2016 Appropriation Budget Table of Contents Board Approved August 21, 2015

Transcription

1 INDIANAPOLIS AIRPORT AUTHORITY 2016 APPROPRIATION BUDGET ORDINANCE NO BOARD APPROVED AUGUST 21, 2015

2 2016 Appropriation Budget Table of Contents Board Approved August 21, Appropriation Summary 2 Airport System Fund Expenses 3 Capital Improvement Fund 4 Anticipated Rates Supplemental Schedules: 5-6 Capital Improvement Program Summary 7 Airport System Fund Revenues 8 Capital Improvement Fund Sources of Funds Projections 9 Analysis of Airport System Fund Revenue 10 Analysis of Airport System Fund Expenses

3 Appropriation Summary ($000) Total Total Personal Services $ 29,065 $ 30,169 Supplies & Materials 5,866 5,881 Contractual Services and Debt Service 163, ,040 Operating Capital Total Airport System Fund $ 198,696 $ 199,627 * Total Capital Improvement Fund $ 57,000 $ 58,000 * * Appropriation amount published in local newspapers on 7/7 and 7/14 1

4 Airport System Fund Expenses - Appropriated Budget Ordinance Ordinance vs 2015 Budget Ordinance Fav / (Unfav) Variance Budget Budget $ % OPERATING AND MAINTENANCE: Personal Services $ 29,065,000 $ 30,169,000 $ (1,104,000) -3.8% Utilities 10,183,000 10,445,000 (262,000) -2.6% Contractual Services 18,971,000 20,827,000 (1,856,000) -9.8% Supplies & Materials 5,866,000 5,881,000 (15,000) -0.3% Other Charges 1,777,000 1,750,000 27, % Capital Expenditures 703, , , % Environmental Remediation 34,000 34, % Total Operating Expenses 66,599,000 69,643,000 (3,044,000) -4.6% DEBT SERVICE: Special Leases - UAL 33,579,000 33,814,000 (235,000) -0.7% Interest Payments 50,838,000 46,284,000 4,554, % Principal Payments 47,680,000 49,886,000 (2,206,000) -4.6% Total Debt Service 132,097, ,984,000 2,113, % TOTAL AIRPORT SYSTEM FUND $ 198,696,000 $ 199,627,000 $ (931,000) -0.5% CAPITAL IMPROVEMENT FUND $ 57,000,000 $ 58,000,000 $ (1,000,000) -1.8% 2

5 Capital Improvement Fund Appropriation Capital Improvement Fund Appropriation: Garage Atrium Canopy Replacement $ 5,968 Rehabilitate Taxiway H - H1 and H2 4,500 Parking Garage Improvements & ,995 Replace or Update Security System 3,769 Covered Parking Installation - Employee Lot 3,200 PARCS System Assessment & Implementation 1,840 Rehabilitate Airport Roads ,759 IND - Terminal Optimization 1,500 Campus Fiber Repair / Development 1, DAS Replacement 1,360 Shuttle Bus Replacement (Parking) ,200 Other (Airport Funded Projects less than $750,000) 12,127 Subtotal (agrees to Program Summary p. 6) $ 42,681 Estimated potential carryover from prior year 12,319 Additional appropriation - unspecified revenue development projects 3,000 Total Capital Improvement Fund Appropriation $ 58,000 3

6 Anticipated Rates Cost Per Enplanement (Signatory Passenger Airlines) $11.50 $11.00 $11.06 $11.05 $10.81 $10.50 $10.26 $10.05 $10.17 $9.97 $10.31 $10.00 $ Budget 2016 * Signatory Airlines Landing Fees (Per 1,000 lbs) $2.10 $1.95 $1.95 $1.95 $1.90 $1.88 $1.88 $1.92 $1.95 $1.90 $1.70 $ Budget 2016 * * Assumes $16 million capital requirement. 4

7 SUPPLEMENTAL SCHEDULES

8 INDIANAPOLIS AIRPORT AUTHORITY 2016 CAPITAL IMPROVEMENT PROGRAM SUMMARY June 12, 2015 Review with Finance & Audit Committee *2016 PROJECT NUMBER PROJECT TITLE PROJECTS THAT ARE NOT SUBJECT TO MII VOTE (PROJECTS IN BLUE FONT WILL BE FUNDED USING 2015 AIRPORT FUNDS GREATER THAN $1 MILLION) PROJECT TYPE TOTAL PROJECT COST ENTITLEMENT GRANTS 2016 CASH FLOW CONTINGENT DISCRETIONARY & OTHER GRANTS AIRPORT FUNDS INTERNAL RATE OF RETURN (IRR) EXCLUSION IF NOT APPLIED 1 Construct High Speed Taxiway Exits Apron & Other Airfield 5, N/A Grant Funded 2 Rehabilitate Taxiway H - H1 and H2 Apron & Other Airfield 4, ,500 3,375-1,125 N/A Grant Funded / Rehabilitation of Necessary Asset 3 Replace Lighting on Taxiway H - H1 and H2 Apron & Other Airfield N/A Grant Funded / Replacement of Necessary Asset 4 Replace Airfield Circuits, Cables & Transformers, and Regulators Apron & Other Airfield 1, N/A Grant Funded / Replacement of Necessary Asset 5 Construct North Service Road and Convert North Access Road to Tug Road Apron & Other Airfield 3, N/A Grant Funded / FAA Regulatory 6 Rehabilitate Taxiway C Apron & Other Airfield N/A Grant Funded / Rehabilitation of Necessary Asset 7 Replace Ground Power Units Apron & Other Airfield 5,271-1, N/A No Authority Cash Funding Project 8 Airfield Pavement Evaluation and Management Plan Update Apron & Other Airfield ** N/A Grant Funded / FAA Regulatory 9 Airfield Electrical Replacement - Preliminary Design Apron & Other Airfield ** N/A Grant Funded / Replacement of Necessary Asset 10 IND - Terminal Optimization Terminal 3, , ,500 N/A Required Maintenance of Existing Asset 11 Terminal Backup Heating and Cooling Terminal N/A Required Maintenance of Existing Asset 12 Terminal Bird Deterrent System Terminal N/A Required Maintenance of Existing Asset 13 Garage Atrium Canopy Replacement Parking 6, , ,968 N/A Health Safety 14 Covered Parking Installation - Employee Lot Parking 3, , , % - 15 Parking Garage Improvements Parking 2, , ,368 N/A Required Maintenance of Existing Asset 16 Rehabilitate Asphalt Lots 2016 Parking N/A Required Maintenance of Existing Asset 17 Parking Garage Electric Capacity Study and Options Analysis Parking RD - 18 Parking Garage Electric Capacity Implementation Parking 1,128-1, RD - 19 Replace or Update Security System Safety & Security 4, , ,769 N/A Required Maintenance of Existing Asset/Safety 20 Radio System Upgrade Safety & Security N/A Required Maintenance of Existing Asset/Safety 21 Deicing Control Facilities Improvements Environmental & Other Regulatory N/A Grant Funded / Replacement of Necessary Asset 22 Stormwater Wastewater REI/RFQ/RFP Environmental & Other Regulatory 1, ** % Requires O&M savings of ~$131k /year for 20 years 23 Deicing Control Facilities Improvements Environmental & Other Regulatory ** N/A Grant Funded / Rehabilitation of Necessary Asset 24 Rehabilitate Airport Roads Non-Airfield Roadways 1, , ,759 N/A Required Maintenance of Existing Asset 25 Campus Fiber Repair/Development Information Technology 2,915-1,452 1, ,463 N/A Maintenance of Required System DAS Replacement Information Technology , ,360 N/A Maintenance of Required System 27 Computer, Server and Equipment Replacement Program (2016) Information Technology N/A Required Maintenance of Existing Asset 28 Geographic Information System /2017 Information Technology 1, N/A Efficiencies gained cannot be accurately measured 29 Computer, Server and Equipment Replacement Program (2015) Information Technology ** N/A Required Maintenance of Existing Asset 30 Crashphone - Firehouse Alerting Information Technology ** N/A Health Safety / Grant Funded 31 Shuttle Bus Replacement (Parking) Vehicle & Equipment Replacement 1, , ,200 N/A Replacement of Asset with no Utility 32 (2016) Water Blaster Vehicle & Equipment Replacement N/A Safety / Reduction of O&M 33 (2016) Snow Equipment Replacement Program Vehicle & Equipment Replacement N/A Replacement of Equipment with no Utility 34 Advance Planning and Design Other N/A Planning Capital 35 IND Terminal and Campus Wayfinding and Signage Study Other N/A Replacement of Essential Asset / Safety / Grant Funded 36 Property - Relocate Record Storage and Create Temp Controlled Space for Air Cargo Revenue Development ** RD - ACTUAL COST THRU 2014 (1) 37 IMC - Rehabilitate Workstand/GSE Parking & Construct Tug Road Properties & Non-Terminal Buildings N/A Required Replacement of Existing Asset 38 Central Energy Plant Cooling Tower Steel Properties & Non-Terminal Buildings ** N/A Required Maintenance of Existing Asset 39 IMC - Commons Building Roof Replacement Properties & Non-Terminal Buildings 1,524-1,524 - ** N/A Required Maintenance of Existing Asset 40 CEP - Boiler #2 Replacement Properties & Non-Terminal Buildings 1,135-1, N/A Required Replacement of Existing Asset 2015 FORECAST COST 2016 PROJECT COST $ in 000's PROJECTED SOURCE OF FUNDS HURDLE RATE *Project Numbers were only given to New Projects or those projects with cost increase more than 10% over originally approved amount. **Project was previously approved; however cost increased more than 10% or scope has changed. (1) Total includes only projects with forecasted spend in 2016 and beyond. RD = Revenue Development Projects that are subject to the Hurdle Rate Policy, and as we enter into these projects, we will continue to evaluate the projects and their required performance as we move forward with them. 5 Page 1 of 2

9 INDIANAPOLIS AIRPORT AUTHORITY 2016 CAPITAL IMPROVEMENT PROGRAM SUMMARY June 12, 2015 Review with Finance & Audit Committee *2016 PROJECT NUMBER PROJECT TITLE PROJECT TYPE TOTAL PROJECT COST ACTUAL COST THRU 2014 (1) 2015 FORECAST COST 2016 PROJECT COST $ in 000's ENTITLEMENT GRANTS PROJECTED SOURCE OF FUNDS 2016 CASH FLOW CONTINGENT DISCRETIONARY & OTHER GRANTS AIRPORT FUNDS INTERNAL RATE OF RETURN (IRR) HURDLE RATE EXCLUSION IF NOT APPLIED 41 CEP - Cooling tower fill replacement Properties & Non-Terminal Buildings N/A Required Maintenance of Existing Asset 42 CEP - Replacement of IW's Supervisory Control and Data Acquisition System Properties & Non-Terminal Buildings ** N/A Required Maintenance of Existing Asset 43 IMC Hangar 7 - Hangar Door Rehabilitation Properties & Non-Terminal Buildings ** N/A Required Maintenance of Existing Asset 44 Joint Replacement and Repairs Runway Indy Regional Relievers N/A Grant Funded / Replacement of Necessary Asset 45 Rehabilitate Runway & Taxiway Connectors A1, A2, A3, A4 - Metro Relievers 2,500-2,500 - ** N/A Grant Funded / Replacement of Necessary Asset 46 Replace Airfield Lighting - Metro Relievers 1,014-1,014 - ** N/A Grant Funded / Replacement of Necessary Asset 47 Rehabilitate Apron Pavement - Metro Relievers N/A Grant Funded / Replacement of Necessary Asset 48 Replace AWOS - Metro Relievers N/A Grant Funded / Replacement of Necessary Asset 49 Acquire Land for Runway Extension and Terminal Expansion - Hendricks Co. Relievers 3,058-1, N/A Regulatory / Capacity Enhancement 50 Install Perimeter Fencing Phase 4 - Hendricks Co. Relievers N/A Grant Funded / Regulatory 51 Replace Aviation Fuel Farm - Heliport Relievers ** N/A Grant Funded / Replacement of Necessary Asset 52 Structural Slab Replacement - Heliport Relievers 1, ** N/A Grant Funded / Replacement of Necessary Asset Previously Approved PARCS System Assessment & Implementation Parking 1, , , % - Previously Approved Parking Garage Improvements Parking 3, ,626 1, ,627 N/A Required Maintenance of Existing Asset Previously Approved Noise & General Airport System Land Acquisition Properties & Non-Terminal Buildings 5,156 1, N/A Regulatory / Capacity Enhancement Previously Approved Construct New Airfield Maintenance Facility Safety & Security 11, N/A Replacement of Essential Asset / Safety / Grant Funded Previously Approved Capital Salaries Other 3, N/A Previously Approved CEP - Replacement of Stack Economizers Boilers Properties & Non-Terminal Buildings N/A Required Maintenance of Existing Asset Previously Approved West Perimeter Road Bridge Repairs Non-Airfield Roadways N/A Required Maintenance of Existing Asset Previously Approved Geographic Information System /2016 Information Technology 1, N/A Efficiencies gained cannot be accurately measured Previously Approved Rehabilitate, Relocate & Widen Taxiway B - Eagle Creek Relievers 1, N/A Grant Funded / FAA Regulatory / Maint of Existing Asset Previously Approved Airport Layout Plan (ALP) Update - Eagle Creek Relievers N/A Grant Funded / FAA Regulatory Previously Approved Disparity Study for the Indianapolis Airport Authority Relievers N/A FAA Regulatory SUBTOTAL 3,164 24,807 42,681 4,696 1,768 36,217 SUBTOTAL PROJECTS SUBJECT TO MII APPROVAL NONE SUBTOTAL PROJECTS WITH 2016 FORECASTED SPEND 2,066 8,165 42,681 4,696 1,768 36,217 OTHER PROJECTS WITH NO 2016 IMPACT 1,098 16, GRAND TOTAL (1) 3,164 24,807 42,681 4,696 1,768 36,217 SUMMARY BY PROJECT TYPE Apron & Other Airfield - 2,643 6,009 4,316-1,693 Terminal , ,713 Parking 32 3,932 15, ,658 Safety & Security , ,973 Environmental & Other Regulatory 154 1, Non-Airfield Roadways - - 2, ,089 Information Technology - 3,775 4, ,253 Vehicle & Equipment Replacement - - 1, ,923 Other Revenue Development Properties & Non-Terminal Buildings 1,906 4,358 1, ,654 Relievers 1,072 6,369 1, , TOTAL 3,164 24,807 42,681 4,696 1,768 36,217 *Project Numbers were only given to New Projects or those projects with cost increase more than 10% over originally approved amount. **Project was previously approved; however cost increased more than 10% or scope has changed. (1) Total includes only projects with forecasted spend in 2016 and beyond. RD = Revenue Development Projects that are subject to the Hurdle Rate Policy, and as we enter into these projects, we will continue to evaluate the projects and their required performance as we move forward with them. 6 Page 2 of 2

10 Airport System Fund Revenues -Appropriated Budget Ordinance Ordinance vs 2015 Budget Ordinance Fav / (Unfav) Variance Budget Budget $ % AIRLINE TOTAL 47,657,120 52,131,500 4,474, % NON-AIRLINE AIRFIELD Fuel Sales 200, ,000 12, % Ground Handling / Other 175, ,031 (17,065) -9.7% RETAIL Food & Beverage 5,227,299 5,134,863 (92,436) -1.8% News & Gifts 1,136,866 1,065,690 (71,176) -6.3% Specialty Shops 1,237,629 1,306,314 68, % Advertising 835, ,786 99, % Car Rental 9,234,867 9,533, , % Other 1,371,686 1,337,912 (33,774) -2.5% PARKING & GTC Parking 40,500,085 44,658,338 4,158, % Ground Transportation Center 484, , , % PROPERTIES Freight Buildings 933, ,945 43, % Ground Leases 5,779,905 5,889, , % Hangars / Other Buildings 13,549,142 13,466,632 (82,510) -0.6% RELIEVERS 3,088,098 3,183,100 95, % Indianapolis Maint. Center (IMC) 8,558,107 8,524,349 (33,758) -0.4% OTHER INCOME 64,577 67,113 2, % Total Non-Airline Revenue 92,377,079 97,063,201 4,686, % OTHER REVENUES Special Leases - UAL 26,754,228 26,709,137 (45,091) -0.2% GASB Adjustment (306,354) (306,354) - 0.0% Operating Grant Revenue 764, ,500 (28,500) -3.7% Passenger Facility Charges (PFC's) 14,635,351 14,708,821 73, % Customer Facility Charges (CFC's) 5,867,022 6,332, , % Interest 4,457,756 3,881,301 (576,455) -12.9% TOTAL OPERATING REVENUE 192,206, ,255,487 9,049, % LESS Inter-fund Transfers (9,329,199) (19,800,000) (10,470,801) 112.2% TOTAL (net of transfers) $182,877,003 $181,455,487 ($1,421,516) -0.8% 7

11 Capital Improvement Fund - Source of Funds Projections Ordinance Ordinance vs 2015 Budget Ordinance Fav / (Unfav) Variance Budget Budget $ % Federal and State Grants (A) $20,254,700 $ 6,962,893 $ (13,291,807) -66% Interest 3,800,000 3,800,000-0% Operating Fund Transfers 5,529,199 16,000,000 10,470, % Prepaid Transfers (B) 3,939,123 - (3,939,123) -100% Passenger Facility Charge (C) n/m Insurance Proceeds & Other ( D) - 750, , % Proceeds from Land & Property Sales (E) 2,000, ,000 (1,250,000) -63% Capital Improvement Funds 21,476,978 29,737,107 8,260,129 38% TOTAL $57,000,000 $ 58,000,000 $1,000,000 2% (A) The large variance in Federal and State Grants is due to a combination of AIP funded projects being pushed from 2014 to 2015, the timing of the receipt of grants and actual spend on the projects the grants are funding. A large 2014 project was pushed into 2015 for funding purposes and there is a $10 million carryover of 2014 grant funds expected to be received in (B) Prepaid Transfer in 2016 zero due to anticipated change in structure of the airline rates and charges model. (C) Passenger Facility Charges (PFC's) are recognized as capital funding sources to the extent anticipated to fund capital program costs in each respective year. The current approved PFC Use Application does not anticipate the funding of any future capital projects. (D) Insurance Proceeds & Other includes funding for land purchases as well as other proceeds (warranty/insurance proceeds) for projects where these funds will be collected. (E) Proceeds from Land and Property Sales represents auction proceeds from the sale of property, proceeds from the sale of Airport land, and property sales under the Purchase Assurance (Noise Compatibility) Program. 8

12 Analysis of Airport System Fund (ASF) Revenue Budget Ordinance Ordinance vs 2015 Budget Ordinance Fav / (Unfav) Variance Budget Budget $ % Airline $ 47,657,120 $ 52,131,500 $ 4,474, % Airfield 375, ,031 (5,065) -1.4% Retail 19,043,830 19,313, , % Parking 40,984,598 45,271,799 4,287, % Properties 20,262,773 20,333,571 70, % Relievers 3,088,098 3,183,100 95, % Indianapolis Maintenance Center (IMC) 8,558,107 8,524,349 (33,758) -0.4% Other Income 64,577 67,113 2, % Special Leases - UAL 26,754,228 26,709,137 (45,091) -0.2% Operating Grant Revenue 764, ,500 (28,500) -3.7% Passenger Facility Charges (PFCs) 14,635,351 14,708,821 73, % Customer Facility Charges (CFCs) 5,867,022 6,332, , % Interest/Other 4,151,402 3,574,947 (576,455) -13.9% TOTAL OPERATING REVENUE 192,206, ,255,487 9,049, % Exclude Pass-through (non-cash amount) (26,754,228) (26,709,137) TOTAL OPERATING REVENUE after non-cash items * $ 165,451,974 $ 174,546,350 * From this total there is an inter-fund transfer of $9.3m in 2015 & $19.8m in 2016 for the Capital Requirement ASF Revenue Budget by Type ASF Revenue Budget vs 2015 Airline Parking $52,131,500 $45,271,799 $ ASF 2015 ASF Special Leases - UAL $26,709,137 $43 Properties Retail PFCs IMC CFCs Interest/Other $20,333,571 $19,313,238 $14,708,821 $8,524,349 $6,332,381 $3,574,947 Millions $33 $23 $13 $3 ($7) Relievers Operating Grant Revenue Airfield/Other $3,183,100 $735,500 $437,144 IMC 4.2% CFCs 3.1% PFCs 7.3% 2016 ASF Revenue Budget by Percentage Retail 9.6% Interest/Other 1.8% Relievers Operating Grant 1.6% Revenue 0.4% Properties 10.1% Airfield/Other 0.2% Special Leases UAL 13.3% Airline 25.9% Parking 22.5% Management Comments Airline revenues are planned to increase $4.5 million (9.4%) attributable to a projected increase in landed weights of 1.5% and outcome of the airline use agreement with a focus on stability, sustainability and maintaining existing assets. Retail revenue is anticipated to increase $0.3 million (1.4%) primarily attributable to an increase in car rental concessions and advertising revenues. Parking revenues are planned to increase $4.3 million (10.5%) based on actual yield trends and a projected increase in enplaned passengers of 2.0%. Customer Facility Charges relating to car rentals are planned to increase $0.5 million (7.9%) based on actual trend and projected passenger numbers. Interest/Other decrease of $.6 million (13.9%) reflects lower debt service reserve fund balances due to debt refunding. Inter-fund Transfers increase of $10.5 million the result of newly negotiated airline use agreement. 9

13 Analysis of Airport System Fund (ASF) Expenses Budget Ordinance Ordinance vs 2015 Budget Ordinance Fav / (Unfav) Variance Budget Budget $ % OPERATING AND MAINTENANCE: Personal Services $ 29,065,000 $ 30,169,000 $ (1,104,000) -3.8% Utilities 10,183,000 10,445,000 (262,000) -2.6% Contractual Services 18,971,000 20,827,000 (1,856,000) -9.8% Supplies & Materials 5,866,000 5,881,000 (15,000) -0.3% Other Charges 1,777,000 1,750,000 27, % Capital Expenditures 703, , , % Environmental Remediation 34,000 34, % Total Operating Expenses 66,599,000 69,643,000 (3,044,000) -4.6% DEBT SERVICE: Special Leases - UAL 33,579,000 33,814,000 (235,000) -0.7% Interest Payments 50,838,000 46,284,000 4,554, % Principal Payments 47,680,000 49,886,000 (2,206,000) -4.6% Total Debt Service 132,097, ,984,000 2,113, % TOTAL AIRPORT SYSTEM FUND APPROPRIATION $ 198,696,000 $ 199,627,000 $ (931,000) -0.5% Exclude Pass-through (non-cash amount) (33,579,000) (33,814,000) Exclude Variable Debt reserve (non-cash amount) (12,560,000) (12,386,000) Exclude Other Debt Service Amortization (non-cash amount) (2,124,000) (1,010,000) TOTAL AIRPORT SYSTEM FUND after non-cash items $ 150,433,000 $ 152,417, ASF Expense Budget by Type ASF Expense Budget vs 2015 Principal Payments $49,886, ASF 2015 ASF Interest Payments $46,284,000 $50 Special Leases - UAL Personal Services $33,814,000 $30,169,000 Millions $40 $30 $20 Contractual Services $20,827,000 $10 Utilities $10,445,000 $0 Supplies/Materials & Other $7,665,000 Capital Expenditures $537, ASF Expense Budget by Percentage Utilities 5.2% Personal Services 15.1% Contractual Services 10.4% Special Leases UAL 16.9% Principal Payments 25.0% Interest Payments 23.2% Management Comments Personal Services increase of $1.1 million (3.8%) for annual merit increases and health insurance increases. Utilities anticipated to exceed prior year $0.3 million (2.6%) driven primarily by rate increases. Contractual Services projected to increase $1.9 million (9.8%) relating to Environmental and Engineering professional fees, Communications and Marketing initiatives, costs associated with land development, outsourced pavement and roof repairs, outsourced grounds maintenance, and higher credit card fees due to increased parking revenues. Operating capital expenditures necessary for the investment in preserving existing assets. Supplies/Materials & Other 3.9% Capital Expenditures 0.3% 2016 budgeted debt service represents scheduled interest and principal payments reflecting lower interest payments and higher principal payments than prior year. 10