,231 23,352 2045 80,159 12,331 45,673 22,155 Source: Population Projections by Age, Sex, Race, and Hispanic Origin for Florida and Its Counties, 2025- 2045, Florida Estimates of Population, Bureau of Economic and Business Research, University of Florida. [Remainder of page intentionally left blank] A-4 Monroe County Property Tax Levies and Collections For Last Ten Tax Years Percent of Tax Year Tax Lew Tax Collection Lew Collected 2012 $77,534,605 $75,121,671 96.9% 2013 75,553,652 72,474,231 95.9 2014 76,985,354 74,342,547 96.6 2015 79,657,302 76,698,560 96.3 2016 80,394,533 77,254,282 96.0 2017 80,815,240 78,390,783 97.0 2018 85,024,504 82,458,796 97.0 2019 91,293,021 87,641,300 96.0 2020 95,518,603 90,338,710 97.0 2021 96,989,237 95,049,452 98.0 Source: Monroe County,Florida Annual Comprehensive Financial Report for Fiscal Year Ended September 30,2021. Property tax levies, based on assessed values as of January 1st, become due and payable on November 1st of each year. A four percent discount is allowed if the taxes are paid in November,with the discount declining by one percent each month thereafter. Accordingly, taxes collected will never be one hundred percent of the tax levy. Taxes become delinquent on April 1st of each year and tax certificates for the full amount of any unpaid taxes and assessments must be sold not later than June 1st of each year. Monroe County,Florida Assessed Value and Estimated Actual Value of Taxable Property For Last Ten Fiscal Years Real Property Fiscal Year Commercial Less:Tax Total Ended Residential Commercial Personal Exempt Total Taxable Direct September 30 Pro er Proj2er Proj2er Proj2er Assessed Value Tax Rate 2012 $17,306,874,296 $8,256,888,373 $798,092,402 $7,818,927,504 $18,542,927,567 4.1382 2013 17,287,606,922 8,347,419,400 771,466,155 7,679,334,047 18,727,158,430 3.9880 2014 17,903,163,790 8,713,264,820 740,963,901 8,241,122,698 19,116,269,813 4.0165 2015 21,153,226,046 9,577,152,035 729,104,179 9,863,211,411 21,596,270,849 3.8007 2016 23,134,080,788 9,674,350,023 728,961,085 10,505,834,921 23,031,556,975 3.8080 2017 25,238,536,707 10,315,713,392 709,815,884 11,257,153,269 25,006,912,714 3.2475 2018 26,059,270,000 10,808,503,930 716,716,873 6,015,518,781 26,553,651,764 3.2600 2019 27,883,537,936 10,875,740,917 826,204,701 6,061,363,626 28,464,940,007 3.1228 2020 29,530,266,065 10,917,353,093 878,507,996 6,106,170,011 30,167,680,090 3.0260 2021 30,178,704,674 11,595,018,803 905,787,545 10,946,283,806 31,733,227,216 3.1173 Source: Monroe County, Florida Annual Comprehensive Financial Report for the year ended September 30,2021. A-5 Assessed values used are net taxable values after deducting allowable statutory exemptions. Property is assessed as of January 1st and taxes based on those assessments are levied and become due on the following November 1st. Therefore,assessments and levies applicable to a certain tax year are collected in the fiscal year ending during the next succeeding calendar year. Estimated actual value for each tax year is equal to the assessed value. The ratio of total assessed to the total estimated actual value is 100%for each tax year. Monroe County,Florida Aggregate Millage Rates For Last Ten Tax Years Tax Year Operating Debt Service 2012 4.1382 0 2013 3.9880 0 2014 4.0165 0 2015 3.8007 0 2016 3.8080 0 2017 3.2475 0 2018 3.2600 0 2019 3.1228 0 2020 3.6109 0 2021 3.1173 0 Source: Monroe County, Florida Annual Comprehensive Financial Report for the Fiscal Year Ended September 30,2021. Property Tax Reform Millage Rollback Legislation. In 2007, the State Legislature adopted a property tax plan which significantly impacted ad valorem tax collections for State local governments (the "Millage Rollback Legislation"). One component of the Millage Rollback Legislation required counties, cities and special districts to rollback their millage rates for the 2007-2008 Fiscal Year to a level that,with certain adjustments and exceptions, would generate the same level of ad valorem tax revenue as in Fiscal Year 2006-2007; provided, however, depending upon the relative growth of each local government's own ad valorem tax revenues from 2001 to 2006, such rolled back millage rates were determined after first reducing 2006-2007 ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the Rollback Legislation also limited how much the aggregate amount of ad valorem tax revenues may increase in future Fiscal Years. A local government may override certain portions of these requirements by a supermajority,and for certain requirements, a unanimous vote of its governing body. Constitutional Exemptions. Certain exemptions from property taxes have been enacted. Constitutional exemptions include, but are not limited to, property owned by a municipality and used exclusively by it for municipal or public purposes, certain household goods and personal effects to the value fixed by general law, certain locally approved community and economic development ad valorem tax exemptions to new businesses and expansions of existing businesses, as defined by general law and historic preservation ad valorem tax exemptions to owners of historic properties, $25,000 of the assessed value of property subject to tangible personal property tax,the assessed value of solar devices or renewable A-6 energy source devices subject to tangible personal property tax may be exempt from ad valorem taxation, subject to limitations provided by general law, and certain real property dedicated in perpetuity for conservation purposes, including real property encumbered by perpetual conservation easements or by other perpetual conservation protections, as defined by general law. Limitation on Increase in Assessed Value of Property. The State Constitution limits the increases in assessed just value of homestead property to the lower of (1)three percent of the assessment for the prior year or(2)the percentage change in the Consumer Price Index for all urban consumers,U.S.City Average, all items 1967=100,or successor reports for the preceding calendar year as initially reported by the United States Department of Labor, Bureau of Labor Statistics. The accumulated difference between the assessed value and the just value is known as the"Save Our Homes Benefit."Further,upon any change of ownership of homestead property or upon termination of homestead status such property shall be reassessed at just value as of January 1 of the year following the year of sale or change of status; new homestead property shall be assessed at just value as of January 1 of the year following the establishment of the homestead;and changes, additions, reductions or improvements to the homestead shall initially be assessed as provided for by general law. Owners of homestead property may transfer up to$500,000 of their Save Our Homes Benefit to a new homestead property purchased within two years of the sale of their previous homestead property to which such benefit applied if the just value of the new homestead is greater than or is equal to the just value of the prior homestead. If the just value of the new homestead is less than the just value of the prior homestead, then owners of homestead property may transfer a proportional amount of their Save Our Homes Benefit,such proportional amount equaling the just value of the new homestead divided by the just value of the prior homestead multiplied by the assessed value of the prior homestead. For all levies other than school district levies,assessment increases for specified nonhomestead real property may not exceed ten percent(10%)of the assessment for the prior year.This assessment limitation was, by its terms, to be repealed effective January 1, 2019; however, the legislature by joint resolution approved an amendment abrogating such repeal, which was approved by the electors in the November 6, 2018 general election and went into effect January 1,2019. Homestead Exemption. In addition to the exemptions described above, the State Constitution also provides for a homestead exemption. Every person who has the legal title or beneficial title in equity to real property in the State and who resides thereon and in good faith makes the same his or her permanent residence or the permanent residence of others legally or naturally dependent upon such person is eligible to receive a homestead exemption of up to$50,000. The first$25,000 applies to all property taxes,including school district taxes. The additional exemption, up to $25,000, applicable to the assessed value of the property between$50,000 and$75,000,applies to all levies other than school district levies. A person who is receiving or claiming the benefit of an ad valorem tax exemption or a tax credit in another state where permanent residency, or residency of another legally or naturally dependent upon the owner, is required as a basis for the granting of that ad valorem tax exemption or tax credit is not entitled to the homestead exemption. In addition to the general homestead exemption described in this paragraph, the following homestead exemptions are authorized by State law. Certain Persons 65 or Older. A board of county commissioners or the governing authority of any municipality may adopt an ordinance to allow an additional homestead exemption equal to (i) of up to $50,000 for persons age 65 or older with household income that does not exceed the statutory income limitation of$20,000 (as increased by the percentage increase in the average cost of living index each year A-7 since 2001)or(ii)the assessed value of the property with a just value less than$250,000, as determined the first tax year that the owner applies and is approved, for any person 65 or older who has maintained the residence as his or her permanent residence for not less than 25 years and whose household income does not exceed the statutory income. The County enacted an ordinance providing for the exemption from County ad valorem taxes described in this paragraph. In addition, veterans 65 or older who are partially or totally permanently disabled may receive a discount from tax on homestead property if the disability was combat related and the veteran was honorably discharged upon separation from military service. The discount is a percentage equal to the percentage of the veteran's permanent, service-connected disability as determined by the United States Department of Veteran's Affairs. The County has not enacted an ordinance providing for the exemption from County ad valorem taxes described in this paragraph. Deployed Military Personnel. The State Constitution provides that by general law and subject to certain conditions specified therein,each person who receives a homestead exemption who was a member of the United States military or military reserves, the United States Coast Guard or its reserves, or the Florida National Guard;and who was deployed during the preceding calendar year on active duty outside the continental United States, Alaska, or Hawaii in support of military operations designated by the legislature shall receive an additional exemption equal to a percentage of the taxable value of his or her homestead property. The applicable percentage shall be calculated as the number of days during the preceding calendar year the person was deployed on active duty outside the continental United States, Alaska, or Hawaii in support of military operations designated by the legislature divided by the number of days in that year. Certain Active Duty Military and Veterans. A military veteran who was honorably discharged, is a resident of the State,and who is disabled to a degree of 10%or more because of misfortune or while serving during wartime may be entitled to a $5,000 reduction in the assessed value of his or her property. This exemption is not limited to homestead property. A military veteran who was honorably discharged with a service-related total and permanent disability may be eligible for a total exemption from taxes on homestead property. A similar exemption is available to disabled veterans confined to wheelchairs. Under certain circumstances,the veteran's surviving spouse may be entitled to carry over these exemptions. Certain Totally and Permanently Disabled Persons. Real estate used and owned as a homestead by a quadriplegic,less any portion used for commercial purposes,is exempt from all ad valorem taxation. Real estate used and owned as a homestead by a paraplegic, hemiplegic, or other totally and permanently disabled person, who must use a wheelchair for mobility or who is legally blind, is exempt from taxation if the gross household income is below statutory limits. Survivors of First Responders. Any real estate that is owned and used as a homestead by the surviving spouse of a first responder (law enforcement officer, correctional officer, firefighter, emergency medical technician or paramedic), who died in the line of duty may be granted a total exemption on homestead property if the first responder and his or her surviving spouse were permanent residents of the State on January 1 of the year in which the first responder died. Save Our Homes Portability Aoected by Storm Damage (SOH). Owners of homestead property that was significantly damaged or destroyed as a result of a named tropical storm or hurricane can elect to have the property deemed abandoned if the owner establishes a new homestead by January 1 of the second year immediately following the storm or hurricane. This will allow the owner of the homestead property A-8 to keep their SOH benefit if they move from the significantly damaged or destroyed property to establish a new homestead by the end of the year following the storm. Property Tax Relief for Natural Disasters. In light of recent natural disasters, the State Legislature created a property tax relief credit for homestead parcels on which certain residential improvements were damaged or destroyed by a hurricane that occurred in 2016 or 2017,namely Hurricanes Hermine,Matthew, and Irma. If the residential improvement is rendered uninhabitable for at least 30 days due to a hurricane that occurred during the 2016 or 2017 calendar year, taxes initially levied in 2019 may be abated. Due to this reduction in ad valorem tax revenue, the Legislature is required to appropriate funds to offset the deficit in certain taxing jurisdictions. Recent Amendments Relating to Ad Valorem Taxation. In the 2016 legislative session, several amendments were passed affecting ad valorem taxation, including classification of agricultural lands during periods of eradication or quarantine, deleting requirements that conservation easements be renewed annually, providing that just value of real property shall be determined in the first tax year for income restricted persons age 65 or older who have maintained such property as their permanent residence for at least 25 years, authorizing a first responder who is totally and permanently disabled as a result of injuries sustained in the line of duty to receive relief from ad valorem taxes assessed on homestead property, revising procedures with respect to assessments, hearings and notifications by the value adjustment board, and revising the interest rate on unpaid ad valorem taxes. Future Amendments Relating to Ad Valorem Taxation. Historically,various legislative proposals and constitutional amendments relating to ad valorem taxation have been introduced in each session of the State legislature. Many of these proposals have provided for new or increased exemptions to ad valorem taxation and limited increases in assessed valuation of certain types of property or have otherwise restricted the ability of local governments in the State to levy ad valorem taxes at then current levels. Administrative Action Relating to Due Dates. On Monday,March 16,2020,the Governor directed the Department of Revenue to provide flexibility on tax due dates to assist those adversely affected by COVID 19. On March 26, 2020, the Department of Revenue's Executive Director issued an emergency order to extend the final due date for property tax payments for the 2019 tax year. Such order applies to all 67 counties within the State, including the County. Property taxes, as described above, are normally due by March 31 however, as a result of the executive order, the Department of Revenue waived the due date so that payments remitted by April 15, 2020, for the 2019 tax year were considered timely paid. See "INVESTMENT CONSIDERATIONS"in the body of this Official Statement for more information about the impacts of COVID-19 on the County. A-9 Monroe County,Florida Ten Largest Taxpayers Percentage of Total Taxable Taxpayer Assessed Value Assessed Value 1. Ocean Reef Club Inc. $149,794,463 17.90% 2. Fla.Keys Electric Co-Op 120,127,882 14.35 3. Passco Ocean DST 86,903,302 10.38 4. Casa Marina A Waldorf Astoria 85,688,742 10.24 5. Galleon Condominium Assoc.Inc. 81,149,432 9.69 6. Key Largo Hospitality 69,054,637 8.25 7. Pebblebrook Hotel Trust 62,705,657 7.49 8. SH3 LTD 61,941,412 7.40 9. City of Key West 60,686,891 7.25 10. Windward Pointe II LLC 59,000,000 7.05 $837,052,418 100.00% Source: Monroe County, Florida Annual Comprehensive Financial Report for the year ended September 30,2021. A-10 0-, Lf) N �t \,o �t Lf) m o 0 �i N 00 00 \,0 Lf) L o �t N 00 �t Ln N N N N � �t m c O 4 ri 4 N ri c+� ri o o Ct N m \,O o N Ln ON Ln O cv N oo N o" ID H N N N cc C) n U � � o v � 0 00 m H N � v � � ro o cz tz cz cz U ct � N000000 �., N o o o o o o C) �i O O O Lfj O Lf) o cz L o o N 1 N 0 Ln 0000 r \ Lfj Lfj c r oo v � � ct oo oo N N �r m m Lfj 00 O Lfj cr cf� m C) > O �t �t �t �t o N �t 0 00 Ln J Z a; 4 a; cv o cf 4 (0; Lr) (0. Lr) Lr) Lr) m _o o .� M 00 0 00 4t a\ Q0 00 m Ln o � Ln oo t� Ln a\ m Ln O 0-, Lfj o m \,O a; 4 o Lfj U NN N N Ln m m m N C) O O it N m Lf) n 00 d O u CZ N N o 0 0 0 0 0 0 0 0 0 0 Economy and Tourism International and domestic tourism remains an important economic factor in Monroe County. The tropical climate together with the recreational water activities makes the Florida Keys and Key West a major tourist area. Further evidence of the importance of the tourist industry is that of the top ten taxpayers in Monroe County,eight are hotels. Beginning in March 2020 through the remainder of the calendar year, the County experienced significant disruptions to its economy due to the global pandemic caused by COVID-19.Because of travel restrictions,stay at home orders,and closures of non-essential businesses,the leisure and hospitality sectors were hit the hardest. Unemployment in the County rose sharply from 2.8% to 17.7% in May 2020. As a result, the County's tourism dependent sales tax revenues shrank. During peak closure months of April, May, and June 2020, the County's half-cent sales tax revenue dropped 41%, 64%, and 52% respectively. Local bed tax revenues also experienced declines of 46%, 91%, and 88% respectively. During Fiscal Year 2021, the County saw improved economic indicators and the County slowly began its recovery from the negative impacts from the pandemic. In fact,because international travel was restricted throughout Fiscal Year 2021, many found traveling to the Florida Keys an ideal vacation spot. The County saw its one cent infrastructure sales surtax increase over 44% and its tourist development tax increase over 76% in Fiscal Year 2021. [Remainder of page intentionally left blank] A-12 Monroe County,Florida Average Monthly Employment by Major Sector 2019 and 2020 Sector 2019 2020 Agriculture,forestry,fishing and hunting 144 134 Mining 1 1 Utilities 585 585 Construction 3,188 3,081 Manufacturing 313 297 Wholesale trade 455 571 Retail trade 5,952 5,313 Transportation and warehousing 1,256 1,132 Information 359 333 Finance and Insurance 685 690 Real estate and rental and leasing 1,475 1,392 Professional, scientific and technical services 1,439 1,498 Management companies and enterprises 112 103 Administration and support and waste management services 1,714 1,646 Educational services 11837 N/A Health care and social assistance 2,345 2,334 Arts,entertainment and recreation 1,380 1,238 Accommodation and food services 14,062 11,415 Other services,except public administration 1,419 1,261 Public administration 31122 3,051 Unclassified 35 42 Source:Florida Insight N/A—Not Available A-13 Employment Monroe County has consistently trailed the State in unemployment for each of the past ten years as shown in the table below. Employment Monroe County County State Labor Unemployment Unemployment Year Force Employ Unemplo)�ment Rate % Rate 2012 43,603 41,044 2,559 5.9% 8.6% 2013 44,153 41,922 2,231 5.1 7.5 2014 44,941 43,038 1,903 4.2 6.4 2015 45,948 44,332 1,616 3.5 5.5 2016 46,592 45,095 1,497 3.2 4.9 2017 45,626 44,121 1,505 3.3 4.2 2018 45,085 43,910 1,175 2.6 3.6 2019 46,557 45,559 998 2.1 3.3 2020 44,755 41,223 3,532 7.9 7.7 2021 45,926 44,558 1,368 3.0 4.6 Source: Local Area Unemployment Statistics,Florida Department of Economic Opportunity. Per Capita Personal Income Monroe County,Florida and United States,2011-2020 (rounded to dollars) Year Monroe County State of Florida United States 2011 $62,936 $40,482 $42,783 2012 70,711 41,475 44,614 2013 65,746 41,069 44,894 2014 71,934 43,388 47,017 2015 73,336 45,493 48,891 2016 79,980 46,253 49,812 2017 87,396 48,774 51,811 2018 98,438 51,150 54,098 2019 104,370 53,034 56,047 2020 106,583 55,675 59,510 Source: Per Capita Personal Income by County,U.S.Bureau of Economic Analysis. A-14 Education The County is served by The School Board of Monroe County. The School Board maintains 16 schools serving grades kindergarten through 12, with 763 Instructional staff members and 69 Administrative staff members. For the school year 2021, the school system served 9,125 children. The County maintains a public library, which was the first public library established in south Florida. The library includes five facilities. Risk Management The County is exposed to various risks of loss related to tort;theft of, damage to, and destruction of assets;errors and omissions;injuries to employees; and natural disasters. During the fiscal years ended 1976, 1984 and 1988, the County established the Workers' Compensation, Group Insurance, and Risk Management Funds, respectively, as internal service funds to account for and finance its uninsured risks of loss. Under these programs, the Workers' Compensation has self-insured coverage up to the first $500,000 per claim for regular employees. Workers' Compensation claims in excess of the self-insured coverage of$500,000 are covered by an excess insurance policy. The Group Insurance Fund provides self- insured excess claims.Risk Management has a$5,000,000 excess insurance policy for general liability claims with a$200,000 self-insured retention and building property damage is covered for the actual value of the building with a deductible of$50,000. Deductibles for windstorm and flood vary by location. The Board purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss.Settled claims have not exceeded this commercial coverage in any of the past three years. All funds of the County participate in the programs and make payments to the Workers' Compensation, Group Insurance and Risk Management Funds based on management's estimates of the amounts needed to pay prior and current year claims. The claims liabilities reported are based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.These claim liabilities have not been discounted. Changes in the claim liability amounts in fiscal years 2021 and 2020 were: Worker's Group Risk Compensation Insurance Management Total Unpaid Claims at Sept.30,2019 $1,333,516 $1,121,259 $646,670 $3,101,445 Incurred Claims(Including IBNR) 2,169,013 14,933,097 502,258 17,604,368 Claim payments (1,862,141) (14,991,833) 46( 8,918) (17,322,892) Unpaid Claims at Sept.30,2020 1,640,388 1,062,523 680,010 3,382,921 Incurred Claims(Including IBNR) 1,678,053 17,423,291 890,192 19,991,536 Claim payments (1,775,139) (17,434,467) 71( 6,992) (19,926,598) Balance at September 30,2021 $1,543,302 $1,051,347 $853,210 $3,447,859 A-15 Other Postemployment Benefit Plans Plan Description—The Board administers a single-employer defined benefits healthcare plan (the 'Plan"). Section 112.0801, Florida Statutes, requires the County to provide retirees and their eligible dependents with the option to participate in the Plan if the County provides health insurance to its active employees and their eligible dependents. The Plan provides medical coverage,prescription drug benefits, and life insurance to both active and eligible retired employees.The Plan does not issue a publicly available financial report.No assets are accumulated in a trust that meets the criteria as set forth in GASB Statement No. 75. The Board may amend the plan design, with changes to the benefits, premiums and/or levels of participant contribution at any time.In an open session,on at least an annual basis and prior to the annual enrollment process, the Board approves the rates for the coming calendar year for the retiree and County contributions. The Plan includes participants from the Board, each Constitutional Officer, and the MCLA. The Board is responsible for funding all obligations not funded on a pay-as-you-go basis by Constitutional Officers or the MCLA. However, the following disclosures are based only on the Board's and the Constitutional Officers' (the County's) share of the net Other Post-Employment Benefits ("OPEB") obligation since the MCLA's discrete financial statements reports its share of OPEB obligation. Benefits Provided—Employees who retire as active participants in the Plan and were hired on or after October 1, 2001 may continue to participate in the Plan by paying the monthly premium established annually by the Board.Employees who retire as active participants in the Plan,were hired before October 1, 2001, have at least ten years of full-time service with the County and meet the retirement criteria of the Florida Retirement System('FRS")but are not eligible for Medicare,may maintain group insurance benefits with the County following retirement, provided that the retiring employee contributes the amounts as shown in the following table. Contribution as Percentage of Annual Actuarial RateM Plan Years of Service with Monroe County Year 25+ 20-24 10-19 2018 HIS(2) 17% 18% 2019 HIS 18 26 2020 HIS 20 34 2021 HIS 22 42 2022&Thereafter HIS 25 50 (1) The new retiree contributions began a five-year phased-in approach beginning January 1,2018. (2) Participation in the Plan is at a cost equal to the FRS Health Insurance Subsidy(HIS)for ten years of service (currently$5 per month for each year of service credit at retirement with a minimum HIS payment of$30 and a maximum HIS payment of$150 per month). Retirees who have met the requirements for early retirement,have not achieved age 60 and whose age and years of service do not equal 70(rule of 70)must pay the standard monthly premium until the age criteria or the rule of 70 is met.At that time,the retiree's cost of participation will be based on the preceding A-16 table. Surviving spouses and dependents of participating retirees may continue in the Plan if eligibility criteria specific to those classes are met. An employee who retires as an active participant in the Plan, was hired prior to October 1, 2001, has at least ten years of full-time service with the County, and meets the retirement criteria of the FRS and is eligible for Medicare at the time of retirement or becomes eligible for Medicare following retirement, may maintain group health insurance benefits with the County following retirement,provided the retiring employee contributes the Actuarial Rate for Medicare retirees as determined by the actuarial firm engaged by the County, less a $250 per month County subsidy. Alternatively, retirees meeting these criteria may elect to leave the County health plan and receive a$250 per month payment from the County, payable for the lifetime of the retiree. Employees Covered by Benefit Terms—Eligibility for post-employment participation in the Plan is limited to full time employees of the County and the Constitutional Officers.At September 30, 2021, there were no terminated employees entitled to deferred benefits. The membership of the Board's medical plan consisted of: Active Employees 1,273 Retirees and Beneficiaries Currently Receiving Benefits 425 Total Membership 1,698 Contributions — The Board establishes, and may amend, the contribution requirements of Plan members. The required contribution is based on pay-as-you-go financing requirements, net of member contributions. Total OPEB Liability The County's total OPEB liability of $60,034,000 was measured as of September 30, 2021, and was determined by an actuarial evaluation as of October 25,2021. Actuarial Methods and Assumptions—The valuation, dated October 25,2021,was prepared using generally accepted actuarial principles and practices, and relied on unaudited census data and medical claims data reported by the Board. The total OPEB liability for the Board in the September 30,2021 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement,unless otherwise specified: Actuarial Cost Method Entry Age Normal based on level of percentage of projected salary. Inflation Rate 2.5%per annum Salary Increase Rate 3.5%per annum Discount Rate 2.21%per annum(Beginning of Year) 2.15%per annum(End of Year) Source:Bond Buyer 20-Bond GO index Marriage Rate The assumed percentage of married participants at retirement is 25% and is based on the current retired population of the County. A-17 Spouse Age Spouse dates of birth were provided by the County. Where this information was missing, male spouses were assumed to be three years older than female spouses. Medicare Eligibility All current and future retirees were assumed to be eligible for Medicare at age 65. Amortization Method Experience/Assumptions gains and losses were amortized over a closed period of 11.3 years starting on October 1,2019,equal to the average remaining service of active and inactive plan members (who have no future service). Plan Participation Percentage The assumptions for participation of eligible retirees in the County's postemployment benefit plan are: Retirees with 25+Years of Service: 100% Retirees with 20—24 Years of Service:20% Retirees with<20 Years of Service:25% The actuarial assumptions include an annual health care cost trend rate of 5.5% initially, reduced by decrements of 0.5% to an ultimate rate of 4.5%. The assumptions included a discount rate tied to the return expected on the funds used to pay the benefits, and assumes for an unfunded plan,that the benefits continue to be funded on a pay-as-you-go basis. Mortality rates were based on the Pub-2010 projected forward using the SOA scale MP-19. Expected retiree claim costs were developed using 24 months historical claim experience through May 2020.Non-claim expenses are based on the current amounts charged per retired employee. Changes in the Total OPEB Liability Total OPEB Liaby Balance at the beginning of the year $57,533,000 Changes for the year: Service cost 3,177,500 Interest cost 1,314,800 Change in Experience - Changes in assumptions or other inputs 404,700 Benefit payments (2,396,000) Net change in total OPEB liability 2,501,000 Balance at the end of the year $60,034,000 Sensitivity of the Total OPEB Liability to Changes in the Discount Rate—The following presents the total OPEB liability of the Board, as well as what the Board's total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower(1.15 percent)or 1-percentage-point higher (3.15 percent)than the current discount rate: Current Discount 1%Decrease Rate 1%Increase 1( 15%) 2( 15%) 3( 15%) Total OPEB Liability $69,639,000 $60,034,000 $54,030,000 A-18 Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates — The following presents the total OPEB liability of the County, as well as what the County's total OPEB liability would be if it were calculated using a healthcare cost trend rates that are 1-percentage-point lower (4.5 percent decreasing to 3.5 percent)or 1-percentage-point higher(6.5 percent decreasing to 5.5 percent)than the current healthcare cost trend rates: Healthcare Cost Trend Rates 1%Decrease Current Trend 1%Increase (4.5% decreasing to (5.5% decreasing to (6.5% decreasing to 3�5!il 4dil 5�5 Total OPEB Liability $51,929,000 $60,034,000 $70,960,000 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended September 30, 2021, the County recognized OPEB expense of $5,230,300. At September 30,2021,the County reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Changes of Assumptions or Other Inputs $13,076,000 $5,226,800 Total $13,076, 000 $5,226,800 The amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: FRS For Fiscal Year Amount 2022 $743,200 2023 743,200 2024 743,200 2025 731,800 2026 731,900 Thereafter 4,155,900 Total $7,849,200 Florida Retirement System The County's employees participate in the FRS. As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan ('Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration ("SBA"). As a general rule, A-19 membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida.The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries.Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the Web site: www.dms.myflorida.com/workforce operations/retirement/publications. Pension Plan Plan Description—The Pension Plan is a cost-sharing multiple-employer defined benefit pension plan,with a Deferred Retirement Option Program('DROP")for eligible employees. Benefits Provided—Benefits under the Pension Plan are computed on the basis of age,average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life,equal to 1.6%of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with at least six years of credited service or 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life,equal to 1.6%of their final average compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers)who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age,are entitled to a retirement benefit payable monthly for life,equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life,equal to 2.0%of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers' class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33%for judges and justices)of their final average compensation based on the five highest years of salary for each year of credited service. For Plan members enrolled on or after July 1, 2011, the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular,Senior Management Service,and Elected Officers'class members,and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support A-20 class members. Also, the final average compensation for all these members will be based on the eight highest years of salary.As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1,2011,there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of three percent determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1,2011,will not have a cost-of-living adjustment after retirement. As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of- living adjustment is three percent per year.If the member is initially enrolled before July 1,2011, and has service credit on or after July 1,2011,there is an individually calculated cost-of-living adjustment.The annual cost- of-living adjustment is a proportion of three percent determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1,2011,will not have a cost-of-living adjustment after retirement. In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate.Deferred monthly benefits are held in the FRS Trust Fund and accrue interest.There are no required contributions by DROP participants. Contributions - Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants, are required to contribute three percent of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates established by the Florida Legislature.These rates are updated as of July 1 of each year. The employer contribution rates by job class for the periods from October 1, 2020 through June 30, 2021 and from July 1, 2021 through September 30, 2021, respectively, were as follows: Regular-10.00% and 10.82%; Special Risk Administrative Support-35.84% and 37.76%; Special Risk-24.45% and 25.89%; Senior Management Service-27.29% and 29.01%; Elected Officers'-49.18% and 51.42%; and DROP participants-16.98% and 18.34%. These employer contribution rates include 1.66% HIS Plan subsidy for the periods October 1, 2020 through June 30, 2021 and from July 1, 2021 through September 30, 2021, respectively. The County's contributions, including employee contributions, to the Pension Plan totaled $12,167,517 for Fiscal Year 2021. Pension Liabilities,Pension Expense,and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions-At September 30, 2021, the County reported a liability of$24,009,850 for its proportionate share of the Pension Plan's net pension liability. The net pension liability was measured as of June 30,2021,and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2021. The County's proportionate share of the net pension liability was based on the County's FY 2021 contributions relative to the FY 2021 contributions of all participating members. At June 30, 2021,the County's proportionate share for all funds was 0.3178 percent, which was a decrease of 0.028 percent from its proportionate share measured as of June 30,2020. The contributions made after the measurement date of the Pension Plan's net pension liability but before the end of the County's fiscal year will be recognized as a reduction of the Pension Plan's net pension liability in the subsequent fiscal period rather than in the current fiscal period. A-21 For the year ended September 30,2021, of the$2,238,393 that the County recognized as a pension benefit of$293,191 related to FRS pension expense. In addition, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: FRS Pension Deferred Deferred Outflows of Inflows of Resources Resources Differences Between Expected and Actual Experience $4,114,789 $- Changes of Assumptions 16,426,582 Net Difference Between Projected and Actual Earnings on Pension Plan Investments - 83,753,383 Changes in Proportion and Differences Between Pension Plan Contributions and Proportionate Share of Contributions 5,200,117 10,087,428 Pension Plan Contributions Subsequent to the Measurement Date 3,068,141 - Total $28,809, 229 $93,840,811 The deferred outflows of resources related to the Pension Plan$3,068,141, resulting from County contributions to the Plan subsequent to the measurement date,will be recognized as a reduction of the net pension liability in Fiscal Year 2022.Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension expense as follows: FRS For Fiscal Year Amount 2022 $(11,994,003) 2023 (13,986,116) 2024 (18,526,220) 2025 (23,740,054) 2026 147,070 Total $(68.099.3231 Actuarial Assumptions — The total pension liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumption, applied to all periods included in the measurement: Inflation 2.40% Salary increases 3.25%, average,including inflation Investment rate of return 6.80%,net of pension plan investment expense,including inflation Mortality rates were based on the PUB2010 base table which varies by member category and sex, projected generationally with Scale MP-2018 detail are in the valuation report. The actuarial assumptions used in the July 1, 2021, valuation were based on the results of an actuarial experience study for the period July 1,2013 through June 30,2018. The long-term expected rate of return remained at 6.80%, and the active member mortality assumption was updated. A-22 The long-term expected rate of return on Pension Plan investments was not based on historical returns,but instead is based on a forward-looking capital market economic model.The allocation policy's description of each asset class was used to map the target allocation to the asset classes shown below.Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption.The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Compound Annual Annual Target Arithmetic (Geometric) Standard Asset Class Allocation Return Return Deviation Cash 1.0% 2.1% 2.1% 1.1% Fixed Income 20.0 3.8 3.7 3.3 Global Equity 54.2 8.2 6.7 17.8 Real Estate(Property) 10.3 7.1 6.2 13.8 Private Equity 10.8 11.7 8.5 26.4 Strategic Investments 3.7 5.7 5.4 8.4 Total 100.0% Discount Rate — The discount rate used to measure the total pension liability was 6.80%. The Pension Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees.Therefore,the discount rate for calculation of the total pension liability is equal to the long-term expected rate of return. Sensitivity of the Count)�'s Proportionate Share of the Net Position (Asset)Liability to Changes in the Discount Rate—The following represents the County's proportionate share of the net pension (asset) liability calculated using the discount rate of 6.80%, as well as what the proportionate share of the net pension (asset) liability would be if it were calculated using a discount rate that is one percentage point lower(5.80%)or one percentage point higher(7.80%)than the current rate: FRS Net Pension Liability(Asset) Current Discount 1%Decrease Rate 1%Increase 5( S0%) 6( S0%) 7( S0 County's Proportionate Share of the Net Pension Plan(Asset)Liability $107,359,624 $24,009,850 $(45,666,977) Pension Plan Fiduciary Net Position—Detailed information regarding the Pension Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Annual Comprehensive Financial Report. HIS Plan Plan Description—The HIS Plan is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida legislature at any time.The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying A-23 their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Benefits Provided—For Fiscal Year 2021,eligible retirees and beneficiaries received a monthly HIS payment of$5 for each year of creditable service completed at the time of retirement,with a minimum HIS payment of$30 and a maximum HIS payment of$150 per month.To be eligible to receive these benefits, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions — The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature.Employer contributions are a percentage of gross compensation for all active FRS members.For Fiscal Year 2021,the HIS contribution for the period October 1,2020 through June 30, 2021 and from July 1, 2021 through September 30, 2021 was 1.66% and 1.66%, respectively. The County contributed 100%of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation.In the event legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or cancelled. The County's contributions to the HIS Plan totaled$1,494,694 for Fiscal Year 2021. Pension Liabilities,Pension Expense,and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions—At September 30, 2021, the County reported a liability of$31,306,155 for its proportionate share of the County's HIS Plan's net pension liability. The net pension liability was measured as of June 30, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1,2021.The County's proportionate share of the net pension liability was based on the County's FY 2021 contributions relative to the FY 2021 contributions of all participating members. At June 30, 2021, the County's proportionate share of all funds was 0.253 percent, which was a decrease of 0.003916 percent from its proportionate share measured as of June 30,2020. The contributions made after the measurement date of the HIS Plan's net pension liability but before the end of the County's fiscal year will be recognized as a reduction of the HIS Plan's net pension liability in the subsequent fiscal period rather than in the current fiscal period. A-24 For the year ended September 30, 2021, of the $2,238,393 that the County recognized as pension expense,$2,500,384 related to HIS pension expense.In addition,these activities reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: HIS Pension Deferred Deferred Outflows of Inflows of Resources Resources Differences Between Expected and Actual Experience $1,038,549 $12,999 Changes of Assumptions 2,438,748 1,278,769 Net Difference Between Projected and Actual Earnings on HIS Plan Investments 32,355 - Changes in Proportion and Differences Between HIS Plan Contributions and Proportionate Share of Contributions 2,135,494 1,142,081 HIS Plan Contributions Subsequent to the Measurement Date 344,811 - Total $5,989,957 $2,433,849 The deferred outflows of resources related to the HIS Plan,totaling$344,811,resulting from County contributions to the HIS Plan subsequent to the measurement date,will be recognized as a reduction of the net pension liability in Fiscal Year 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the HIS Plan will be recognized as pension expense in the enterprise and internal service funds as follows: FRS For Fiscal Year Amount 2022 $884,499 2023 281,777 2024 581,386 2025 771,713 2026 577,153 Thereafter 114,769 Total $3,211, 997 Actuarial Assumptions — The total pension liability in the July 1, 2021, actuarial valuation was determined using the following actuarial assumptions,applied to all periods included in the measurement: Inflation 2.40% Salary increases 3.25%, average,including inflation Municipal bond rate 2.21% Mortality rates were based on the Generational RP-2010 with Projection Scale MP-2018 tables. The actuarial assumptions used in the July 1, 2021, valuation were based on the results of an actuarial experience study for the period July 1,2013 through June 30,2018. The municipal rate used to determine total pension liability increased from 3.50%to 2.21%. A-25 Discount Rate—The discount rate used to measure the total pension liability was 2.16%.In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor.The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index. Sensitivity of the County s Proportionate Share of the Net Position Liability to Changes in the Discount Rate—The following represents the County's enterprise and internal service funds proportionate share of the net pension liability calculated using the discount rate of 2.16%, as well as what the proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (1.16%)or one percentage point higher(3.16%)than the current rate: HIS Net Pension Liability Current Discount 1%Decrease Rate 1%Increase 1( 16%) 2( 16%) 3( 16%) County's Proportionate Share of the Net Pension Plan(Asset)Liability $35,880,801 $31,306,155 $27,067,050 Pension Plan Fiduciary Net Position—Detailed information regarding the HIS Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Annual Comprehensive Financial Report. Investment Plan The SBA administers the defined contribution plan officially titled the FRS Investment Plan. The Investment Plan is reported in the SBA's annual financial statements and in the State of Florida Annual Comprehensive Financial Report. As provided in Section 121.4501,Florida Statutes,eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. County employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member's accounts,are defined by law,but the ultimate benefit depends in part on the performance of investment funds.Benefit terms,including contribution requirements,for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the Pension Plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% and 0.06% of payroll and by forfeited benefits of plan members for the periods October 1, 2020 through June 30, 2021 and from July 1, 2021 through September 30, 2021, respectively. Allocations to the investment member's accounts during the F Y 2021, as established by Section 121.72,Florida Statutes, are based on a percentage of gross compensation,by class,as follows:Regular class 6.30%,Special Risk Administrative Support class A-26 7.95%,Special Risk class 14.00%,Senior Management Service class 7.67%and County Elected Officers class 11.34%. For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the Pension Plan is transferred to the Investment Plan, the member must have the years of service required for Pension Plan vesting(including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Non-vested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five-year period,the employee will regain control over their account. If the employee does not return within the five-year period, the employee will forfeit the accumulated account balance. For Fiscal Year 2021, the information for the amount of forfeitures was unavailable from the SBA;however,management believes that these amounts,if any,would be immaterial to the County. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump sum distribution,leave the funds invested for future distribution,or any combination of these options.Disability coverage is provided; the member may either transfer the account balance to the Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the Pension Plan or remain in the Investment Plan and rely upon that account balance for retirement income. The County's Investment Plan pension expense totaled$2,608,643 for Fiscal Year 2021. 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LU Ln gLE E 0 > v o.o.2d: O n C - N W 'O CL CL CL D �- N c d d A W N E N h (U U U U J N tyil A A 0 w V1 V1 V1 X 0 N A A a L L) w U .o co .o LU c c a W U 2 Li Li \ f ; f $ | ! § r = 10 'o f ) ) [ # \ G U, " 2 \ § k — co < « < U, j co r = gwo § � Jkj _ ; euU / Bk � � — § co co � § k � - r co /] ` — ) § ) § § _ � LZL § L § » § ] ; § ! ! § 99 ) ) ) § � ) � ¥ $ a \ \ \ � 1 � E ( © a ® 2 { aa ) : ] a I 7 � » LL \ \ \ { LL,E eeee ° ; � _ _ _ ® ° ) 6 LLJ> -0 3 3 ) ® z / a a qzz _ » § J � ! } } / \ % ƒ ; y @ | ! § > U. f ) ° q ) # \ Gq § = Et � G > @ — 2 < < gwo @2L 'i, /"= - ] Rm § § k � §§ § § § ! } u a] ]0U,) E ` R5 0 U, � a2E / b § ! §Lu 0 _ ) @ j ; ) ! : £ s ) \ a 2 27 a } � ) § L ) \ \ \ { § § ) ; � ® — ~ & & ( ( j 3 3 q / ° § LU » § ) � 2 ) } w y O O CO r r M O r N M N 00 CO Ln to 0 M M r r N U' M W CO CO of N O ?a 'O U � Mn W Ln N O � � � � r M Ln M M O � 0 7 'w UA W O O M mr CO m O f O C O W CO O CO Ln to 0 CO M O O M N M M O N M CO N M O of CO M O O M W M U' M mO Ln Ln CO M r � Co O O CO r r Ln W CO W U' M W M M O N Ln O N r M O O O z u C r N M O W M N CO r N N Ln U r s CO M CO W L Q N M N N 0 u> u> 2 J ~ W N O 0 0 0 0 0 O O r G N M M U Q U W o � rn O o O o I� M M 00 00 O 0 0 Ln 0 0 Cfl r N W W h h z O A N r CO O O N N W M M to N M M z U N W M M tfi O M W M O M W M COO V N Qy Q O LLL W W m N M N N Lu z U m u> u> Oa J W W U W O O M r 0 0 r M M r O M O O M Cfl O O Cfl Cfl U' r N U' W of h z 0 C y N CO CO Ln 0 O O N W M M to N M M Z C m W z Q p M to O C M V V M r N N M o W Q W O m N M N N = z ua O W U W � z Q a a z z Q a LOU W O j a O I g a m 0 = j O O LLjJ LL z Y O O_ N N O QOU > y N ° d M W C U m C 0 p Q y C N C w .0 d V1 V1 N N x U t6 C N .p y N p y s U w = °)m w s m p a ° ° L N c �_ O i.L c O N pU = > W � m (D O E mUU a`� ti c a° ¢ m° j u o o ° s 5 ay 0 O 'p U U W p ° E -° ° h 2 Y o °0 6 > m > > ° ° m rn m pa z x > N ~ z r 4 ~ w O W ° ° c c ° m m � � = U � � ate ~ c c a LU W U O Z LL LL 01 w y O M M N of r r r O O M M O M O) N O O Ln M N N r Ln M M M O N ?+ .� > M M M CO M M M M r M M O Cfl W U' 0 (U 7 'w ' CO r r N O M O O_ M O W r O r O z C m .y M m W M O N N O m N N co CO m CO N A a m W v Vj V Vj Z M M W W M r r r N O co M O W W O O to CO M M r O r M of N > r M CO M N M M O N N U' W O r O O N N N O Ln O M M O z CO N CO N M M M M O W O O O r CO J U O r O O O O r O r O W Q Q m ,I- L) z u u 0 = L N O O O O O V V M r W C O M CO A p) Cfl W O M r N N M O) W N O O Cfl CO a U Y M L _ ' M H O M N N O N W V M M Q Q W a m N N N M L ¢ o g hh g o 0 0 M M m e o o w W O O O O O N N r r r O CO O O 0 O C N O O O O O N N r M r 0 0 M CO h ;E0 z W C p� CO of O M r CO CO O O W O O r CO CO z W = a N CO M Ln of M of O N O W to r r O M. m a o . I u CO M N N O V N C M M M M x W W CO M N N N M m O W 0 O W W U W Z LLU J � W g W CO L) W a p 2 O Ln a ° W J 0 C N N W = N p U M p L) (> W z T '° .� N U rn c O U U � (U c J N N p ° °- y N L) 2 w N c N T x U W. N w N m ° Lug ° w m s m $ c g � > E U .� p csns OLZ c Q c O c � p O N z E — > W y N U U OO � s 0 0 Q y N ow m = y m •U o o N N 6 Lu W o ° E h m > m > > m rn m pa H 0 U O E w w o m m LL z x ° s > z c w W s m m c c a W U 0 Z LL LL � t 0(D o d C O O O O N r O m y O M r 0 V M 7 v O M M M CO N CO ON 20 O N M O woz Q V co � z � zz u> 2z 1Z-- Q � 5o00o w M W p zO a w N o v o v rn rn zU o rn o�oR r2 r2 Q M V V Q J p v Q a W w -jhQ ° Q h c=iovol� w M pp V U a m c°ioornoc"o' rn rn zW Q a wo cmV O M O M M N x a v p = M CO V O v v p W - W w O<w W O m �.�. M M M m p w w z W u o ° ma 'o � o j W °w oni g w U - Q w � z O J a a o N O N W CO J d 0 = zLu C 0 x W z y w m 'fl m `m U = m�-s c '� .0 m N c`0.+ m V) j j O E W O In 0 c j j ° W (1)I-I- ~ y m m O W W a1 01 w y N CO O r O O M O O O r M N M M M O N V(N N V V M M M M ID U'r N r M M M N .�� > �-N -N� I�O O O V N CO � O O M V � d •� A CO M C U CO •- N V CO N O .- r N N A d r V M m m V N M O M 0 >� M N V I� V I� O O N M N O M M M V V O r .-CO.-N V V N I�O V O r O M O V V Co CO I V CO M I� r N O V O M I� O M O O M O z M Co O Co M V I� O O M r M (0V U ,I-I M I� M CO M V I� W x J Q = N Co 00 O N V M O O O O r V N M r r O M U Q J W O -O 00 O O M V I� O V O M O CO N I� r M V C )yJ N O IQ 0 0 0 CO N I�O V V O CO z ~ h z M C p CNO Q QaU ii NWN WO W WO M V O M . . -c W CO CO CO O CO Ww co �pvp M O� W z N a m u J O h ° Q W CO O O O V M O O N r V N M r r N W W V O O O O V 0 0 O V O CO N }p (� U U w N y O IQ 0 0 0 L N O V O O M O V M V V M M zz W C N M M V M M O M M M M M M O W = ay 'gip C-N MN MMM � NM OOO MM O . am W y p vw �� I� rn co rn� Mrn � � o M O W y 02 ' W (n M N N M M M = z z u U unQ _ o ° zazou O W J 0 z } g w CO - ¢ W W z O z ~ P Ow W a -j 0 > Op )` E o E p z Co m rn 0 0 �- x z >LU :o N .. 00 `00 0 0 W N C N N d 0 N N C U U .0 N U 0 C c M N O � U T U B t6 d > c d O_ > W 0 > p 0 0 U J �] O� tsil t6 C N W N O 12 W 0-0 = U' 0) 0) 0) 0)O ) L J'6 N O W C O t6 X z N 0 V1 U C d O t6 t6 t6 m '- 0 N N y C W I- U LL E 2E X a w U w y O O W CO Co of O O O Co Co V O V N M CO CO CO O O O O N N N O W O O 0 0 Co of N O U 7 r1 .- CO N N r .�- V of V N CO � N M � W Efl Efl O CO CO O N N O 00 W CO W W Co W z Q M M U � z W ua u> Q W 2 J N U Q z N r N r r V W O O O O IQ p z I- LJ O A N M a Q a LZ a V g o co u u W h W a h O M M N 0 0 0 O N N a M O M N N O O O O O O O } z U y W N y r I N I� r V Co Co IQ IQ CO I- p I- y C rn V V Sri O co I� r z a U p •� M N V V V CO OU w y y L O m 2 WO W V O W u> u> z ! a W h g w m = LU } a� a p WLn 2 LU LL w p J LU ? � c U p o a m m N E W C. EO c .�, .N N L p o " -o O E o W a p ° o s c ayi ayi U N N U U w y -o m > m > > O rn m c�a z ~ z C in ~ x ii N N c c o co co - N N N N C > C a W d H H ~LU c c aW U O z ti ti O O Oa w y W N O O CO I� V CO V N V of N O .�d > O CO CO � ,I- CO COI� d •� N O M I� O O M N O O M M U CO •- A CO N V O O M M r M r O � O � of of CO C_ V7 p) M O M O r r � W Efl Efl O M O M O M I1 O M O 0- N O O V IN O O .- CO N of N N O O m N N W V B O O Co CO M r Co ,I- I� coO V I� .- O r W z O coof N .- O M N CO of I� O N U I�Co CON �- O O Co- I,- CO IQ W Q V V W Efl Efl x J = N co U Q W N H O M O 1- O O O OON U' � O VI� V(N co C M 6 CoO r A O V V I� V O O O N V z h O C co O O g co m m Q U z M O N �- CO N N Co �- O O M O V ov Q W w m v v o co o a a g u u W h , J Lu of 00 of O ',I- V V V CO O I� r W Q O M O M M V CO V O N O M O O O O p a N N Co Co(N r Co IQ CO CO O Co V Co M V V M O � a m N p � O Co Co O N N O V O COM � O W O wp p COv v rn r w 2 w W V V W u u a zza0a o O LU> a W a >- u g W CO a W O N a p a x T O U a J N L, z J � O (o d W M p 9 � � Cd G L) N O_ C N O d y C (6 LLU d N rn O `p s 0W = a�m LL s co a o c .E m °� Loan) o s O i.� O v� U _ vi >+� '� � o_ (D m000 �` w w W N N N x o C N N N O U U W o E m ? y m m m m 1 > m o o m rn m �a z x N N H z C c c c ~ x ii N N H t co co W N s > W 0 � - W N N > I-U s a a � aaHH U 'o 'o s c c Wa' W U O z ti ti w y O ' O CO O O O M 0000 M O O O N CO I� O M r 0000 r N .�w d M U' O r O " I� O O r r V O W O O V V M V I� U m A V N W M N O O CO A n d O N N N M rl-i W u, MO Ov w co v rn W Co M M M O N U' U' O O U' O O z O W O N N M M W O r N U N N °M N N Co U' W Q M M z z Efl Efl 2 J W N 0 0 0 O 00 O r r 0 0 W W Q = V O V N= ON O U' ° O O W W 6Mi 6Mi A W O M 00 O Q a a , LL N V OJ N � p y p � m m O = Q J W u W I- <, a h O O O of 0 of W 0 0 O W W } p OLL, W W A y O O O CO N 6Mi O O O O mm z W = N •�'O V O N V CO I� O N N O X m z p O m r r r O _ w W U N zLL, 6 u LL, w U w w � z � a z z Q o W J (L W g w m g w N a z N OW L, h O > ° J Q W c N y Oco > w y O y M W V1 E E � � a c o c 0 11 N L N s u- O f%1 ° E c (D W E E w p 'c� o o s ayi ay) N N C O O N c O O d U U W N p t6 t6 U C C t6 O � m O o 0 o _ O N A A U F- p .. •w m m O c o m m m z N 0 rn z C T o O I- x ii N N H CO CO ? U _ a a m m w `m U c c Wa' W U O z ti ti O Oa V CO O W m m N V N O N O N .� d � O r � O CO W V U' V O V O N I� U CO .y A W 00 A � C z •- •- .- N •- � W Efl Efl O O O V of V V O W M N N N CO N O M O M N N O r z u N O N V W O O O O U W m N M V O r W Q N z 6s fl a 2 J N O O O O O M M U Q N O O O O O V r r r O V N N z U W L,M C 'O V W � W MW CEO 6ri V p y p z um, m N V N Lz m 6s V w Oh i- y W o00o N � o00 w O O O o rn � v v O O o v v } p U y W N y O O O O O N N O O O N N z W p a m z p v o o O W y Wp O m N M N V N m W w U 2 W u u O j a U } N g w m O w N a p J 2 W z N OW W O o ° J �W C N N m N � d O N M S fry O U m t6 0 m C y O N O O N w �' W c C. c o c > Q o .w N o �- O v� E S > W W N N O_ O)U U s W N N E C NW' W U .0 O O O U U W p t6 t6 t+On t6 tNi1 j A > > t6 A A o o 0 .. c E ° O o c�a m m z ~ z c o = o ~ w " ~ s CO CO j = � 2E a �' w mm L) c c c Wa' W U O z ti ti w y O I S O W O W I�W M W Co O M M V I�N O r M >a .� W M r W M r r V M W � O W d �•� M� M V O M N O N CO M O C m y V N .�- V r .�-N co A a � W Efl M W V V O M M O M O O U' CO z O O M M r W V O N.� V -O M 00 W W WLU O Q M M z u> az V W W V O O M W O r V M W 0 U W CNO W W O Q Q JL.L, M LL o y Q z w m ULL, W O D J C O O O M M N N 6Mi Iz=- z ZQ N °� W O O V O W W W O0 - UO' UO' } Co � OOv v v coC5 Way w wWteU Wv vc �O W W V) p O m N = U 0 VI z u O LL, m O a � W ¢ z W V) z W gw W } ay a2Wi O J N a ayi ayi LLJ a y ` J m g O > tl y �W U W O N N`� N O U N U W of N N o w .�'W N m ° a VU) U)com N N cs V- O O oW W U 0 W s s o A N U U s o X N O s d d 0 H ~ N t6 > N > N O O) A A Q �UI- H XOrOii � H t m m O O V) d W U O z W W N O Oa w y O V O M W O I� r 0, M M N O W V M O O Co M M O W O >a.�> N V O O CO O N O O U CO N W CO W d •� M O r N r M W N O W O m •y A N O N r M V N M N 0 c a z 0 U. v 6s V W O M O N co 0, r N N ,,I-V O V N M O W W O W I� r N N�- N O�- N V I�W V CO CO z N 0 W I� O O 0 M N O N N N N Q 0 0 W M O N r O r r W z � a 0 = N 0 M W 6Wi V 0 0 V 0 IQ V� r CMO CO IQ W z () W M CO N O Co O W O O N M O N N O Q Q Q = 0� U. M M N N M p Vj O z W m d W z j m u O ¢ W w W I- . h ' ' ' J C _ O O M O O M } z W(� a W N O V C.,O C.,O C.,O O V O IQ O IQ W O O W W O O M M O V N 00 N r z W = U N .� W 6� M W = a m w 0 O W y p O m = p W U = W u = z O a W 0 � aai g Lu m J W o 0 W = O W z U ~ c m N LU Ot=i g 0 �- 0 o y 0 0 W Lj W o_ W C - E = N O) O 0 0 2 N N U y y 0 0-o >, y - y ou o y m � E D 0 U N y a�o o O o -o -O .0 0 _ y U N O U U J p d N 0 0 O m U cJ U O t6 t6 0' Y cJ t6 6 U LOL— O N W d m 0 W' N U 2 U = 0 a- (OD _O c-od ��- N >,O WQ = N !n �,�U WE ° - 0.0 o ° oN m ° mm z N ° z o c ° .= H E mom° a�H H c.�s > W W W m I-J O V) J J j �U LZ 2E a C 2 U W X a W U w y N O M W of O O r r W N O O N O N O O O O W V M >a .� d r O r M o 0 CO W O W d •� O O O W 0 0 O r O U m A M of O V O O O 0 N O d O O O r 0 CO O O O Cr0 00 � W CO co rl-iW CO z 7 O N N O O N U CO M M N N CO W a V V a z UQg No 0 0 o w w w o o o w w p = W N O O O O O O aaaw � � p V p > W m Lu z � m u u Oh �- a W 0�V o� v60i v60i woVf 0o0�V UW W ZWjO W 000 ww oO wvV w W yC v 0 O m _ u a z a a O W J J } N g w m V W aptai = W z h OW O J O W ° y U > w N O O M p N N U W N rnUUoZ 7 O N Lu -O d d U U W aD E t6 I- N > A > > N O O) A A O N N N O N A A z s > ~ z C O U ~ W W N N I- ,O m m j U C U `m I- U c c Wa w U O z Li Li M O Oa w y CO CO N I� r M M O W O O W N O O O O N N W W O g O W O V O O O O M M O U' V 0 d 7 •� O V N N O O N O W Co V V 0 U CO A V V N N M O N V O A C d N N N M M O j U. V V W r O N M V O O O r r r N O V W CO V I� CO U' W W of I� OU- W 0 Z M O N W W W M M M O V p U CO CO N N N M M CO CO z U. W a V a z o 0 0 0 m m 0 0 w °i O N 0 0 p = ? 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O A p) 0 N C C W L >~ z y 7 2 ~ W O W H t co co >LU U a � 2 °� a U c c a W U O 2 ti ti w y 0 0 O O O O M M N O O N 0 Q U m N N V V z m p y w u z o w w w w w v z wco co N a U V V LU a a wLU u u xJ 0 = N — M M M O O M M N N V V 0 VI p () w " m o x5 J h a W W Q W h a M M M 00 M M > z (� W W N y O O z W = ' In V V ( N N co co V V O WU N N Q O m _ Lu W o w � a z W g w CO z } w a QU. g x Q = W a N w J a W y N M QLLJ W U a N .p' N o c N N In p Z O f%1 o O — N W W U. N N a C a W W Q O s d d QW E N h U 0 m > > U A A m m j c C m a W U .O 'O c c aW U O z ti ti O Oa •� .0, d�-, j co co W o o W c�oNrn rn rn .� co v - o Sri co m co co U CO M O N NO N d N M V N j 2 a z u> V u3 M of 0 O 0 W of of CO CO N N h r CC) U' N N M M z z - CO CO O of of N N N = U N0 N0 of of CO M M N N za N N N N V V Q6s w X U a ~ N O O M W O O Q Q W .-M .- N CO CO CO CO z h U 0 N N N N N O V V a a a O O M O O L a n g m N W Q WI oaQWNco 0z W = z y 0m = � O O 6i 6i M V O O o W y W QLL, O CD N N � wLa W u3 UL, z z a x W N g W CO Q W o a Q w x O x Ln a oLLJ N J W W O N d N O Y y Ni5 d M W J U a y '6 0 A In 'E' Ln E L'- W Z X- ° ° °' c ai ayi Ln y Y W U N N 0 U U W Ec�a o 0 0 rn m c�a p H Q .. E '6 H X U Li c c p 'o co ? a L x w U o 0 c c aW U 0 z ti ti | ! § Cd cd oo a; a; ) ' a f ) \ ) § _ § Lu \ § / 00 m - 2 'i LL, � L _ B ) / Km _ §( / «( \ @ _ x _ ` ° £ UL a ! 0L L _ ; E < � L § � 82 Lu Lu L, \ b = � § ) LL ; � o e § § / \ ( \Ln [ —cc.' � \ ) ) \ \ \} ] R \ } \ » 5 ! 3 ± \ f ® _ § , ; © > e j I ( ® : 3 3 LuM t » � § » § ) � f ) ) } ? \ \ f ; f ° , 2 | ! § E 27 ) ! q > LU >LU ) ` ) ) # L« ` ] gwo � w _& / ; B ) / gymco / § § Lu - 2 2 � LLn a ! £ ) § ) kLU � E < g < o > G § ( Lu Lu \ b § § � ) � 2E \ � LU } ) } 2 * k { j \ / \ ( \ \ ( ` / ) \J ] R \ oE L)co /� L ) N�& Lli j$ I -j - x/ ) > \ J» L e 2 ) ) U m •y A A `° aoz p j ii v u3 u3 z W A W z U , Q p = a N O O O O O O O zi- Uo a Q ¢ a c 0 VI p N W •ti 7 a W z h CO m 0 = Q z W Vj fl W h W w = h � a Z W L X N N y V V V O O a Q p .0 O w 0 wO W U = O m u u z ¢J w Q z W y W N g m U O L z a c w o LLj J y M (n d p .. = w y 2 U ZO _ > f%1 > � ,, -o m U W U N W C w x- C N c d d W �O s U U W E t6 U tSJ N > > O A A V1 O p 'N O U O E N N A A z > ~ z C T U ~ W U. N lo- co co LLJ c a LU t a c c aLU W U O z ti ti O Oa w y W O COO M M N O O O M of N O V N N V 000 ,0 2 O O) of U > - 1- V O O M O O O O O O O O d •> N V O N M M CO 66,6 M O) O O C m -7, M V� - M O O coM � of O N w A a z p > v z _ W N O co O N N r O O co O of > I� O V I� r V O V O O co W CO CO I� O O O r N O 7 w a a O z a u> w N O O O rn rn U' O O o 0 rn rn p = z O O O � O O O V (CO Q a Q M p •� •�- of of Co D O V O r r vj W p z U. m o � aag � h W w h o o o p U a O O o rn rn rn O O o 0 rn rn h z 0 = w m � o 0 0 � � � o 0 o v (co z W V X m N w w o C E, wLL, y J p O co LL, LL, a W u u z zLL, Q z w g w m g w N a w p h O ~ a (D LU W 3 OLU W > w N V 105 M = Q N y C N E w 0 rn E in c>i W 7 m W s c m C. z o = O -o y o s 0 c C O f%1 0 N WD7 U U o � W N N t6 N a' O O s U U U w w E O z > rn ~ z C T ~ W U W N N .0 co co N c c aw U 0 z Li Li O O U' 0 z m a° z p M M r r W W 'o W O M M O Z w O W N W U V V LU w a ¢ w u u 2 J a N Q = a N W O O W Q a a W M C d V V V V V p VI p y W w m o) hz o z w m O O z W = X L V V V V V c00 O W w W V U w u u O - z a z z Q w w g w m J w N � a x w z a O U a uw W z 0 c w J w ' d M g c N C x w m m o o ay a E f/) C 6 O U L) W E I- U Y N > > A A V1 O pN U O U O N N A A z H z C T H x Lt N p t co co j c C a W y 0 ~ L) 'O 'O c c Wa W U O z ti ti O Oa w y of of M O O O M O N CO Co I� r V O O O V O ?a .� d O O N O O O N V CO M00 V CO CEO N CO 0 d N N N N N M a z u u w w O O N N V V O O O M M O O z w V LI) > U N N w w ¢ � a a a 2 J U o 0 a N _ 0 0 U' 0 0 0 U' 0 �2 �2 �2 Vm00 LL,0 f/1 p z W w m N N V •�•� V N a0 a ¢ g u u tJi � w z X C 00 00 00 0 0 0 00 o) > p (7 Q uw U' U' U' 0 0 0 U' 0 zW = W N C U M M M .�- M 00 V CO CO m O W W W z Q m Lu O w U y u J z W J Q W g w m U w w z ~ OLU LI g 0 N z L, N ayi p O N U N O A E w Q c m o L) J 4) O o_ U Nf m p d LI) E i N ow S .� O� a w c o c c s m o U Y o � a`� V) O L LI) > o_ in U U W L ON w W W J W E N h (�j Y N j �_ rn N N m D ° 0 " In o O E t6 m m m z > ~ z >11 ~ W W N N Imo- M m m j C C d U c c Wa w U 0 2 Li Li w y (O M an I r W (O M ' r M ' O M O M of(O M I W N N(O O (O M O 0 O O .�U > M I�O N r O N O) N O N M � � 0 d •=' O M M I�r O O M W O N O M U CO •- M O V r r M O W M (O N � a (O M M M I0 M I�N M M M O O W M of CO (O I�W O COM O W M N � M O �CO N O N O I� O O N O) I� CO O O N M W W M I� M f/1 U C M 0 CO M W O M W M CO O V W Q (O M M .- ` V .- N M U Z u> u> a = J N O 000 O �_M O O r O O U Q N 00000 00 W (O N p O O O O O I�CO O U' M O Z ~ O m D7 O O O M M N O M W M (O (O Q Q Q M M r N M OU. CO M m O O V r m m 0 � pzQpw OW z i- 00000 �Mo rn o� rnco p p a o 0 0 0 0 o o w o c0 N M M ~Z ZW p WZ N OOr rM N OM O LyJ WM OO (O (O N r W m 0co� Xm0 wyppWUmO N(O u u Z W J W `2 W m W a p = O n w W O w J W 15 N d M W U o m '� d f/1 E (D E ° o w .� m s ii c ° a > � -° c c s m 'o U s_ Z O vl =E > y >' aai aai o oa E �' ti ° O _ c ayi ayi ° c a° a w� p p p o o ° s U L >.N Z m m m LIJ N N N N H t m m a 5a `maa U c c LU a W U O z ti ti a1 O Oa w y O O N N M O W O N N M I� O O W O O M M O — W M M M O O O O (O U 7 «1 Lo M C6 O (O N (O V CO a° z 00 M MO O M M U' r Z UJ m of of O O O 0 w Q M M N O W O r r U Q N M M V V O o 0 M M M M LI) p p N o rn rn 0 0 o 0 0 o rn rn ia Q y O Q = W m a W z m= Q W Wm u u Lt - U � z O w N m 0 rn rn CO CO0 0 0 o rn rn Z y M M M M M V O O N N W n a p O m = O W U U w a z z a W J W a g g w m w p N x U. O = J a N V w W z O C N N U O LU ay ° m `m E Ln E ° c ow 5 o °� u a EO c N N y c . s c C O f%1 W N N N c 0 0 .. c o Z 0 > ~ Z C W W N N H t m m j a t C C Wa w U 0 2 Li Li )f;f ) @ CO\ a E f f f " m@@ ( ° � � / ) ) � _ _ u « = et JG § � two / E �] - � §LL, o - 2 DmLfxL - G£S), u` a ! LL 0u0� 5 oLL = � Juj U. UJ \ U. -j ( \ \ Ln \ ) ) 2 { } a I U. {\ § } \ \ \ f07 \ § { 3 k e , I. _ ( ( ) 7e B \ x I 3 3 > EL Lli / » L e ) ) ) c \ )f> > ® @ CO\ E � , 2 - ) _ � ; u < ® � = Gt - JGL cm two § E � ! § k / j � �/§ 0 » « - ! }L - OXLL LL SQ , a— 0 . 0E GR < o > � ' ƒ , Lu _ > Lu ao » ; f b -j § k LU g ) \ \ All § ¥ ) ( ] o ( ® / ) 3j1 ] R \ � \/ + { { 0 ) e ] e ~ ` - ( ( ) 7 e B \ j ) } = 3 3 LE § 0 0 � � 2 } w y O M M C, C, M C, V 0, N C', O .� r �O CO CO � N U' O V � d 7 'w CO CO CO ,I- O N C m •y N M M of V N O m j ii a z u3 � u3 I�O E M M M O (N CO U' Z z CO CO I� N N = � o w W Q O V) Z - u> u> LL Q U � Oo o 0 0 0 0� 00 O O O O O N N N N p � C, N OU' U' O O U' CO COZ ~ a 0 M O M M coN I� co co Q ¢ J a C coof W coLL, M M V W V N V r 0 v p Q w z C m u u OW U W o 0 C, C, C, C, o p h a O O O O O O O N N N N Z D U W N y O IQ IQ O O I �- N M of of co W = V7 C p� O M M of N I� of W CO = a m Lu p C w O M M V W V N V r CO O W o a z O co 2 OW U WLu z z Q ¢ w gw co w w a p N = WQ Q a W O J } W d O y M p Y LLJ U) LLJ = U V1 N O O_ d C N w y N .G O L 'E' m $ C. c. a� o y c rsii U U E w ti m w > a o LLE E ay ay `° `n > m >W (D E O m m = C U H p m f�- "O N N N A A A x U- cco co c c a W O O z ti ti j C C LL a z I�Cr N V M O ICO N V'it O O Z V)LU U M�M V V COO COO N M C0 Z Q Q LL � » » U Q U N O O O O O O O O O O O O Q Q ¢ a a = M M N M M O O OO M M p V p a W LL co W Z J 0] Q j Q F W » » LL W Q d o o O o 0 o O O o o O O Y (�dZ W o o O o 0 o O O o o O O F � X m )yJ H 7 W O m W di di O Z a a Z Q / Q U Z W J Q U,^2 W m W N N OLU paa a c a.� J LL O O N C xLu !_W co (AQ O- NV yw 0� do,0 o c cO o n A,O r m m � oLLN v O CU, uj OC d d 0L 0 —F - m umuma o m 0)L2 m m W ` O O W co co N N > a F ccc W� U O Z 1i 1iN w y O O O O O O O O M M .�d N M OM r r O O r CNO iC O O - O O O CO CO a z Co of of O W v Vj w O O O W of N N M O I: O O O O O N N CO M CO CO CO CO N CO A z O M O O O O O O W O z Q z = u> a W � 0. � aL p = U N _ d O O M M M M M o o Q a aL p V p W W m W z a m O = aJW WpW �= a o o v v v v v }zt� a W m y O O U' U' U' U' U' z a m U p rn o rn rn rn 00 � xmpw O W n = z O co W Vi W W W u3 u3 Z W JO 1- W g >Wa, m = W Wz0•h N OWWQO cap J p J W U E o oa m C N N O N W a t6 E E O N W U o_ N C d d C N W' a .O W U U W p Q N A A zLLJ N j Vl z .- W co co W x U a W z ti ti N Oa w y (O(O (O (O (o 00 N ; �-�- �- �- W U = •='= N N N N � 00 COa z M M � W v Vj Efl (O(O (O (O (O O N N M M N O oO W W I� O CO Z z N N N M N OJ N = U 00 O O M W W ¢ N Q U 2 J W N p 0 of CO of of z l- a o A p� iri u'i iri u'i QQaJ � �� o0 0 0 O vipQw co � z a m V V O W U W o 0 0 0 z o U w CO CO 00 00 z W = W N if! = x m O 0 •�= O O O O O W W C z O CO .� R W z a z z Q ¢ w g w Co w w a p N = O = Q a LU W O J ! W d O W p Y O v) LU = z O O U >, X U 'U C d O O O w W O CO N J CL O c N N s O f%1 �' ti O W O N C d d N � s U U W E t6o Z N H z N f- X LL C D co co H j c (L W y U 'O 'O a W U O 2 ti ti w y 0, ?j 0 0 0 N N N N d COO •� I� r V O O O N O O O O •y A N W O O V M M ? iLaz u> u> � � V M ICI M CO CO M M V O z 0 0, O O O r r r r O v z N 00 o o v w U N W N V r V Z w U J Z N 0 > N V V O O I— w 0 N N N N N O O Q Q Q a O M M M O O M M wLL � m O Q w w u u w - W y h }zt� ww o0 0 0 o r Zw = = y O o o O o = a m h ' v v v v v OLl U w y O m v v v v v wp w U O w 0 aza � a o � aa� } N g w CO w w u o LL Lu 0 w V W 0 w w Ln 0 N N N N O J M LLJ 0 o N Gy7 11 � N -Ea w O_ U N .p U = N O N c o N O w w O f/1 > p c N �p rNii N N C C w O (D p W o o m m x O ii m z N > T~ Z p .G 3 H w c c I- t co co> m m � = a ) a J t H H U C C w X U O p > > a w z w w M y .� 'a co co rn V V o 0 V 7 «1 � M M M L COa z > U. o O O o v v v ZC5 0 M M M Ln LU 2 J N 0 = = N O O O O O O Q a a w M C p OO OO r0 m 0 m U. U. WU > z w w0 o 0 0 0 0 0 Z C = y c p o 0 0 0 0 0 = X m h w p = wp w U = 20 Mi. w u Z w J w w gw }m a02 U. U. Z U. O w a o w w 0 > o J w w N to y M d Q f/1 O y O) ,p T O tC '0 O O N p 0 0 C U x > N D A A Z tb w U w C o t m m w s w ~ U 'p 'p > U aLU 7 d t H C C a W U O z ti ti � o -� o0 0 0 oo �� Cfl Cfl U CO •y N N OJ N N N N N O O O 00 O V O O CO Ln Ln Ln O 0 U' V Ln O W V O M W W V �� O M V z Z r W O O V V CO r �W U CO V O M V O M N � V CO CO CO N w w ¢ r v v v a W 2 J > N O O O O O O O O O O U Q w o O O O O O O O O m m O O O O O O O O M M z V a M C p M W W V V V V O M Q Q Q W r Cfl Cfl Cfl N M p co 0 W W c'i V V V a w z a m u o = aLn W r LLu j i- o000 00 0 0 O O O O O O O O M M Q N c o 0 0 N C m 0 m W W (00 M M N V = O W Ln0 O` m M v vv U U ? W u o � Z 0 z z Q a Q g w m U } a Q w O m z a W W O O J U W y y U M W Lt Ln LLJ Ln o n 0 = O n E = W T�- C d d C O �W' = N W N � 'U w-s U U W > y 0 �- .. 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V W .N. 0 N > A A z > ~ Z i 3 N ~ X D .0 co co j E C W W X U > > W z LL LL Oa s > ; 0 0 M w w U e A W W W W r V V N N Nm C M M M M M A > L, a z u u w w o o o N N CR CR W W M co-co- 0 M z � M M C00 C00 N V V W � N C W Q V V OLn CO M M V N � a � o 00 00 0 0 O O O O O O N O O O z V = M C a co co O O N N N Q a Q z o ° ry° W W m m > W � LO 2Wz O a Q m W ~ W J ~ O O O O O 0 C }° (� Q W N O O O O O O t6 Z W 0. W y00i °�n 0. m a ° 0W Lno 0` m O W U z w m o W J 2 W m g w m y w a O U. W 0' n U.J N O U M O ° W _ 6 O y d 6 C(n U d p W O c N � O A d x In N d W � N U T O- i o d L y w o s v H Ln O.9 c O Ln W W T Q Q6 W d d O W U s E U U N > N I- .. 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N j rn0�0f� OON O M O M rn rnO N V N f rn O rn v M V M M; rn �-' M""N f�O O M Co M o M O Q C m � N N O N Co O O N N M M m M �C m.� a > M o m f V O m C o f� V Co N M O M M Co O M O Co M Co Co O M ❑ M O f� N O r o r rn O O V VLo rn Z M M co co M N M N ❑ .3-1 NM Co MCo rn v W U O O N M o" O Co MM V N M Z Q W U U 2 J u N 0 0 0 o r�vo MM r�Mr� M M �o rev co co ❑ ❑ C N M M o N O f�O O V O Z i a rnoo o rn�rn�� rn rn M O M V V N M M c N N (n M V M N f�O rn N O M ❑ W ❑ H W LL 3 O rn M N N O N V C C a a m m N N co co 0 F H U W v w x " Z C7 a s ono rnv o 0 W C Luj m rn o rn O O co MM rn o corn Mrs co co N Z a m ] o o�n co r�co co rnv ono v v M W N W �� M V rn N M O O O N _ OW U uj Z O m rn rn M M M N N O N CO CO U C Z W J Q O wm > � n r2 ❑ N w 0z � � w w LL LL C ' N n J ZZ0 = — � " E o_ a>>� N o �xx U w M W W W k Q N-o V N = U - o W � c U .. �'c. mw d y w m oO o— o a d ZO c EU O .o-w.- 2o- o .. o .� aOsi� O N E N m>Y� .a o Z o m E 7 w o o m a m 0 W U U U o O L LL d d �— �0�W U in > Z o C o > > O cn mom �U Q0 ' u u N o o F m . . o_w o Z o o rn m m j o m .. ;? o ac W LL aZi aZi in in o m m Z w mv N m Z C.a Y C u1 ul H L m m w . � o o w w m 0 d d H U w o o m U v v > m � -H a U [if[if H H C ~ w U O Z LL LL I-�-1 w y rn M co M M co Co rn M rn V N N V O O >a > r V c O V V rn rn r M V N N U' O rn V CO M M M d 7 'w M rn V r rn M M co I� rn � M O M co rn rn rn U co •- A V M M V M N co CO rn rn co ,I- V V N m d N r rn V M M M M rn M r rn M M rn N M M M V O co rn O rn Co co O Co co M Co N O M rn Co rn W V O V m r M M rn rn M M M O O CO U' U' " O CO rn N M N Z Cho o o r co co Co m rn o O V m r o co O V O rn N ,I- CO ,I- .- .- V N V "t V M z = u> Efl a W co co O O M M 0 0 0 o 0 0 O O O V a W 0 co o o o o o V It U' r N rn (q M CO O CO N N O O O ❑ h Z o m M M N M CO rn O V CO O O CO rn I� O V CO co N N N Z W M C p r M V CO Co N rn M N N V I� rn M Q a Q > CO CO V V V ❑ / ❑ w m ri v V o < Jg J h a w o co o o M co 0 0 0 0 0 o 0 0 0 0 o O O W ~ W V ~ co V I� r N rn 0 0 0 O N O O N O O O }❑ V• W d m y rn N "t U' rn N M M O rn M M M M 0 I� O M M h Z ❑ a W M M N M I� M V O V Co O rn N I� rn co N N N W LI) LI) .- r M .- - .- Co M N co rn N V L r rn .- M M m ❑ ❑ '�7 N M V V N .- .- V N CO CO V V V W❑ coO W WULL wwW g w m w N a p LO) 2 N W � u Y O � o u J m LU m T — W N 2 vv a� 6 � � � � � � a O i � c m o m o m c Uo Uo Uo o o o � ro w O sO s O V� UU o c o � � � oo > a E 0 wo_o W w w U U U U U U U U rn z "- C C W o a� m Y Y Y Y Y Y Y Y Y Y Y Y j W m r m m a 0 c r X O c c o m m m co co w cs w o c UUUUUUUUUUUU w = m m ~ U co co > _ Ui� _ � a � U c c w x U O > > a w Z W W s � O W O W O Cr Cr O NCO W O M M M N O N O 3 d j N W O CO CO CO W V V ��W �I� M U CO._ M N N W N W m _ _ N .-CO C Cr Cr CO I� Cl I� to = d Z .-.- .- N N .- V W A A O N CO Cr Cl m Cl O_ V N W Cr O O N COO Cr Cr Cr .-I�LO V CO V Z Cr I�N CO M N CO Cr M N Z U M 1 O CO N_N N cl O LL J W N V) EA U Q O N O O O M M M N V N M � Cr Cr O CO CO CO I� �CO V V Z M M N p V) p Q 41 LLN N M M M N N M M zEL o O w ULL z F Z p W W O O O N N N C V W O O W F fn Cr Cr O O O O co W co Z a Q p N O N N O N W W �' Q W m W m "O M M WW H Z Q N N N N N Q 0! 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Q UUUUUO c V¢ > m V O in � r Nr:coNNui:rnMocovNrn v r pp�� r m�-N V N V�N�MNNNrN N A (O N MN��-N(O vO Mm�ON V EH EH EH G M r o r M N O M N N V M_(O N O W H O N (O N N O V LL G LL A EH EH EH N Oa G A H3 H3 H3 N N m N M I(O V m M M O(O N N M N V O O N N V r V N O O NMI N N M W m M �-_V O N N�-N NrO V Mmm m r 6G Z � H3 H3 H3 N Z G r O M N M N N r r O M r M V N O F2 O Z m 0 6 LL Q LL LL W O LL=W H V EA EH EH Z V CC N 0 LL W O O v U z J z m O W Z W Z w w¢ o o> o m a m O Q Z> w m m O LL d m u 9 o a 3 N 2 o O N N N N N lL U chi > o 3 m9s.`oc m� �5c z o E.= a� ss�a;ooa��Jaa LL c O O c j O O W o T T L 0 c zoo R o m m o m m m a m`m m o rn p� � °�¢��¢¢U��co)�Oa m m � r o A o a- m o a a O">:r E m � m m m m m m m m m m m F ">u O o '> o m a o 0 0 °Q .�a c au c o= 3 Q...... 9 � m m m m m m m m m m m V Q w m m m m m m m m m m m o a o u w Tc w A m =z.>-.. m e S m 0 CC O Z W O. —��——————————— L a 0 0 o Q Um v Z w o2O a U f 45 \ k - ) ) - - - - - - § CD . - �2 :5 0 uzgm ) § S [ C) _ E - - § 0 / ) § } ©) o ) J! x � )e � ) 00 � % - /)< f 10 ] \ \mo \\\ \ m o< <_= zo / CL \ § \ \ \ « ,_, - ` - - ) , . . . . �_ . , 0 . . . . . , . , Ml 3 [ � 37 ¢ - - - - - - - - - § ® O ` ° ` - - - - - - - � R [ \ ° ) ] / ^ ; ;; % \ ( ( k ) B ] [ ` - 2 ) § ` ° - - - f ® ) - ` 0 - u - - \\\\} w � � ,)\\� �\ \\\\ \{{\i7) �\ ([ff\\Q �) - 777 `\ !2{s - _fft \;{=§7 77//\§5)) ) E )) E1;\Ew //) § § § §\E §)) - ///2]/J3 ////2]/3 I I ƒ II m c 2 m C w N w = N y N L w U.- - U O L.-� �EEmcoc 3 o `� C --N C N O O = C T O N.0.0 E N rN-� N 'O > .Q.+-T' rL-� � L(0 N zN-O'O 'O ° O C U p_ to O Q 3 0 0 C N C c N r ECM N m m - N N _ OU mQ �� m N 0E O� W.� N m m N L T L r-� N L O N O U V =` N m ° N m N � N C N 0 0 0 N N 'O N E N' N �W/ � > = > � X �w wNQ 0 � V I N = m T O O N C C `p m p"' m L. m C —/5 E C m J C w Q L 0 C N Q w w .m T c N L O. O O _ m O O.L.J O'O 0 E V c (D m N L E N E c C C O 0 3 m w O O�p N `p O O N C w0 .m L C c 0 0 m ° C U m `U' O.NJ O.c U.c m N �/� C'O Co O 0 C c E O O 0 � t fl. VI °M.o W.9 ° a�w ° `° 0 E ° o o�3 a) O-o c c ) 75 ° a ° mE c m w 0 g 0 o.c) ( c aa ° O > m c N " E E > C- o 0 N O N O C c c C 0 m U-p N to 0 0 O U O O N C O 0 0 O N E N�- C U L s V C O L C N �1 ° O m p N H N c T N p Q7 p cp N p m 3 > " c V I c N N 0 = o V7 ='- =C U _ = N O p 0 O 0'O 0 m (0 c 'O 'O tl! a -p m tl!c m 'O rL.. N L m 0 �w m w U t o c a 0 12 a `o a 0 .c.L.. 'm0.N y d V N O. UC 'C7 U N N = U-c C N'O.L.. c fl. m00 I- F= E U Q+ m m 0Ec a 0m m mN z) E 2 C p C.c Z f0 N E 0 N.N m N 2 N� c N F U ° C- c0 m E 0 I- c L o 0 L ° L o.0 O L c L c 0 U m D C)s 02 o c Z m � m > � E a � m m E H S O. 0 °- mmc0ic O = 0 0 0 a oc N Oa Y C f6 _N T f6 C O C OJ C GO co Q M s Monroe County,Floritla Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Governmental Activdies'. Netlnvestment in Capital Assets $ 268,481,196 $ 270,422,340 $ 310,395,5519 $ 298,886,532 $ 318,447,503 $ 333,523,204 $ 319,025,970 $ 368,2462763 $ 399,934,362 $ 441,882,862 Restrikad 132,785,608 124,146,225 128,646,709 165,286,629 212,145,042 218,356,360 223,726,802 242,976,406 215,045,527 231,594,176 Unrestricted 56,444,010 43,602,257 31,027,325 (34,345,949) (50,029,144) (71,941,5491 (75,261,059) 1102,004,2361 1118,409,070) (11,232,306) Total Governmental Activities Net Position 457,710,814 438,170,822 470,069,585 429,827,212 480,563,401 479,938,015 467,491,713 509,214,933 496,570,819 662,244,732 Business-Type ActiNtias'. N Net Investment in Capital Assets 79,206,109 84,103,067 81,817,278 85,160,743 83,423,290 88,918,775 109,681,382 109,870,078 125,243,211 134,366,434 Restricted 8,935,257 4,486,851 6,198,120 6,984,353 7,749,206 9,040,085 7,078,684 8,521,859 5,401,902 5,150,078 Unrestricted 16,451,519 20,052,819 20,907,399 18,169,069 17,056,422 15,228,021 (6,537,650) 14,386,250 18,738,982 30,1902374' Total Business-Type Activities Net Position 104,592,885 108,642,737 108,922,797 110,314,165 108,228,918 113,186,881 110,222,416 132,778,187 149,384,095 169,708,886 Primary Government'. Netlnvestment in Capital Assets 347,687,305 354,525,407 392,212,82B 384,047,275 401,870,793 422,441,WB 428,707,352 478,112,8415 525,177,573 576,249,296 Restrikad 141,720,865 128,633,076 134,844,829 172,270,982 219,894,248 227,396,445 230,805,486 251,498,265 220,447,429 236,744,254 Unrestricted 72,895,529 63,655,076 51,934,724 (16,176,880) (32,972,722) (56,713,528) (81,798,709) (87,617,986) (99,670,088) 18,960,068 Total Primary Government Net Position $ 562,303,699 $ 546,813,559 $ 578,992,382 $ 540,141,377 $ 588,792,319 $ 593,124,896 $ 577,714,129 $ 641,993,120 $ 645,954,914 $ 831,953,618 Monroe County,Florida Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year Expenses 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Governmental Activities General Government $ 33,109,735 $ 32,494,96li $ 37,267,214 $ 34,493,464 $ 35,557,069 $ 37,502,040 $ 33,047,216 $ 42,600,073 $ 46,598,839 $ 16,601,238 Public Safety 94,622,170 97,644,691 98,221,343 99,117,813 107,153,098 125,871,354 123,536,270 137,1.113 146,7:7,995 54,232,193 Physical Environment 2,250,694 4,056,887 2,885,932 20,416,097 11,598,822 5,142,872 13,:57,1703 13,827,552 11,429,330 13,389,100 Transportation 5,550,632 5,810,368 5,836,775 4,%7,860 7,693,769 8,551,788 6,328,758 10,298,824 8,389,528 1,231,070 Economic Environment 29,394,468 257404,860 30,286,372 31,304,117 35,425,413 36,494,174 36,762,716 34,418,745 39,803,950 34,853,094 Human Services 10,002,254 8,772,408 8,776,107 9,117,149 9,247,469 10,391,189 8,128,718 10,268,471 12,030,396 10,165,464 Culture and Recreation 5,009,394 4,945,156 4,765,301 5,049,406 5,471,494 6,024,215 5,770,585 6,931,363 7,212,319 4,771,308 Court Related 8,708,250 8,678,198 8,564,174 9,041,892 9,858,508 9,633,236 9,575,187 11,096,739 11,315,558 8,161,413 Loss on Abantlonment N/A N/A 1,078,820 N/A N/A N/A N/A N/A N/A N/A Interest on Long-Term Debt 1,919,617 1,346,365 1,090,490 2,909,022 3,359,908 4,125,659 4,277,283 7,016,851 3,610,346 3,580,054 Loss on Sale of Land N/A N/A N/A 1,145,660 N/A N/A N/A N/A N/A N/A W Total Governmental Activities Expenses 190,567,214 191,153,881 198,772,528 217,562,480 225,365,550 243,736,527 241,283,836 273,617,731 287,158,261 146,984,934 Business-Type ActiNties'. Solid Waste 15,924,397 16,147,322 17,090,607 17,445,567 18,146,600 20,124,195 43,351,034 19,828,142 19,630,064 20,236,811 Toll Bridge 1,325,922 1,299,827 1,321,780 1,351,918 1,528,494 1,462,962 801,434 968,264 1,109,241 453,350 Key West Airport 9,183,855 8,551,579 9,315,084 9,390,022 10,5l12,895 12,425,901 10,466,36: 15,878,519 12,873,173 16,468,583 Marathon Airport 1,525,104 1,654,187 1,973,093 1,445,054 1,859,845 2,003,847 2,546,125 2,780,432 1,453,139 1,665,301 PFC Operations&Restrictions N/A N/A N/A N/A 873,420 336,892 3,267,351 N/A N/A N/A Total Business-Type Activities Expenses 27,959,278 27,652,915 29,700,564 29,632,561 32,991,254 36,353,797 60,432,313 39,455,357 35,065,617 38,824,045 Total Primary Government Expenses $218,526,492 $218,806,796 $228,473,092 $247,195,041 $258,356,804 $ 280,090,324 $ 301,716,149 $ 313,073,088 $ 322,223,878 $ 185,808,979 B-1-129 Monroe County,Florida Changes in Net Position-Continued Last To Fiscal Years (accrual basis of accounting) Fiscal Year Program Revenues 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Governmental Activities'. Charges for Services'. General Government $ 9,696,11' $ 9,900,022 $ 111111121 $ 12,618,594 $ 14,981,927 $ 15,500,950 $ 17,185,955 $ 21,635,273 $ 17,569,020 $ 16,:61,224 Public Safety 14,575,155 13,570,962 13,096,102 13,192,489 16,036,894 17,651,710 19,562,405 22,009,140 21,556,101 262 47,082 Physical Environment 4,029,585 7,557,781 94,236 1,488,769 43,747,897 3,079,450 1,:67,558 1,451,142 982,086 6,547,369 Transportation 280,555 186,162 294,635 207,897 229,598 160,506 226,678 117,205 114,924 4,170 Economic Environment 12,688 385,941 454,473 58,366 24,245 19,201 - - -Human Services 571,446 541,277 431,788 327,134 265,740 333,5'1 3537361 289,244 273,7413 208,385 Culture and Recreation 56,652 181 329 212,996 175,866 192,799 927,377 843,448 825,751 815,623 921,588 Court Related 1,195,299 1,676,794 1,061,006 4,771,093 4,379,726 4,268,008 4,337,159 4,634,650 4,815,378 4,891,716 Operating Grants and Contributions 31,140,270 26,680,241 24,484,744 32,045,494 240 71941745 16,969,758 14,899,740 14,560,761 17,912,440 15,676,309 Capital Grants and Contributions 862,661 9,689,270 22,553,751 16,271,947 9,559,026 17,243,156 22,912,402 55,791 631 29,683,031 24,091 368 Total Governmental Activities Program Revenues 62,420,645 70,369,779 78,200,371 81,157,649 110,131,637 76,153,697 81,932,706 121 315,497 93,723,049 92,149,211 Business-Type Activities'. Charges for services'. Solid Waste 17,:06,705 17,877,147 17,978,5:8 18,295,8210 18,269048 18,054144 20,693191 20,308,625 20,241,154 21658,991 Toll Bridge 928,993 961,458 994,032 1,071,150 1,148222 1012930 (8980) 1599076 1�30,211 2,110,105 Key West Airport 6,116,883 6,325,872 6,874,905 6,690,157 7,131456 8,137144 7550128 9092,112 7906395 11290,898 Marathon Airport 764,401 816,578 829,353 885,399 968966 1456352 914082 995039 1076883 1296124 Op a rating Grants and Contributions 3,393,187 3,485,298 2,545,532 5,996,892 2,902,539 5,607,647 6,338,177 19,429,527 7,737,514 24,408,750 Capital Grants and Contributions 262,241 2,343,704 1,089,450 1,362,200 1,525,314 4,:93,294 22,457,943 8,961,757 14,473,750 6,632,248 Total Business-Type Activities Program Revenues 29,372,410 31,810,057 30,311,870 34,301,619 31 945,545 39,261 511 58,005,941 60,386,136 53,165,907 67,397,716 Total Primary Government Program Revenues $91 793,055 $102,179,836 $ 108,512,241 $ 115,459,268 $ 142,077,182 $ 115,415,208 $ 139,938,647 $ 181,701 633 $ 146,888,956 $ 159,546,927 Monroe County,Florida Changes in Net Position-Continued Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net(Expense)Revenue Governmental Activities $(128,146,569) $(120,784,102) $(120,572,157) $(136,404,831) $(115,233,913) $(167,582,830) $(159,351,130) $(152,302,234) $(193,435,212) $ (54,435,796) Business-Type Activities 1,413,132 4,157,142 611,306 4,669,058 (1,045,709) 2,907,714 (2,426,372) 20,930,779 18,100,290 28,573,671 Total Primary Government Net Expense $(126,733,437) $(116,626,960) $(119,960,851) $(131,735,773) $(116,279,622) $(164,675,116) $(161,777,502) $(131,371 455) $(175,334,922) $ (25,862,125) General Revenues and Other Changes in Net Position Governmental Activities'. Taxes'. Ad Valorem Taxes $ 74,644,751 $ 72,39520103 $ 73,682,489 $ 75,322,772 $ 75,463,966 $ 77,511,075 $ 81,4752461 $ 86,857,839 $ 89,441,895 $ 96,010,623 Tourist Impact Tax 6,288,112 3,895,240 4,348,164 4,297,140 4,579,158 4,564,973 4,095,460 4,981,287 4,011,963 7,065,769 Gas Tax 5,632,636 5,339,694 5,722,072 5,711,689 6,180,346 6,501,374 6,160,380 6,410,690 5,801,456 6,713,716 1/2 Cent Sales Tax 8,755,791 9,172,600 9,947,619 10,736,520 11,092,027 11,438,274 11,043,667 12,498,403 10,098,395 15,081,839 One Cent Infrastructure Tax 16,318,450 17,172,360 18,653,970 20,161,451 20,817,676 21,510,929 20,805,323 23,583,643 19,863,169 28,613,899 Tourist Development Tax 25,606,873 27,192,150 30,555,397 34,480,163 36,633,260 36,519,7W 32,763,679 39,850,300 32,095,701 56,526,152 Other Taxes 1,866,485 1,837,247 1,960,584 1,081,021 1,131,692 1,097,971 1,145,385 1,077,006 1,010,381 1,252,142 Other State Sharetl Revenue 2,968,649 3,113,211 3,298,568 2,938,180 3,381,168 3,634,152 4,633,569 3,680,786 3,469,952 4,019,753 Investm ant Income 1,253,656 1,349,397 1,641:621 2,103,571 2,280,8ll 2,651,474 3,937,057 8,007,239 5,264,098 1,356,664 N Miscellaneous 2,846,449 2,681,696 2,570,727 4,782,480 3,276,417 3,237,284 6,479,131 7,495,951 7,470,045 2,694,123 Transfers 305,017 415,202 415,169 796,538 1,155,026 (1,709,842) 1,073,778 (417,690) 2,264,043 1,224,956 Total Government Activities 146,486,869 144,560,810 152,797,080 162,411,525 165,991,547 166,957,444 173,609,890 194,025,454 180,791,098 220,559,636 Business-Type Activities'. Investment Income 154,535 90,463 65,637 133,956 133,972 220,1259 359,254 798,274 586,285 14,637 Miscellaneous 11,988 7,970 18,286 101,565 (18,484) 120,248 240,318 409,028 183,376 272,782 Transfers (305,017) (415,202) (415,169) (796,538) (1,155,026) 1,709,842 (1,073,778) 417,690 (2,264,043) (1,224,956) Total business-Type Activities (138,494) (316,769) (331,246) (561,017) (1,039,538) 2,050,249 (474,206) 1,624,992 (1,494,382) (867,537) Total Primary Government $ 146,348,375 $ 144,244,041 $ 152,465,834 $161,850,508 $164,952,009 $ 169,007,693 $ 173,135,684 $ 195,650,446 $ 179,296,716 $ 219,692,099 Change in Net Position Governm ental Activities $ 11340,300 $ 23,776,708 $ 32,224,923 $ 26,006,694 $ 50,757,634 $ (625,386) $ 14,258,760 $ 41,723,220 $ (12,644,114) $ 165,723,913 Business-Type Activities 1,274,638 3,840,373 280,060 4,108,041 (2,085,247) 4,957,963 (2,900,578) 22,555,771 16,605,908 27,706,134 Total Primary Government $ 19,614,938 $ 27,617,081 $ 32,504,983 $ 30,114,735 $ 48,672,387 $ 4,332,577 $ 11,358,182 $ 64,278,991 $ 3,961,794 $ 193,430,047 B-1-130 4, 4- 0 GJ 41 r_ .LA aj co CL .LA � � EH u w — — — — — — — — — — 0 E x o u >o 0 o 0 > om 0= x LL CCU uu x -u H.o 0 0 o x u o o. u o 0 c u 0< m 2 u u cli W E 0 u. x . . . o x u o Monroe County,Florida Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General Fund: Reserved N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Unreserved N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Nonspendable $ 3,830 $ 5,450 $ 4,048 $ 3,870 $ 3,728 $ 28,175 $ 1,212,963 $ 116,368 $ 44,694 $ 22,521 Restricted 95,485 102,461 116,890 - - - - - - - Committed - - 10,000,000 10,000,000 10,000,000 5,111,583 10,000,000 10,000,000 10,000,000 10,000,000 Assigned 14,038,181 14,044,788 13,438,606 12,293,875 12,779,394 14,226,382 10,841,907 9,722,793 7,229,638 10,058,026 Unassigned 23,300,792 21,494,627 11,967,821 13,706,442 15,490,123 15,479,357 12,248,363 16,063,448 18,514,102 22,926,844 Total General Fund $ 37,438,288 $ 35,647,326 $ 35,527,365 $ 36,004,187 $ 38,273,245 $ 34,845,497 $ 34,303,233 $ 35,902,609 $ 35,788,434 $ 43,007,391 All Other Government Funds: .4 Reserved N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Unreserved,Report In: Special Revenue Funds N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Debt Service Fund Capital Project Funds N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Nonspendable $ 9,151,579 $ - $ - $ - $ - $ - $ - $ - $ - $ - Restricted 141,986,915 130,474,266 129,848,990 165,907,485 177,362,347 174,219,867 184,495,426 194,029,791 176,704,614 185,660,925 Committed 2,752,586 2,845,763 3,208,266 3,655,171 3,382,205 3,881,370 4,617,178 5,641,853 6,388,959 6,627,115 Assigned 11,745,017 5,592,775 6,152,655 6,282,834 5,276,737 5,021,010 4,325,401 4,746,840 4,974,285 6,169,529 Unassigned (3,457,865) (5,796,007) (4,649,995) Total All Other Governmental Funds $165,636,097 $138,912,804 $139,209,911 $175,845,490 $186,021,289 $179,664,382 $193,438,005 $198,622,477 $188,067,858 $193,807,574 Total Governmental Fund Balances $203,074,385 $174,560,130 $174,737,276 $211,849,677 $224,294,534 $214,509,879 $227,741,238 $234,525,086 $223,856,292 $236,814,965 Monroe County,Florida Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenues: Taxes $123,106,019 $123,735,974 $130,708,005 $137,755,535 $141,160,646 $143,749,520 $142,658,412 $158,897,014 $150,623,897 $192,246,012 Licenses and permits 5,472,910 3,944,718 4,360,817 4,981,871 18,935,412 6,719,940 7,996,804 8,163,115 7,758,928 9,164,607 Intergove m mental 51,270,543 51,869,218 71,488,374 62,910,951 49,444,606 47,798,496 56,105,886 78,086,217 75,734,154 71,676,717 Charges for services 19,094,901 19,130,497 20,219,171 22,233,877 24,916,469 28,239,891 29,522,881 32,470,561 27,611,297 31,432,435 Fines and forfeitures 1,215,361 1,628,656 3,063,793 3,021,667 3,403,295 4,318,095 4,781,662 5,375,419 4,591,060 5,976,698 Investment income 1,139,627 1,270,808 1,570,241 2,029,937 2,202,204 2,542,317 3,671,805 8,006,181 5,777,011 1,356,684 Miscellaneous 1,778,179 2,223,848 2,842,370 5,436,360 1,990,379 1,994,790 2,329,622 2,392,261 6,991,000 2,556,611 Total Revenues 203,077,540 203,803,719 234,252,771 238,370,198 242,053,011 235,363,049 247,067,072 293,390,768 279,087,347 314,409,764 Expenditures: General Government 30,471,282 28,820,391 29,517,833 29,164,606 28,922,141 30,750,282 34,214,450 33,615,952 37,775,861 39,758,349 — Public Safety 90,401,842 91,348,083 97,566,342 95,398,226 100,803,744 117,234,349 129,172,198 126,270,227 125,453,276 126,819,226 °J Physical Environment 1,708,848 1,695,709 1,920,924 2,739,223 3,491,768 3,483,739 9,230,329 28,808,743 6,671,351 5,557,546 Transportation 6,118,697 7,880,265 8,202,345 10,738,756 9,083,333 8,004,899 7,908,496 13,783,665 11,409,276 11,196,141 Economic Environment 27,301,464 27,383,724 30,270,689 31,270,853 35,331,685 35,637,822 35,877,487 34,302,516 39,673,314 37,162,099 Human Services 9,742,329 8,535,525 8,611,596 8,787,781 8,982,614 9,998,592 9,316,650 10,168,881 11,549,750 11,656,880 Culture and Recreation 4,523,854 4,776,649 4,493,470 4,724,380 4,908,583 5,397,221 5,461,730 6,103,571 5,924,520 9,401,578 Court Related 8,303,562 8,512,091 8,285,541 8,632,302 8,713,001 8,556,056 9,537,690 9,561,302 9,542,156 10,313,127 Capital Outlay 7,851,958 29,263,032 67,570,720 64,430,847 56,405,650 40,466,809 17,555,894 22,616,516 29,850,660 29,241,003 Debt Service Principal 6,132,753 4,808,643 4,990,338 11,092,352 21,154,694 8,427,373 8,670,397 14,843,076 12,966,162 19,207,119 Interest 1,554,236 1,373,797 1,190,415 938,222 1,558,266 1,457,767 1,424,992 3,778,852 5,484,236 2,635,270 Other Debt Service Costs 390,266 255 255 124,570 65,300 65,300 49,230 Total Expenditures 194,501,091 214,398,164 262,620,468 268,042,118 279,420,779 269,414,909 268,435,613 303,902,531 296,300,562 302,948,338 Excess of Revenues Over(Under)Expenditures $ 8,576,449 $(10,594,445) $(28,367,697) $(29,671,920) $(37,367,768) $(34,051,860) $(21,368,541) $(10,511,763) $(17,213,215) $ 11,461,426 B-1-132 Monroe County,Florida Changes in Fund Balances of Governmental Funds-Continued Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Other Financing Sources(Uses) Transfers In $ 65,998,245 $ 84,877,924 $ 65,968,130 $ 79,801,546 $ 83,406,991 $ 92,065,213 $ 97,649,030 $ 95,336,942 $117,944,851 $105,673,565 Transfers Out (65,060,291) (83,745,980) (64,836,219) (78,425,488) (81,672,445) (93,195,535) (95,482,878) (85,981,701) (115,400,430) (104,239,318) Refunding Revenue Note Issued - - - - - - - - - - Bonds Issued - - - - - - - - -Debt Proceeds - 5,461,341 27,412,932 65,408,263 47,212,188 25,397,527 32,433,750 20,940,370 4,000,000 - Premium on Bonds Issued - - - - - - - - - - Discount on Bonds Issued - - - - - - - - - - Payments to Refunded - - - - - - - - - - Bond Escrow Agent - - - - - - - - - - _Capital Lease Acquisitions - - - - - - - - - - �O Notes Payable - - - - - - - (13,000,000) - - Proceeds from Sale - - - - - - - - - - of Capital Assets Total Other Financing Sources(Uses) 937,954 6,593,285 28,544,843 66,784,321 48,946,734 24,267,205 34,599,902 17,295,611 6,544,421 1,434,247 Net Change in Fund Balances $ 9,514,403 $ (4,001,160) $ 177,146 $37,112,401 $11,578,966 $ (9,784,655) $ 13,231,361 $ 6,783,848 $(10,668,794) $12,895,673 Debt Service as a Percentage of Noncapital Expenditures 4.33% 3.34% 3.17% 5.97% 10.21% 4.32% 4.05% 6.64% 6.92% 7.98% Monroe County,Florida General Governmental Tax Revenues By Source Last Ten Fiscal Years (modified accrual basis of accounting) Sales Taxes Local Fiscal Property State Sales Year Tax TIMP Tax TDC Other Total 2012 74,644,751 3,144,056 18,649,940 25,606,873 1,060,399 123,106,019 2013 72,392,013 3,895,240 19,196,940 27,192,150 1,059,631 123,735,974 0 2014 73,682,489 4,348,864 18,653,970 30,555,397 1,960,584 129,201,304 2015 75,322,772 4,297,140 20,161,451 34,480,163 1,081,021 135,342,547 2016 75,463,966 4,579,158 20,817,676 36,633,260 1,131,692 138,625,752 2017 77,511,075 4,564,973 21,510,929 36,519,780 1,097,971 141,204,728 2018 81,472,461 4,095,460 20,805,323 32,763,679 1,145,385 140,282,308 2019 86,857,839 4,981,287 23,583,643 39,850,300 1,077,006 156,350,075 2020 91,347,019 4,011,963 19,863,169 32,095,701 1,010,381 148,328,233 2021 96,010,623 7,065,769 50,409,454 56,526,152 1,252,142 211,264,140 Source: Monroe County Clerk of the Circuit Court Finance Department B-1-133 Monroe County,Florida Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Fiscal Total Estimated Assessed Year Real Property Commercial Less Total Taxable Direct Actual Value as a Ended Residential Commercial Personal Tax Exempt Assessed Tax Taxable Percentage of Sept 30 Property Property Property Property Value Rate Value I'I Actual Value I'I 2012 17,306,874,296 8,256,888,373 798,092,402 7,818,927,504 18,542,927,567 4.1382 N/A N/A 2013 17,287,606,922 8,347,419,400 771,466,155 7,679,334,047 18,727,158,430 3.9880 N/A N/A 2014 17,903,163,790 8,713,264,820 740,963,901 8,241,122,698 19,116,269,813 4.0165 N/A N/A 2015 21,153,226,046 9,577,152,035 729,104,179 9,863,211,411 21,596,270,849 3.8007 N/A N/A 2016 23,134,080,788 9,674,350,023 728,961,085 10,505,834,921 23,031,556,975 3.8080 N/A N/A 2017 25,238,536,707 10,315,713,392 709,815,884 11,257,153,269 25,006,912,714 3.2475 N/A N/A 2018 26,059,270,000 10,808,503,930 716,716,873 6,015,518,781 26,553,651,764 3.2600 N/A N/A 2019 27,883,537,936 10,875,740,917 826,204,701 6,061,363,626 28,464,940,007 3.1228 N/A N/A 2020 29,530,266,065 10,917,353,093 878,507,996 6,106,170,011 30,167,680,090 3.0260 N/A N/A 2021 30,178,704,674 11,595,018,803 905,787,545 10,946,283,806 31,733,227,216 3.1173 N/A N/A Source:Monroe County Property Appraiser N/A-Not Applicable Estimated actual value for each tax year is equal to the assessed value.The ratio of total assessed to the total estimated actual value is 100 for each tax year. Monroe County,Florida Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years Overlapping Rates Monroe County Municipalities School District Total Debt Total Debt Total Debt Total Direct& Fiscal Operating Service County Operating Service City Operating Service School Special Overlapping Year Millage Millage Millage Millage Millage Millage Millage Millage Millage Districts Rates 2012 4.1382 - 4.1382 1.2864 - 1.2864 3.5650 - 3.5650 0.9644 9.9540 2013 3.9880 - 3.9880 1.3363 - 1.3224 3.6600 - 3.6600 0.9982 9.9686 2014 4.0165 - 4.0165 1.3935 - 1.3935 3.6810 - 3.6810 1.0206 10.1116 2015 3.8007 - 3.8007 1.5067 - 1.5067 3.5500 - 3.5500 1.0579 9.9153 N 2016 3.8080 - 3.8080 1.5023 - 1.5023 3.4840 - 3.4840 1.2781 10.0724 2017 3.2475 - 3.2475 1.6965 - 1.6965 3.3560 - 3.3560 1.1527 9.4527 2018 3.2600 - 3.2600 1.8093 - 1.8093 3.3580 - 3.3580 1.1899 9.6172 2019 3.1228 3.1228 1.9349 - 1.9349 3.3430 - 3.3430 1.2484 9.6491 2020 3.0260 3.0260 1.2862 - 1.2862 3.3520 - 3.3520 0.8583 8.5225 2021 3.1173 3.1173 1.3151 - 1.3151 3.2840 - 3.2840 0.8935 8.6099 Source:Monroe County Property Appraiser "I Overlapping rates are those of other local governments that apply to property owners within Monroe County. Not all overlapping rates apply to all Monroe County property owners(e.g.,the rates for special districts apply only to the proportion of the County's property owners whose property is located within the geographic boundaries ofthe special district.) B-1-134 � � � � 4- 0 � $ r_ _ aj CL / « m \ \\\ / - \ \ � § Ic k \ e _ { / IS _ m>i - ) ) \ { IS J 0 ± / / f = _ / 2o Monroe County,Florida Property Tax Levies and Collections Last Ten Fiscal Years Fiscal Year Total Tax Collected within the Ended Levy for Fiscal Year of the Levy Collections in Total Collections to Date September 30 Fiscal Year Amount Percentage of Levy Subsequent Years Amount Percentage of Levy 2012 77,534,605 75,121,671 96.9% 39,035 75,231,810 97.0% 2013 75,553,652 72,474,231 95.9% 45,529 72,608,896 96.1% 2014 76,985,354 74,342,547 96.6% 31,613 74,432,413 96.7% A 2015 79,657,302 76,698,560 96.3% 11,303 76,709,783 96.3 2016 80,394,533 77,254,282 96.0% 5,557 77,265,026 96.1% 2017 80,815,240 78,390,783 97.0% 8,314 78,404,438 97.0% 2018 85,024,504 82,458,796 97.0% 3,040 82,463,779 97.0% 2019 91,293,021 87,641,300 96.0% 3,781 87,643,799 96.0% 2020 95,518,603 90,338,710 97.0% 12,864 90,338,710 97.0% 2021 96,989,237 95,049,452 98.0% N/A 95,069,452 98.0% Source: Monroe County Tax Collector Monroe County,Florida Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-Type Activities Percentage Fiscal Revenue Revenue Loans Capital Revenue Revenue Capital Primary of Personal Per Year Bonds Notes Payable Leases Bonds Notes Leases Government Income l'I Capita l'I 2012 29,583,500 9,453,109 - - 6,060,000 - 567,270 45,663,879 N/A N/A 2013 25,097,409 14,485,806 - - - - 517,270 40,100,485 N/A N/A 2014 20,418,912 41,458,400 - - - - 467,270 62,344,582 N/A N/A 2015 41,580,227 59,480,817 31,566,220 - - - - 132,627,264 N/A N/A 2016 53,849,136 92,085,120 16,000,000 - - - - 161,934,256 N/A N/A 2017 46,793,045 119,769,209 15,000,000 - - - - 181,562,254 N/A N/A 2018 39,560,000 153,497,215 15,250,000 - - 24,060,741 - 208,307,215 N/A N/A 2019 34,985,000 154,013,603 13,125,000 - - - - 202,123,603 N/A N/A 2020 30,310,000 151,847,440 11,000,000 - - - - 193,157,440 N/A N/A 2021 25,530,000 139,543,320 8,875,000 - - 748,000 - 174,696,320 N/A N/A Note:Details regarding the County's outstanding debt can be found in the notes to the financial statements. i')See the Schedule of Demographic and Economic Statistics on page 1-21 for personal income and population data. N/A-Not Available B-1-136 O L U N > 7 C m N O X L m 0 O V 7 mr `m o :.o.o n.� O m Q a U N~ O L m m LUJ m 'o N O m O UJ m p� 0,2 L= Vj O C O U� m M N O)UJ N C L m � 'Q A m A O mO N L N N O m O U a, N O fn ~ m O L YO O C M d > U NO W a Q J 0 0 m._ m W C N m O cmJ fn 0 0 E J o N m w>m E 3 m m `L _ U O) Q C O C E O O .�d C Q O m .o > N a m m m m m m m om m o > m me c « m = > 7 E o O O c c m m _ m > 0 0 o c c > >o 0 > U 3 m o 2 o m._ o Z Q m � O m � N O d � � U c c d > > � O O � U U m m O O `c `c m 0 0 0 � -a Z M m y = N a m U N O d N O m m m y y > C E ~ 7 O O m .W « > a d U o a Q m m N � _ O 'O O 0 m O O y H m m m NO C W ,0 _ U m a= � _ m O c LL O � ' = d N Q d V O C m O J Q > N m O L o a c W .0 N m C m 0 y O � U Q m O U m o `m N d O W } � C N N c m rn o r � co � co rn r c U m L Nm m I N p O O �O OJ OJ V N �O V N V f 6 r 6 V �O O M N O V N M I y OJ OJ OJ O) �O O N (O O �� (O c D d N N ~ O � COO O O W W Q V W W Ori o G G N IUII > > LyI V �O V c) No G GJ O V O O O �O M OJ �O N M U G>J d G > N GJ OJ N O) N O O N O N O .O d o Vm y G r v u rn O a y x o o �- y J N o o w o rn o N r co y o o M o rn o v r � f 0 o 0 of o M r N I U O (O m IOJ O N O �O ( G M V O) �O (O c r N 0) �q I a v v v m v co w r o N 0 N o o r co rn v N o rn T V M M V (O O) O) (O r C OJ N I r O O �O V OJ lo U r O (O m O N i0 O y m w � co v co U O ON ON N N N N L U c U N N M LL � N 0 N O Z M N O N O N N (0 N T O C O) (0 N � O) N Em V LL O O >- = L = A N T O m LL U _ d � O ~ O y o J >. C O U `o w 3 m m m 0 c `m m L H Monroe County,Florida Pledged Revenue Bonds and Notes Business-Type Activities Last Ten Fiscal Years KEY WEST AIRPORT NET DEBT SERVICE FISCAL AVAILABLE AVAILABLE TIMES YEAR REVENUEW EXPENSES(" REVENUE PRINCIPAL INTEREST(" TOTAL COVERAGE 2012 9,301,807 8,009,716 1,292,091 410,000 - 410,000 3.15 2013 - 2014 2015 2016 2017 2018 2019 2020 2021 14,138,301 16,828,590 (2,690,289) 748,000 - 748,000 -360 (a)"Available Revenue"shall mean income from operations and such PFC revenues and PFC fund balance necessary to provide the required coverage. (b)"Expenses"exclude depreciation of fixed assets,OPEB costs,and amortization of deferred charges which are reflected as expenses in the financial statements **Monroe County Airport Variable Rate Revenue Bonds(KWIA)Series 2006 were redeemed on May 1,2013. Monroe County,Florida Demographic and Economic Statistics Last Ten Fiscal Years Personal Per Income Capita Fiscal (amounts expressed Personal Median School Unemployment Year Population(') in thousands)(') Income(') Age(2) Enrollment(3) Rate I") 2012 74,809 4,245,050 56,745 46.4 8,351 4.7 2013 76,351 4,415,284 57,829 46.5 8,432 3.5 2014 77,136 5,368,160 69,593 46.7 8,420 3.7% 2015 77,482 5,765,374 74,409 46.8 8,523 3.6 N 2016 79,077 5,869,890 60,303 46.7 8,842 3.2 2017 77,013 6,417,335 83,328 46.7 8,825 3.5 2018 75,027 6,911,436 92,119 47.3 8,719 2.4% 2019 76,745 7,516,454 101,262 46.7 8,967 2.3% 2020 82,874 7,876,488 106,583 48.3 8,578 4.5 2021 N/A N/A N/A N/A 9,125 2.5% Data sources: (1)Bureau of Economic Analysis,U.S.Department of Commerce (2)U.S.Census Bureau (3)Monroe County School Board (4)Florida Research and Economic Database N/A=Not Available B-1-139 Monroe County,Florida Principal Employers Current Year and Nine Years Ago 2021 2012 Percentage of Percentage of Total County Total County Employer Employees Rank Employment Employees Rank Employment US Armed Services 2,190 1 27.21% 2,931 1 7.41 Monroe County School District 1,701 2 14.23% 1,047 2 2.45% Ocean Reef Club 850 3 7.11% 904 3 2.11 Publix Stores 730 4 6.11% 430 8 1.01 N Ocean Properties 550 5 4.60% 1.38 N Monroe County Government 540 6 4.52% 592 5 1.24 Monroe County Sheriffs Office 518 7 4.33% 531 6 1.08 Lower Keys Medical Center 500 8 4.18% 1.61 City of Key West 470 9 3.93% 464 7 N/A Spottswood Properties 360 10 3.01 Historic Tours of America 300 9 N/A Health Management Services 688 4 0.90% Historic Tours of America 350 10 0.90 Florida Keys Aqueduct Authority 255 10 Source:Key West Chamber of Commerce and the Florida Research and Economic Database N/A=Comparative Period Data Not Available Monroe County,Florida Full-time Equivalent County Government Employees by Function Last Ten Fiscal Years Fiscal Years 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Function General government 337 342 328 328.9 294.4 292 304 303 220 250.2 Public safety 587 587 593.5 596.5 599.4 601 630 633 652 651 Physical environment 57 56 71 81 79 82 97 103 163 110 w Transportation 63 66 71 73 77 78 64 64 64 61 Economic environment 28 27 27 28 30 30 30 30 29 30 Human Services 28 29 30 29 29 29 30 29 30 23 Culture and recreation 42 41 43 42 42 42 42 42 59 52 Court Related 95 94 94 95 126 126 125 124 131 130 Total 1,221 1,237 1,242 1,257 1,274 1,276 1,280 1,322 1,328 1,306 Source:Monroe County Office of Management and Budget B-1-140 Monroe County,Florida Operating Indicators by Function Last Ten Fiscal Years Function 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Sheriff Traffic violations 11,939 9,511 9,349 10,481 10,497 11,562 12,095 14,312 13,551 18,196 Fire Number of calls answered 4,176 4,538 1,683 1,657 1,066 825 1,161 86 83 75 Ambulance Number of calls answered 2,964 3,278 2,927 3,370 3,360 4,166 3,656 2,455 3,327 4,309 Transportation Street resurfacing(miles) 0.50 7.60 - 37.99 22.70 15.00 3.43 4.91 1.53 1.42 Number of Vehicles on roads Upper Keys Inbound 12,021 12,432 13,009 14,107 14,607 12,318 14,656 14,755 12,915 12,535 Outbound 11,951 12,388 12,938 14,055 14,568 14,369 14,107 14,206 12,334 13,868 AMiddle Keys Inbound 8,265 8,423 8,781 9,207 9,096 8,028 9,257 9,546 7,916 6,698 Outbound 8,260 8,425 8,809 9,289 9,047 7,295 9,269 9,432 7,799 6,984 Lower Keys Inbound 18,241 18,070 18,642 18,241 20,638 20,350 20,861 21,169 18,899 14,543 Outbound 18,323 18,217 18,810 18,323 21,765 21,033 21,474 21,834 18,818 15,094 Airport Enplanements 366,817 401,660 377,952 349,790 367,254 398,592 416,234 475,034 340,307 659,321 Axles crossing toll bridge 2,323,623 2,379,995 2,440,765 2,689,809 2,838,203 2,761,259 Closed 1,438,715 2,183,710 1,741,572 Human Services Assisted Living Facility Residents 16 16 15 13 12 15 14 13 12 8 Animals Collected 2,368 2,505 2,419 1,653 2,167 1,623 899 1,391 1,830 1,166 Animals Adopted 898 932 874 879 789 818 453 701 563 451 Culture and recreation Library Holdings 205,725 201,836 200,847 193,976 204,072 179,724 184,988 190,302 165,865 136,866 Court Related Number of cases filed 40,037 36,823 36,435 45,032 36,319 40,929 29,477 28,782 24,752 24,142 Sources:Various county departments N/A-Data Not Available Monroe County,Florida Capital Asset Statistics by Function Last Ten Fiscal Years 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Function Public Safety: Sheriff Stations 5 5 5 4 4 5 5 4 4 4 Patrol Units 155 155 120 125 112 130 136 277 149 164 Fire Stations 9 9 10 9 9 10 10 9 9 9 Ambulances 9 9 9 12 12 11 11 8 8 8 Physical Environment: Transfer Stations 3 3 3 3 3 3 3 3 3 3 Transportation: Unpaved Streets(miles) 91.00 14.00 14.00 14.00 91.40 91.40 14.19 14.19 14.19 14.19 N Paved Streets(miles) 306 297 297 297 306 306 306 306 306 306 cn Bridges 26 26 26 26 26 26 26 26 26 26 Airports 2 2 2 2 2 2 2 2 2 2 Toll Bridge 1 1 1 1 1 1 - 1 1 1 Human Services: Assisted Living Facility 16 16 15 13 12 15 14 13 12 8 Animal Shelters 3 3 3 3 3 3 3 3 3 3 Culture and Recreation: Parks Acreage 89 89 97 144 165 165 165 165 165 165 Beaches 4 4 4 4 4 4 4 4 4 4 Ball Fields and Courts 50 50 50 36 51 51 51 51 51 51 Other Facilities 16 16 16 34 36 36 37 37 37 37 Libraries 5 5 5 5 5 5 5 5 5 5 Court Related: Courtrooms 10 10 10 10 10 10 10 10 10 9 Sources:Various county departments B-1-141 z O F- U W N W U z a J a O U N �h Oa Y C f6 _N T f6 C O a+ C OJ C M aj GO co Q M s F- d Q U O Q - L O a C m N � O N z: ` > C ; E U E a� o O cU-'.y o(j3Y N m m L U m C 0 � O C � O O U U O O N m Q OO O N N m d w _ O N O t O O a o Q U N Q o O O O Zi U.O mU c C C a m L O- o a m o O U C n m r mo c tL O - N m O-w mo U-o_ ac m o a moos a`F c cU m o o a O`o s w >.-2.c c O. 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[THIS PAGE INTENTIONALLY LEFT BLANK] Newhin & Assmriales, August 18, 2022 Mr. Richard Strickland Senior Director of Airports Key West International Airport 3491 South Roosevelt Boulevard Key West, Florida 33404 Re: Report of the Airport Consultant Monroe County, Florida Airport Revenue Bonds (Key West International Airport), Series 2022 (AMT) Dear Mr. Strickland: Newton& Associates, Inc. ("NAP')is pleased to submit herewith this report ("Report')' which has been prepared for Monroe County, Florida ("County")by NAI in conjunction with Ricondo & Associates, Inc. ("Ricondo")2 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 and Eligible PFC Revenues (both, as defined in the hereinafter described Resolution) derived from the operation of the Key West International Airport ("Airport"). 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 grant funds, state grants funds and other funds, will be used to pay the costs of certain capital improvements at the Airport (the"2022 Project," as more particularly described in Section II 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 Bonds; (iii) pay capitalized interest; and (iv)pay the costs of issuance of the 2022 Bonds. ' This letter and the attached body of the report titled BACKGROUND,ASSUMPTIONS AND RATIONALE FOR FINANCIAL FORECASTS comprise the REPORT OF THE AIRPORT CONSULTANT. 2 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. Monroe County Airport Revenue Bonds C- 1 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 2 The test of financial 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. 206A-2022 adopted by the Board of County Commissioners on August 17, 2022 as supplemented by Resolution No. 20613-2022, adopted on August 17, 2022, as the same may be subsequently amended and supplemented from time to time, (collectively, the "Resolution")including but not limited to the rate covenant contained 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 established under the Resolution. In applying the financial feasibility test, NAI has considered, and this Report describes the 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 September 30, 2021, or the most recent five year period for which complete data were available ("Study Period"). 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 and Eligible PFC Revenues of the Airport available for debt service on the 2022 Bonds, debt service requirements of the 2022 Bonds and debt service coverage for the period October 1, 2022, to September 30, 2027 ("Forecast Period"). COVID-19 Pandemic 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 addresses the COVID-19 pandemic and its impacts on the air transportation industry, and which summarizes certain measures Airport management took to mitigate the reduction of activity which resulted from the pandemic). Russian Invasion of Ukraine On February 24, 2022, President Putin of the Russian Federation authorized "special military operations" in Ukraine. Russian forces began missile and artillery attacks, striking major Ukrainian cities including Kiev. This invasion of Ukraine by Russia has received widespread international condemnation and resulted in various financial sanctions imposed on Russia, as well as military support initiatives and humanitarian aid efforts provided to the Ukraine. As of the date hereof, the Russian invasion of Ukraine is ongoing. While the economic outlooks described in Section III consider the Russian invasion's current and future 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 transcontinental level, but also at a local level within the United States. As a result of the invasion, sanctions have been Monroe County Airport Revenue Bonds C-2 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 3 imposed on Russia, which creates regulatory barriers that can hinder economic growth. NAI has not factored any impact of this conflict into its financial forecasts. Summary Opinion—Financial Feasibility In conducting its study, NAI has: (i) examined the estimated costs of and funding sources for the 2022 Project; (ii) examined the demographic and economic analysis prepared by Ricondo as set forth in Section III of the Report; (iii) examined the passenger demand and air service analysis prepared by Ricondo as set forth in Section IV of the Report; (iv) examined the operational and financial performance of the Airport during the Study Period; and (v) prepared a forecast of Net Revenue and Eligible PFC Revenues over the Forecast Period to test the sufficiency of Net Revenues and Eligible PFC Revenues to cover the estimated debt service on the 2022 Bonds by at least 1.25 times, as required by the Resolution. Based on the foregoing and the analyses and assumptions set forth in the Report, NAI projects Gross Revenues, Operation and Maintenance Costs, Net Revenues, Eligible PFC Revenues, debt service coverage and airline cost per enplaned passenger for each year of the Forecast Period as set forth below: Financial Forecast and Debt Service Coverage - Summary Forecast Period (Est. DBO) FY 2023 FY 2024 FY 2026 FY 2026 FY 2027 Net Revenues [A] $3,264,691 $3,216,327 $3,931,271 $3,723,321 $3,238,609 Eligible PFC Revenues [B] $0 $0 $2,600,000 $2,600,000 $2,600,000 Total Available for 2022 Bonds Debt Service [A+B] $3,264,691 $3,216,327 $6,631,271 $6,323,321 $6,838,609 Debt Service [C] $0 $0 $2,612,000 $2,468,260 $2,466,760 Debt Service Coverage [A+B]/ [C] n/a n/a 2.60 2.67 2.38 Airline Cost per Enplaned Passenger $9.82 $9.99 $12.83 $13.19 $13.19 Monroe County Airport Revenue Bonds C-3 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 4 The County and the Airport 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 Florida Keys, lies 98 miles north of Cuba, approximately 160 miles southwest of Miami and 66 nautical miles north of the Tropic of Cancer. Within the County, there are five municipalities: the cities of Key West, Layton, Marathon, Key Colony Beach and the Village of Islamorada. The Airport is a small-hub', commercial airport located within the city limits of Key West, Monroe County, Florida and covers approximately 268 acres. Of this area, 87 acres are salt ponds and mangrove vegetation. The remaining 181 acres are usable for the Airport. 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 owned by Palm Beach millionaire Malcolm Meacham. Pan American Airlines was established in Key West that year and leased the Airport site from Meacham. The Airport remained a small and privately owned strip until the start of World War 11. 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 was over. 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. In FY 2022, it is estimated that the Airport will serve approximately 740,000 passenger enplanements served by its six Signatory Airlines. The Airport is owned by the County and is operated as a separate enterprise fund of the County by the Monroe County Board of County Commissioners ("BOCC"). The BOCC exercises 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. 3 The FAA categorizes airports that have total enplanements of at least.05%of total U.S. enplanements as small hubs. Monroe County Airport Revenue Bonds C-4 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 5 Financial Structure of the Airport The 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: Clerk of Circuit Court & Comptroller; Property Appraiser; Sheriff, Supervisor of Elections; and Tax Collector ("Constitutional Offices"). 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 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. The Bond Resolution The 2022 Bonds are to be issued under the terms and conditions of the Resolution describing the terms for the sale of the 2022 Bonds. Pursuant to the Resolution, the County agrees that for the Fiscal Year commencing October 1, 2022, and for each Fiscal Year thereafter, the County 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: (i)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 (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. Monroe County Airport Revenue Bonds C-5 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 6 If, in any Fiscal Year, the County shall fail to comply with the foregoing requirements, it is 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 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 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, it is assumed that the terms and conditions of the Signatory Agreement will continue in effect through the entire Forecast Period. The Signatory Agreement sets forth the rights and obligations of the parties as well as the procedures for calculating airline rentals, fees and charges for the use and occupancy of the arrivals terminal and the departures terminal buildings ("Terminal Complex") and the Airfield. The Signatory Agreement also establishes 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 Charges") and provides for mid-year adjustments, if necessary, and an annual settlement based upon actual costs and activity. The Airline Rates and Charges are calculated under what is 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 Complex. The County is required to pay for the non-airline areas of the Airport with non-airline revenue. Each Signatory Airline is obligated to pay Airline Rates and Charges totaling a minimum annual commitment of$450,000 during the term of the Signatory Agreement. 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. Monroe County Airport Revenue Bonds C-6 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 7 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 inadequate for the efficient movement of passengers at existing and anticipated future activity levels. The 2022 Project will include a second-level concourse ("Concourse A") of approximately 49,000 square feet located immediately north of the Existing Airside Terminal. Concourse A will contain seven gates equipped with passenger boarding bridges, holdrooms, passenger 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 bridge which connects the Existing Landside Terminal to the Existing Airside Terminal. The aircraft parking ramp level below Concourse A will be unenclosed and will support a new airline 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 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. 2022 Project Cost and Funding The estimated cost of the 2022 Project is approximately $113.4 million, the funding of which includes approximately $2.8 million of Airport Improvement Program ("AIP") grant funds, $39.8 million of Florida Department Of Transportation grant funds, $11.4 million of"COVID-19 Relief Funds" (comprising a combination of CARES, ARPA and CRRSA grant funds), an Monroe County Airport Revenue Bonds C-7 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 8 estimated $14.8 million' of Bipartisan Infrastructure Law (`BIL") grant funds, $10 million of an AIP grant anticipation note, $2.7 million of PFC PAYGO funds, and $31.9 million of 2022 Bonds proceeds. Demographic and Economic Analysis The demand for air transportation is, to a large degree, dependent upon the demographic and economic characteristics of the geographical area surrounding the Airport (the Airport's Air Trade Area). This relationship is particularly true for origin and destination (O&D)passenger traffic, which has historically made up virtually all the demand at the Airport. The Air Trade Area's strong leisure and hospitality industry also impacts demand for air travel. Because the largest component of O&D demand is visitors to the Air Trade Area, the demand for air travel to the Air Trade Area is also heavily influenced by national economic conditions. All national demographic and economic indicators project positive growth through 2027. Overall, local and national data signal the Air Trade Area has an economic base capable of supporting increased demand for air travel during the Forecast Period. See Section III for the demographic and economic analysis of the Air Trade Area. Forecast of Economic Variables Used in Passenger Demand Proiections COMPOUND ANNUAL GRONVM RATE VARIABLE 2019 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 Oobs) 65,640 71,982 1.2/o ...............................-..................................................................................................................................................................................................................................................................................................................................................o............................................................. US Total Employment Oobs) 203,809,516 225,663,310 1.3/o ......................................................................................................................................................................................................................................................................................................................................................................................................................................o............................................................. Air Trade Area Total Eanvnge $2,770 $3,321 2.3/o .........................................................................................................................................................................................................................................................................................................................................................................................o............................................................. US Total Eammgs $11,907,552 $14,050,453 2.1/o Air Trade Area Total Personal Income $6,842 $7,916 1.8/o -.7................................................................................................................................................................................�............................................................. US Total Personal Income $16,89,466 $20..,.300. .,.453. 2.3/o Air Trade Area.. /o Per Capita Personal Income $92,181 $107,261 1.9 ............................................................................................................................................................................................................................................................................................................................................................................................................................................................. US Per Capita Personal Income $51,424 $58,659 1.7/o .....................................................................................................................................................................................................................................................................................................................................................................................................................................0............................................................. Air Trade Area Gross Regional Product(GRP) $4,852 $5,844 2.4/0 US Gross Domestic Product(GDP) $19,402,21, $22,875,535 2.1/o Passenger Demand and Air Service Analysis The Airport is served by six passenger airlines that operate nonstop service to 23 destinations as of July 2022. In FY 2021, American Airlines had the largest share of passengers at 49.9 percent, followed by Delta at 25.8 percent, and United at 12.6 percent. Silver Airways, JetBlue Airways, and Allegiant Air represented the residual 11.7 percent of passengers in FY 2021. The Airport has experienced rapid growth in recent years, with enplaned passengers increasing from 366,190 'Current FAA estimate for FY 2023 through FY 2025 based AIP Passenger Entitlement Grant apportionment formula. Monroe County Airport Revenue Bonds C-8 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 9 in FY 2012 to 475,034 in 2019, a 3.8 percent compound annual growth rate (CAGR)for this period. Enplaned passengers decreased 28.4 percent in 2020 from the FY 2019 level of 475,034 to 340,307 due to the impacts of the COVID-19 pandemic on demand for air travel. Enplaned passengers rebounded in 2021 with a record 659,321 boardings, as airlines increased capacity to the Airport in response to strong demand for travel to domestic leisure destinations. As shown on in the table below, the growth in activity in FY 2021 resulted in a 6.8 percent CAGR for enplaned passengers between FY 2012 and FY 2021. Forecasts of aviation demand (i.e., enplaned passengers, aircraft operations, and landed weight) were developed for FY 2022 through FY 2027. The short-term forecast through FY 2024 was based on estimates of airline capacity, informed by published airline schedules through June 2022, and passenger load factors by route during the recovery from the COVID-19 pandemic. The long-term forecast, from FY 2025 through FY 2027, was based on a socioeconomic regression analysis that identified predictive statistical relationships between historical passenger volumes and independent socioeconomic variables. The short-and long-term forecast considers the following factors: 1) Historical activity at the Airport and across the industry. 2) Airline network strategies and allocation of capacity as demand for air travel recovers from the impacts of the COVID-19 pandemic. 3) Recent trends and projections of local and national socioeconomic factors. 4) The FAA Terminal Area Forecast Passenger enplanement activity is forecast to increase from 659,321 in FY 2021 to 781,909 in FY 2027, which represents a CAGR of 2.9 percent, as shown below. Additional information on air traffic and the activity forecast is provided in Section IV of this Report. (Remainder of Page Intentionally Left Blank) Monroe County Airport Revenue Bonds C-9 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 10 Historical and Forecast Enplaned Passengers FISCAL YEAR ENPLANED PASSENGERS ANNUAL GROWTH 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,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�� 201w23661w9w0 N/A ��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� 2013 393,906 7.6/o 2014 400,669 1.7/o 2015 349,790 -12.7/o 2016 367,254 5.0/o 2017 398,592 8.5/o 2018 416,234 4.4/o 2019 475,034 14.1/o 2020 340,307 -28.4/o 2021 659,321 93.7/o Forecastw,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� 2022 739,504 12.2/o 2023 704,628 -4.7/o 2024 731,316 3.8/o 2025 748,069 2.3/o 2026 764,962 2.3/o 2027 781,909 2.2/o COound NAnnual Growth Rate 2012—2021 6.8/o 2021 —2027 2.9/o Historical Airport Financial Performance NAI has reviewed the financial performance of the Airport during the Study Period, the results of which are depicted on Table V-1 of the Report. While the Resolution was not in effect during the Study Period, Gross Revenues, Operation and Maintenance Costs and Net Revenues were compiled in a format consistent with that described in the Resolution. As shown on Table V-1, Total Gross Revenue grew from approximately $8.2 million in FY 2017 to approximately $9.2 million in FY 2019. In FY 2020, however, Total Gross Revenues (excluding CARES grant funds of approximately $5.3 million available for Operation and Maintenance Costs) decreased back to approximately $8 million, an amount insufficient to cover Total Operation and Maintenance Costs for FY 2020 (approximately $8.7 million). Taking into consideration CARES funds, however, FY 2020 Total Gross Revenues were approximately $13.3 million, more than sufficient to offset Total Operation and Maintenance Costs for the year and producing Net Revenues of approximately $4.6 million. Monroe County Airport Revenue Bonds C- 10 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 11 In FY 2021, the financial performance of the Airport experienced a strong recovery over FY 2020 with Total Gross Revenues (excluding CARES grant funds of approximately $9.1 million available for Operation and Maintenance Costs)increased to approximately $11.6 million, exceeding the Total Operation and Maintenance Costs in FY 2021 (approximately $9.4 million), producing Net Revenues for FY 2021 of approximately $2.2 million. With the addition of the FY 2021 CARES funds, however, FY 2021 Total Gross Revenues were approximately $20.7 million, resulting in approximately $11.2 million of Net Revenues. Table V-5 shows estimated FY 2022 Gross Revenues and Operation and Maintenance Costs as estimated by the Airport as of the date of this Report. As shown, Total Gross Revenues (including CARES grant funds of approximately $640.7 thousand)in FY 2022 are estimated to be approximately $13.5 million. When applied to the estimated Total Operation and Maintenance Expense estimated for FY 2022, approximately $3.7 million of Net Revenue is estimated. Forecast of Gross Revenues, Operation and Maintenance Costs, Net Revenues, Eligible PFC Revenues and Debt Service Coverage NAI has prepared a forecast of Gross Revenue, Operation and Maintenance Costs, Net Revenues, and Eligible PFC Revenues taking into consideration the Airport's historical financial trends, and the estimated financial impacts of completing and operating the 2022 Project expected to occur during the Forecast Period. These impacts include: (i) estimates of additional Revenue to be generated from the use of the completed 2022 Project; (ii) estimated, additional Operation and Maintenance Costs reflecting general price increases, and incremental costs estimated to be incurred as a result of the 2022 Project; (iii) estimated PFC collections over the Forecast Period based on forecast passenger enplanements; (iv)the estimated debt service on the 2022 Bonds; and (v)the estimated debt service coverage on the 2022 Bonds. The Report of the Airport Consultant In preparing the Report, NAI has studied and analyzed, among other things, the 2022 Project, the cost and funding for the 2022 Project, the issuance of the 2022 Bonds, the future traffic and earnings prospects of the Airport during the Forecast Period, and has considered whether, in its opinion, the County will be able to satisfy the requirements of the Resolution with respect to debt service coverage during the Forecast Period. In conducting the study NAI has: 1) Examined the historical financial performance of the Airport from FY 2017 through FY 2021 and the Airport's estimate for FY 2022; 2) Determined the historical relationship between Airport passenger enplanements and related Airport Revenues; 3) Examined the Demographic and Economic Analysis prepared by Ricondo & Associates, Inc., included as Section III of the Report; Monroe County Airport Revenue Bonds C- 11 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 12 (4) Examined the Passenger Demand and Air Service Analysis prepared by Ricondo & Associates, Inc., included as Section IV of the Report; 5) Prepared a forecast of Gross Revenues, including airline revenues which were forecast in accordance with the Airline Rates and Charges methodology provided for in the Signatory Airline Agreement, and non-airline revenues, the most significant of which were forecast based on the forecast of passenger enplanements for the Forecast Period which was prepared by Ricondo & Associates, Inc., as set forth in Section IV of the Report, and applicable other factors; 6) Prepared a forecast of Operation and Maintenance Costs over the Forecast Period, considering the scope of the 2022 Project, projected general price-level increases and incremental expenses estimated to be incurred from the operation of the 2022 Proj ect; 7) Prepared a forecast of Net Revenues and Eligible PFC Revenues available to pay debt service on the 2022 Bonds; and 8) Prepared a forecast of debt service coverage to test the sufficiency of Net Revenues and Eligible PFC Revenues during the Forecast Period to pay the debt service payments on the 2022 Bonds as required by the Resolution. The scope of analyses, details supporting the passenger and financial forecasts, and findings are set forth in the body of the Report. ASSUMPTIONS UNDERLYING FINANCIAL FORECASTS For the purposes of the Report, NAI has developed its financial forecasts based upon the following assumptions: 1) Total 2022 Project cost of approximately $113.4 million including costs for design, construction, acquisitions, owner's cost and other costs as provided by the County; 2) The County's receipt of the federal and state grant funding sources in the amounts set forth on Table II-1 of the Report, and applied to the cost of the 2022 Project; 3) The County's receipt of the AIP grant anticipation note in the amount identified on Table 11-1 of the Report, and applied to the cost of the 2022 Project; 4) Total 2022 Bonds Project Fund requirement(construction fund deposits) of approximately $32 million of 2022 Bonds proceeds; Monroe County Airport Revenue Bonds C- 12 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 13 5) The sources (including the par amount of the 2022 Bonds proceeds and premium) and uses of 2022 Bonds funds of approximately $40.0 million, including construction fund deposits, capitalized interest fund and debt service reserve fund, and issuance expenses; and 6) The continued state of recovery from the economic and passenger enplanement downturn brought on by the COVID-19 pandemic; 7) The forecast passenger enplanements for each year over the Forecast Period as prepared by Ricondo& Associates, Inc., and set forth in Section IV of the Report. 8) The Signatory Airlines will provide the level of air service at the Airport necessary to accommodate the level of enplaned passengers identified over the Forecast Period and pay the Airline Rates and Charges applicable to their operations under the Signatory Agreement during the Forecast Period; and 9) That there will be no acts of God, military conflicts, global or national health crisis which significantly impairs the national economy, the passenger airline industry, or successful operation of the Airport over the Forecast Period. In NAI's opinion, the techniques employed for this analysis, forecasts and Report are consistent with industry practice for airport facilities and in support of issuances of airport revenue bonds. In conducting its analyses, developing its financial forecasts, and formulating this Report, NAI has relied upon accuracy and reasonableness of certain information and estimates provided by the County, its financial advisor, the Airport, and Ricondo & Associates, Inc. Historical Airport financial data was provided by the County and the Airport. The cost of the 2022 Project was provided by the Airport. The demographic and economic analysis comprising Section III of the Report was provided by Ricondo & Associates, Inc. The passenger demand and air service analysis (including the forecast of enplaned passengers over the Forecast Period) comprising Section IV of the Report was also provided by Ricondo & Associates, Inc. The 2022 Bonds amortization, estimated interest rate assumptions and resulting sources and uses of funds were provided by Frasca& Associates, LLC, the County's municipal advisor. While NAI believes the information and assumptions relied upon in preparing its financial forecasts and formulating its opinion are accurate and reasonable, actual variations from these assumptions are inevitable, and such variations may be material. Subject to the foregoing, however, NAI expects the Airport to generate Net Revenues and Eligible PFC Revenues, as defined in the Resolution, in amounts which will be sufficient for the County to make all payments required under the Resolution with respect to the 2022 Bonds and to satisfy the rate covenant described in Section 5.03 of the Resolution in each Fiscal Year of the Forecast Period. Monroe County Airport Revenue Bonds C- 13 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) Mr. Strickland August 18, 2022 Page 14 Accordingly, NAI concludes it is feasible to proceed with issuance of the 2022 Bonds in the approximate principal amount of$40 million, and to use the proceeds thereof, along with other funds, for the purposes described herein. Sincerely, NEWTON& ASSOCIATES, INC. Nancy Newton President Attachment Monroe County Airport Revenue Bonds C- 14 Report of the Airport Consultant (Key West International Airport), Series 2022(AMT) BACKGROUND ASSUMPTIONS AND RATIONALE FOR FINANCIAL FORECASTS REPORT OF THE AIRPORT CONSULTANT Airport Revenue Bonds (Key West International Airport), Series 2022 (AMT) 1 yI Key West 4 r » Internad nal Airport AUGUST 18, 2022 Prepared By: h1oM i1matilles,lot. in conjunction with R I C 0 i C-15 Report of the Airport Consultant TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................................. 19 A. PURPOSE AND SCOPE OF THIS REPORT................................................................................19 B. THE AIRPORT...............................................................................................................................20 C. THE BOND RESOLUTION..........................................................................................................26 D. THE SIGNATORY AIRLINE AGREEMENT..............................................................................26 II. THE 2022 PROJECT..........................................................................................................................27 A. NEED FOR THE 2022 PROJECT.................................................................................................27 B. DESCRIPTION OF THE 2022 PROJECT.....................................................................................27 C. 2022 PROJECT COST AND FUNDING.......................................................................................28 D. THE 2022 BONDS.........................................................................................................................30 E. AIRPORT IMPROVEMENT PROGRAM GRANTS ...................................................................31 F. COVID-19 RELIEF GRANT FUNDS...........................................................................................32 G. INFRASTRUCTURE INVESTMENT AND JOBS ACT FUNDS................................................34 H. FLORIDA DEPARTMENT OF TRANSPORTATION GRANT FUNDS....................................34 I. PASSENGER FACILITY CHARGES...........................................................................................35 J. FUTURE CAPITAL IMPROVEMENTS.......................................................................................36 III. DEMOGRAPHIC AND ECONOMIC ANALYSIS...........................................................................38 A. DEMOGRAPHIC ANALYSIS ......................................................................................................40 B. ECONOMIC ANALYSIS ..............................................................................................................43 C. ECONOMIC OUTLOOK...............................................................................................................65 IV. PASSENGER DEMAND AND AIR SERVICE ANALYSIS ...........................................................67 A. AIR CARRIERS SERVING THE AIRPORT................................................................................67 B. AIR SERVICE ANALYSIS...........................................................................................................68 C. FACTORS AFFECTING AVIATION DEMAND AT THE AIRPORT.......................................78 D. FORECAST OF PASSENGER DEMAND AND AIRLINE OPERATIONS ...............................83 E. FORECAST OF PASSENGER DEMAND....................................................................................87 F. AIRCRAFT OPERATIONS FORECASTS...................................................................................87 G. LANDED WEIGHT FORECASTS................................................................................................90 V. FINANCIAL ANALYSIS ..................................................................................................................91 A. FRAMEWORK FOR THE FINANCIAL OPERATION OF THE AIRPORT..............................91 B. THE BOND RESOLUTION..........................................................................................................91 C. HISTORICAL AIRPORT REVENUE AND EXPENSES.............................................................95 Np,wtllll&Assul"'Johisp IIDIIw C-16 Report of the Airport Consultant D. FORECAST OF AIRPORT REVENUES AND EXPENSES...................................................... 103 E. PROJECTED PASSENGER FACILITY CHARGE REVENUES..............................................108 F. FORECAST COVERAGE FACTOR..........................................................................................111 G. AIRLINE COST PER ENPLANED PASSENGER.....................................................................111 H. SENSITIVITY OF FORECASTS TO PASSENGER ENPLANEMENT LEVELS.................... 112 EXHIBIT "A" Airport Layout Plan.............................................................................................. 25 EXHIBIT III-1: Air Trade Area.................................................................................................... 39 EXHIBIT IV-1: Average Domestic Yield.................................................................................... 73 EXHIBIT IV-2: Destinations Served............................................................................................ 75 EXHIBIT IV-3: Domestic Seat Capacity Recovery..................................................................... 80 EXHIBIT IV-4: Historical Monthly Averages of Jet Fuel and Crude Oil Prices......................... 82 EXHIBIT IV-5: Enplaned Passengers From Fiscal Year 2021 Through Fiscal Year 2024 ......... 85 FIGURE V-1: Application of Revenue......................................................................................... 94 TABLE II-1: 2022 Bonds Project Cost& Funding Plan.............................................................. 29 TABLE II-2: Estimated Series 2022 Bonds (AMT) Sources & Uses of Funds ........................... 30 TABLE II-3: Federal COVID-19 Relief Funds Awards & Uses.................................................. 33 TABLE II-4: Future Capital Improvements ................................................................................. 37 TABLE III-1: Historical and Projected Population...................................................................... 40 TABLE III-2: Per Capita Personal Income................................................................................... 42 TABLE III-3: Gross Regional Product and Domestic Product(GRP or GDP)............................ 44 TABLE III-4: Civilian Labor Force & Unemployment................................................................ 46 TABLE III-5: Major Employers In the Air Trade Area ............................................................... 48 TABLE III-6: Employment Trends by Major Industry Sector..................................................... 50 TABLE III-7: Total Bank Deposits .............................................................................................. 57 TABLE III-8: Total Retail Sales Per Capita................................................................................. 59 TABLE III-9: Residential Building Permits & Valuation CY 2010 - CY 2020........................... 61 TABLE III-10: Forecast of Economic Variables Used in Passenger Demand Forecasts............ 66 TABLE IV-1: Carriers Serving the Airport.................................................................................. 67 TABLE IV-2: Historical Scheduled Passenger Air Carrier Base................................................. 68 TABLE IV-3: Historical Enplaned Passengers............................................................................. 69 TABLE IV-4: Historical Total Enplaned Passengers by Airline.................................................. 71 TABLE IV-5: Top 20 Domestic Origin & Destination Markets.................................................. 76 TABLE IV-6: Historical Origin & Destination Passengers.......................................................... 77 TABLE IV-7: Historical Aircraft Operations............................................................................... 77 TABLE IV-8: Historical Total Landed Weight by Airline........................................................... 79 TABLE IV-9: Fiscal Year to Date Enplaned Passenger Recovery............................................... 81 TABLE IV-10: Socioeconomic Regression Analysis Outputs..................................................... 86 TABLE IV-11: Enplaned Passenger Forecast.............................................................................. 88 NP,W11111&Assul"'Johisp IIDIIw C-17 Report of the Airport Consultant TABLE IV-12: Aircraft Operations Forecasts.............................................................................. 89 TABLE IV-13: Landed Weight Forecasts.................................................................................... 90 TABLE V-1: Historical Revenue, Expenses & Debt Service....................................................... 96 TABLE V-2: Historical Cost Per Enplaned Passenger................................................................. 97 TABLE V-3: Current Public Parking Rates.................................................................................. 99 TABLE V-4: Historical Non-Airline Revenue Per Enplaned Passenger.................................... 102 TABLE V-5: Forecast Airport Revenue, Expenses & Debt Service Coverage.......................... 104 TABLE V-6: Forecast Passenger Facility Charge Revenue....................................................... 109 TABLE V-7: Passenger Facility Charge Fund Activity ............................................................. 110 TABLE V-8: Forecast Airline Cost Per Enplaned Passenger..................................................... 112 TABLE V-9: Sensitivity Analysis 25%Reduction of Enplaned Passengers ............................. 113 TABLE V-10: Sensitivity Analysis; Airline Cost Per Enplaned Passenger............................... 114 Np,wtllll&Assul"'Johisp IIDIIw C-18 Report of the Airport Consultant 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. ("NAP')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"). 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 of Transportation ("FDOT") grants-in-aid, a combination of certain COVID-19 Relief Funds, Bipartisan Infrastructure Law (`BIL") grant funds, proceeds of an AIP grant anticipation note, and certain 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 II 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 Bonds; (iii)pay capitalized interest; and (iv)pay the costs of issuance of the 2022 Bonds. The test of financial 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. 206A-2022, adopted by the Board of County Commissioners on August 17, 2022 as supplemented by Resolution No. 20613-2022, adopted on August 17, 2022, as the same may be subsequently amended and supplemented from time to time, (collectively, the "Resolution")including but not limited to the rate covenant contained 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 established under the Resolution. In applying the financial feasibility test, NAI has considered, and this Report describes, the 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 September 30, 2021, or the most recent five year period for which complete data were available ("Study Period"). ' 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. NP,W11111&Assuciah"Sp IIDIIw C-19 Report of the Airport Consultant 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 on the 2022 Bonds, Debt Service requirements of the 2022 Bonds and Debt Service coverage for the period October 1, 2022, to September 30, 2027 ("Forecast Period"). It concludes with NAI's findings regarding financial 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 addresses the COVID-19 pandemic and summarizes certain measures that Airport management took to mitigate the reduction of activity which resulted from the pandemic). B. THE AIRPORT 1. General Description/Location and History of the Airport The Airport is a small-hubs, commercial airport located within the city limits of Key West, Monroe County, Florida and covers approximately 268 acres. Of this area, 87 acres are salt ponds and mangrove vegetation. The remaining 181 acres are usable for the Airport. See Exhibit "A", Property Map herein. 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 owned by Palm Beach millionaire Malcolm Meacham. Pan American Airlines was established in Key West that year and leased the Airport site from Meacham. The Airport remained a small and privately owned strip until the start of World War 11. 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 was over. 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 2 The FAA categorizes airports that have total enplanements of at least.05%of total U.S. enplanements as small hubs. P, dill&Assuciahisp IIDIIw C-20 Report of the Airport Consultant States mainland. The County seat, the City of Key West, located on the southernmost tip of the 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. 3. Airport Ownership and Management The Airport is owned by the County and is operated as a separate enterprise fund of the County by the Monroe County Board of County Commissioners ("BOCC"). The BOCC exercises 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. 4. Existing Facilities The existing facilities of the Airport are described in general below and depicted on Exhibit"A." a. Airfield The Airport's airfield facilities ("Airfield")include those facilities necessary to support the movement and operation of aircraft, including a runway, taxiways and apron areas, along with 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-319, Boeing 737-700 and EMB 190 aircraft. Airplane Design Group III also includes turboprops, such as the ATR 42-600, military aircraft, and large 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. 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 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. NP,W11111&Assuciah"Sp IIDIIw C-21 Report of the Airport Consultant taxiways designated as Taxiways B through E. The taxiways' pavement consists of asphalt and concrete. 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. 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. 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. 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 The Airport's current passenger terminal area facilities are made up of the following facilities. 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 are connected by two elevated, enclosed corridors spanning the arrival roadway. The westerly corridor is an enclosed pedestrian bridge providing passenger access between the two buildings. The easterly corridor houses a passenger baggage conveyor system. 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. rWhIll&Assuciah"sp IIDIIw C-22 Report of the Airport Consultant 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 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 AlA). 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 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, fuel farm facilities, cargo facilities, Monroe County Sheriff and CBP facilities, and airside access Gates 1 and 5. iii. Automobile Parking Facilities 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 operates parking at the Airport through its parking manager, Republic Parking Systems. iv. Adam Arnold Annex The Adam Arnold Annex consists of approximately 6,600 square feet of space and houses the Airport Badging Office and CBP. V. Fixed Base Operator Facilities 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 square feet and a fuel farm which has three 12,000 gallon above-ground fuel storage tanks, two 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 Aviation LLC d/b/a Signature Flight Support. rWhIll&Assuciah"sp IIDIIw C-23 Report of the Airport Consultant 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. viii. Air Traffic Control Tower The ATCT is temporarily located on the north side of the airfield and is operational daily, 7:00 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 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 to the building, in connection with its overnight parcel delivery services. 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, LLC., is approximately 1,180 square feet and rests on approximately 0.7 acres. The other service facility is approximately 950 square feet, rests on approximately 0.6 acres and is leased by the Hertz Corporation. Xi. Greyhound Lines Station 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"). NP,W11111&Assuciah"Sp IIDIIw C-24 Report of the Airport Consultant EXHIBIT "A"Airport Layout Plan Y ti. z p, „4 saamAt vy� �l(glUUJ`VI y k ro Y r �N 6J ti n u� tw � ��im u 1 V NMh>Nr qm�' S I u. q 't �' 'f rirn � �w, AIL �Y V f 1 ra 1% �m �l a r r uu,gg r dU @I�mr *kml � 1 amr i q1 �4f° i y� f�E v �/IMlil'J;"�19X1N r �( d T d 7 4 E� L I fip JV -I' PL J , p IN V.JU1A IIC1 N Al A,1RP(JR1 14 "zr.,MIRMA C-25 Report of the Airport Consultant 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 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, it is assumed that the terms and conditions of the Signatory Agreement will continue in effect through the entire Forecast Period. The Signatory Agreement sets forth the rights and obligations of the parties as well as the 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. 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 Charges") and provides for mid-year adjustments, if necessary, and an annual settlement based upon actual costs and activity. The Airline Rates and Charges are calculated under what is 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 Complex. The County is required to pay for the non-airline areas of the Airport with non-airline revenue. Each Signatory Airline is obligated to pay Airline Rates and Charges totaling a minimum annual commitment of$450,000 during the term of the Signatory Agreement. 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. rWhIll&Assuciahisp IIDIIw C-26 Report of the Airport Consultant 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 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 inadequate for the efficient movement of passengers at existing and anticipated future activity levels. 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). 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 CAGR of 6.8%from FY 2012 to FY 2021. B. DESCRIPTION OF THE 2022 PROJECT The 2022 Project will include a second-level concourse ("Concourse A") of approximately 49,000 square feet located immediately north of the Existing Airside Terminal. Concourse A will contain seven gates, each equipped with passenger boarding bridges, holdrooms, passenger 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 bridge which connects the Existing Landside Terminal to the Existing Airside Terminal. The aircraft parking ramp level below Concourse A will be unenclosed and will support a new airline 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 rWhIll&Assuciah"sp IIDIIw C-27 Report of the Airport Consultant 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 II-1. As shown on Table II-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 Improvement Program ("All?") 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 million of an AIP grant anticipation note, $2.7 million of PFC PAYGO funds, and $31.9 million of 2022 Bonds proceeds. (Remainder of Page Intentionally Left Blank) 'Current FAA estimate for FY 2023 through FY 2025 based AIP Passenger Entitlement Grant apportionment formula. rWhIll&Assuciah"sp IIDIIw C-28 Report of the Airport Consultant TABLE II-1 2022 Project Cost and Funding Plan � a ' vi c p o m } a c» o ' a z a m o c - � a c+ Qo a` o o n o me _cD a p o y m v c» E c - vs w a m o e a ti c -I U� .> LL 0 V M� SA , A r - - - - Id p ° o 0 _ _ _ _ _ _ ect o » » » o 0. - cli w v a .. - v o a - - m - N a - - U v v oa __ _ _ _ _ _ __ _ _ - _ _ � w LL c 2 0 0 m o m LL> c m Q - o - c w ¢ c oo o y v 9 =o c m a a a a o 0 Q o _ E c m w m o E o,'m o� W U m a W U A a W H m W 0 3 E .m C) o _m CU 3 U .m2 a c .mC) ¢ mU 'v ° E o w w a o o W a z m w a CO E W a � a E m2 6 U U o a2 6 ~ LL o c U o a m 'a a z 19 3 a z 1° m a z 1° ¢ a z 19 a z 1? o 0 0 H z H m H H H a H c LL S Q a` C-29 Report of the Airport Consultant 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: Bond Proceeds: Par $39,680,000 Premium 40,826 TOTAL SOURCES $39,720,826 USES: Project Fund Deposits $31,896,168 Other Fund Deposits: Capitalized Interest Fund $4,175,850 Debt Service Reserve Fund 2,781,250 6,957,100 Cost of Issuance $867,558 TOTAL USES $39,720,826 Source: Frasca &Associates, LLC. Current Market Rates 8/12/2022 as of August 9, 2022+ 75 bp. 2022 Bonds ROAC Financial Tables.xlsx 6 Preliminary and Subject to Change. rWhIll&Assul"'Johisp IIDIIw C-30 Report of the Airport Consultant 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 Revenue, 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 201 87. Funds obligated for the AIP are drawn from the Airport and Airway Trust Fund, which is 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 construction are included in the funding plan of the 2022 Project(Table II-1). 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 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 entitlement categories such as primary, cargo, and general aviation. Remaining funds are then apportioned to a discretionary fund. Set-aside projects (airport noise and the Military Airport Program)receive first attention from this discretionary fund distribution. The remaining funds 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. 1. AIP Entitlement Grants The FAA distributes AIP Entitlement Grants to commercial service airports based on levels of aviation activity. One of the most common types of funding available for 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. 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://www.faa.gov/airports/aip/oveiview/#history. rWhIll&Assuciahisp IIDIIw C-31 Report of the Airport Consultant 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("LOP'), 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 Grants, future Discretionary Grants may also be included in an FAA LOI. F. COVID-19 RELIEF GRANT FUNDS The Coronavirus Aid, Relief, and Economic Security ("CARES") Act(H.R. 748, Public Law 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. 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 used as provided by the FAA's Policy and Procedures Concerning the Use of Airport Revenues ("Revenue Use Policy"), which include payment of operating and maintenance expense, debt service expense and, in certain cases, capital improvement expense. On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 ("CRRSA")was enacted into law as a part of the 2021 Consolidated Appropriations Act. The CRRSA Act provides $2 billion in additional grant assistance to be awarded as 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. On March 11, 2021, the American Rescue Plan Act of 2021 ("ARPA"), which provides 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. rWhIll&Assuciahisp IIDIIw C-32 Report of the Airport Consultant 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 FY 2021 O&M Expense $9,063,499 $0 $0 $9,063,499 Total FY 2021 $9,063,499 $0 $0 $9,063,499 FY 2022(subject to change) O&M Expense $640,701 $0 $0 $640,701 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 2022 Project Funding 2,000,000 3,563,873 5,820,591 11,384,464 Total $6,724,987 $3,670,458 $6,246,931 $16,642,376 Total Uses $21,789,697 $3,670,458 $6,246,931 $31,707,086 Source:Airport Records. 8/12/2022 Prepared by New ton&Associates,Inc. 2022 Bonds ROAC Financial Tables.xlsx (Remainder of Page Intentionally Left Blank) rWhIll&Assul"'Johisp IIDIIw C-33 Report of the Airport Consultant 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 Alp Passenger Entitlement Grants, the Airport expects to receive approximately $18.5 million of the $15 billion 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 11-1) and anticipates programming the balance of these grant funds for other eligible uses. H. FLORIDA DEPARTMENT OF TRANSPORTATION GRANT FUNDS9 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 quality of Florida's environment and communities. 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, development, land acquisition, and capital improvements which are intended to help provide a safe, cost-effective and efficient statewide aviation system. The state aviation grant program is funded from Florida's Transportation Trust Fund. The aviation industry is a major contributor to this fund through Florida's aviation fuel tax. 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 airport master plan or layout plan. They must also be consistent, to the maximum extent feasible, with the approved local government comprehensive plans of the units of government in which the airport is located. 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://www.fdot.gov/aviatior/fundinginfo.shtm NP,W11111&Assuciahisp IIDIIw C-34 Report of the Airport Consultant The MOT 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: (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. At commercial service airports, the MOT 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, MOT provides up to 12.5% of project costs when the FAA provides 75%funding. Since not all projects are eligible for federal funding, MOT may provide up to 50% of project costs ineligible for federal funding. Ultimately, the availability of funding and shares of project costs which will be paid by the MOT are limited to amounts appropriated annually by the Florida Legislature. The authority for the MOT to fund Florida airport projects comes from Florida Statutes, Sections 332.006 and 332.007. The Airport has received a Commitment Letter from MOT for approximately $38.9 million of MOT grant funds for the period shown below and has identified this amount for the funding of 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 rWhIll&Assuciah"sp IIDIIw C-35 Report of the Airport Consultant 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 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 nineteenth (19th)PFC application ("PFC Application No. 19"), which included $2.7 million of PFC funding for design costs for the 2022 Project, was approved by the FAA on January 25, 2022. With respect to the construction costs of the 2022 Project to be funded with PFCs, the County received FAA approval of its twentieth (20th)PFC application ("PFC Application No. 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. See Section V for historical and the projected PFC revenue and the application of Eligible PFC Revenues to the Debt Service on the 2022 Bonds. J. FUTURE CAPITAL IMPROVEMENTS Table II-4 sets forth the capital improvements the Airport anticipates during the Forecast Period. (Remainder of Page Intentionally Left Blank) P, dill&Assuciahisp IIDIIw C-36 Report of the Airport Consultant TABLE II-4 Capital Improvement Plan (Excluding the 2022 Project) omo � ' n F c � W 0 0 o o o o o LL ry N o _ _ _ _ _ _ o Im a o» w _ Q LL o N o 0 0 0 0 0 0 o 0 0 0 o o o N O w 0 a ¢ a a c v v v c O � a p � u u. 'a o v co v o v o o 0 0� » F» F» - Im c WO Fn co ni _ a v v v C a F» F» c _ c ry m v 0 c u`3 o n v u o v M o $ v m _ _ __ _ o o go w 2 = E p 3 E - o- E �j o2 E E E E E E " - c c 8 c c 8 8 8 8 0 p (9 j o d 'o a c 8 (9 �j ❑j a a a a a o o - - o a. - c r E ¢" ro c c c c m o c J 2 2 E m u E n E E E E ¢¢ o ¢ o o a m w m d E - -°'o E - -°'o E E _ - - o U K in O w C9 It0 U z 10 o U in O w U ¢ z m o ¢ z m o ¢ � z m o ¢ z C-37 Report of the Airport Consultant ggqqll I 1 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 the demand at the Airport10. 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), 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. (Remainder of Page Intentionally Left Blank) 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. rOm&Assuciahisp hic- Report of the Airport Consultant C-3 8 EXHIBIT III-1 Air Trade Area K['.N WWE'.5T INTERNATIONAL AIRPORT MAY JhA". ",*6 „4 Palm Beach lnternatioral � rvm i' Cate;Coral6^�� Alrpnrt�pgll ( CCOUNTY � HENDRY COU'hl'4'1! r PALM BEACI11 COUNTY �uy`4atd � 5r nrt PowreSt Florida -.... a International Airport(RS W) 1 BoD4,a�j Raiarid BROWARD COUNTY Nil 10s COLLIER COUNTY Fort OauelerdaNp-Fdn4Nywraortl r r international Airport(ELL) r r f b E>� � TAiamY4nterna4l�.na1 Airport iMIA) hN dcYropmL t COUNTY ' IC �fi Li"� ,Vzr fr44^"t ,� II�"YW krv4�rv. •s zn L�� Florida Ke.Y5 M�rat Qn' a�f rv^ w Airport(MTH) Vey e w � Key West International Airport(E'NW) r. 1 FL DA , Ir�T �4 N 4 ^,rrr±rta r,fldrarttw� 1 �, I.. 7 10 :.G'OY f'J4 N'41r 4110"I"tfih nrrr KByf.1MiRZ rm[mmatYunul J v. Orr r„.prra 4r r rq<•n,,, r �rYr r s u,.„r, "'in, rr,1,,, aprru Tw4 ➢;,a or ,�, r,,e:r,re -la re,n., rinkyq a 9�r¢,,),}rA, 16' o,a Al .....K" r n ✓Jt 0q�,rrl + , AIR TRADE ARFA rwhm Assuciahisp hic- Report of the Airport Consultant C-39 ggqqll I N 0 01 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)" 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 2027.12,11 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. TABLE III-1 Historical and Projected Population COMPOUND ANNUAL GROWTH RATE HISTORICAL PROJECTED HISTORICAL PROJECTED AREA 2000 2010 2019' 2027 2000-2010 2010-2019 2000-2019 2019-2027 Air Trade Areal 79,470 73,220 74,228 73,806 -0.8% 0.2% -0.4% -0.1% Florida............................................�16047..�1..�.................1..8.8.451.53.1...................21.47.7.73.1...................231547...044�1.................................1.6/....................................................1..5/....................................................1.5/......................................................... .......................... .Urrited States................�282 162.374..........�309..321.E..........�328..241 ZE..... .4..z1�......................0.9%...................................0.7/...................................�0.8%.................................... . .................. 04 ,432 0.7010 NOTES: 1 2019 is the last year or historical data in the 2021 Woods&Poole database and is the basis for Woods&Poole's future projections.Therefore,it is the last year or historical data displayed m this table. 2 The 2020 Census shows that the population of the Air Trade Area incressed to 82,874.The cause of this growth is uncertain,and the 2032population projection has not been adjusted to reflect the 2020 increase in population. All data are pres ented 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. " 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. rwhm&Assuciahisp hic- Report of the Airport Consultant C-40 ggqqll I N 0 01 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) over this same period. Florida and U.S. PCPI increased (1.9 percent and 2.2 percent CAGRs, respectively) over this same period. 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 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 Trade Area had a PCPI of$60,000 or more in CY 2019, which was higher than the percentage of households in these income categories for both Florida (41.2 percent) and the United States (45.8 percent). (Remainder of Page Intentionally Left Blank) 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. P,whm&Assuciahisp hic- Report of the Airport Consultant C-41 ggqqllR I C 01 N 0 01 TABLE III-2 Per Capita Personal Income (in 2012 Dollars) PER CAPITA PERSONAL INCOME YEAR AIR TRADE FLORIDA UNITED AREA STATES .......................................2.0 .10 ............................................................$6.3..70.9�.............................................$40�.20 1 ...............................................$�42.�3�66........................w 2w0w1 ��1 $63,�437 $40,�896 $�43w�55w,3w,��w,��w,��w,��w,��w,��w,��w,��a 2w0w1 2 $6�9673 $4w,1115 $�44,605w,��w,��w,��w,��w,��w,��w,��w,��a 2w0w1 3 $6w4 4��l6 $401w,5 5 $�44264w,��w,��w,��w,��w,��w,��w,��w,��a .......................................2.0.14............................................................$69624�.............................................$4.1.,�953...............................................$�45775........................w 2w0w1 �5 $7w,1310 $43,�936 $�47w�57 lw,��w,��w,��w,��w,��w,��w,��w,��a .......................................2.0.16............................................................$7�6564�.............................................$44,249�..............................................$�48.�03..5........................w .......................................2.0 .17 ............................................................$�82204�.............................................$45,765...............................................$�49�175........................w 2w0w1 �8 $�9w0,�3w,26 $47,085 $�50w�4�5w,0w,��w,��w,��w,��w,��w,��w,��w,��a 2019 $�9w2,�1w,8 w,1 $47,724 $�5�1424w,��w,��w,��w,��w,��w,��w,��w,��a ectedw,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��a 2020 $�9w,1,�047 $4w8,�9�10 $�5 2w�5�04w,��w,��w,��w,��w,��w,��w,��w,��a 2w0 2��1 $�9w6,�3w,57 $4�9,674 $�53262w,��w,��w,��w,��w,��w,��w,��w,��a .......................................2022............................................................$�9.8 .�1..50�.............................................$50�..5..50�..............................................$�54.�1 �3.7........................w 2023 $�9�9�95w8 $5w,1��.44w1 $�55027w,��w,��w,��w,��w,��w,��w,��w,��a 2024 $�1w0w,1 772 $52,340 $�55,923w,��w,��w,��w,��w,��w,��w,��w,��a 2w0 2�5 $�1w035w94 $53,248 $�56827w,��w,��w,��w,��w,��w,��w,��w,��a 2026 $�1w0w54w24 $54,�165 $�57w�73w,9w,��w,��w,��w,��w,��w,��w,��w,��a 2027 $�1w07,�26w1 $55,092 $�58 w�65w,9w,��w,��w,��w,��w,��w,��w,��w,��a .............Compound"Annual....................................................................................................................................................................................................................................................w Growth Rate ........................20�.10....._...2.0.1�9....................................................4...2%�.........................................................�1�...9o%��........................................................�2��.20%�...........................w 202719�% 1 8 o% 17o%�w,��w,��w,��w,��w,��w,��w,��w,��w,��a Percentage....of Households...in Income ..Categories ...(2019)................... Income w,Category AIR w,TRADE FLORIDA UNITED (in 2009 dollars) AREA STATES e�sethan��$2w9,�9w992w34o% 2w98 o% 278 o%��w,��w,��w,��w,��w,��w,��w,��w,��a $��5w,9�99w925go% 2w90o% 26.3% ..........$6�0,000�..to..�.$�74�99.9....................................1.2�..5��0 ......................................................1..1.�.�20��.....................................................�.1..0..�.go%�.........................w ,000�$��99 9�9w91w49o% 12.2o% 1w,31�% or More 2w35o% hgo% 2��19o%��w,��w,��w,��w,��w,��w,��w,��w,��a 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 Economic and Demographic Data Source(CEDDS),June 2021. PREPARED BY: Ricondo&Associates,Inc.,March 2022. rwhm Assuciahisp hic- Report of the Airport Consultant C-42 ggqqll I N 0 01 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, 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' 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. (Remainder of Page Intentionally Left Blank) rwhm&Assuciahisp hic- Report of the Airport Consultant C-43 ggqqll I N 0 01 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��................................................................................................................................................................................................................................................................................................................................................................................................................................�. �� 137��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�$1�w555629w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� $ $�� ........................................20..1.1.................................................................................................$3.�.8 ..1.............................................................................................................$760.� $75..................................................................................................1.5...725...30............................................. ........................................2012... ...............................................................................................$3.�.8 .7............................................................................................................$768..72...................................................................................................$1.6...083...77............................................. ........................................20..1.3..............................................................................................$3.�.84............................................................................................................$790.25..................................................................................................$1.6..450....1..2............................................. ........................................2014... ...............................................................................................$3.�.9.7............................................................................................................$g 1.7.26...................................................................................................$1.6...934...25............................................. ........................................20..1.5.............................................................................................$4..22............................................................................................................$87.1...24...................................................................................................$17..5 9.1...0 5............................................. w,3w9 $w,904 w,30 $w,w,17 w,894w,52w, $ ........................................2017... ..............................................................................................$4..5.6............................................................................................................$934..1.9..................................................................................................$1.8 ..332..2.1............................................. ........................................2018... ..............................................................................................$4..64............................................................................................................$9 70..3 5..................................................................................................$1.8 ..9 3 5...04............................................. 2019 $4.85 $1,007.27 $19,402.22 roJ��ectedw,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� w,7w� w,979.26 w,l wg w,728w,98w, $ $ $ ........................................2 021.................................................................................................$5.�..1.5..........................................................................................................$1...0 6.5...17..............................................................................................$2 0..2 5 9...0 g............................................. ........................................2022...............................................................................................$5.�.2.7.........................................................................................................$1...09.3..6.5...............................................................................................$20..683...42............................................. 2023 0.2 3..............................................................................................$5.�.3.8 .........................................................................................................$1....1..22...5.g..............................................................................................$2.1...1.12....1..6 $ ............................................. 2024 N w5 w,4N9 $w,lw,w1w,52.w,06 $w,w2wl w,546w,05w, w,61 $w,lw,w1w,82.w,06 $w,w2w1 w,984w,56w, $ ........................................2026...............................................................................................$5.�.7.3..........................................................................................................$1...2.12...64..............................................................................................$22..427...8 5............................................. ........................................2027...............................................................................................$5.�.84.........................................................................................................$1...24.3..7.5...............................................................................................$22...875...54............................................. w,w,w,w,w,ComPN wound 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,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,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 2010-2019 2.5/0 3.0% 2.5/0 2019—2027 2.4/0 2.7/0 2.1/o �.NOTES:.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................�. 1 CY2019 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. All data are presented on a calendar year has is. SOURCE: Woods&Poole Economics,Inc.,2021 Complete Economic and Demographic Data Source(CEDDS),June 2021. PREPARED BY: Ricondo&Associates,Inc.,March 2022. 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 rwhm&Assuciahisp hic- Report of the Airport Consultant C-44 ggqqll I N 0 01 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.15 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 States. (Remainder of Page Intentionally Left Blank) 15 Iacurci, Greg,"The pandemic pushes millions from the labor force. That's bad news," CNBC, https://www.cnbc.com/2021/02/08/January jobs-report-covid-19-pushes-millions-from-the-work-force.htnil (accessed October 20,2021). rwhm&Assuciahisp hic- Report of the Airport Consultant C-45 ggqqll I N 0 01 TABLE III-4 Civilian Labor Force and Unemployment Rates (in Thousands) CIVILIAN LABOR FORCE YEAR AIR TRADE AREA FLORIDA UNITED STATES 2010w, w, w,41.9 w, 9,147 w,1w,53 w,889w, 2011u, u, u,42u.S9,260 153,617, 2012w, w, w,43w.6w, 9,336 w,1w,54w,975w, 2013u, u, u,44.2 u, 9,415 155,389 2014w, w, w,44.9 w, 9,546 w,1w,5w5 w,922, 201w,5 w, w,45.9 w, 9,640 w,1w,5w7w,w13w,0w, 2016w, w, w,46w.6w, 9,841 w,1w,59w,w187 2017w, w, w,45w.6w, 10,032 0032w,1 w,6w0w,320w, 201w,8 w, w,45w.w1 10,166 0 w,lw66w,1w,62w,075w, 2019w, w, w,46w.6w, 10,330 w,1w,63 w,53w,9w, 2020 w,44w.gw, 10 w,1w,14w,1w,6w0w,742, 20211 47.8 10,484 161,204 u,Com u,oundu,Annual P Growth Rate 2010-2019 1.2% 1.4/0 0.7/o 2019-2021 lu,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u, 1.3% 0.7% -0.7% lw,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w, 2010-2021 1.2% 1.2% 0.4% UNEMPLOYMENT RATES 2010 7.5% 10.8% 9.6% 2011 7.0/0 10.0/0 8.9/o 2012 5.9/0 8.7/0 8.1/o 2013 5.1/0 7.5/0 7.4/o 2014 4.2/0 6.4/0 6.2/o 2015 3.5/0 5.5/0 5.3/o 2016 3.2/0 4.9/0 4.9/o 2017 3.3/0 4.3/0 4.4/o 2018 2.6/0 3.6/0 3.9/o 2019 2.2/0 3.3/0 3.7/o 2020 8.1/0 7.9/0 8.1/o 2021 2.9/0 4.8/0 5.4/o NOTES: I 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. rOm&Assuciahisp Inc- Report of the Airport Consultant C-46 ggqqll I N 0 01 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.17 This in turn correlates with lower labor costs and a more attractive business climate. 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 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). (Remainder of Page Intentionally Left Blank) 16 Tax Foundation,"2021 State Business Tax Climate Index,"https://taxfoundation.org/2021-state-business-tax- climate-index/(accessed September 28,2021). "U.S.Department of Labor,Bureau of Labor Statistics,"Union Members—2021," https://www.bls.gov/news.release/pdf/Urion2.pdf(accessed February 1,2022). 18 TBD Economics,LLC, The Economic Contribution of Spending in the Florida Keys National Marine Sanctuary to the Florida Economy,https://marinesanctuary.org/wp-content/uploads/2019/07/FKNMS-Report-Final-072819.pdf (accessed January 31,2022). 19 Tourism Economics, Comparative Visitor Economic Impacts for Key West, FL,https://cruising.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. zl Includes service members,civilians and contractors. rwhm&Assuciahisp hic- Report of the Airport Consultant C-47 ggqqllR I C 0 N 0 01 TABLE III-5 Major Employers in the Air Trade Area (Over 500 Employees) EMPLOYER DESCRIPTION #OF LOCAL EMPLOYEES US Armed Services US government 2,190 uMonroeuC2unt5 Schook Puublic school udistrict 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,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,1 u,u701u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u Ocean Reef Clubu u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,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,uPrrvate club a/real estate develou,um ent 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,850u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u P uPubl�x uStores y uKe West,u Marathon,&Key go n Largo Groce store ucham73u,0u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u wOcean w, P P Pro w,ertieSHositalit3 consortium 550w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w wMonroe County ty go Government, w,C O government 540w, Monroe County Sherifl7sw,0ffice Lnw enforcement,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,518 wLower w,Kwey w,wsw Medical ,Centerw,wKey West City government500w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w uNOTE:u, u, u, u,u,u, 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. 4. Employment by Major Industrial Sector The Air Trade Area's economy is primarily dependent on tourism; however, local government, military bases and the real estate market provide a significant level of employment as well. Sources of economic diversity in the region are discussed in this section by focusing on the following nonagricultural employment sectors, listed in order of their contribution to the Air Trade Area's employment base:22 • leisure and hospitality • government • financial • 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 construction sector in this Report,and the trade,transportation,and utilities supersector is divided into the trade sector and tmnsportation/utilities sector. rwhm&Assuciahisp hic- Report of the Airport Consultant C-48 ggqqll I N 0 01 • 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 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 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. (Remainder of Page Intentionally Left Blank) zs 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. 14 Goodhue,David,"Workers ride this bus to better-paying jobs in paradise. They're a long way from home," Miami Herald,https://www.miaiuiherald.com/news/local/commurity/floiida-keys/article234300792.html(accessed March 17,2022). rwhm&Assuciahisp hic- Report of the Airport Consultant C-49 TABLE III-6 Employment Trends by Major Industry Sector (Employment in Thousands) AIR TRADE AREA UNITED STATES NONAGRICULTURAL EMPLOYMENT' NONAGRICULTURAL EMPLOYMENT' COMPOUND COMPOUND ANNUAL GROWTH RATE ANNUAL GROWTH RATE SECTOR 2013 2019 2020 2013-2020 2019 2020 2013 2019 2020 2013-2020 2019-2020 �.Leisure..and.Hospitality. .....................................5..�3.................1.7�.3................1.4 2....................................._1 i-�................. �.�..8%/......................17.143.........9...913.........�5..75.1............................_.1...2/........................................._.20...9 .Govemment"........................................7...i....................7.7..................7,fi.........................................1.0 ............................................_..1.i. .......................24�.05.5........24 732.........24:.i29..............................0.0 ............................................._.2.4%..................... �.Financial....t............................................................fi..9...................7.5.....................�4.........................................0.9%............................................_..1��../.......................17t.8.�.2�......19 611.........1�9:.44�7..............................1.2�/............................................._.0.8%...................... �.Trade.................................................................................2...................7........................i........................................._.0..2/............................................_.7.M......................2..4t..�.i.2�......25�375.........24:.1�39............................._0.3/..........................................._.4.9%...................... .Professional and Business Services......fi..3....................7.3......................i..........................................9.g/..........................................._.2�.T. ......................2fit..�.fi�......29 833.........28:.7z�7..............................1�.3/............................................._.3,.7 ...................... 1. ..................................Z......................................................................................................................................................................................................................................................................t.......................... Construction 5.1 5.8 5.6 1.2% -3.5% 11,754 13,227 12,717 1.1% -3.9% ..............3........................................................................................................................................................................................................................................................................................... Other Services 3.6 4.2 3.8 0.6% -9.6% 10,513 11,576 10,511 0.0% -9.2% .Education and He...Services.......................................3��...................3..�5........................................_.0..8 ............................................_.... .......................24 838.........2s...041.........2...0................................1.7 ............................................._.... ...................... �.Trans...ortation/Utties..................................... ...................7.5..................7..�3.........................................5��.7 ............................................_.0�.0. ......................5��s9.i............9..808............0..5�2i.............................5�. ............................................._.1..5 ...................... ...P... ..................................................... .......... ......... ................................ ..................................... ............. ........... .................................................... �.Manufac....... .....0..4.... ...O.fi..... ....0..5..�. ....3��.3../.... .._.4.4./.... ...�.1.2'.�fi.1......�13,528......�1�z's0�8.... ....0..1/.... ..._.5,.3....... ....................... ....................................................................................................................................................................��................................................................................................................................................................................................................................................................ Information 0.6 0.5 0.5 -3.4% -5.7% 3,265 3,400 3,245 -0.1% -4.6% �.Total..............................................................................58.. ................G4.7..............�..��2.....................................0.4.�.............................................7...8�.......................�.2 ..�8.�....199 043.......88...186..........................0.7....................................................�..� Percent of 2020 Nonagricultural Employment tdHosplt,1Iy z3sy ri4y Gore--t 1�21d�i F J 1oa� 12.ay T de 1u11oy%2by Professional and Bunness Services 11 9 IIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIUIIIVIIIullil llil llil llil lliIAII IIII 15.3% Const...tion2 Other S-ices3 6'3y Fdarat-a,dHealthS-iiree mMp4d Mmomuuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiuuiul 144y T-penatm/Unoe'ee a idir sly ManufxWN g Eby mte,.,atm 4 IIIbM%1Ty 00% 5.0% 10.0% 15.0% 200% 25.0% 300% ®Alr Trade Area Ilul United States NOTES: All data are presented on a calendaryear basis. 1 Employment data include wage and salary workers,proprietors,private household employees,and miscellaneous workers.Employment data reflect the number ofjobs,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 2 Includes mining and logging employment 3 The nonagricultural employment forthe services sector includes outsourcing fromthe manufacturing sector. 4 The information sector includes co-nications,publishing,motion picture and sound recording,and on-line services. SOURCE:U.S.Deparhnent of Comunerce,Bureau ofEcononu Analysis,November 16,2021. PREPARED BY:Ricondo&Associates,Inc.,March 2022 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 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. rwhm&Assuciahisp hic- Report of the Airport Consultant C-50 ggqqll I N 0 01 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 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 approximately 3.6 million visitors and those visitors spent approximately $2.4 billion.25 The decline was due to the COVID-19 pandemic and the fact that the Florida Keys were closed to visitors in spring 2020. However, CY 2021 not only saw a recovery in total visitors to 2019 levels, but spending increased, including on hotel rooms, with the average monthly average daily 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, the monthly ADR in CY 2021 climbed nearly $100 from 2019 levels to $380.44.26 The largest hotel in the Air Trade Area by number of rooms is the historic Casa Marina in Key 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 15"2020 Monroe County Visitor Volume and Spending,"MMGY Travel intelligence, https://www.monroecounty- fl.gov/DocumentCenter/View/30094/2020-Monroe-County-Domestic-Visitor-Volume?bidld=(accessed February 7, 2022). 26"Key West Chamber of Commerce-Demographic Update 2021-22," Tourist Development Council, December 2021. rOm&Assuciahisp hic- Report of the Airport Consultant C-51 ggqqllR I C 01 N 0 01 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 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 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: 27 ROGO applies to residential properties and NRGO applies to non-residential properties. 28"10 Charts That Prove the Florida Keys are Still the Best Lodging Market in the World,"Hodges Ward Elliott (HWE),http://hodgeswardelliott.com/wp-content/uploads/2020/08/Floiida-Keys-Think-Piece-08.05.2020.pclf (accessed February 3,2022). 29 Ibid. 30 Ibid. 31 Ibid. 32 Tourism Economics, Comparative Visitor Economic Impacts for Key West, FL,https://cruising.org/-/media/clia--- visitor-spending-analysis---key- west#:—:text=A%20total%20of%2012%2C800%20jobs,West%20were%20sustained%20by%20tourism(accessed January 31,2022). 33"Cause Ship Data," City ofKey West—Port Operations,https://www.keywesttravelguide.com/key-west-tourism- statistics(accessed January 13,2022). 34 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-saturday (accessed January 13,2022). 35 Miles,Mandy,"Debate Continues as Cause Ships Make a Controversial Return to Key West,"Keys Weekly, https://keysweekly.com/42/debate-continues-as-cruise-ships-make-a-controversial-return-to-key-west(accessed February 17,2022). 36 Thakkar,Emrys,"Carnival Cause Line Removes Key West on Upcoming Sailings," Cruise Hive, https://www.cniischive.com/caniival-cruise-line-removes-key-west-for-upcoming-sailings/63874 (accessed February 17,2022). rOm&Assuciahisp hic- Report of the Airport Consultant C-52 ggqqll I 1 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 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 replica of original house), and the Audubon House and Tropical Gardens. 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 Historic Theaters and Performing Arts Venues. Key West is known for its performing arts 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. 3'Dry Tortugas,National Park Service,https://www.nps.gov/drto/index.htm(accessed January 14,2022). 38 Fort Zachary Taylor Historic State Park,Florida State Parks,https://www.floiidastateparks.org/parks-and- trails/fort-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://destinationfloiidakeys.com/so-whats-up-with-the-buoy-key-wests-top-photo-op(accessed January 17,2022). rwhm&Assuciahisp hic- Report of the Airport Consultant C-53 ggqqll I N 0 01 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. Bahia Honda State Park. An island park about 12 miles south of Marathon, the Bahia Honda State Park includes three beaches: Calusa, Loggerhead, and Sandspur (which is still undergoing reconstruction after damage from Hurricane Irma in 2017).40 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 Independence Celebration, Hemingway Days, Key West Lobsterfest, the Key Lime Festival, and 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 completely surrounded by water from start to finish. ii. Government 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 40 Harrison, Carlos,`Bahia Honda State Park: Beaches, Snorkeling and Camping in the Keys," Visit Florida, https://www.visitfloiida.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). rwhm&Assuciahisp hic- Report of the Airport Consultant C-54 ggqqllR I C 01 N 0 01 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 (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 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 patrolling 55,000 square miles of seas stretching to Cuba and the Bahamas.42 Trumbo Point also 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 The financial sector comprises financial, insurance, and real estate services. In CY 2020, the financial sector accounted for approximately 7,400 employees in the Air Trade Area, the third highest employment level among all sectors. The financial sector accounted for 12.3 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 10.3 percent in the United States. Financial employment in the Air Trade Area increased by 0.9 percent between CY 2013 and CY 2020, compared to a 1.2 percent increase for the United States over the same period. Financial 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 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 41"Sector Key West," United State Coast Guard Atlantic Area,https://www.atlanticarea.uscg.niil/Our- Organization/District-7/Units/SectorKeyWest(accessed January 28,2022). rwhm&Assucialvsp hic- Report of the Airport Consultant C-55 ggqqll I N 0 01 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." (Remainder of Page Intentionally Left Blank) 43 Son,Hugh, "U.S.banks are `swimming in money' as deposits increase by$2 trillion amid the coronavirus," CNBC,https://www.cnbc.com/2020/06/21/banks-have-grown-by-2-trillion-in-deposits-since-coronavirus-first- hit.html(accessed October 1,2021). rOm&Assucialvsp hic- Report of the Airport Consultant C-56 ggqqll I N 0 01 TABLE III-7 Total Bank Deposits (Dollar Amounts in Millions) TOTAL BANK DEPOSITS YEAR AIR TRADE UNITED FLORIDA AREA STATES 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,�� 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,��u$225�8 $4�098 �94u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�$7,67687u8 u,��u,��u,��u,��u,��u,��u,�� 2011ww,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w$2257��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,,$4��11157w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�$8 ,2�4940w3w,��w,��w,��w,��w,��w,��w,�� 2012uu ��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$23u,0�5��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,$42�3908u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�$8 ,9�47244u,��u,��u,��u,��u,��u,��u,�� 2013uuu,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$2,42�0��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,$44��1108 $9>4�3��352u5u,��u,��u,��u,��u,��u,��u,�� 2014uu ��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$2,5u,31u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,$4�623��64u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$1011272u4u,��u,��u,��u,��u,��u,�� 2015uu, u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$2,66�0��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�$5020u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$10657721u,��u,��u,��u,��u,��u,�� 93 2u01u6��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$2,833��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�$54��1660u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$112�8 �0 5u,1u8 u,��u,��u,��u,��u,��u,�� 2017uu ��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$299�8 $56�3793�u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$118 �598 u6u0u,��u,��u,��u,��u,��u,�� 2u01u8 $320�3��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�$5�8 ��58 �3�2u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$123��078 u8 u0u,��u,��u,��u,��u,��u,�� 2019uu ��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$33u,4�6��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,$60�3555u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$128 �u1��312u0u,��u,��u,��u,��u,��u,�� 2020uuu ��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$380�3��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,$710 5�49u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$155901�u3u9u,��u,��u,��u,��u,��u,�� 2021uuu,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u$4,5u,6�0 ��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�$8 �0��8085u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��$172�3��55u,11u,��u,��u,��u,��u,��u,�� Compound Annual Annual Growth Rate 2010 —2019 4.5/0 4.4/0 5.9/o 2019 —2021 16.7/0 15.7/0 16.0/o 2010 —2021 6.6/0 6.4/0 7.6/o NOTE: Year ending June 30. SOURCE: Federal Deposit Insurance Corporation(FDIC),Summary of Deposits Report, September 2021. PREPARED BY: Ricondo&Associates,Inc.,March 2022. 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. rwhm&Assuciahisp Inc- Report of the Airport Consultant C-57 ggqqll I N 0 01 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 19th-century structure. The Air Trade Area also includes the Searstown Shopping Center and smaller boutiques and independent retailers throughout the Florida Keys. 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. Table III-8 presents total retail sales per capita for the Air Trade Area, Florida, and the United States between CY 2010 and CY 2019. Figures are shown on a per capita basis because the Air 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 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 $31.7 million in CY 2027, reflecting a CAGR of 1.5 percent between CY 2019 and CY 2027. Growth in Florida and the nation's total retail sales per capita is projected to be slightly lower than the Air Trade Area, with each one projected to experience a CAGR of approximately 1.4 percent between CY 2019 and CY 2027. (Remainder of Page Intentionally Left Blank) rwhm&Assuciahisp hic- Report of the Airport Consultant C-58 ggqqll I N 0 01 TABLE III-8 Total Retail Sales Per Capita (in 2012 Dollars; Amounts in Millions Per Capita) TOTAL RETAIL SALES PER CAPITA YEAR AIR TRADE UNITED FLORIDA AREA STATES Historical 2010 u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$u,u2u3u.4u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,$u,ul s.,ul $lu,4.u2 2011 $w,w2w4w.ws $w,w15.,6 $lw,4.w,7w,w,w,w,w,w,w,w,w,w,w,w 2012 $u,u2u5 u.u3 $u,ul s.,9 $lusu,.u,lu,u,u,u,u,u,u,u,u,u,u,u 2013 $2usu.u6 $u,ul 6.,ul $lusu,.u,3u,u,u,u,u,u,u,u,u,u,u,u 2014 $26.1 $u,ul 6.,4 $lusu,.u,6 2015 $2u6u.u7 $u,ul 6.,7 $lusu,.u,9 2016 $u,u2u7u.u0 $u,ul 6.,g $lu,6.u,lu,u,u,u,u,u,u,u,u,u,u,u 2017 $27.3 $w,wl 7.,0 $1 w,6.w,3w,w,w,w,w,w,w,w,w,w,w,w 2018 2u7u.ug17.,3 lu,6.u,6 $ $ $ ulu, 2019 $28.3 $17.6 $16.9 P�roJ�ected,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u 2020u $2u6u.ug $u,u17.,2u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$lu,6.u,7u,u,u,u,u,u,u,u,u,u,u,u 2021 $2w9w.ws $w,w1 g.,3 $1 w,7.w,6 2022w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,$29.9 w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,$w,w1 g.,6w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,$1 w,7.w,9 2023 a $3u0u.u3u,u,u,u,u,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,$u,ul g.,9u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$18.1 u,u,u,u,u,u,u,u,u,u,u,u 2024u $3u0u.u7u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$u,u19.,u1 $1 u,8 .u,3u,u,u,u,u,u,u,u,u,u,u,u 2025 a $3ulu.ulu,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$19.3 u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$18.5 u,u,u,u,u,u,u,u,u,u,u,u 2026u $3ulu.4u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$u,u19.,su,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,$lu,g.u,7u,u,u,u,u,u,u,u,u,u,u,u 2027 $3w,lN.w7 $19.7 $lw,g.w,9 w,CwOw, oundw, Annual Growth Rate u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,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,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,o 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,uou,u,u,u,u,u,u,u,u,u,u,u,u 2010-2019 2.1/0 1.7/0 1.9/0 u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,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,u,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,o 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,uou,u,u,u,u,u,u,u,u,u,u,u,u 2019—2027 1.5/0 1.4/0 1.4/o 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 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. rwhm Assuciahisp hic- Report of the Airport Consultant C-59 ggqqllR I C 01 N 0 01 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 to a 3.7 percent decrease in national professional and business services employment. vi. Construction In CY 2020, the construction sector accounted for approximately 5,600 employees in the Air 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 construction employment decreasing 3.5 percent compared to a 3.9 percent decrease in national construction employment. 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 States over the CY 2010 to CY 2020 period. However, over the 5-year period prior to the 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. rwhm&Assuciahisp hic- Report of the Airport Consultant C-60 ggqqll 0 N 0 0, 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 w,3wgw,679 w,7w,824w, w604w,�lw,0w, w,101 w,943w, $ $ $ w,4w2w,3w60w,gw,g lw,sw, w624w,0�lw, lwOs w,269 $ $ $ w,�w4w,g 10 lw,3w,20w,1w,829w,65 gw, w,1w40 w,425 $ $ $ w,gw�w,75w2 lw,gw,wlw,�w,lw,990w,w822w, w,1w77 w,�w56 $ $ $ w,gw4w,07w5 $w,lw,9w,54w9w, 1,046,363 046363, $w,1w,93 w,243w, $ 2015 262 $82...........................................1..09..9.24.....................................$23...43.9..................................1....1.82...5 82 $ .............................223...6..1.1.................. g�w4w, w1 w,2w06 w642 w,237 w,102 $ $ $ 09wsw1 w,2wgwlw,w,977 w,258 w,505 $ $ $ ....................................2.0.1 g.............................................................553.....................................................$1.59..........................................1..44..4.27.....................................$3...1...54.4..................................1...3.28...827.............................$27.1....120................ ....................................2.0.19.............................................................672....................................................1.�.1..........................................1..54..3.02....................................3..3...2.1.0..................................1...3.g�..048.............................280..5.3.4................ $ $ $ ggw4w, w1 w,4w7wlw,w,141w, w,3w07 w,2w,10 $ $ $ Corripound Arms al Growth Rate 2015—2019 26.6/0 18.5/0 8.8/0 9.1/0 4.0/0 5.8/o 2010—2020 3.4/0 5.5/0 15.5/0 16.8/0 9.3/0 11.7/o NOTE: All 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 Area to be more in line with 2019 levels, single family home sale prices were up 54 percent year- 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 current environment they have more equity and attractive financing options for second homes.44 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, 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.keysnews.com/flkeysfreepress/business/news/housing-market-began-to-soften-in-q3/article-3 9791124- 37fc-llec-a5e0-974c448b38e2.html(accessed January 28,2022). 45"Expert Insights on the 2022 Florida Keys Housing Market," Coastal Realty of the Florida Keys, https://coastalrealtyofthefloridakeys.com/expert-insights-on-the-2022-florida-keys-housing-market(accessed January 28,2022). rwhm&Assuciahisp hic- Report of the Airport Consultant C-61 ggqqllR I C 01 1 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 COVID-19 pandemic than other services employment in the United States, with the Air Trade Area other services employment decreasing 9.6 percent between CY 2019 and CY 2020, compared to a 9.2 percent decrease in national other services employment. Other services employment includes personal services (e.g., assisting the elderly with activities of daily living); dry cleaning and laundry services; repair and maintenance services; religion, 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. viii. Education and Health Services In CY 2020, the education and health services sector accounted for approximately 3,600 employees in the Air Trade Area, 6.0 percent of total nonagricultural employment in CY 2020 in the Air Trade Area, compared to 14.4 percent in the United States. Education and health services employment in the Air Trade Area decreased by 0.8 percent 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 41 Weld,Elliott,"Housing market began to soften in Q3,"Florida Keys Free Press, https://www.keysnews.com/flkeysfreepress/business/news/housing-market-began-to-soften-in-q3/article_3 9791124- 37fc-1lec-a5e0-974c448b38e2.html(accessed January 28,2022). rOm&Assuciahisp hic- Report of the Airport Consultant C-62 ggqqll I N 0 01 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 United States. Transportation/utilities employment in the Air Trade Area increased at a CAGR of 5.7 percent 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 access: • The Air Trade Area is directly connected to major U.S. markets, particularly on the east coast of the United States, by a critical roadway link, U.S. 1. U.S. 1, also known as the 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 bridges. This is the primary thoroughfare for residents, tourists, and trucking operations 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. • Port Key West provides several passenger transportation facilities, including three cruise 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 rwhm&Assuciahisp hic- Report of the Airport Consultant C-63 ggqqllR I C 01 N 0 01 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. X. Manufacturing 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. Manufacturing employment in the Air Trade Area increased by a CAGR of 3.3 percent between 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 The information sector combines telecommunications service providers, traditional publishing, motion picture and sound recording, broadcasting, software, online services, and data processing. In CY 2020, the information sector accounted for approximately 500 employees in the Air Trade 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. 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. rwhm&Assuciahisp hic- Report of the Airport Consultant C-64 ggqqll 0 N 0 01 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 through CY 2032.50 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 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 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 Section IV describes the methodologies used in developing forecasts of enplaned passengers at the Airport including (among other methodologies) statistical linear regression modeling, with local, state, and national socioeconomics and demographics as independent variables and enplaned passengers as the dependent variable. Independent variables considered for this analysis included population, employment, earnings, personal income (per capita and total), and GRP/GDP for the Air Trade Area and the United States. For each socioeconomic and 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 III-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. 41 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. "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. rwhm&Assucialvsp hic- Report of the Airport Consultant C-65 ggqqllR I C 0 N 0 01 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/o Air Trade Area Total Employment(lobs) 65,640 71,982 1.2% US Total Employment(Jobs) 203,809,516 225,663,310 1.3% Air Trade Area Total Earnings $2,770 $3,321 2.3% US Total Earnings $11,907,552 $14,050,453 2.1% Air Trade Area Total Personal Income $6,842 $7,916 1.8% US Total Personal Income $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 Income $51,424 $58,659 1.7% Air Trade Area Gross Regional Product(GRP) $4,852 $5,844 2.4% US Gross Domestic Product(GDP) $19,402,219 $22,875,535 2.1% NOTES: All data are presented on a calendaryear basis. 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 of historical 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 of work rather than residence of workers.As a result,some employees may be double-counted using this measure. 3 Figures displayed in billions of2012dollars. 4 Figures displayed in 2012 dollars. SOURCE: Woods&Poole Economics,Inc.,2021 Complete Economic and Demographic Data Source(CEDDS),June 2021. PREPARED BY: Ricondo&Associates,Inc.,March 2022. (Remainder of Page Intentionally Left Blank) rwhm&Assuciahisp hic- Report of the Airport Consultant C-66 ggqqll I N 0 01 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. TABLE IV-1 Carriers Serving the Airport PASSENGER SERVICE ' ALL-CARGO SERVICE Allegiant Air Mountain Air Cargo (dba uFedEx),u,u,u,u,u,u,u American Airlines SKYWAY u(dba u,UP S Delta Air Lnes u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,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. u,JetBlueu, u,Silver uAirways uUnited Airlinesu,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u NOTES: dba-doing business as Scheduled as of July 2022,except where noted in this notes section. i Includes regional affiliates,where applicable. SOURCES:Monroe County,July 2022;Innovata,July 2022. PREPARED BY: Ricondo&Associates,Inc.,July 2022. 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 FY 2012 and FY 2013. United suspended service in FY 2014 through FY 2016 but resumed service in FY 2017. Allegiant Air ("Allegiant") and JetBlue Airways ("JetBlue") commenced service in FY 2021. Table-IV-2 presents the years that each existing scheduled passenger air carrier provided service at the Airport. rwhm&Assuciahisp hic- Report of the Airport Consultant C-67 ggqqll I N 0 01 TABLE IV-2 Historical Scheduled Passenger Air Carrier Base AIR CARRIER 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Allegrant Air American Airlines .................................................................................................................................*...................................*.......................................................................................................................................................................................................................................................................................................................................... Cape An- Delta An-Lines ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... JetBlue Airways Silver Airways .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................. Southern Airways Express Southwest Airlines United Airlines NOTES: 1 Where applicable,includes affiliated,regional,and merged carriers. SOURCES:Monroe County,January 2022,Innovata,February 2022. PREPAREDBY:Ricondo&Associates,Inc.,March 2022. 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.52 It ranked 108th in passengers in the United States in CY 2020, according to the FAA Air Carrier Activity Information System ("ACAIS") enplaned passenger data. The Airport predominantly serves O&D passengers, with O&D passengers accounting for 98.2 percent of all passengers at the Airport in FY 2021. Table IV-3 presents historical enplanement activity at the Airport between FY 2012 and FY 2021. The Airport experienced growth between FY 2012 and FY 2014, but with the exit of Southwest Airlines (Southwest) at the Airport in the previous year, FY 2015 enplanement 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 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. 52 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. rOm&Assucialvsp hic- Report of the Airport Consultant C-68 ggqqllR I C 0 N 0 0, TABLE IV-3 Historical Enplaned Passengers (Fiscal Year Ended September 30) FISCAL YEAR ENPLANED PASSENGERS ENPLANED PASSENGER GROWTH 2012w, w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,366,190 w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w,w, 2013 393,906 7.6/o 2014 400,669 1.7/o 2015 349,790 -12.7/o 2016 367,254 5.0/o 2017 398,592 8.5/o 2018 416,234 4.4/o 2019 475,034 14.1/o 2020 340,307 -28.4/o 2021 659,321 93.7/o CooundAnnualCrrowthRate��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� w, 2012-2019 3.8/0 2012-2021 6.8/o SOURCE:Monroe County,January 2022. PREPARED BY: Ricondo&Associates,Inc.,March 2022. Notable details regarding passenger activity at the Airport between FY 2012 and FY 2021 are as follows: FY 2012. In FY 2012, enplaned passengers increased 10.0 percent. Growth over the period was supported by increased seat capacity from Silver, operating at the time as United Express, Delta, 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 2014. 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. rOm&Assuciahisp Inc- Report of the Airport Consultant C-69 ggqqllR I C 0 N 0 0, 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 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 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. 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 capacity to its other destinations, American initiated service to Dallas Fort Worth International Airport (DFW), ORD, and Philadelphia International Airport (PHL). FY 2020. Enplaned passengers decreased 28.4 percent in FY 2020. After increasing capacity 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 2020, total seat capacity at the Airport was at 27.9 percent of May 2019 levels. Seat capacity 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. 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). rwhm&Assuciahisp hic- Report of the Airport Consultant C-70 ggqqll 0 N 0 01 • 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 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. TABLE IV-4 Historical Total Enplaned Passengers by Airline (Fiscal Years Ended September 30) 2017 2018 2019 2020 2021 CARRIER' ENPLANED SHARE ENPLANED SHARE ENPLANED SHARE ENPLANED SHARE ENPLANED SHARE PASSENGERS PASSENGERS PASSENGERS PASSENGERS PASSENGERS .Alle..iantA>t...........................................o........................o..o .........................0.........................O..O°/.........................0........................O...O./........................0........................O..O./...................124.8.5...................1..9./...... g .American Airlines...........................147..690...............37..1..0/.................1.51..054................36...3.0/.................1..87..734.................39..5./.................155..88�...............45..8..0/.................32.8..994.................49..9./.... Delta A L nes...............................................l 0:.919.....................40.4%.........................1.43 514........................34.5.0/.........................1..76 775.........................37..Z./........................106:.817.....................3..1...40/..........................1 E�'1'2?i....................... ...... JetBlue..............................................................................o....................................o n ...................................0....................................O.O%.....................................0....................................O...O./...................................0...................................O..O./............................19 123. ...........................Z...9./......... 88 Silver Airways .................................................78.8.63..........................1.9,.80/..........................93...25.7.........................ZZ...4.0/...........................G7 60.4...........................14..Z./.........................42.B............................1....O............................45.�.4.1.0...............................9./......... Y .United Airlines.................................................1.1.'.1.ZO...........................Z..B/...........................28:40.9...........................�.8%............................42.°.92..1..............................9...0./...........................34'.7.51.........................1.0.ZO/...........................83?321..........................l..Z.�./...... ...................................................................................................................................................o.......................................................................................o.........................................................................................o.....................................................................................o.......................................................................................,o.......... Airport Total 398,592 100/0 416,234 100/0 475,034 100/0 340,307 100/0 659,321 100/o NOTES: 1 Includes regional/coni nater affiliates. SOURCES:Monroe County,January 2022. PREPARED BY Ricondo&Associates,Inc.,March 2022. 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. rwhm&Assuciahisp hic- Report of the Airport Consultant C-71 ggqqll I N 0 01 Scheduled nonstop service53 is provided to 23 destinations in FY 2022, as shown on Exhibit IV- 2. 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 COVID-19 pandemic, reaching 84.8 percent in FY 2021, as Key West was an attractive destination for leisure travelers during this period. The Airport has historically generated higher average fares than other Florida markets and higher than the average fares for all U.S. airports. Exhibit IV-1 presents the average domestic yield54 for the Airport, the average for all Florida airports, and the average for all U.S. airports on a rolling four-quarter basis from the period ending Q4 2018 to the period ending Q1 2022. During this period the Airport has consistently generated higher average domestic yields than average for all Florida airports and all U.S. airports, making it an attractive market for airlines to serve. (Remainder of Page Intentionally Left Blank) ss Includes destinations served seasonally. 54 Average domestic yield is generally expressed as the number of cents(or equivalent)earned for each passenger mile flown. It is calculated by dividing the revenue generated from passengers by the number of revenue passenger miles,which in turn are calculated by multiplying the number of passengers on a flight by the number of miles flown by the aircraft. rwhm&Assuciahisp hic- Report of the Airport Consultant C-72 ggqqllR I C 01 N 0 01 EXHIBIT IV-1 Average Domestic Yield Key West, Florida and the United States n)i'nesRi�� Yileki Ave ii,a g e 0 "'0 1') ............. "'005 yO (M Q I Q�11 Q'11 (M Q I Q�11 Q'11 (M Q I Q�11 Q'11 (M Q I 11R 11) 113 10 11) �110 11) �M'10 110�0 �M'10 �M'10 "Mll I �0 1 I �Mll I Mll I "olli, Qija0n' Poi'kod E11(fincl - ["AA/ "Wal Hniida - "Wal U Quarter EYW Totall Plorida Totall U.S. Q4 2018 $0.22 $0.12 $0.16 Q1 2019 $0.22 $0.12 $0.16 Q2 2019 $0.22 $0.12 $0.16 Q3 2019 $0.22 $0.13 $0.16 Q4 2019 $0.22 $0.13 $0.16 Q1 2020 $0.21 $0.12 $0.16 Q2 2020 $0.21 $0.12 $0.15 Q3 2020 $0.20 $0.11 $0.14 Q4 2020 $0.19 $0.10 $0.13 Q1 2021 $0.17 $0.08 $0.11 Q2 2021 $0.17 $0.09 $0.11 Q3 2021 $0.17 $0.09 $0.12 Q4 2021 $0.17 $0.10 $0.13 Q1 2022 $0.18 $0.11 $0.14 NOTES:Yields have been adjusted to a 1,000 mile average stage length. SOURCE: US Department of Transportation O&D Survey,August 2022 PREPARED BY: Ricondo&Associates, Inc.,August 2022 Nrwhm Assuciahisp Inc- Report of the Airport Consultant C-73 ggqqll I N 0 01 3. Aircraft Operations Table IV-7 presents historical operations (takeoffs and landings) at the Airport between FY 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. (Remainder of Page Intentionally Left Blank) rwhm&Assuciahisp hic- Report of the Airport Consultant C-74 ggqqllR I C 01 N 0 01 EXHIBIT IV-2 Destinations Served ., ,. w a r, #m m � r n r rwhm Assuciahisp hic- Report of the Airport Consultant C-75 ggqqll 0 N 0 0, 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 1 New York City 157 9.1% Delta,JetBlue,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 Ph�ladelphta 85 5.0/o American 4 Atlanta 84 4.9/o Delta 5 Chicago 72 4.2% American,United 6 Tampa 65 3.8/o Silver 7 Boston 64 3.7% JetBlue 8 Charlotte 57 3.3/o American s 9 Dallas 57 3.3% American 10 Detroit 43 2.5/o 11 Orlando 41 2.4% Silver 12 Houston 33 1.9% United 13 Mmneapohs 28 1.7/o 14 Pittsburgh 28 1.6/o Allegiant ......w......,��w,��w,��w,��w,��w,��w,��w,��w,w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��ow,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� 15 Nashville 28 1.6/o Allegiant 16 Cincinnati 27 1.6/o Allegiant ..w,..w,..w,..w,..w,��w,��w,��w,..w,..w,..w,..w,��w,��w,��w, 17 Cleveland 26 1.5/o ..w,..w,..w,..w,..w,��w,��w,��w,..w,..w,..w,..w,��w, 18 indtanapohs 25 1.5/o Allegiant 19 Denver 24 1.4/o ..................... .............................. ...............................................................................................................................................................................................................................o............................................................................................................................ 20 Columbus 24 1.4/o �....�.......... Other O&D Markets 661 38.4/o Total Domestic O&D Passengers 1,720 100.0/o NOTES:Figures may not add due to rounding. PDEW—Pass engers Daily Each Way O&D—Origin and Destination Scheduled service operated during Fiscal Year 2021. 1 Includes John F.Kennedy International(JFK),Newark Liberty International(EW R),and LaGuardia(LGA)Airf 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. 4Includes Boston Logan International(BOS),Manchester-Boston Regional(MHT),and T.F.Green International(PVD)Airports,as well as Portland International Jetport(PW M). 5 Includes Dallas Fort Worth International Airport(DEW)and Dallas Love Field(DAL). 6 Includes Orlando International(MCO)and Orlando Sanford International(SFB)Airports. 7Includes George Bush Intercontinental Airport/Houston(IAH)and WilliamP.Hobby(HOU)Airports. SOURCES:US Department of Transportation,DB1B Survey,February 2022. PREPARED BY: Ricondo&Associates,Inc.,March 2022. rOm&Assuciahisp hic- Report of the Airport Consultant C-76 ggqqllR I C 0 N 0 01 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 PERCENTAGEof PASSENGERS PASSENGERS O&D PASSENGERS PASSENGERS RESIDENT O&D PASSENGERS VISITOR O&D .......................................20�1.2............................................................366...1�90...........................................360455..............................................9.8...4�..............................................67745................................................1.8.so/.............................................298445..............................................81...5 ....................... .......................................20�1.3............................................................393906...........................................385�.923..............................................9.8...0 �..............................................72085................................................1.8.30/..............................................321427..............................................81...6 ....................... .......................................20�1.4............................................................400 669...........................................391�.i 75..............................................97.6%..............................................80935................................................ZO.Zo/..............................................320�.135..............................................79.9%....................... .......................................20�1.5............................................................349 790...........................................345�.417..............................................9.8..../..............................................77'653................................................ZZ.Zo/.............................................272486..............................................77.9 ....................... 2016 367,254 363,990 991/0 78,592 214/0 28$662 786/0 .......................................6�1.............................................................398..592...........................................395468.................................................. ..............................................88089................................................ ....o..............................................310503..............................................77.9 ....................... .......................................K� ............................................................416 234..........................................412�.224.................................................. .............................................K. 100 729..............................................24..0..............................................319 505..............................................75.8%....................... ....................................... �1.............................................................479 034...........................................468�.757...............................................8.... .............................................K. 106 408.............................................. .40..............................................368626..............................................77.6 ....................... .......................................202��............................................................340 307...........................................333�.491..............................................�.8...m..............................................K. 65 339....................................................o.............................................279 308..............................................80.9%....................... .......................................202�..............................................................659�32.1............................................647.617...............................................8... .............................................i�6..1 ..................................................o..............................................559�.104..............................................8h8 ....................... K. Compound A u Growth Rate 2012_-2019 38/0 - 71 2012 02—21 6 /0 -8 6 7/-0 6 /0 3 /0 44/0 72/0 NOTES:O&D—Origin and Destination SOURCES:Monroe County,January 2021;US Department ofTransporta[ion,D13113 Sa y,Fetao y 2021. PREPARED BY:Ricondo&Associates,Inc.,March 2022. TABLE IV-7 Historical Aircraft Operations (Fiscal Year Ended September 30) FISCAL YEAR PASSENGER ALL CARGO GENERAL AVIATION MILITARY TOTAL ANNUAL GROWTH AIRLINE /OTHER AIR TAXI ............................201.7.....................................................1.5�.8.1.4.....................................................1..348.......................................................626.......................................................7 50......................................................5.1...53.8............................................................... ............................201.8.....................................................i.¢.8.1.8.....................................................1.�44.....................................................3...�3.......................................................459......................................................5....8�....................................................1..../............................. ............................201.9.....................................................1628.0.....................................................1.�430.....................................................34 822.......................................................520......................................................53�.05.2.....................................................1...8 ............................2020.....................................................13°�27.8.....................................................1:�64.....................................................29 564.......................................................442......................................................44t.92.9.................................................._.15.3%.......................... ............................2021......................................................22 598.....................................................1.�923.....................................................3.. �68.......................................................439......................................................6. 2.8..................................................42............................... .......... ...............................................'..................................................................:..................................................................9,'j......................................................................................................................................'............................................................................ Compound Annual Growth Rate SOURCES:Monroe County,January 2022;US Department of Transportation,Federal Aviation Administration,Operations Network,February 2022. PREPARED BY.Ricondo&Associates,Inc.,March 2022. 4. Landed Weight 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, rOm&Assuciahisp hic- Report of the Airport Consultant C-77 ggqqll I N 0 01 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. 1. Impact of the COVID-19 Pandemic 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 U.S. airports and 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-3, 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 total United States. In June 2021, departing seats from the Airport represented 241 percent of June 2019. The increase in activity at the Airport has been driven in part by factors that are specific to the COVID-19 pandemic: • Leisure destinations like Key West with an abundance of outdoor activities where visitors 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 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 July 2022. rOm&Assuciahisp hic- Report of the Airport Consultant C-78 ggqqll I N 0 01 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. TABLE IV-8 Historical Total Landed Weight by Airline (Fiscal Years Ending September 30, in 1,000 Pound Units) 2017 2018 2019 2020 2021 LANDED LANDED LANDED LANDED LANDED CARRIER' WEIGHT SHARE WEIGHT SHAREWEIGHT SHAREWEIGHT SHAREWEIGHT SHARE .............................................................................................................................................................................................................................................................................................................1.............................�........... Allegtivrt Au 15,158 1.5/o .................... ..............................................................................................................................0........................................................................0..................................................................................................................................................................................................................................0......... AnricanAirlines 183,934 37.2/0 177,873 35.9/0 218,425 39.1/0 226,778 45.0% 487,619 48.4/0 Delta Au Lines 189,957 38.4/0 165,820 33.5/0 202,045 36.2/0 154,233 30.6/0 267,795 26.6/0 JetBlue 40,256 4.0/o .............................................o........................................................................o........................................................................................................................................................................................................................................... SilverAlrways 97,869 19.8/0 108,300 21.9/0 77,671 13.9/0 63,348 12.6/0 62,760 6.2/0 UnrtedA>rlules 17,063 3.5/0 37,247 7.5/0 54,115 9.7/0 52,125 10.5/0 126,025 12.5/0 ................ ........................................................................ ........................................................................................................................................................�....... Passenger Airline Total 488,822 98.8/0 489,240 98.8/0 552,256 98.9/0 497,184 98.6/0 999,612 99.2/o M21!�ain Air Cargo(dba FedEx) 3,511 0.7/0 3,953 0.8/0 3,876 0.4/0 3,808 0.6/0 3,851 0.4/0 ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................� SKYWAY dbaUPS 2,219 0.4/0 2,202 0.4/0 2,202 0.7/0 3,183 0.8/0 4,322 0.4/0 Cargo Airline Total 5,729N N 1.2%N 6,154 N 1.2%N 6078 N 1.1%N 6,991 N 14"/u N 8173N N 0.8% Total 494,551 100.0/0 495,394 100.0/0 558,333 100.0/0 504,175 100.0/0 1,007,785 100.0/o NOTES: dba-doing business as Totals may not add due to rounding. 1 Includes regional/conmuter affiliates. SOURCE.Monroe County,January 2022. PREPARED BY. Ricondo&Associates,Inc.,March 2022. (Remainder of Page Intentionally Left Blank) rwhm&Assuciahisp hic- Report of the Airport Consultant C-79 ggqqll I N 0 01 EXHIBIT IV-3 Domestic Seat Capacity Recovery Key West, Small Hubs, and the United States v� 71 �7 ¢yr 7 w,m V A"rr } /,,;,"} a, c o 4 ---1 , C H -f r4 N 'I [ iN ^.I N +d l.i C et ME' tNO p 1' 4c1aua9til it y rrd lndev cd to glnc same numth m ',(9, s 015RC P In ru o a'ta,9 u�y—1021. 1IRF11A RID HY: Ric)natcr&As,",6atvs,In lu,JkI➢y 29 22, (Remainder Of Page Intentionally Left Blank) rwhm&Assuciahisp hic- Report of the Airport Consultant C-80 ggqqll 0 N 0 01 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 January 46,450 56,694 122/0 44,312 95/0 67,826 146/o .................................................................................................................................................................................................................................................................................................................................................o.............................................................................................................................o February 44,968 56,381 125/0 47,057 105/0 64,290 143/o March 56,129 38,826 69/0 67,097 120% 78,310 140% .................................................................................................................................................................................................................................................................................................................................................. ...................................................................................................................................................... Apnl 45,442 1,219 3/0 68,489 151/0 71,766 158/o .................................................................................................................................................................................................................................................................................................................................................. ...................................................................................................................................................... May 41,282 2,506 6/0 72,160 175/0 66,802 162/o June 38,347 13,946 36/0 74,928 195/0 57,095 149/0 .................................................................................................................................................................................................................................................................................................................................................. ...................................................................................................................................................... July 38,163 21,442 56/0 73,950 194/0 60,526 159/0 August 32,571 16,108 49/0 63,689 196/o N/A N/A .................................................................................................................................................................................................................................................................................................................................................. ......................................................................................................................................................... September 28,216 18,614 66/0 50,268 178/o N/A N/A Total 475,034 340,307 72/0 659,321 139/o N/A N/A NOTE: N/A-Not Applicable SOURCE:Monroe County,August 2022. PREPARED BY. Ricondo&Associates,Inc.,August 2022. 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 when America West Airlines merged with US Airways, retaining the US Airways brand. In 2009, Delta acquired Northwest Airlines. In 2010, United acquired Continental Airlines. In 2011, 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 July 28, 2022, JetBlue and Spirit announced their intention to merge no later than the first half of 2024, pending government and shareholder approval. JetBlue and Spirit will continue to operate as independent airlines until after the transaction closes. Spirit has terminated its prior merger agreement with Frontier that was announced in February 2022. Spirit does not currently serve the Airport. Consolidation 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 sufficient levels of staffing to operate increased levels of capacity. Airlines have responded by rOm&Assuciafttsp Inc- Report of the Airport Consultant C-81 ggqqllR I C 01 N 0 01 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." In April 2022, the average price of jet fuel was $3.59 per gallon, having grown steadily since May 2020. Exhibit IV-4 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 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. EXHIBIT IV-4 Historical Monthly Averages of Jet Fuel and Crude Oil Prices 120 $4.00 Avo age 0 We OH Pt ices 51017 Average.1et Fuel Prices yy Ica 'S' 1',1 a rp � ti7}� "$ .5�Ou Lm $60 $ro2M y $1.so k $ace y W50 0 WOO Month..Year SO4:R( V fti&� ra�¢ru�arp"T6rnat ara6racua,�M SC�tuwktis ,lh 1�r a�,Y'lczfu,u uuaar.h,cia��u�ra4ay��[�Gau,Duly 4l�?"�. 1"JUTrhlt>=D BY- ss Airlines for America,Passenger Airline Cost Index(PACI) Q3 2021. (https://www.airlines.org/dataset/a4a- quarterly-passenger-airline-cost-index-u-s-passenger-airlines/)accessed February 2022. rwhm&Assucialvsp Ilic— Report of the Airport Consultant C-82 ggqqll I N 0 01 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 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. D. FORECAST OF PASSENGER DEMAND AND AIRLINE OPERATIONS 1. Activity Forecast Methodology Forecasts of Airport activity were developed for FY 2022 through FY 2027. The short-term forecast through FY 2024 was based on estimates of airline capacity and passenger load factors by route during the recovery from the COVID-19 pandemic. The long-term forecast, from FY 2025 through FY 2027, was based on a socioeconomic regression analysis that identified predictive statistical relationships between historical passenger volumes and independent socioeconomic variables. The assumptions, techniques, and results of the forecast process are described in the following subsections. 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, rwhm&Assuciahisp hic- Report of the Airport Consultant C-83 ggqqllR I C 01 N 0 01 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 Airport • The FAA Terminal Area Forecast 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 influences continue to impact passenger activity during this period, with traditional influences primarily driving activity throughout the remainder of the Forecast Period. Exhibit IV-5 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 forecast to occur in FY 2023 due to airlines rebalancing capacity across their route networks as COVID-19 pandemic related factors diminish and demand for business travel and long-haul international travel returns. Enplaned passengers are forecast to increase starting in FY 2024. 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 increased awareness of the Key West market and airlines' continued service levels even as demand has returned in other leisure markets. The following factors were also considered in the development of the recovery period forecast: • 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. rOm&Assuciahisp hic- Report of the Airport Consultant C-84 ggqqllR I C 0 N 0 01 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 changes are not assumed in the forecast. EXHIBIT IV-5 Enplaned Passengers From Fiscal Year 2021 Through Fiscal Year 2024 �0c, 'r F- 91'"trr SOUIiC°l''S: Monrare County,Jaarauuary 2022(historical), Riccaraalo&Associates,Mc-February 2022(<aualysis). PREP.K1I FI)BY: Ricondo&Assocarates,Inc.,l'+wI<arcla 2022. ii. Long Term Activity Forecast Methodology As the COVID-19 pandemic's influences on passenger demand diminishes, it is expected that the 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).56 "Woods&Pool Economics,Inc.,2021 Complete Economic and Demographic Data.Source(CEDDS),June 2021. rOm&Assuciahisp hic- Report of the Airport Consultant C-85 ggqqll 0 N 0 0, The resulting regression equations were populated with independent projections of the relevant socioeconomic variables," 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— SOCIOECONOMIC VARIABLE FY 2027 CAGR Total 8ulation- US 1 Pop . /o u, Total Employment- US 2.4/o Total Earnings - US 2.6/o w, Total Personal Income Per Capita Cap - US 2.5/o u, Gross 4ional Product- US 2 Reg . /o u, Total 9ulation- Florida 1 Pop . /o u, Total Employment- Florida 2.2/o Total Employment- Monroe County 2.2/o Average 2.3 /o NOTES: FY—Fiscal Year CAGR—Compound Annual Growth Rate ATA—Air Trade Area SOURCES:Woods&Poole Economics,Inc.,June 2021;US Department of Transportation,DB1B Survey,February 2022.,Ricondo&Associates,Inc.,February 2022. PREPARED BY: Ricondo&Associates,Inc.,May 2022. 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. 57 Ibid. rwhm&Assucialvsp hic- Report of the Airport Consultant C-86 ggqqll I N 0 01 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. • 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 demand. E. FORECAST OF PASSENGER DEMAND 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 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 FY 2022 to FY 2027. F. AIRCRAFT OPERATIONS FORECASTS Passenger volume growth at the Airport is expected to be accommodated through a combination of larger aircraft, new flights, and increasing load factors. Table IV-12 presents historical and forecast aircraft operations at the Airport through FY 2027. 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. (Remainder of Page Intentionally Left Blank) rwhm&Assucialvsp hic- Report of the Airport Consultant C-87 ggqqll I N 0 01 TABLE IV-11 Enplaned Passenger Forecasts (Fiscal Years Ended September 30) FISCAL YEAR ENPLANED PASSENGERS ANNUAL GROWTH 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,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,��u,�� 201u,23u6619�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,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,uou,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/o 2015 349,790 -12.7/o 2016 367,254 5.0% 2017 398,592 8.5/o 2018 416,234 4.4/o 2019 475,034 14.1/o 2020 340,307 -28.4/o 2021 659,321 93.7/o Forecast 2022 739,504 12.2/o 2023 704,628 -4.7/o 2024 731,316 3.8/o 2025 748,069 2.3/o u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u,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,u,a,u,u,u,u,u,u,u,u,u,u,u,u,u,u,u, 2026 764,962 2.3/o 2027 781,909 2.2/o Compound Annual Growth Ratew,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,�� 2012—2021 6.8/o 2021 —2027 2.9/o NOTES:N/A-Not Applicable SOURCES: Monroe County,January 2022(historical);Woods&Poole Economics,Inc.,June 2021;Ricondo& Associates,Inc.,February 2022(forecast). PREPARED BY: Ricondo&Associates,Inc.,March 2022. rOm&Assuciahisp Inc- Report of the Airport Consultant C-88 ggqqllR I C 01 N 0 01 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........................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 2012 18,530 51.4 76.8/c N/A 43,843 459 62,832 ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ 2013 17,294 57.7 78.9/c N/A 40,833 685 58,812 .................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 2014 15,380 64.1 81.3/e N/A 37,848 597 53,825 ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ 2015 15,548 59.7 75.4/e N/A 38,272 595 54,415 2016 14,954 64.1 76.6/c N/A 36,404 798 52,156 ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 2017 15,814 66.6 75.6/c 1,348 33,626 750 51,538 ......................................................................................................i.......................................................................................................................................................................................................................................................................................................................................................... 2018 16,818 61.5 80.5/e 1,448 33,413 459 52,138 ....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... 2019 16,280 69.9 83.5/a 1,430 34,822 520 53,052 ........................................................................................................................�...................................................................................................................................................................................................................................................................................... 2020 13,278 82.2 62.4/u 1,645 29,564 442 44,929 .................................................................................................................................................................................................................................o...................................................................................................................................................................................................................................................................................... 2021 22,598 88.2 66.2/u 1,923 39,168 439 64,128 Forecast............................................................................................................................................................................................................................................................................................................................................................................................................................................................................. 2022 20,733 94.5 75.5/a 1,954 39,834 439 62,959 ............................................................................................................................................................................................................................................................................................. 2023 19,296 94.6 77.2/a 1,985 40,511 439 62,231 o..............................................................i.........................................................................................................................................................................................9'...................... 2024 19,444 95.3 79.0/a 2,017 41,200 439 63,099 2025 19,811 95.3 79.2/u 2,049 41,900 439 64,199 2026 20,179 95.4 79.5/a 2,082 42,612 439 65,312 ..............................................................................................................................................................................o...................................................................................................................................................................................................................................................................................... 2027 20,545 95.5 79.7/u 2,115 43,337 439 66,436 �.CoxnP....ound Annual Growth�Rate........................................................................................................................................................................................................................................................................................................................................................................................................................ 2012-2021 2.2/u 6.2/u N/A N/A -1.2/u -0.5/a 0.2/u 2021-2027 -1.6/a 1.3/a 3.2/a 1.6/a 1.7/a 0.0/a 0.6/a NOTES:N/A-Not Applicable or Not Available SOURCES:Monroe County,January 2022;FAA OPSNET,February 2022(historical);Ricondo&Associates,Inc.,February 2022(forecast). PREPARED BY: Ricondo&Associates,Inc.,March 2022. 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 FY 2021, when a full year of A319s were operated by both airlines. 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 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 rwhm&Assuciahisp hic- Report of the Airport Consultant C-89 ggqqll I N 0 01 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. G. LANDED WEIGHT FORECASTS Table IV-13 presents historical and forecast landed weight at the Airport. As shown, total landed weight forecast for FY 2027 is 993 thousand, thousand-pound units, which represents a CAGR of-0.2 percent from FY 2021. TABLE IV-13 Landed Weight Forecasts (Fiscal Years Ended September 30, in 1,000 Pound Units) PASSENGER ALL-CARGO FISCAL YEAR AIRLINES AIRLINES TOTAL Historical .....w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,.w,..w...................w..................... 2017ww� 48�8 8 �2257w294w945w51w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w, 2018ww 48�92�4061w5�44w953w9�4 2019ww 55225660w78 5w5 8 3w34 2020 4971 8469w9w15w041 75 2w02199961w,28 173 100w7785��w,��w,��w,��w,��w,��w,��w,��w,��w,��w, Forecast 2022 982 305g3w03 9w9060�8 2w0239w154�68 8 4w3�69w23904��w,��w,��w,��w,��w,��w,��w,��w,��w,��w, 2w0259473558 7w08 9w5606�4��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w, 2027 98400 1g9wg99w929w90 ooundAnnualw,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��w,��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&Associates,Inc.,March 2022. rOm&Assucialvsp hic- Report of the Airport Consultant C-90 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& Comptroller; Property Appraiser; Sheriff, Supervisor of Elections; and Tax Collector Constitutional Offices"). 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 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 Annual Comprehensive Financial Reports. 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 adopted by the County on August 17, 2022. Pursuant to the Resolution, the County agrees that for the Fiscal Year commencing October 1, 2022, and for each Fiscal Year thereafter, the County 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: (i)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 (ii) 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 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 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. P, dill&Assuciah"sp IIDIIw C-91 Report of the Airport Consultant 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 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 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. "Net Revenues shall mean Gross Revenues less Operation and Maintenance Costs." "Operation and Maintenance Costs" shall mean any and all costs incurred by the County in operating, maintaining and administering the Airport, including, but not limited to, the general administrative and legal costs of the County related to operation, maintenance, management, security and development of the Airport; costs associated with equipment, vehicles, supplies, materials, services and support for the operation, maintenance, management, security and 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 rWhIll&Assuciahisp hic- C-92 Report of the Airport Consultant 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." 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. (Remainder of Page Intentionally Left Blank) rWhIll&Assuciahisp IIDIIw C-93 Report of the Airport Consultant 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: 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 Maintenance Fund such sums as are necessary to pay Operation and Maintenance Costs for the ensuing month 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 1 Payment of Subordinated Indebtedness 1 Deposits to Operation and Maintenance Reserve Account of Monroe County,Florida Key West International Airport Operation and 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 NP,W11111&Assucildhisp Inc- C-94 Report of the Airport Consultant 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 659,321 and exceeding the pre-pandemic levels in FY 2019. In response to the passenger activity reductions caused by the pandemic, Airport management took certain steps to mitigate the effects of the lost activity including: • Closely monitoring expenditure levels while maintaining safe Airport operations; • 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. The impacts of the pandemic on the Airport are reflected on Table 11-1, and particularly in the 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. (Remainder of Page Intentionally Left Blank) rWhIll&Assuciah"sp IIDIIw C-95 Report of the Airport Consultant 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 Securty 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% Rental Car Rents 426,992 393,801 398,111 384,344 607,713 9.2% Public Parking 419,381 447,326 438,609 290,966 420,034 0.0% General Adation 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 189,699 212,665 261,406 162,406 172,540 -2.3% Restaurant 280,876 277,295 353,860 256,566 499,930 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% Investment 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% CARESS 0 0 0 5,295,800 9,063,499 N/A Other Miscellaneous Revenue 3 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% OPERATION&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&Other' 2,173,798 1,825,169 2,393,946 2,295,026 3,252,871 10.6% Security Services-MCSO(Net) 2,198,441 2,364,910 2,402,040 2,384,817 3,068,832 8.7% TOTAL OPERATION&MAINTENANCE COSTS: $7,425,276 $7,346,059 $8,190,294 $8,669,974 $9,411,119 6.1% NETREVENUES3 $731k716 $241,871 $1,010,279 $4,603,199 $11,241,976 97.6% DEBTSERVICE NIA NIA NIA NIA NIA DEBT SERVICE COVERAGE NIA NIA NIA NIA NIA 1 Revenues and Operation and Maintenance Costs data was prodded by the Airport for the purposes of the Report of the Airport Consultant. s CARES amounts shown were applied to Operation and Maintenance Costs. 3 FY 2021 includes contract settlement amount of$150,00D and an intergovernmental revenue amount of$124,899. 4 Includes amounts for County Allocated O,erhead. 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 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 Reconciliation CARES $0 $0 $0 $5,295,800 $9,063,499 Settlement 0 0 0 0 150,000 Investment 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 $12,717,367 $13,688,499 $15,929,258 $20,263,862 $16,535,996 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 $41,496 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. @,,I.d by Newton&Associates,Inc 8il2/2022 2022 Bands BOAC Financial Tebles_xlsx C-96 Report of the Airport Consultant 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. Table V-2 sets forth the Airport's historical airline CPEP during the Study Period. As depicted on Table V-2, the airline CPEP decreased at a CAGR of 5.8% during the Study Period, from $10.75 in FY 2017 to $8.45 in FY 2021. TABLE V-2 Historical Cost Per Enplaned Passenger CAGR 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% Airline Terminal Rents 1,820,649 1,784,141 1,988,022 1,967,945 1,639,351 -2.6% Airline Security Charges 443,106 342,184 529,122 411,378 594,213 7.6% Total Airline Payments $4,283,113 $3,670,621 $4,727,284 $4,283,222 $5,569,512 6.8% Enplaned Passengers 398,592 416,234 475,034 340,307 659,321 13.4% Airline Cost per Enplaned Passenger $10.75 $8.82 $9.95 $12.59 $8.45 -5.8% Source:Airport Revenues and Enplanements provided by Airport Records. 8/12/2022 Con-piled by Newton&Associates,Inc. 2022 Bonds ROAC Financial Tables.xlsx 58 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. NP,W11111&Assul"'Johisp IIDIIw C-97 Report of the Airport Consultant 2. Rental Car Revenues Revenues received from the rental car companies operating at the Airport collectively comprise 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 10% of gross receipts or a concession fee MAG, plus 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 new agreements are put into place. Two of the On-Airport RACs, Avis and Hertz occupy and pay land lease rental for service 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 strong enplanement growth over the Study Period. 3. Public Parking Revenues 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 pays all expenses, plus a management fee and an incentive fee, if any, to Republic Parking 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 $420,034 in FY 2021. Table V-3, below, depicts the current parking rates at the Airport. rWhIll&Assuciahisp IIDIIw C-98 Report of the Airport Consultant 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. Source:Airport Records. 8/12/2022 Prepared by Newton&Associates, Inc. 2022 Bonds ROAC Financial Tables.xlsx 4. General Aviation Revenues General Aviation revenues include FBO rentals, hangar rentals, and other revenues related to general aviation activity at the Airport. As shown on Table V-1, during the Study Period, the 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 attributable to a FBO fair market value rental adjustments implemented by the Airport. 5. Ground Transportation In addition to rental car companies, ground transportation providers operating at the Airport 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. P, dill&Assuciahisp IIDIIw C-99 Report of the Airport Consultant 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 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 the 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 $499,930 in FY 2021, representing a CAGR of 15.5% during the Study Period. 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 attributable to the enplanement growth experienced during the Study Period. 8. Air Cargo Revenues 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. rWhIll&Assuciahisp IIDIIw C-100 Report of the Airport Consultant 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. 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. 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 were $5,295,800 in FY 2020 and $9,063,499 in FY 2021. See Table 11-3 and Table V-1. 12. Other Miscellaneous Revenues 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 revenue amount of$124,899. 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. P, dill&Assuciahisp IIDIIw C-101 Report of the Airport Consultant 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 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 Ground Transportation $0.66 $0.62 $0.82 $0.60 $0.62 $0.61 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 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. 8/1 212 0 2 2 Prepared by Newton&Associates,Inc. 2022 Bonds ROAC Financial Tables.xlsx 13. Airport Operation and Maintenance Costs Operation and Maintenance Costs are incurred for operation and maintenance of the Airport grounds and facilities as previously described in Section I of this Report. Historical Operation 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 6.1IN, 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 rWhIIll&Assull"Whisp IIDIIw C-102 Report of the Airport Consultant 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 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 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 Resolution. (Remainder of Page Intentionally Left Blank) rWhIll&Assucifllv'sp IIDIIw C-103 Report of the Airport Consultant 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 of the 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: 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% 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% Non-Aidine 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% General Aviation 309,000 318,270 327,818 337,653 347,782 358,216 3.0% 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% 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: Personnel Seruces $3,881,961 $4,076,059 $4,279,862 $4,493,855 $4,718,548 $4,954,475 5.0% Contractual Sms,Supplies/Materials&Other 3,096,262 3,313,000 3,544,910 3,793,054 4,058,568 4,342,668 7.0% Security SeMces-MCSO(Net) 2,284,733 2,444,664 2,615,791 2,798,896 2,994,819 3,204,456 7.0% Transfers-County 0-head 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 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 AMOUNTAVAILABLE 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 SUBORDINATE DEBT SERVICE f [D] $0 $12,000 $12,000 $167,500 $323,000 $323,000 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 [A+B]/[C] n/a n/a n/a 2.50 2.57 2.38 Debt SeMce is PRELIMINARY. Source'.Frasca&Associates,LLC.Current Market Rates as of August 9,2022+75 to Estiimated payments becoming due on revolving line of credit.See Table II-2 Grant Anticipation Note funding source. 3 Under the Resolution,each year Net Revenues plus Eligible PFC Revenues mustbe at least 125%of Debt SeMce payable for each such year. Source'.Estimated FY 2022-Airport Records. 8/12/2022 Prepared by Newton&Associates,Inc. 2022 Bonds ROAC Financial Tables.xlsx NP,W11111&Assul"'Johisp IIDIIw C-104 Report of the Airport Consultant 1. Airport Revenues a. Airline Revenues Airline revenues comprise revenues derived from landing fees, Terminal rents, and security fees 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 Terminal Complex and Airfield. Anticipated Operations and Maintenance Costs increases would include general price level 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. Airline revenues are projected to increase at a CAGR of 10.4%, from $6,281,689 in FY 2022 (estimated)to $10,314,469 in FY 2027. b. Forecast of Non-Airline Revenues Rental cars, public parking, ground transportation, food and beverage and retail and advertising 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. rWhIll&Assuciflft"sp IIDIIw C-105 Report of the Airport Consultant 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. ii. Public Parking Revenues Public parking revenues are forecast to increase from $550,000 in FY 2022 to $703,048 in FY 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 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 2022 to $358,216 in FY 2027, a CAGR of 3.0%. iv. Ground Transportation Revenues 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 Forecast Period. V. Advertising Concession Revenues 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 rWhIll&Assul"'Johisp IIDIIw C-106 Report of the Airport Consultant food and beverage and purchase merchandise. According to the Airport, the number of food, 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%. vii. Air Cargo Revenues 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 based on the forecast of cargo airline landed weight and the projected landing fee rates over the Forecast Period. 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. ix. CARES Funds CARES funds in the amount of$640,701 is estimated to be allocated to Operation and Maintenance Costs in FY 2022. X. Other Miscellaneous Revenues Total Other Miscellaneous Revenues are projected to remain flat at$1,500 (estimated FY 2022 revenue) over the Forecast Period. 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. rWhIll&Assul"'Johisp hic- C-107 Report of the Airport Consultant 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 II, 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 the payment of PFC eligible projects including 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 miles (and pay no fare) do not pay a PFC. Because of the profile of passengers visiting the Air Trade 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 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 $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 CAGR of 2.64% over the Forecast Period. 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. (Remainder of Page Intentionally Left Blank) rWhIll&Assul"'Johisp IIDIIw C-108 Report of the Airport Consultant 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 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 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% 1 $4.50 PFC level less $0.11 airline handling fee per enplaned PFC charge. 2 Source for% PFC Enplanements is PFC Application#20. Estimated by Newton&Associates,Inc. 8/12/2022 2022 Bonds BOAC Financial Tables.xlsx (Remainder of Page Intentionally Left Blank) P, dill&Assul"'Johisp IIDIIw C-109 Report of the Airport Consultant TABLE V-7 Passenger Facility Charge Fund Activity Fiscal PFC Interest Total PFC PFC Year End Year Income Earnings Revenue Expenditures Balance PFC Receipts Avai lab le for Approved Projects, End of Year 9/30/2016 1 $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 2020 1,681,104 70,704 1,751,808 4,763,782 5,019,638 20213 2,648,832 8,307 2,657,139 3,123,782 4,552,995 FY 2022 ESTIMATED 2022 Estimated $2,856,852 17,517 $2,874,369 $4,708,239 $2,719,125 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 Monroe County Report on Schedule of Passenger Facility Charges and Reports on Compliance and Internal Control. Monroe County Report on Schedule of Passenger Facility Charges and Reports on Compliance and Internal Control:FY 2017-FY 2020. Year End Balance for FY 2021 is not stated on Monroe County Report on Schedule of Passenger Facility Charges and Reports on 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. 4 Forecast PFC Expenditures provided by Airport.Includes amounts for existing PAYGO PFC projects and 2022 Bonds Debt Service commencing FY 2025. Prepared by New ton&Associates,Inc. 8/12/2022 2022 Bonds ROAC Financial Tables.xlsx 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. In its PFC application (Application #20)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 rWhIll&Assuciahisp IIDIIw C-110 Report of the Airport Consultant 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 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 Year. Table V-5 presents the projections of: (i)Net Revenues, (ii)Eligible PFC Revenues and (iii) Debt Service Coverage over the Forecast Period. As shown, Debt Service Coverage is forecast to exceed the coverage requirements of the Resolution in each year of the Forecast Period. G. AIRLINE COST PER ENPLANED PASSENGER Airline CPEP is a measure that reflects total airline costs paid to operate at 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. 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. 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%. NAI believes that this range of CPEP is reasonable, considering historical CPEP levels, the physical scope and cost of the 2022 Project, and forecast Operation and Maintenance Expenses estimated to be required after completion of the 2022 Project. (Remainder of Page Intentionally Left Blank) rWhIll&Assul"'Johisp IIDIIw C-111 Report of the Airport Consultant 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' 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% Source:Key West International Airport. 2 Excludes cargo airline landing fees. 3 Source:Ricondo&Associates,Inc. Prepared by:Newton&Associates,Inc. 8/12/2022 2022 Bonds ROAC Financial Tables.xlsx 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 sensitivity of passenger activity on the County's ability to pay the Debt Service on the 2022 Bonds, and otherwise meet its obligations under the Resolution during the Forecast Period. Under this sensitivity analysis, enplanements have been assumed to decrease by approximately 111,000 in FY 2023 and then increase at the annual rate of 2%from FY 2024 to FY 2027. As shown on Table V-9, Net Revenues are forecast to remain sufficient to cover Debt Service by 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. (Remainder of Page Intentionally Left Blank) P,whill&Assuciah"sp IIDIIw C-112 Report of the Airport Consultant 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 of the 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% 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% 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 $9,647,778 $10,108,882 $10,294,186 10.4% Non-Aidine Revenues: 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 $661,266 914,101n $914,101 $914,101 $914,101 $914,101 6.7% Public Parking 550,000 577,000 646,233 659,157 672,340 685,787 4.5% General Avation 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 649,768 552,303 563,349 689,536 703,330 717,396 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% 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% Contractual Svcs,Supplies/Materials&Other 3,096,262 3,313,000 3,544,910 3,793,054 4,058,568 4,342,668 7.0% Security SeMces-MCSO(Net) 2,284,733 2,444,664 2,615,791 2,798,896 2,994,819 3,204,456 7.0% 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 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 $2,750,988 $2,663,125 $3,381,926 $3,112,159 $2,566,427 -7.1% ELIGIBLE PFC REVENUES [B] $0 $0 $0 $2,526,428 $2,576,957 $2,628,496 AMOUNTAVAILABLE 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 f [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 Forthe pusposes ofthis Sensitivity Analysis,Eligible PFC Revenues are assumed at 100%of estmated PFC collections. Debt SeMce is PRELIMINARY. Source'.Frasca&Associates,LLC.Current Market Rates as of August 9,2022+75 to a Estiimated payments becoming due on revolving line of credit.See Table II-2 Grant Anticipation Note funding source. °Under the Resolution,each year Net Revenues plus Eligible PFC Revenues mustbe at least 125%of Debt SeMce payable for each such year. Source'.Estimated FY 2022-Airport Records. 8/12/2022 Prepared by Newton&Associates,Inc. 2022 Bonds ROAC Sensitivity Financial Tables.xlsx NP,W11111&Assul"'Johisp IIDIIw C-113 Report of the Airport Consultant 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 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 4,218,021 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% 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% Enplaned Passengers 3 739,504 628,578 641,150 653,973 667,052 680,393 -1.7% Estimated Airline Cost per Enplaned Passenger $8.49 $11.01 $11.39 $14.75 $15.15 $15.13 12.2% Source:Key West International Airport. 2 Excludes cargo airline landing fees. 3 Source:Ricondo&Associates,Inc.:FY 2022.Newton&Associates,Inc.:Forecast Period. 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O a�i a�i p a� Q.. aoi w \ 2 j \ } \ % \ , z %\ 7- \ \ }� z 'ajug ) ° / /4:T fig ) T \./ ( 2gt.A Q § k� C).00 � § - \ ® C, bo { \ a / @G E .2 , # [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX E PROPOSED FORM OF BOND COUNSEL OPINION [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX E FORM OF OPINION OF NABORS, GIBLIN & NICKERSON, P.A., WITH RESPECT TO THE SERIES 2022 BONDS Upon delivery of the Series 2022 Bonds in definitive form, Nabors, Giblin & Nickerson, P.A., Tampa,Florida,Bond Counsel,proposes to render its opinion with respect to such Series 2022 Bonds in substantially the following form: (Date of Delivery) Board of County Commissioners of Monroe County, Florida Key West, Florida Commissioners: We have examined a record of proceedings relating to the issuance of$ aggregate principal amount of Monroe County, Florida Airport Revenue Bonds (Key West International Airport), Series 2022 (AMT) (the "Series 2022 Bonds"). The Series 2022 Bonds are issued under the authority of the Laws of the State of Florida, including, particularly, Chapter 125, Part 1, and Chapter 332, Florida Statutes, and other applicable provisions of law, and pursuant to Resolution No. 206A-2022, adopted by the Board of County Commissioners(the "Board")of Monroe County,Florida(the "County")on August 17, 2022, as supplemented by Resolution No. 20613-2022, adopted by the Board on August 17, 2022 (collectively, the "Resolution"). The Series 2022 Bonds are dated and shall bear interest from their date of delivery, except as otherwise provided in the Resolution. The Series 2022 Bonds will mature on the dates and in the principal amounts, and will bear interest at the respective rates per annum, as provided in the Resolution and set forth in the Contract of Purchase executed in connection with the sale of the Series 2022 Bonds (the "Purchase Agreement"). Interest shall be payable on each April 1 and October 1, commencing on April 1, 2023. The Series 2022 Bonds shall be subject to redemption prior to maturity in accordance with the Resolution and as set forth in the Purchase Agreement. The Series 2022 Bonds are being issued for the principal purpose of financing certain capital improvements to the Key West International Airport, as more particularly described in the Resolution. As to questions of fact material to our opinion, we have relied upon the representations contained in the Resolution and in the certified proceedings relating thereto and to the issuance of the Series 2022 Bonds and other certifications of public officials E-1 Board of County Commissioners of (Date of Delivery) Monroe County, Florida Page 2 furnished to us in connection therewith without undertaking to verify the same by independent investigation. Furthermore,we have assumed continuing compliance with the covenants and agreements contained in the Resolution. We have not undertaken an independent audit, examination, investigation or inspection of the matters described or contained in any agreements, documents, certificates,representations and opinions relating to the Series 2022 Bonds, and have relied solely on the facts, estimates and circumstances described and set forth therein. In our examination of the foregoing, we have assumed the genuineness of signatures on all documents and instruments, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. Based upon the foregoing, under existing law, we are of the opinion that: 1. The County is a duly created and validly existing political subdivision of the State of Florida. 2. The County has the right and power under the Constitution and Laws of the State of Florida to adopt the Resolution, the Resolution has been duly and lawfully adopted by the County, is in full force and effect and is valid and binding upon the County in accordance with its terms, and no other authorization for the Resolution is required. The Resolution creates the valid pledge which it purports to create of the Pledged Funds (as such term is defined in the Resolution), subject to the provisions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the Resolution. 3. The County is duly authorized and entitled to issue the Series 2022 Bonds and the Series 2022 Bonds have been duly and validly authorized and issued by the County in accordance with the Constitution and laws of the State of Florida and the Resolution. The Series 2022 Bonds constitute valid and binding obligations of the County as provided in the Resolution, are enforceable in accordance with their terms and the terms of the Resolution and are entitled to the benefits of the Resolution and the laws pursuant to which they are issued. The Series 2022 Bonds do not constitute a general indebtedness of the County or the State of Florida or any agency, department or political subdivision thereof, or a pledge of the faith and credit of such entities, but are payable from the Pledged Funds in the manner and to the extent provided in the Resolution. No holder of the Series 2022 Bonds shall ever have the right to compel the exercise of any ad valorem taxing power of the County or the State of Florida or any political subdivision, agency or department thereof to pay the Series 2022 Bonds. 4. Under existing statutes, regulations, rulings and court decisions, the interest on the Series 2022 Bonds is excluded from gross income for federal income tax purposes, E-2 Board of County Commissioners of (Date of Delivery) Monroe County, Florida Page 3 except for any period during which a Series 2022 Bond is held by a "substantial user" of the facilities financed with proceeds of the Series 2022 Bonds or a "related person" within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as amended (the "Code"). Such interest on the Series 2022 Bonds is an item of tax preference for purposes of the federal alternative minimum tax and, with respect to certain corporations, interest on the Series 2022 Bonds is taken into account in determining the annual adjusted financial statement income for the purpose of computing the alternative minimum tax imposed on corporations for tax years beginning after December 31, 2022. The opinions set forth above are subject to the condition that the County comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2022 Bonds in order that interest thereon be (or continues to be) excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the Series 2022 Bonds to be so included in gross income retroactive to the date of issuance of the Series 2022 Bonds. The County has covenanted in the Resolution to comply with all such requirements. Ownership of the Series 2022 Bonds may result in collateral federal tax consequences to certain taxpayers. We express no opinion regarding such federal tax consequences arising with respect to the Series 2022 Bonds. It should be noted that, except as may expressly be set forth in an opinion delivered by us to the underwriters (on which opinion only they may rely)for the Series 2022 Bonds on the date hereof, we have not been engaged or undertaken to review (1) the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Series 2022 Bonds and we express no opinion relating thereto, or (2) the compliance with any federal or state law with regard to the sale or distribution of the Series 2022 Bonds and we express no opinion relating thereto. The opinions expressed in paragraphs 2 and 3 hereof are qualified to the extent that the enforceability of the Resolution and the Series 2022 Bonds may be limited by any applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally, or by the exercise of judicial discretion in accordance with general principles of equity. The opinions set forth herein are expressly limited to, and we opine only with respect to, the laws of the State of Florida and the federal income tax laws of the United States of America. The only opinions rendered hereby shall be those expressly stated as such herein, and no opinion shall be implied or inferred as a result of anything contained herein or omitted herefrom. E-3 Board of County Commissioners of (Date of Delivery) Monroe County, Florida Page 4 This opinion is given as of the date hereof and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. We have examined the form of the Series 2022 Bonds and, in our opinion, the form of the Series 2022 Bonds is regular and proper. Respectfully submitted, E-4 APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate(the"Disclosure Certificate")dated 2022 is executed and delivered by Monroe County, Florida (the "Issuer") in connection with the issuance by the Issuer of its $_ Airport Revenue Bonds, Series (Key West International Airport), 2022 (the 'Bonds"). The Bonds are being issued pursuant to Resolution No. 206A-2022 adopted by the Board of County Commissioners of the Issuer(the'Board")on August 17,2022,as supplemented by Resolution No. 20613-2022 adopted by the Board on August 17,2022 (collectively,the 'Resolution"). SECTION 1. PURPOSE OF THE DISCLOSURE CERTIFICATE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the holders and Beneficial Owners (defined below) of the Bonds and in order to assist the Participating Underwriters in complying with the continuing disclosure requirements of the Rule(defined below). SECTION 2. DEFINITIONS. In addition to the definitions set forth in the Resolution which apply to any capitalized term used in this Disclosure Certificate, unless otherwise defined herein, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in,Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a)has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Dissemination Agent" shall mean initially, Digital Assurance Certification LLC, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "EMMA" shall mean the Electronic Municipal Market Access web portal of the MSRB, located at http://www.emma.msrb.org. "Event of Bankruptcy"shall be considered to have occurred when any of the following occur: the appointment of a receiver,fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person,or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. "Financial Obligation" shall mean a (i) debt obligation; (ii) derivative instrument entered into in connection with,or pledged as security or a source of payment for,an existing or planned debt obligation; or (iii) a guarantee of (i)or (ii). The term Financial Obligation shall not include municipal securities as to F-1 which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule. "Listed Events"shall mean any of the events listed in Section 5(a)of this Disclosure Certificate. "MSRB"shall mean the Municipal Securities Rulemaking Board. "Obligated Person"shall mean any person,including the Issuer,who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to support payment of all, or part of the obligations on the Bonds(other than providers of municipal bond insurance, letters of credit,or other liquidity or credit facilities). "Participating Underwriters"shall mean the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. "Repository" shall mean each entity authorized and approved by the Securities and Exchange Commission from time to time to act as a repository for purposes of complying with the Rule. As of the date hereof,the Repository recognized by the Securities and Exchange Commission for such purpose is the MSRB,which currently accepts continuing disclosure submissions through EMMA. "Rule"shall mean the continuing disclosure requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934,as the same may be amended from time to time. "State"shall mean the State of Florida. SECTION 3. PROVISION OF ANNUAL REPORTS. (a) The Issuer shall,or shall cause the Dissemination Agent to,by not later than April 301h following the end of the Issuer's previous fiscal year, commencing with the report for the fiscal year ended September 30,2022,provide to any Repository in electronic format as prescribed by such Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate;provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date provided, further, in such event unaudited financial statements are required to be delivered as part of the Annual Report in accordance with Section 4(a) below. If the Issuer's fiscal year changes,it shall give notice of such change in the same manner as for a Listed Event under Section 5. (b) If on the fifteenth (15th) day prior to the annual filing date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Issuer by telephone and in writing (which may be by e-mail)to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 3(a). Upon such reminder, the Issuer shall either (i) provide the Dissemination Agent with an electronic copy of the Annual Report by no later than the annual filing date, or(ii)instruct the Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Disclosure Certificate, state the date by which the Annual Report for such year will be provided and instruct the Dissemination Agent that a failure to file has occurred and to F-2 immediately send a notice to the Repository in substantially the form attached as Exhibit A,accompanied by a cover sheet completed by the Dissemination Agent in the form set forth in Exhibit B. (c) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of any Repository; (ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate,stating the date it was provided and listing any Repository to which it was provided;and (iii) if the Dissemination Agent has not received an Annual Report by 6:00 p.m.Eastern time on the annual filing date(or,if such annual filing date falls on a Saturday,Sunday or holiday, then the first business day thereafter) for the Annual Report, a failure to file shall have occurred and the Issuer irrevocably directs the Dissemination Agent to immediately send a notice to the Repository in substantially the form attached as Exhibit A without reference to the anticipated filing date for the Annual Report, accompanied by a cover sheet completed by the Dissemination Agent in the form set forth in Exhibit B. SECTION 4. CONTENT OF ANNUAL REPORTS. The Issuer's Annual Report shall contain or include by reference the following: (a) the audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Issuer's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement dated , 2022 (the "Official Statement"), and the audited financial statements shall be filed in the same manner as the Annual Report when they become available;and (b) updates of the following tabular historical financial and operating data set forth in the Official Statement in the tables entitled: (i) Historical Enplaned Passengers, (ii) Historical Total Enplaned Passengers by Airline, (iii) Airlines Serving the Airport, (iv) Top 20 Domestic Origin and Destination Markets, (v) Historical Origin and Destination Passenger, (vi) Historical Aircraft Operations, (vii) Historical Revenues, Expenses and Debt Service, (viii) Historical Airline Cost Per Enplaned Passenger, and (ix) Passenger Facility Charges. F-3 The information provided under Section 4(b)may be included by specific reference to documents, including official statements of debt issues of the Issuer or related public entities,which are available to the public on the Repository's Internet website or filed with the Securities and Exchange Commission. The Issuer reserves the right to modify from time to time the specific types of information provided in its Annual Report or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the Issuer;provided that the Issuer agrees that any such modification will be done in a manner consistent with the Rule. SECTION 5. REPORTING OF SIGNIFICANT EVENTS. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given,notice of the occurrence of any of the following events with respect to the Bonds. Such notice shall be given in a timely manner not in excess of ten (10)business days after the occurrence of the event,with the exception of the event described in number 17 below,which notice shall be given in a timely manner: 1. principal and interest payment delinquencies; 2. non-payment related defaults,if material; 3. unscheduled draws on debt service reserves reflecting financial difficulties; 4. unscheduled draws on credit enhancements reflecting financial difficulties; 5. substitution of credit or liquidity providers,or their failure to perform; 6. adverse tax opinions,the issuance by the Internal Revenue Service of proposed or final determinations of taxability,Notices of Proposed Issue(IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds,or other material events affecting the tax status of the Bonds; 7. modifications to rights of the holders of the Bonds,if material; 8. Bond calls,if material,and tender offers; 9. defeasances; 10. release, substitution, or sale of property securing repayment of the Bonds, if material; 11. ratings changes; 12. an Event of Bankruptcy or similar event of an Obligated Person; 13. the consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive F-4 agreement to undertake such an action or the termination of a definitive agreement relating to any such actions,other than pursuant to its terms,if material; 14. appointment of a successor or additional trustee or the change of name of a trustee, if material; 15. incurrence of a Financial Obligation of the Issuer or Obligated Person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer or Obligated Person, any of which affect security holders,if material; 16. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Issuer or Obligated Person,any of which reflect financial difficulties;and 17. notice of any failure on the part of the Issuer to meet the requirements of Section 3 hereof. (b) The notice required to be given in paragraph 5(a) above shall be filed with any Repository,in electronic format as prescribed by such Repository. SECTION 6. IDENTIFYING INFORMATION. In accordance with the Rule, all disclosure filings submitted pursuant to this Disclosure Certificate to any Repository must be accompanied by identifying information as prescribed by the Repository. Such information may include,but not be limited to: (a) the category of information being provided; (b) the period covered by any annual financial information, financial statement or other financial information or operation data; (c) the issues or specific securities to which such documents are related (including CUSIPs,issuer name,state,issue description/securities name,dated date,maturity date,and/or coupon rate); (d) the name of any Obligated Person other than the Issuer; (e) the name and date of the document being submitted;and (f) contact information for the submitter. SECTION 7. TERMINATION OF REPORTING OBLIGATION. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance,prior redemption or payment in full of all of the Bonds, so long as there is no remaining liability of the Issuer,or if the Rule is repealed or no longer in effect. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5. SECTION 8. DISSEMINATION AGENT. The Issuer may,from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be Digital Assurance Certification,L.L.C. F-5 SECTION 9. AMENDMENT; WAIVER. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived,provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a),4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements,change in law,or change in the identity,nature or status of the Issuer,or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances;and (c) The amendment or waiver either (i) is approved by the holders or Beneficial Owners of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of holders or Beneficial Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or Beneficial Owners of the Bonds. Notwithstanding the foregoing, the Issuer shall have the right to adopt amendments to this Disclosure Certificate necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type(or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer.In addition,if the amendment relates to the accounting principles to be followed in preparing financial statements,(i)notice of such change shall be given in the same manner as for a Listed Event under Section 5,and(ii)the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form)between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. ADDITIONAL INFORMATION. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information,using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate,the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 11. DEFAULT. The continuing disclosure obligations of the Issuer set forth herein constitute a contract with the holders of the Bonds. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order,to cause the Issuer to comply with its obligations under this Disclosure Certificate;provided, F-6 however,the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with the provisions of this Disclosure Certificate shall be an action to compel performance. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Resolution. SECTION 12. DUTIES,IMMUNITIES AND LIABILITIES OF DISSEMINATION AGENT. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate. The Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Dissemination Agent as required by this Disclosure Certificate. The Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Dissemination Agent shall have no duty or obligation to review or verify any information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer,the Holders of the Bonds or any other party. The Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Dissemination Agent shall have no duty to determine, or liability for failing to determine,whether the Issuer has complied with this Disclosure Certificate. The Dissemination Agent may conclusively rely upon certifications of the Issuer at all times. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and defeasance,redemption or payment of the Bonds. (b) The Dissemination Agent may, from time to time, consult with legal counsel (either in- house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder,and shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and expenses of such counsel shall be payable by the Issuer. (c) All documents, reports,notices, statements, information and other materials provided to the MSRB under this Disclosure Certificate shall be provided in an electronic format and accompanied by identifying information as prescribed by the MSRB. [Remainder of page intentionally left blank] F-7 SECTION 13. BENEFICIARIES. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and holders and Beneficial Owners from time to time of the Bonds,and shall create no rights in any other person or entity. Dated: 2022 MONROE COUNTY,FLORIDA By: Mayor,Board of County Commissioners By: Clerk of the Circuit Court and Comptroller in and for Monroe County,Florida and Ex-Officio Clerk of the Board of County Commissioners ACKNOWLEDGED BY: DIGITAL ASSURANCE CERTIFICATION L.L.C., as Dissemination Agent By: Name: Title: F-8 EXHIBIT A NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT Issuer: Monroe County, Florida Obligated Person: Name(s)of Bond Issue(s): Airport Revenue Bonds,Series(Key West International Airport),2022 Date(s)of Issuance: 2022 Date(s)of Disclosure Certificate: CUSIP Number: NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate between the Issuer and Digital Assurance Certification,L.L.C.,as Dissemination Agent. [The Issuer has notified the Dissemination Agent that it anticipates that the Annual Report will be filed by ]. Dated: Digital Assurance Certification,L.L.C.,as Dissemination Agent,on behalf of the Issuer cc: F-9 EXHIBIT B EVENT NOTICE COVER SHEET This cover sheet and accompanying "event notice" will be sent to the MSRB, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D). Issuer's and/or Other Obligated Person's Name: Issuer's Six-Digit CUSIP Number: or Nine-Digit CUSIP Number(s)of the bonds to which this event notice relates: Number of pages attached: Description of Notice Events(Check One): 1. 'Principal and interest payment delinquencies;" 2. 'Non-Payment related defaults,if material;" 3. "Unscheduled draws on debt service reserves reflecting financial difficulties;" 4. "Unscheduled draws on credit enhancements reflecting financial difficulties," 5. "Substitution of credit or liquidity providers,or their failure to perform;" 6. "Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;" 7. "Modifications to rights of securities holders,if material;" 8. 'Bond calls,if material, and tender offers;" 9. "Defeasances;" 10. 'Release, substitution,or sale of property securing repayment of the Bonds,if material;" 11. 'Rating changes;" 12. "An Event of Bankruptcy or similar event of an Obligated Person;" 13. "The consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms,if material;" 14. "Appointment of a successor or additional trustee, or the change of name of a trustee, if material." 15. "Incurrence of a Financial Obligation of the Issuer or Obligated Person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer or Obligated Person, any of which affect security holders, if material;" F-10 16. "Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the Financial Obligation of the Issuer or Obligated Person,any of which reflect financial difficulties;"and 17. 'Failure to provide annual financial information as required." I hereby represent that I am authorized by the Issuer or its agent to distribute this information publicly: Signature: Name: Title: Digital Assurance Certification,L.L.C. 315 E.Robinson Street, Suite 300 Orlando,Florida 32801 407-515-1100 Date: F-11 [THIS PAGE INTENTIONALLY LEFT BLANK] I e I N LY1 , i 1 III III III Mixed Sources fk Product g—p fr.w 11.nged -jWfo s ntr Iled sources and "gd.dcwood or fiber. Printed by:ImageMaster,LLC www.imagemaster.com