M A S T E R P L A N
S
ection 6I
MPLEMENTATION PLANThe previous sections of this Master Plan Update present a logical, step-by-step explanation of how the long-range improvement plan was developed for Athens-Ben Epps Airport. This implementation plan is designed to assist Airport management in achieving their primary goals to maximize revenues and minimize operating expenditures, while at the same time providing facilities to accommodate the flying public. The implementation plan presented in this Section both describes the staging of proposed improvements and provides the basic capital requirements of each. Over the 20-year planning period, the implementation plan may serve as general financial guidance in making policy decisions regarding the development of the Airport.
6.1 Program STAGING and Cost Estimating
An initial development schedule was prepared based upon facility needs presented in Section 3, which in most cases are dependant upon passenger or operations forecasts. Therefore, since actual activity levels realized at the Airport may vary, the staging must remain sensitive to such variation. It is quite possible for some projects to move up in priority, while at the same time, others move down. A prioritization of improvements considered the urgency of need, ease of implementation, logic of sequence, and input received from Airport representatives. The objective was to establish an efficient order for project development and implementation that satisfied forecasted activity and Airport desires. The development schedule is divided into three general stages that represent the short (2002-2006), intermediate (2007-2011), and long- term (2012+).
The next step focused on identifying costs associated with each capital improvement project. These project-specific development costs were then further broken down considering conventional aviation funding sources, such as the FAA, local share, and other participation, including PFC funding.
6.1.1 Capital Improvement Program
The Capital Improvement Program (CIP) development schedule and cost summary are presented in Tables 6-1 and 6-2, which provide an itemized breakdown of the FAA, local, and other funding for the improvements proposed by this Study.
As noted, cost projections are based on year 2002 dollars and include estimated engineering fees and contingencies. These projections however, should be used for planning purposes only and do not imply that funding for these will necessarily be available. Each year indicates construction initiation and therefore, any environmental/design efforts will need to precede construction.
|
Table 6-1 CAPITAL IMPROVEMENT PROGRAM Athens-Ben Epps Airport |
||||
|
Development Item |
Total Cost |
FAA Share |
Local Share |
OTHER |
|
Stage I (2002-2006) |
||||
|
Runway 9 extension (500') including land acquisition, relocation of the localizer, PAPI-4, MIRL, and extension of Taxiway A |
$6,700,000 |
$6,030,000 |
$670,000 |
$0 |
|
East general aviation apron expansion adjacent to Sonny’s Flight Service (6,200 SY) |
$140,000 |
$0 |
$0 |
$140,0001 |
|
20-Unit T-Hangar taxilanes (1,160') |
$110,000 |
$99,000 |
$11,000 |
$0 |
|
Georgia State Patrol taxiway (450 ') |
$40,000 |
$36,000 |
$4,000 |
$0 |
|
West general aviation area including stormwater detention facilities |
$380,000 |
$342,000 |
$38,000 |
$0 |
|
T-Hangars (36-unit) |
$600,000 |
$0 |
$600,000 |
$0 |
|
General aviation terminal building |
$1,000,000 |
$0 |
$1,000,000 |
$0 |
|
ARFF Facility (5,000 SF two-story structure) |
$700,000 |
$630,000 |
$70,000 |
$0 |
|
REIL Runway 9 |
$25,000 |
$22,500 |
$2,500 |
$0 |
|
Taxiways A, A1, A3, and A4 widening from 50' to 75' and strengthening |
$2,600,000 |
$2,340,000 |
$260,000 |
$0 |
|
Runway 9/27 widening from 100 ' to 150', strengthening, and install HIRL |
$4,500,000 |
$4,050,000 |
$450,000 |
$0 |
|
Entrance road |
$1,080,000 |
$972,000 |
$108,000 |
$0 |
|
East general aviation apron expansion (13,000 SY) |
$210,000 |
$189,000 |
$21,000 |
$0 |
|
South general aviation apron expansion (13,500 SY) and strengthening of large aircraft (Group II) parking area |
$420,000 |
$378,000 |
$42,000 |
$0 |
|
South commercial terminal development - apron (17,000 SY) and taxiways including land acquisition (38.5 acres) |
$2,300,000 |
$2,070,000 |
$230,000 |
$0 |
|
Subtotal Short-Term |
$20,805,000 |
$17,158,500 |
$3,506,500 |
$140,000 |
|
1 PFC FundedNotes: |
||||
|
Table 6-2 CAPITAL IMPROVEMENT PROGRAM Athens-Ben Epps Airport |
||||
|
Development Item |
Total Cost |
FAA Share |
Local Share |
OTHER |
|
Stage II (2007-2011) |
||||
|
South commercial terminal development
|
$4,900,000 |
$4,410,000 |
$490,000 |
$0 |
|
Rental car maintenance facility and remote storage facility (96 Spaces) |
$550,000 |
$0 |
$550,000 |
$0 |
|
Hangars (10) and taxilanes (360') |
$280,000 |
$99,000 |
$181,000 |
$0 |
|
Runway 27 extension (500' by 150') including land acquisition, HIRL, PAPI-4, and replacement of ODALS with MALSR |
$8,600,000 |
$7,740,000 |
$860,000 |
$0 |
|
Glideslope antenna relocation |
$6,800,000 |
$6,120,000 |
$680,000 |
$0 |
|
Taxiway A extension (1,300') connecting A3 and B3 |
$1,400,000 |
$1,260,000 |
$140,000 |
$0 |
|
Subtotal Intermediate-Term |
$22,530,000 |
$19,629,000 |
$2,901,000 |
$0 |
|
Stage III (2012+) |
||||
|
T/W B extension (1,100'), T/W A relocation (400') between T/W A3 and R/W 2/20 and removal of T/W B3 |
$1,200,000 |
$1,080,000 |
$120,000 |
$0 |
|
General aviation apron expansion (18,100 SY) including demolition of old commercial terminal |
$760,000 |
$684,000 |
$76,000 |
$0 |
|
Helicopter parking pads |
$80,000 |
$72,000 |
$8,000 |
$0 |
|
T-Hangars (20-unit) |
$340,000 |
$0 |
$340,000 |
$0 |
|
General aviation automobile parking (388 spaces) |
$390,000 |
$0 |
$390,000 |
$0 |
|
Air cargo apron (4,000 SY) |
$500,000 |
$450,000 |
$50,000 |
$0 |
|
Rental car remote storage facility (208 spaces) |
$210,000 |
$0 |
$210,000 |
$0 |
|
REIL Runways 2 and 20 |
$50,000 |
$45,000 |
$5,000 |
$0 |
|
Subtotal Long-Term |
$3,530,000 |
$2,331,000 |
$1,199,000 |
$0 |
|
TOTAL |
$46,865,000 |
$39,118,500 |
$7,606,500 |
$140,000 |
|
Notes:
|
||||
6.2 FINANCIAL OVERVIEW
6.2.1 Introduction
This Section provides an overview to financial aspects of recommended capital improvements for the short-term planning period set forth in Section 6.1 of this Master Plan Update. The purpose of this Section is to provide an overview to the Unified Government of Athens-Clarke County (UGACC), Airport Authority, Airport Manager and staff, FAA, State of Georgia (State), and other interested parties with respect to the financial circumstances under which the short-term recommended development program may be accomplished. The proposed financial plan included herein was developed after taking into consideration the financial structure of the Airport, the estimated costs of the recommended improvements, and the potential funding sources, which may be available to fund such improvements.
6.2.2 Financial Organizational Structure
The Athens-Ben Epps Airport is a department of the UGACC. The Airport operates as an enterprise fund, which is used by public entities to account for financial operations, which are similar to a private business enterprise. The UGACC transfers funds from the General Fund to the Airport Enterprise Fund if operating revenues are not sufficient to pay for operating expenses. Capital projects and matching funds for Federal and State grants-in-aid are funded through the UGACC capital account. All binding contracts for the Airport must be approved by the UGACC Mayor and County Council and executed by signature of the Mayor.
6.2.3 Recommended Capital Improvements
This Section identifies the individual projects recommended in Section 6.1 of this Master Plan Update and sets forth their estimated costs and phasing.
Schedule of Recommended Improvements
In the process of compiling this Airport Master Plan Update, the Airport’s capital needs have been evaluated and certain capital improvements to satisfy these needs have been identified. The recommended capital improvements are presented in three planning phases. For the purpose of this Master Plan Update, the short-term planning period includes all capital improvement projects starting between 2002 and 2006 (Stage I). Stage I improvements are followed by projects required to meet demands expected between planning years 2007 through 2011 designated as the intermediate-term (Stage II). The long-term needs are those, which would exist after 2012 (Stage III).
Each of the capital improvements are described in detail throughout this Master Plan and are therefore described in abbreviated or list form only in this Section. Each planning period is set forth separately so that the financial requirements of each may be more clearly defined. Tables 6-1 and 6-2 lists the various projects of the recommended CIP broken down by planning period. The estimated cost of each improvement is provided accordingly. All costs are presented in constant 2002 dollars.
Development Summary
Stage I of the CIP includes two key projects: (1) a 500-foot extension of Runway 9 including land acquisition, relocation of the localizer, PAPI-4, MIRL, and extension of Taxiway A ($6,700,000); and (2) strengthening and widening of Runway 9/27 from 100 feet to 150 feet, and equipping the Runway with HIRL ($4,500,000). These two projects ($11,200,000) represents 54 percent of all recommended Stage I improvements, which are collectively estimated to cost $20,805,000.
Stage II of the CIP will provide for extensive airside and landside improvements at the Airport. The two primary airside improvements expected to be undertaken in Stage II include (1) an extension of Runway 27 by 500 feet, which includes land acquisition and associated NAVAID improvements ($8,600,000); and (2) the relocation of the glideslope antenna ($6,800,000).
Also included in Stage II is a commercial terminal development program, which includes the construction of a 16,407 square-foot commercial terminal building, Airport access and Loop roads, public and employee parking lots, and rental car ready/return parking ($4,900,000). Collectively, the Stage II improvements are estimated to cost $22,530,000.
Stage III recommendations include no large-scale development programs. As currently foreseen, the major elements of development of this phase involve further airside expansion, as well as general aviation, air cargo and rental car projects. Improvements anticipated during the long-term planning period (Stage III) are estimated to cost $3,530,000.
A summary of the capital improvement costs for each Stage of development is provided on Table 6-3 above.
6.2.4 Potential Funding Sources
Few airports provide all needed capital development funds from internal sources. Federal, State, and private funding together with Airport funds and bond proceeds (supported by airport revenues and/or municipal support) are usually combined to produce the total funds required to undertake a CIP. The Airport has planned for the future by programming its estimated development costs and identifying potential outside funding sources for assistance in the cost of individual projects as appropriate.
Typically, these sources are: FAA, State, private funds (tenant provided), Airport funds, PFC’s, and bond proceeds. These sources are heavily relied upon by commercial airports for funding support, although said sources are subject to change by Congress or other political bodies. Some, such as the FAA Airport Improvement Program, have been modified significantly from time to time. One source, the Passenger Facility Charge program, was authorized by Congress in 1991 and has rapidly become a major source of capital funds for airport development.
In identifying the potential sources of funds it is necessary to examine each project element to determine the eligibility of each. It is also important to consider the availability of funds for each funding source. The following paragraphs briefly discuss the primary external funding sources which may be available for the Airport’s CIP.
Federal Aviation Administration
Congress began appropriating money for airport development in 1946 through the enactment of the Federal Airport Act. Since that time, Congress has passed multiple types of legislation, which were intended to develop the National Air Transportation System. Congress enacted the Airport and Airway Revenue Act of 1970, which established the Airport and Airways Trust Fund (Trust Fund), which was intended to pay for these improvements and be supported by users of the National Air Transportation System through a system of aviation user taxes.
The Airport and Airway Improvement Act of 1982 authorized the capital grant program called the Airport Improvement Program (AIP). The AIP is supported in part by the Trust Fund. Congress authorizes and appropriates funds used for airport improvements, which are administered by the FAA. Congress amends the Act as required to authorize funding levels on an annual or multi-year basis.
On April 6, 2000, the President signed into law the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century commonly referred to as AIR-21. With AIR-21, Congress reauthorized the AIP for a period of five years, from 2000 through 2005.
The AIP provides the following projects are eligible for funding at the 90 percent level at all airports included in the National Plan of Integrated Airport Systems, with exception to large and medium hub airports which are eligible for funding at the 75 percent level: (1) Airport Planning; (2) Airport Development; (3) Noise Compatibility Programs (80 percent at large and medium hub airports); and, (4) Terminal Development at all but large hub airports. It should be noted however, that Terminal Development is only eligible for Federal aid at commercial service airports and is limited to a maximum of $200,000 at non-primary airports (airports enplaning between 2,500 and 10,000 annual enplaned passengers).
Within the AIP grants program, there are two major sub-categories, which are generally used for improvement programs: entitlement grant and discretionary grant programs.
Entitlement Grants
Entitlement grants are essentially an allocation of available funds based upon an airport’s total number of annual enplaned passengers. Only airports defined by the FAA as primary airports (those having 10,000 or more enplanements) are eligible to receive AIP entitlement grants. Under AIR-21, in any Federal fiscal year in which Congress appropriates funding for the AIP program at the $3.2 billion level or more, primary airports receive apportionments based on the following number of enplaned passengers:
$15.60 for each of the first 50,000 enplanements;
$10.40 for each of the next 50,000 enplanements;
$5.20 for each of the next 400,000 enplanements; and,
$1.20 for each additional enplanement.
Given the AIP appropriation level of $3.2 billion, AIR-21 sets a maximum entitlement of $26,000,000 and a minimum of $1,000,000 per Federal fiscal year for primary airports. Actual final amounts may be affected by the total amounts periodically allocated by Congress for this program. Entitlement funds may be carried over from one year to the next, used to pay eligible debt service and among other provisions, future allocation may be earmarked for repayment of current expenditures if the FAA concurs and issues a Letter of Intent (LOI).
The FAA utilizes the Air Carrier Airport Information System (ACAIS) for the purpose of calculating each airport’s Federal entitlement apportionment. The ACAIS is a database, which includes the number of enplaned passengers for every airport in the United States that enplaned (and reported to the FAA) at least one passenger. The ACAIS considers both scheduled enplanements and non-scheduled charter/air taxi enplanements. The FAA utilizes calendar-year enplanements two years prior to the current Federal fiscal year for the purpose of calculating Entitlement apportionments for each primary airport. For example, the FAA will use calendar year 2001 enplanement data to determine an airport’s entitlement apportionment for Federal fiscal year 2003. In 2000, the Airport enplaned 10,551 passengers according to the ACAIS. Given this level of passenger activity, the Airport is eligible for the minimum Entitlement apportionment of $1,000,000 in 2002.
Should an Airport’s annual enplanement level drop below 10,000, the airport may ultimately lose its status as a primary airport and therefore eligibility to receive its share of Entitlement apportionments. According to Airport records, the number of enplaned passengers at the Airport fell to 9,585 in Calendar Year 2001. However, given the adverse impacts on commercial air transportation in the United States resulting from the terrorists attacks on September 11, 2001, the FAA has granted a waiver, for one year, to all airports who fell below the 10,000 enplanement level in 2001, provided said airports were designated primary airports before 2001.
For the purpose of this Master Plan Update, it is assumed that the Airport will continue to receive entitlement grants at the minimum level of $1,000,000 per annum, which is at least $5,000,000 in the short-term planning period (Stage I).
Discretionary Grants
Discretionary grants, as the name implies, are based upon commitments to certain eligible development projects at the discretion of the FAA. Both the entitlement and discretionary grant programs are operated on a system which is designed to allocate the available funding based upon priorities beginning with safety, security, etc. as described in FAA Order 5100.38A.
The Master Plan Update estimates that $17,298,500 is eligible for funding by the Airport Improvement Program. In consideration of the assumed application of $5,000,000 in Entitlement Grants and $140,000 through other funding sources over the Stage I planning period, this Master Plan Update assumes that the remaining FAA eligible amount of $12,158,500 will be funded with proceeds from the FAA discretionary grant program.
Georgia Department of Transportation
The State of Georgia (State) operates the Georgia Airport Aid Program (GAAP) within the Office of Intermodal Programs of the Department of Transportation. The purpose of the GAAP is to provide for planning, capital improvements, maintenance, and approach aids to publicly owned airports.
The GAAP serves all of the 103 airports within the State airport system except Hartsfield Atlanta International, which is currently the largest airport in the world in terms of enplaned passengers. The State General Assembly annually appropriates GAAP funds for a specific fiscal year (July 1 - June 30). The State-funding program has in recent years operated on an annual funding appropriation of approximately $2.2 million to $2.4 million. Of this amount, approximately $1.2 million to $1.4 million is set aside for support of smaller airports not included in areas designated in the U.S. census as Urban (87 airports in the State are in this non-urban category).
With respect to funding priority, all projects funded by the FAA which are eligible for State funding assistance are given the highest priority for GAAP funds. However, within the federally funded programs, general aviation (GA) airport projects are given priority for State funding assistance over the commercial service airport projects because of the State’s position that GA airports normally generate less local revenue and are thus more dependant upon assistance from the State. Because of the limited nature of GAAP funds and in consideration of the fact that the Airport is a primary commercial service airport (resulting in a lower priority with respect to general aviation facilities) the funding plan assumes that the Airport will not receive funds from the GAAP in the short-term planning period (Stage I). None the less, the UGACC should continue to examine means to maximize State participation in the Airport’s development program.
Local/Sponsor
The UGACC will be required to provide for the remaining funds after the application of all Federal and State (if any) grants have been applied to the cost of completing the Stage I improvements. Several local funding sources have been identified and are set forth in the funding plan. In the case of financially self-sufficient airports, which have positive cash flows and accumulated cash reserves, a portion of the local share may be funded by any such cash reserves and the remaining local share requirements may be funded by a debt instrument. The resulting annual debt service would be paid from cash flow surpluses.
Historically, however, the Airport has not operated on a financially self-sustaining basis. Specifically, the Airport has operated at a cash flow deficit after depreciation expense each year from fiscal year 1997 through 2001. If the non-cash depreciation expense were removed from this determination, the Airport would generate a small surplus in fiscal years 1997 and 2000.
Accordingly, the UGACC has transferred cash from its General Fund in amounts each year sufficient to cover the Airport’s operating requirements and it is expected that the UGACC will need to continue this financial support. As a result of deficit operations, there are three primary mechanisms, which the UGACC may utilize to provide for the local share required to complete projects recommended in Stage I and therefore minimize the amount of General Fund transfers. These mechanisms include Passenger Facility Charges, Local Option Sales Tax, and debt financing.
Passenger Facility Charge
The Aviation Safety and Capacity Expansion Act of 1990 (ASECEA) authorized the Secretary of Transportation to grant public agencies which control commercial service airports enplaning more than 2,500 annual passengers the authority to impose a Passenger Facility Charge (PFC) for each passenger boarding an aircraft (enplanement) at a given airport. The purpose of the PFC program is to preserve or enhance safety, security, capacity, competition, and mitigate the impact of aircraft noise. The ACT provides that PFC revenues may only be used for projects approved by the FAA including: payment of all or part of allowable project costs, an airport’s AIP matching funds, augmentation of AIP funded projects, and payment of debt service or financing costs associated with eligible airport development bonds. The ACT provided that public agencies may impose a PFC at the levels of $1, $2, or $3 per enplaned passenger with a maximum PFC charge on any one passenger ticket of $12. AIR-21 amended, among other things, the maximum level of PFC which may be collected by authorized public agencies from $3 to $4.50 per enplaned passenger. These fees are collected by the air carriers when tickets are sold and are later remitted to the airport, minus an $0.08 per PFC handling fee.
In January 1997, the UGACC applied to the FAA for authority to impose and use PFC revenue at the level of $3.00 per enplaned passenger to pay for the eligible portion of certain projects on a pay-as-you-go basis. In September 2001, the Airport reached its collection authority and discontinued collection of PFCs.
The UGACC anticipates the preparation of a new application to the FAA for the authority to impose and use PFC revenues for its east general aviation apron expansion project on a pay-as-you-go basis. The UGACC will request authority to impose a PFC at the level of $4.50 per enplaned passenger. Based on the forecast of enplaned passengers set forth in Section 2, it is estimated that the Airport will collect at least $140,000 in passenger facility charge revenue over the short-term planning period.
Special Purpose Local Option Sales Tax (SPLOST)
The Special Purpose Local Options Sales Tax (SPLOST) is a significant local funding mechanism available to the UGACC. As of July 1, 1985, State law allows local jurisdictions to use SPLOST proceeds for capital improvement projects that would otherwise be paid from the General Fund and property tax revenues. In some cases, the cost of these types of community enhancements would present too great of a burden on taxpayers to be undertaken. SPLOST also allows the UGACC the opportunity to provide local share funding without incurring interest associated with debt financing.
SPLOST Recent History and Application
In 1994, voters in Athens-Clarke County approved SPLOST IV, which was a one-cent sales tax to fund a package of 29 miscellaneous community projects over five years. To date, UGACC has used SPLOST IV funds as the local contribution to bring approximately $27 million in Federal and State money to assist in the funding of certain transportation related projects.
On November 2, 1999, voters approved the SPLOST 2000 referendum, which allowed for the continuation of a one-cent sales tax to fund a diverse list of 40 different community projects. The projects funded with proceeds of the SPLOST are divided into three categories: Public Safety; Basic Facilities/Infrastructure; and, Quality of Life. Generally, Airport projects fall under the category of Basic Facilities/Infrastructure. Among the 40 projects funded with proceeds from the SPLOST 2000 are three Airport related projects. Following is a summary and cost for each Airport project:
SPLOST 2000 Project 9: Airport Water Main
This project consists of an extension of an appropriately sized water main from the Runway 9/27 safety area to the commercial terminal. It will provide water flow necessary to meet fire flow regulations for current and proposed future airport development and the Winterville Road area. The budget for these improvements is $776,010.
SPLOST 2000 Project 10: Airport Sanitary Sewer
The Airport Sanitary Sewer project consists of an extension of a sanitary sewer line from U.S. 78 to the Airport commercial terminal area. It will provide necessary connection to the Athens-Clark County Sanitary Sewer System to serve the current and proposed future Airport development. The budget for these improvements is $882,340.
SPLOST 2000 Project 11: Airport Land Acquisition
This project consists of the land acquisition of approximately 40 acres of land necessary to construct the future Airport commercial terminal facility with an entrance from U.S. 78. The budget for this acquisition is $1,067,822.
Collectively, the three Airport projects represent $2,726,172 of total SPLOST 2000 proceeds. However, in the absence of confirmation of Stage I improvements to be included in the next SPLOST, no SPLOST monies have been programmed to reduce the local portion of the funding plan. However, according to Airport Management, the UGACC intends to include certain, yet undetermined, Stage I projects in the next SPLOST referendum.
Debt Financing
Another alternative available to the UGACC to fund the local share is through a debt instrument, most likely through either the issuance of general obligation bonds (G.O. Bonds) by the UGACC or a financing arranged through a local financing institution. Regardless of the financing mechanism utilized, it is likely the UGACC will need to finance at least a portion of its Stage I improvements to provide for the future development of the Airport. The funding plan assumes the maximum utilization of debt financing for the local share funding requirement (less applicable PFC revenues and UGACC contributions).
6.2.5 Funding Plan
As previously discussed, the Master Plan Update recommends projects to be completed in three stages of development. However, due to the uncertainty associated with the actual implementation and funding of the local share in the intermediate and long-term, no attempt has been made to provide detailed local funding source estimates for Stage II and Stage III of the CIP.
Table 6-2 depicts a funding plan and identifies each element of the Stage I improvements, and a probable funding scenario for Federal and local funds (PFCs and G.O. Bonds/other long-term debt). As presented on Table 6-1, recommended Stage I improvements are expected to cost approximately $20,805,000.
With respect to the Stage I of the CIP, Federal eligibility is estimated to be $17,158,500 and PFC eligibility is estimated to be $140,000. Federal eligibility has been estimated at the 90 percent level for each element pursuant to the Airport and Airways Improvement Act of 1982. This Master Plan Update funding plan assumes that the FAA will fund 100 percent of the federally eligible Stage I improvements ($17,158,500). PFC eligibility for the east general aviation apron expansion project is expected to be at the 100 percent level pursuant CFR 14 Part 158. The balance ($3,506,500) represents the remaining local funding requirement.
The UGACC has budgeted $1,000,000 from its General Fund for the general aviation terminal building project, as depicted on Table 6-2. This UGACC General Fund contribution will reduce the remaining local funding requirement from $3,506,500 to $2,506,500.
According to Airport Management, UGACC provides the Airport a 10 percent match on annual FAA entitlements for projects that will be funded with such. Since FAA entitlements are expected to be $5,000,000 over the Stage I planning period, the UGACC match is expected to be $500,000 over the same period, thereby reducing the remaining local funding requirement to $2,006,500.
For the purpose of this Master Plan Update, it is assumed that the local share (less applicable PFCs for the east GA apron expansion and UGACC contributions) will be funded by the UGACC through a debt instrument, most likely through a debt financing or a line of credit made available by a local financing institution. Table 6-4 and Table 6-5 present the local financing requirement.
Table 6-3 to be added
|
Table 6-4 CAPITAL IMPROVEMENT PROGRAM Athens-Ben Epps Airport |
|
|
Stage I (2002-2006) Financing Plan |
|
|
Sources of Funds: |
|
|
Cash on hand |
$0 |
|
Local financing proceeds |
$2,417,470 |
|
Total Sources: |
$2,417,470 |
|
Uses of Funds: |
|
|
Stage I – (2002 – 2006) local share financing requirement |
$2,006,500 |
|
Capitalized interest during construction |
$169,223 |
|
Issuance expense |
$241,747 |
|
Total Uses: |
$2,417,470 |
|
Estimated Average Annual Debt Service Requirement |
$228,192 |
|
Prepared by Newton & Associates, Inc. Note: Rounding has occurred |
|
As presented by Table 6-4, the $2,006,500 local share will be funded with a local financing in the amount of $2,417,470, which includes associated financing costs and one year of capitalized interest. A term of 20 years and an interest rate of 7.0 percent were assumed with the resulting average annual debt service amounting to $228,192.
An allocation of the average annual debt service among the project elements being financed is necessary so that the UGACC can consider cost recovery mechanisms and the impact on future rental requirements with respect to the Capital Improvement Program. Table 6-5 presents the allocation of the average annual debt service among the Stage I project elements.
6.2.6 Historical Financial Information
A summary of the Airport’s financial information from each of the past five years (Study Period) is provided for a historical perspective. From this information, the financial position of the Airport may be more clearly viewed in the context of future financing requirements.
|
Table 6-5 CAPITAL IMPROVEMENT PROGRAM Athens-Ben Epps Airport |
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|
Stage I (2002-2006) Annual Debt Service Allocation |
|||
|
Project Element |
Local Share Financial Requirement |
Percentage By element |
annual debt service allocation |
|
Runway 9 extension (500') including land acquisition, relocation of the localizer, PAPI-4, MIRL, and extension of Taxiway A |
$170,000 |
8.47 |
$19,333 |
|
East general aviation apron expansion adjacent to Sonny’s Flight Service (6,200 SY) |
$0 |
0.00 |
$0 |
|
20-Unit T-Hangar taxilanes (1,160') |
$11,000 |
.55 |
$1,251 |
|
GSP taxiway (450 ') |
$4,000 |
.20 |
$455 |
|
West general aviation area including stormwater detention facilities |
$38,000 |
1.89 |
$4,322 |
|
T-Hangars (36-unit) |
$600,000 |
29.90 |
$68,236 |
|
General aviation terminal building |
$0 |
0.00 |
$0 |
|
ARFF Facility (5,000 SF two-story structure) |
$70,000 |
3.49 |
$7,961 |
|
REIL Runway 9 |
$2,500 |
0.12 |
$284 |
|
Taxiway A, A1, A3, and A4 widening from 50' to 75' and strengthening |
$260,000 |
12.96 |
$29,569 |
|
Runway 9/27 widening from 100 ' to 150', strengthening, and install HIRL |
$450,000 |
22.43 |
$51,177 |
|
Entrance road |
$108,000 |
5.38 |
$12,282 |
|
East general aviation apron expansion (13,000 SY) |
$21,000 |
1.05 |
$2,388 |
|
South general aviation apron expansion (13,500 SY) and strengthening of large aircraft (Group II) parking area |
$42,000 |
2.09 |
$4,777 |
|
South commercial terminal development - apron (17,000 SY) and taxiways including land acquisition (38.5 acres) |
$230,000 |
11.46 |
$26,157 |
|
$2,006,500 |
100.00 |
$228,192 |
|
|
Estimated Average Annual Debt Service Requirement |
$228,192 |
||
|
Prepared by Newton & Associates, Inc. Note: Rounding has occurred |
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Table 6-6 provides a detailed review of the Airport’s revenues and expenses over the past five years.
Operating Revenues
Airport operating revenues include FBO sales and fuel flowage fees; and general aviation, airline, and other operating revenue. In addition to these unrestricted operating revenues, the Airport collected a PFC through most of the study period.
FBO Sales and Fuel Flowage Fees
The FBO is the Airport’s largest source of revenue generation. FBO sales include the sale of aviation fuel (both Avgas and Jet A products) and oil as well as pilot supplies. FBO sales represented between 72 percent and 80 percent of total operating revenue over the study period. The sale of aviation products, particularly aviation fuel, is a good indicator of aviation activity at the Airport. Collectively, FBO sales have grown from $843,924 in 1997 to $1,052,297 in 2001, representing an average annual rate of 5.7 percent.
The Airport also collects a fuel flowage fee in the amount of $0.10 per gallon of fuel sold by private FBOs at the Airport. Fuel flowage fee revenue declined from $114,070 in 1997 to $27,563 in 2001, representing an average annual rate of -29.9 percent.
General Aviation, Airline, and Other Operating Revenues
a. Hangar Rentals
According to the Airport Manager, the Airport currently enjoys 100 percent occupancy of its existing hangars. The Airport maintains a waiting list, which currently consists of 55 people desiring hangar space. The UGACC executes annually renewable Hangar Lease Agreements with each of its hangar tenants. The UGACC owns and leases two executive hangars; four medium hangars; and 48 T-hangars at the Airport.
TABLE 6-6 to be added
The following sets forth the hangar rental fee schedule for fiscal year 2002.
|
Type of Hangar |
Number of Units |
Fee Per Unit Per Month |
Monthly Rental |
Annual Rental |
|
Large T-Hangar |
20 |
$203 |
$4,060 |
$48,720 |
|
Medium T-Hangar |
12 |
$161 |
$1,932 |
$23,184 |
|
Small T-Hangar |
16 |
$157 |
$2,512 |
$30,144 |
|
Medium Hangar |
4 |
$254 |
$1,016 |
$12,192 |
|
Executive Hangar |
2 |
$422 |
$844 |
$10,128 |
|
Total Hangar |
54 |
$10,364 |
$124,368 |
|
|
Note: The 54 hangar units owned by the UGACC available and leased to tenants may accommodate 63 covered aircraft parking positions. |
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There are five other FBOs conducting aeronautical business at the Airport, which include Colvin Aviation, Inc. (doing business as US Jets), Georgia Aviation, Inc., Georgia Flight Academy, Inc., Sonny’s Air Service, Inc., and Windship Aviation, LLC. All but the Georgia Flight Academy, Inc. occupy aeronautical facilities including hangar and office space at the Airport. Georgia Flight Academy occupies space in the Airport’s commercial terminal building. FBO rentals include office space and hangar rentals, and improved and unimproved land rentals for the four FBOs located outside the commercial terminal building. FBO rent has increased from $43,061 in fiscal year 1997 to $54,554 in fiscal year 2001, representing an average annual growth rate of 6.1 percent.
The Airport is currently served by one commercial service passenger airline, CCAir, Inc. (doing business as US Airways Express). US Airways Express provides the Airport with non-stop service (three daily departures and three daily arrivals) to/from its hub in Charlotte, NC. Airline revenues comprise landing fees and airline terminal rentals. Pursuant to the annually renewable commercial terminal lease between the UGACC and CCAir, Inc., CCAir occupies 1,057 square feet of terminal space and pays an annual terminal space rental of $15,787.32. CCAir also pays an annual rental of $2,124 for 12,500 square feet of aircraft ramp space as well as its pro-rata share of certain terminal charges including security/CFR, public address system/background music, and janitorial/custodial. The current effective landing fee rate is $0.81 per 1,000 units of landed aircraft weight. Airline landing fee revenue declined from $15,204 in fiscal year 1997 to $10,154 in fiscal year 2001, representing an average annual rate of -9.3 percent.
Total terminal rentals comprise rentals from CCAir as described above, the FAA, Georgia Flight Academy, and Hertz Rental Car. The rentals collectively have grown from $40,830 in fiscal year 1997 to $48,527 in fiscal year 2001, representing an average annual rate of 4.4 percent.
Collectively, general aviation, airline and other revenues at the Airport increased from $209,453 in fiscal year 1997 to $233,595 in fiscal year 2001, representing an average annual growth rate of 2.8 percent.
Operating Expenses
The Airport’s operating expenses are set forth on Table 6-6. Operating expenses are those expenses incurred by the UGACC in the operation and maintenance of the Airport. Purchases for resale (aviation fuel, oil, and pilot supplies) represented the largest single category of operating expenses, representing between 41.2 percent (fiscal year 2001) and 45.2 percent (fiscal year 1997) of the total. Aviation fuel purchases for resale increased from $547,320 in fiscal year 1997 to $752,085 in fiscal year 2001, representing an average annual growth rate of 8.3 percent. The Airport’s second largest operating expense category is total personal services, which increased from $292,031 in fiscal year 1997 to $496,511 in fiscal year 2001, representing an average annual growth rate of 14.2 percent. Airport indirect expenses, which are administrative overhead charges billed by the UGACC to the Airport, increased from $109,183 in fiscal year 1997 to $179,319 in fiscal year 2001, representing an average annual growth rate of 13.2 percent. Collectively, these three operating expense categories have averaged between 85.8 percent and 89 percent of total operating expenses and have grown at an average annual growth rate of 11.1 percent.
As presented, total operating expenses including depreciation increased from $1,399,828 in fiscal year 1997 to $1,665,151 in fiscal year 2001, representing an average annual growth rate of 4.4 percent.
Operating Income
Table 6-6 provides a summary of revenues and expenses for the Airport over the past five years. As depicted on Table 6-6, operating income declined from a deficit of $32,507 in fiscal year 1997 to a deficit of $217,704 in fiscal year 2001. This deficit is primarily the result of the increases in purchases for resale, personal services, and indirect administrative overhead expenses, which collectively grew by $988,353 over the Study Period.
The financial results of the last five years reflected on the Airport’s financial statements include allowances for depreciation. As a consequence of these non-cash charges, the resulting financial statements depict overstated losses, or understated surpluses, on a cash basis.
Non-Operating Revenues and Non-Operating Expenses
The Airport’s non-operating revenues and expenses include: intergovernmental revenue; insurance recoveries; interest revenue; interest revenue and expenses; and net gain (loss) on disposition of fixed assets. Collectively, non-operating revenue (net of non-operating expense) declined from $28,142 in fiscal year 1997 to $749 in fiscal year 2001.
Net Income (Before UGACC Transfers)
As depicted on Table 6-6, net income before UGACC transfers ranged from a deficit of $4,365 in fiscal year 1997 to a deficit of $216,955 in fiscal year 2001.
6.2.7 Pro Forma Cash Flow
To determine how the Airport might accomplish the desired upgrades and improvements identified in Table 6-7, a pro forma cash flow analysis has been undertaken, the results of which are depicted on Table 6-7. The methodology used to develop this pro forma required a detailed analysis of the past five years of audited financial activity (summarized in Table 6-6), and a conservative projection of each revenue and aggregate operating expenses over Stage I of the Airport’s CIP (2002 - 2006).
The resulting pro forma cash flow is based on historical records, known changes to occur in the future (e.g. debt retirement, etc.), and operating experience. Some of the assumptions utilized for this pro forma cash flow are as follows.
Operating Revenues
Sales generated by the Airport’s FBO and fuel flowage fees are projected to increase at the rate of growth forecast for total aircraft operations described in Section 2 for the years 2002 through 2006 (2.3 percent per annum). General aviation, airline, and other operating revenues are forecast to grow at the rates experienced over the Study Period on a line-by-line item basis.
PFC income is based on the number of revenue enplaned passengers at the Airport and is expected to increase at an annual rate of 0.6 percent, which is the same average annual growth rate of enplaned passengers at the Airport as described in Section 2.
TABLE 6-7 to be added
New Revenues - T-Hangars
There is one project element of the Stage I improvements which is expected to be self liquidating, thus generating revenues sufficient to cover associated debt outstanding as well as operating and maintenance expenses: 36-unit T-hangars. The following summarizes the assumptions used to estimate the revenues expected to be recognized as a result of undertaking this self-liquidating project.
As previously discussed, the UGACC owns and leases two executive hangars; four medium hangars; and 48 T-hangars at the Airport. Section 3 - Demand Capacity Analysis and Facility Requirements describes the supply and demand for general aviation aircraft parking facilities at the Airport. The demand for hangar space is expected to be 74 units in 2002. Evidence for support of these estimates is the fact that the Airport currently enjoys 100 percent occupancy of its existing hangars and maintains a waiting list, which currently consists of 55 people desiring hangar space. Existing hangar demand (2002) as depicted on Table 3-6 exceeds the Airport’s existing number of covered aircraft parking spaces (63) by 11. Demand for hangar spaces is expected to exceed the existing supply by 32 spaces by 2007. As a result this master plan recommends the construction of 36 T-hangar units at a cost of $600,000.
The calculation of a rental and resulting revenues sufficient to recover the cost of constructing, operating and maintaining the T-hangar facilities is necessary so that this project may be considered self-liquidating. This calculation requires the allocation of estimated average annual debt service related to the T-hangar projects and an estimation of the cost to operate and maintain the new T-hangar facilities. As depicted on Table 6-6, the annual debt service allocation to the T-hangar element of the Stage I program is $68,236 and the annual debt service allocation of the 20-Unit T-hangar taxilanes (Funding Scenario 2 only) is $1,251. Collectively, the annual debt service associated with the T-hangar projects is $69,487. T-hangar and T-hangar taxilane operating and maintenance (O&M) expenses have been estimated at $10,000 per year, resulting in a total rental requirement of 79,487 per T-hangar unit.
For the purpose of conservatively estimating the revenue stream resulting from the implementation of this project element, it has been assumed that only 29 of the 36 T-hangars will be leased (occupancy rate of approximately 80 percent) in the first full year after construction of the T-hangars (assumed to be fiscal year 2004). Given the assumptions relied upon herein, the UGACC will need to charge its hangar tenants a rental no less than $184 per month or $2,208 per year. Collectively, these 29 T-hangar rentals will generate approximately $64,032 at a rate of $184 per month each, which is nearly sufficient to recover the allocable portion of the annual debt service allocation ($68,236).
It is reasonable to expect the UGACC will lease the new T-hangars at rates that include a premium to the existing rental rates, which will consider the age of the existing T-hangars.
For the purpose of this report, it is assumed that the UGACC will lease its 36 new T-hangars at a rate of $210 per month or $2,520 per year. Given the assumptions utilized above, 29 T-hangars will generate approximately $73,080 in revenue during the first year following construction.
Operating Expenses
For the purpose of this pro forma cash flow, the Airport’s total operating expenses including depreciation are assumed to increase at the rate experienced over the Study Period (4.42 percent) through Stage I of the Airport’s CIP (2002 - 2006).
Non-Operating Revenues and Non-Operating Expenses
The first debt service payment estimated in connection with the financing required to fund a portion of the local share of the funding plan is assumed to occur in fiscal year 2003. The average annual debt service as estimated in Section 6.2.5 ($228,192) and its impact on net income before UGACC transfers is presented on Table 6-7. For the purpose of this pro forma, all other non-operating revenues and expenses are assumed to be constant with those recognized in fiscal year 2001.
Net Income (Before UGACC Transfers)
As a result of the assumptions described in this Section 6.2 and the financing requirement described in Section 6.2.5, the net income before UGACC transfers is estimated to range from $258,800 (fiscal year 2002, the first year before full debt service) to $597,629 in 2006. The deficits recognized in this pro forma cash flow will be required to be covered through transfers from the UGACC General Fund or some alternative funding source.
6.2.8 Summary and Findings
The historical financial data utilized in this Financial Overview was provided by the Airport staff and the UGACC Accounting Department.
In order to accomplish the short-term CIP, it will be necessary for the Airport to maintain its status as a primary commercial service airport in order to remain eligible for Federal entitlement grant participation, the minimum of which is currently $1,000,000 per year. Additionally, it will be necessary for the Airport to maximize every opportunity to obtain Federal discretionary grants (and to the extent available State grants) and apply for and obtain the authority to impose and use a Passenger Facility Charge at the level of $4.50 per revenue passenger who boards an aircraft at the Airport.
To accomplish the desired improvements in a timely manner, it would be ideal for the UGACC to identify which Stage I capital improvement projects would be most likely to be approved for inclusion in the next SPLOST referendum. Irrespective of the SPLOST, the UGACC will undertake financing to pay for the 36 unit T-hangar project element of the Stage I improvements. To complete the remaining improvements, the UGACC will need to undertake financing, the amount of which is dependent upon contributions from the UGACC General Fund and Capital Account; as well as any allocable proceeds derived from a successful SPLOST referendum, provided certain Stage I improvements are included in such referendum.
However, given the assumptions utilized in this Financial Overview, a total financing of approximately $2.4 million should be sufficient to fund the remaining local share (local share net of PFCs and UGACC contributions) in Stage I of the Airport’s CIP. As discussed in Section 6.2.7, Pro Forma Cash Flow, the debt service associated with said financing will likely be required to be paid by contributions from the UGACC General Fund.