HomeMy WebLinkAbout08 - Section 7 Financial Analysis - Century Plan - Airport Plan Element June 19987.0 FINANCIAL ANALYSIS
7.1 Introduction
A number of proposed development items have been identified as a result of the Master Planning
process. These projects and estimated costs are listed in this chapter. A schedule of proposed
development periods is shown in three stages: Stage I, Short-Term (1 to 5 years); Stage II, Mid -Term (6
to 10 years); and, Stage III, Long -Term (10 to 20 years). The recommended projects for each
development period are depicted in this chapter in Exhibit 7 -1.
Tables 7 -1 through 7 -3 present the detailed cost estimates of the recommended airport
improvements while Table 7-4 is the summation of the twenty year development costs proposed by this
Master Plan broken down by various agency participation shares.
TABLE 7-4
SUMMARY OF 20 -YEAR DEVELOPMENT COSTS
GEORGETOWN MUNICIPAL AIRPORT
Engineering & Total
Construction Contingencies Development Federal State GMA
Cost @15% Cost Funding Funding Funding Other
Stage I - Short Term $4,944,984 $741,748 $5,686,731 $1,122,812 $198,375 $542,207 $3,823,338
Stage II - Mid -Term $7,927,875 $1,189,181 $9,117,056 $2,253,178 $0 $278,530 $6,774,348
Stage III - Long- $5,484,859 $822,729 $6,307,588 $1,650,679 $0 $152,517 $4,556,142
Term
Total $18,357,718 $2,753,658 $21,111,375 $5,026,669 $198,375 $973,254 $15,153,828
The total cost estimates developed for this Master Plan are based upon the estimated construction
costs of the individual items determined to be required in Facility Requirements, Section 3.0, stated in
1997 dollars. In addition to construction costs, however, financial consideration must be given to the
final engineering and design costs, plus a small allowance for construction contingency costs which have
not been specifically enumerated. For the purpose of this section, 15 percent of the base construction
estimate has been added to all items to reflect these engineering and contingency costs.
After the total costs of all the projects in each stage or development period are determined, it is
helpful for financial planning to indicate the respective amounts which are subject to funding assistance
by the federal, state, and local agencies, and other amounts which might be funded by private or other
governmental agencies. Presently, federal funding assistance is channeled from the Federal Aviation
Administration (FAA) through the Texas Department of Transportation (TxDOT), Aviation Division in
the form of a Block Grant. The TxDOT, Aviation Division is charged with administering and allocating
17326/960507 7 -1
EXHMIT 7 -1
RECOMMENDATIONS FOR CAPITAL IMPROVEMENTS
AT GEORGETOWN MUNICIPAL AIRPORT
Stage I - Short-Term (1 to 5 years)
• Construct three 8 -Bay T- Hangar units
• Construct access T/W for north T- Hangar area (between Tejas and Gantt)
• Construct new Northeast Airport entrance for GA Access
• Construct South Corporate Area Apron and Taxiways
• Construction utilities for the South Corporate Area
• Construct roadways to the South Corporate Area
• Construct hangars in South Corporate Area
• Seal coat bituminous apron adjacent to Terminal
• Construct first stage utility improvements including a central wastewater system for the Terminal
area
• Construct Main Terminal Area Corporate Apron
• Construct Main Terminal Area Corporate Hangars
• Rehabilitate R/W 18 -36
• Repair and seal expansion joints on fueling apron
• Construct aircraft holding aprons, R/Ws 18 -36 and 11/29
• Construct aircraft wash rack
• Replace or renovate the Terminal Building
• Rehabilitate roadways in North Corporate Area
• Construct north water quality basin
Stage II - Mid Term (6 to 10 years)
• Complete Terminal Area wastewater system
• Construct three additional 8 -Bay T- Hangar units
• Improve instrument approaches R/W 18 -36
• Construct corporate hangars (as demand warrants)
• Seal coat R/W 11 -29 and associated T/W's
• Improve airport roadways, with emphasis on Terminal Drive
• Construct Phase I of improvements to West Corporate Area
• Improve boundary fencing and rehabilitate wildlife fence
Stage III - Long -Term (10 to 20 years)
• Rehabilitate, R/W 18 -36
• Install HIRL, R/W 18 -36
• Construct Phase II improvements to West Corporate Area
17326/960507 7 -2
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Table 7 -4
SUMMARY OF 20 -YEAR DEVELOPMENT COSTS
GEORGETOWN MUNICIPAL AIRPORT
Engineering &
Total
Construction
Contingencies
Development
Federal
State
GMA
_QM
@15%
f =
Fundine
Fundine
Fundin2
Other
Stage I - Short Term
$4,972,984
$745,948
$5,718,931
$1,252,592
$198,375
$484,752
$3,783,213
Stage II - Mid -Term
$7,863,875
$1,179,581
$9,043,456
$2,091,088
$0
$308,243
$6,644,125
Stage III - Long -Term
$5,484,859
$822,729
$6,307,588
$1,624,804
$0
$180,534
$4,502,250
Total
$18,321,718
$2,748,258
$21,069,975
$4,968,484
$198,375
$973,529
$14,929,588
these funds to all non -air carrier airports in the State of Texas. Some projects are eligible but not of high
enough priority to receive funding. The federal funding percentage for projects eligible under the Block
Grant Program is 90 percent. The remaining 10 percent of the project costs is the responsibility of the
Sponsor, in this case, the City of Georgetown. TxDOT also has a program to fund certain projects which
are not eligible for FAA funding or are too low on the priority scale to be considered due to the lack of
available FAA grant funds. The percentage of assistance in this situation is typically a 90/10 sharing
between the Sponsor and the TxDOT.
In addition to these capital improvement programs, TxDOT recently instituted a program which
funds terminal building improvements. This is a state funded program which requires matching funding
by the Sponsor. Currently, the total project cost is limited to a maximum of $400,000.
When determining eligibility of the various projects for federal funding assistance, onlythose
items which have historically been allowed are included in the federal funding category. These items
generally include airfield components, i.e., runway, taxiway, and apron projects, land acquisition, general
aviation public use aprons, security fencing, lighting, and certain navigational aids (NAVAIDs).
The work items listed in each of the three development stages are not necessarily in order of
priority. However, in terms of importance, it is recommended that due to the demand for additional
hangar storage space, the work associated with constructing at least three 8 -bay T- hangar buildings
should be among the first projects completed during Stage I. Also, the estimated $400,000 for terminal
renovation would be at a 50150 matching share with TxDOT. Since, the local portion of $200,000,
represents a large percentage of the Sponsors budgeted funding, it is recommended that this item be
placed toward the end of Stage I. Terminal funding alternatives will be discussed in the Management
Analysis at the end of this chapter.
7.2 Economic Feasibility and Financing
This section is primarily concerned with the examination and evaluation of the economic
feasibility of the proposed stages of airport development for GMA. A management analysis which will
offer various possibilities for financing certain proposed improvements will be included later in this
section.
An analysis of economic feasibility of development at an airport, regardless of its size, concerns
itself with that airport's ability to produce the necessary capital investment for the proposed
improvements required to satisfy the forecasted aviation demand, as well as the airport's ability to meet
operating and maintenance costs. The economic feasibility analysis, therefore, focuses on the GMAs
operating revenue, expenses, and capital investment requirements.
To facilitate this analysis, a separate forecast of airport operating and maintenance costs and
operating revenues was accomplished. Not included in this analysis, however, are of revenue or expense
associated with capital improvement expenditures. These costs have historically come from the City
"general fund" as a loan to the GMA under the supposition that the funds would eventually be paid back
to the City. Additionally, no consideration was given to any revenue or expenses from non - related
industrial development on the airport, as none was specifically identified during the Master Plan study
period.
Some airport costs and revenues have been derived from projected airport developments which
have been determined to be needed and feasible to construct, for example, new T- hangars. There is, also,
17326/960507 7 -8
expected revenue from additional land associated with the development of a corporate hangar area on the
southeast and southwest areas of the airport over the 20 year study period. A scenario of the development
program for these hangars will be discussed in the Management Analysis to follow.
Possible impacts on the future growth of GMA resulting from changes in the aviation
environment in the Austin area, only 30 miles south of Georgetown, are discussed in the Management
Analysis section. Specifically, the existing City of Austin air carrier airport is being relocated to the old
Bergstrom Air Force Base site. Also, a near -by general aviation facility, Austin Executive Airpark,
located approximately 6 miles north of Austin, may be in jeopardy for continued use as an airport because
of a change in ownership of the land.
It is, however, safe to say at this point that the basis for projecting future changes in the GMA
financial position will relate to increases in based aircraft. Therefore, a correlation between the income
generated by the airport relative to the existing number of based aircraft will be applied to a number of
aircraft projected to be based at GMA over the study period.
7.2.1 Revenues and Expenditures
In projecting the financial conditions at GMA for the study period, it was necessary to begin with
known levels of expenditures and revenues. These were obtained from the Airport Manager's office in
the form of summary financial reports for previous operating periods. An example form is provided as
Exhibit 7 -2.
An examination of previous and current airport financial reports reveal that the airport is self -
sustaining in terms of the day to day operations of the airport, please refer to Table 7 -5. In regard to
capital development funding requirements, it has been the policy of the City to provide monetary
transfers from the City Budget to cover the Sponsor's share of non - revenue generating facilities such as
runways and taxiways capital improvement projects. Though, the Airport Fund has an obligation to repay
the funds, no specific terms for repayment are in place.
While a public service facility such as the GMA is not operated for profit, the maximum amount
of revenue generated on a fair and reasonable basis should be realized to offset the costs of operation,
maintenance and to generate funds for capital improvement projects. The following paragraphs examine
first, the elements of GMA's expenditures and the assumptions made in projecting them. Then a similar
discussion will follow regarding revenue development for the airport.
7.2.1.1 Expenditures
Expenditures have been divided into two major elements for this study: Personnel Services and
Operating expenses. An explanation of each is discussed below. The resulting projections of these
expenses are found in Table 7 -6.
7.2.1.2 Personnel Services
Based on the Georgetown Airport Financial Statement, an example of which is provided as
Exhibit 7 -2 line items 204 -5010 - 204 -5019 are included as Personnel Services. This element includes all
salaries, taxes, insurance, and non regular salaries. Currently there is one full time employee, the airport
manager, and seven part-time employees including six fuel attendants and one bookkeeper. Also, a slot
has been approved for a full -time grounds maintenance employee at cost of $18,000 per year.
17326/960507 7-9
10-02- 1997 09:21 AM
PAGE: 2
FINANCIAL STATEMENT
AS OF: SEPTEMBER 30TH, 1997
600 - AIRPORT OPERATIONS
REVENUES
ACCOUNT NO#t ACCOUNT NAME
000 -NON- DEPARTMENTAL
000- 4004 -00 TRANSFER IN, WTTB
000 - 4100 -00 AD VALOREM TAX
000- 4110 -00 SALES TAX
000- 4351 -00 MISC REVENUE
000- 4354 -00 CONTRACT LEASES
000- 4355 -00 FUEL SALES
000- 4356 -00 FUEL FLOWAGE FEE
000-4357 -00 HANGAR TIE DOWN REVENUE
000- 4358 -00 TERMINAL SALES, TAXABLE
000- 4359 -00 TERMINAL SALES, NON - TAXABL
000- 4600 -00 INTEREST
000- 4999 -00 DISCOUNTS TAKEN
*** REVENUE CATEGORY TOTALS ***
040- ADMINISTRATIVE /DEBT SVC
040- 4007 -00 BUDGET TFR SALARY ADJ
*** REVENUE CATEGORY TOTALS ***
*** TOTAL REVENUES ***
ANNUAL
CURRENT
Y -T -D
% OF
Y -T -D
BUDGET
BUDGET
PERIOD
ACTUAL
BUDGET
ENCUMB.
BALANCE
63,485.00
0.00
50,000.00
78.76
0.00
13,485.00
6,000.00
0.00
.0.00
0.00
0.00
6,000.00
6,000.00
0.00
5,209.38
86.82
0.00
790.62
0.00
0.0(
122.73)
0.00
0.00
122.73
40,150.00
3,020.86
41,737.62
103.95
0.00 (
1,587.62)
300,000.00
35,989.47
385,637.98
128.55
0.00 (
85,637.98)
1,000.00
0.00
1,249.40
124.94
0.00 (
249.40)
112,000.00
9,333.69
106,544.28
95.13
0.00
5,455.72
3,000.00
681.66
2,982.06
99.40
0.00
17.94
300.00
0.00
265.48
88.49
0.00
34.52
1,500.00
0.00
2,077.67
138.51
0.00 (
577.67)
0.00
0.11
2.13
0.00
0.00 (
2.13)
533,435.00
49,025.79
595,583.27
111.65
0.00 (
62,148.27)
2,734.00
0.00
2,734.00
100.00
0.00
0.00
2,734.00
0.00
2,734.00
100.00
0.00
0.00
536,169.00
49,025.79
598,317.27
111.59
0.00 (
62,148.27)
TABLE 7 -5
SUMMARY of ACTUAL 5 YEAR OPERATING
EXPENSES and REVENUE
GEORGETOWN MUNICIPAL AIRPORT
YEARI
EXPENSES2
REVENUE2
PROFIT (LOSS)
1993
378,523
379,754
1,231
1994
369,694
401,141
31,447
1995
834,672
488,883
(345,789)
1996
43 1,214
525,887
94,673
1997
618,730
591,400
(27,330)
1 FY Year Ends September 30
2 Figures obtained from City Airport Operating Plan Element
2 Figures include Transfers In and Out: specific Capital Improvements Project projects
excluded
TABLE 7 -6
PROJECTED OPERATING EXPENSE2
GEORGETOWN MUNICIPAL AIRPORT
Base Year
FY. 1996/97 2000 2005 2015
Personnel
118,600
147,104
170,535
229,183
Supplies
4,150
4,804
6,131
9,071
Maintenance
251,800
291,490
372,023
605,986
Administrative
25,910
28,313
32,823
44,111
Utilities
10,116
10,735
11,852
14,448
Other
35,470
38,759
44,932
60,385
TOTAL
446,046
521,205
638,296
963,184
1 New Field Maintenance Employee included in first year after base year
2 Does not include Transfer Out associated with Capital Improvement Projects
17326/960507 7 -11
Projections of increases to the manpower requirements at GMA were based primarily on
conversations with the Airport Manager and similar personnel requirements at other airports. No
additional land is planned for acquisition during the Master Plan study period. Accordingly, the
employment of additional maintenance personnel is not anticipated, Additionally, because of the
secretarial and technical assistance from the City, no provisions are made in the study for new
administrative employees.
7.2.1.3 Operations and Supplies
This element was further broken out into five separate sub - headings including: Supplies,
Maintenance, Administrative, Utilities, and other.
The supplies element includes account numbers 204 -5101, 5102, 5103, 5104 and 5107. When
analyzing various expense accounts, primary concern is for a comparison of proposed airport projects
with the requirements for additional supplies and services. An overview of the development plans for
the airport reflect no significant increase in any of the supplies accounts. Therefore, the account
adjustments reflect an inflation increase only.
Airport Maintenance accounts are listed under account numbers 204 -5201, 5202, 5202RS and
5208. The costs associated with these accounts are directly related to the maintenance of airport
facilities. The exception is account 5202RS which shows the costs of fuel purchased for resale. This
account will be discussed in a following paragraph.
Specific development items which might cause a significant increase in a given maintenance
account include land purchases, airfield construction, or the construction of new buildings. A review of
the projects proposed for future development shows that airfield construction projects are planned for all
three stages of development. However, because of the proposed schedule for these development
activities, adjustments to maintenance accounts are not anticipated to be required until after the 2005
budget year. The pavement area at GMA will increase by approximately 35 percent if the various
project's recommended by the Master Plan are implemented. While this increase will undoubtedly have
an impact on the maintenance costs of pavements it represents only a portion of the overall maintenance
budget. Therefore, the projections of future maintenance costs, while reflecting changes due to increases
in pavement area, were not increased in a direct ratio with the additions in pavement area.
Because substantial increases in the number of based aircraft are projected over the study period,
there will obviously be an increase in the amount of fuel purchased for resale, resulting in a relative
increase in income. If an effort to lease the airport operated fueling services and Terminal operationsto
a private company is successful, the income and expenses picture will change. It is anticipated that this
scenario may occur late in Stage I or in Stage II. Therefore, the account related to fuel purchased for
resale was deleted in Stage II and the appropriate income account adjustment were made.
Administrative accounts are 204- 5301, 5302, 5303, 5305, 5306, 5307, 5308, 5309, 5401 and
5402. As stated earlier, no significant changes in the administrative operation of the airport are
anticipated. This is primarily due to the expected continuation of the City's technical and administrative
support. Therefore, the standard inflation figures will be applied to these accounts.
Accounts which do fall into the above headings have been classified as "Other" for the purposes
of the financial analysis. These account numbers are 204 -5109 (interest due), 5410 (Building ISF), 5430
(Administrative Allocation - General Fund) and 5501 (Contingencies). Again, the estimates found herein
17326/960507 7 -12
were based in large part on discussions with the Airport Manager. The result of the discussions is that no
significant change beyond the normal inflation rates have been applied to these accounts.
Utilities comprises account number 204 -5304. While no major increase beyond a normal
supplier periodic adjustment is evident, there will be some increases in utility costs relating to expanded
facilities, particularly related to the planned T- hangar additions. This is not expected to be significant due
to the limited use of power in the units. Also, the cost of these utilities will be passed along to the tenants.
No additional street lighting is anticipated over the course of the planning period.
7.2.2.1 Revenues
As was done with expenditure projections at the GMA, future revenues were also based on the
summary financial reports immediately prior to the study period, please refer to Exhibit 7 -3 for an
example of this report. Additionally, by referring to Table 7 -7 it is possible to identify four primary
sources of operating revenue: 1) Ad Valorem & Sales Tax; 2) Fuel and Terminal Sales; 3) Interest and
Other; and 4) Leases and Rents.
TABLE 7 -7
PROJECTED REVENUES
GEORGETOWN MUNICIPAL AIRPORT
Base Year
FY. 1996/97 2000 2005
2015
Ad Valorem and Sales Tax 13,500 14,752 17,102
22,984
Fuel and Terminal Sales 374,800 433,878 449,036
603,467
Interest and Other 2,200 2,400 2,600
3,000
Leases and Rents 148,1661 204,450 274,600
540,180
538,666 655,480 743,338
1,116,631
2
124 New T- hangars added during the first 3 years of the planning period
2 Corporate Development will add significant revenue between 2005 -2010
3 Does not include Transfers In associated with Capital Improvement Projects
7.2.2.2 Ad Valorem and Sales Tax
A dedicated source of income for the airport comes from the public taxes generated by facilities
and aviation activity on the premises. In specific, all property taxes and the sales tax generated from sales
of aviation products on the airport, which flow into the City Treasury, are funneled back to the airport
operations account. Any increase in these dollars will be tied directly to the growth in aviation activity
on the field. Such growth is projected and the resulting increase in revenues is shown Table 7 -7.
17326/960507 7 -13
10-02- 1997 09:21 AM
600 - AIRPORT OPERATIONS
204- AIRPORT ADMINISTRATION
ACCOUNT NON ACCOUNT NAME
PERSONNEL SI
204 - 5010 -00
204 - 5013 -00
204- 5014 -00
204- 5015 -00
204 - 5016 -00
204- 5017 -00
204- 5018 -00
204- 5019 -00
:RVICES
SALARIES
TAXES, SOCIAL SECURITY
GROUP INSURANCE
RETIREMENT
LONGEVITY
WORKERS' COMP
STATE UNEMPLOYMENT TAX
NON REGULAR SALARIES
FINANCIAL STATEMENT
AS OF: SEPTEMBER 30TH, 1997
ANNUAL CURRENT
BUDGET PERIOD
Y -T -D Y. OF
ACTUAL BUDGET
PAGE: 5
Y -T -D BUDGET
ENCUMB. BALANCE
45,691.00
1,641.52
39,154.74
85.69
0.00
6,536.26
8,312.00
632.34
7,037.56
84.67
0.00
1,274.44
5,972.00
241.08
3,038.54
50.88
0.00
2,933.46
3,278.00
230.92
2,482.72
75.74
0.00
795.28
1,932.00
252.00
2,136.00
110.56
0.00 (
204.00)
1,641.00
166.40
1,149.08
70.02
0.00
491.92
1,206.00
0.00
729.34
60.48
0.00
476.66
55,047.00
2,172.04
55,999.16
101.73
0.00 (
952.16)
** CATEGORY
TOTAL **
123,079.00
5,336.30
111,727.14
90.78
0.00
11,351.86
OPERATING
204- 5101 -00
OFFICE SUPPLIES
1,600.00
100.15
1,127.53
75.28
77.00
395.47
204- 5102 -00
EDUCATIONAL SUPPLIES
100.00
0.00
0.00
0.00
0.00
100.00
204 - 5103 -00
FOOD
1,300.00
0.00
1,099.59
104.00
252.35 (
51.94)
204 - 5104 -00
JANITORIAL SUPPLIES
250.00
0.00
227.33
90.93
0.00
22,67
204- 5107 -00
SMALL TOOLS
900.00
59.95
476.08
66.48
122.27
301.65
204 - 5109 -00
OTHER, INTEREST DUE
4,550.00
0.00
0.00
0.00
0.00
4,550.00
204- 5201 -00
MAINTENANCE - EQUIPMENT
11,000.00
0.00
3,141.80
28.56
0.00
7,858.20
204- 5202 -00
GAS, OIL & TIRES
1,500.00
31,940.24
32,502.54
376.21
18,140.59 (
49,143.13)
204- 5202 -RS
FUEL
235,000.00
63.00
233,075.26
99.41
535.26
1,389.48
204- 5208 -00
MAINTENANCE - AIRPORT
5,871.00
143.40
15,816.86
283.03
800.00 (
10,745.86)
204- 5301 -00
INSURANCE
6,690.00
0.00
5,595.00
83.63
0.00
1,095.00
204- 5302 -00
CONTRACTS & LEASES
2,000.00
0.00
1,800.00
90.00
0.00
200,00
204- 5303 -00
SPECIAL SERVICE & LEGAL
3,500.00
0.00
0.00
0.00
0.00
3,500.00
204 - 5304 -00
UTILITIES
16,000.00
843.40
10,116.11
63.23
0.00
5,883.89
204- 5305 -00
TELEPHONE
1,200.00
66.16
815.72
75.26
87.41
296.87
204 - 5306 -00
TRAVEL & TRAINING
800.00
0.00
328.94
41.12
0.00
471.06
204- 5307 -00
SUBSCRIPTIONS & DUES
100.00
0.00
77.50
77.50
0.00
22.50
204 - 5308 -00
REFUNDS, JUDGMENTS, DAMAGE
500.00 (
23.4(
51.58)
10.32-
0.00
551.58
204 - 5309 -00
ADS, NOTICES, RECORDING FE
0.00
0.00
188.40
0.00
0.00 (
188.40)
204- 5401 -00
VEHILE LEASE
8,320.00
0.00
8,320.00
100.00
0.00
0.00
204- 5402 -00
VEHICLE MAINTENANCE
4,938.00
0.00
4,938.00
100.00
0.00
0.00
204- 5410 -00
BUILDING ISF
2,470.00
0.00
2,470.00
100.00
0.00
0.00
204 - 5430 -00
ADMIN ALLOC - GENERAL FUND
40,867.00
0.00
28,528.00
69.81
0.00
12,339.00
204- 5501 -00
CONTINGENCY
1,000.00
0.00
11.00
1.10
0.00
989.00
** CATEGORY
TOTAL **
350,456.00
33,192.83
350,604.08
105.75
20,014.88 (
20,162.96)
CAPITAL
204- 5602 -00
BUILDINGS & IMPROVEMENTS
50,000.00
0.00
13,072.56
238.40
106,128.00 (
69,200.56)
** CATEGORY
TOTAL **
50,000.00
0.00
13,072.56
238.40
106,128.00 (
69,200.56)
*** DEPARTMENT TOTAL ***
523,535.00
38,529.13
475,403.78
114.90
126,142.88 (
78,011.66)
7.2.2.3 Fuel and Terminal Sales
During Stage I of the study period, the sale of aviation fuel is evaluated as part of the airport
operations revenue. However, it is anticipated that an arrangement will be consummated with a private
firm to provide professional aviation services at the GMA. Therefore, the sale of fuel and aviation
supplies from the terminal will show an increase relative to the number of additional aircraft projected to
be based at GMA during the first five years of the study.
After this period, an adjustment will be made to reflect a continuing increase in the sale of fuel,
but with the airport receiving a percentage of the fuel sales by a Fixed Base Operator (FBO) through a
fuel flowage fee. This fee has been estimated at $0.10 per gallon, as an amount which reflects a fair fee
with ownership of the fueling system in the hands of the airport (City).
7.2.2.4 Interest and Other
This is an adjusting account which has little impact on the overall financial picture at GMA.
Accordingly, only changes relating to inflation are reflected in the projections for this account.
7.2.2.5 Leases and Rents
Airport improvement plans call for the immediate construction of three 8 -bay T- hangar units.
These structures will be owned and maintained by the City as an investment. It is anticipated that these
units will fill quickly. The initial revenue will be used to retire the construction debt over a period of
seven years.
In Stage H, three additional 8 -bay T- Hangar units will be constructed, and new land and facilities
rental income is planned to be derived from the lease of the FBO area. Also, new revenue is planned
from the first Phase of the development of the corporate hangar area on the Southeast side of the airport
will be developed.
No revenues from additional land uses such as agriculture operations or industrial development
are expected during the planning period.
7.2.2.6 Transfers In
This account reflects the income from the City designated as the local share of Federal and State
projects. These amounts are projected in Table 7 -4 in relation to the local share of development costs for
the specific airport improvement projects planned for the appropriate stage but are not included in the
projections of operating revenues.
7.2.3 Summary
The general picture which emerges from a fiscal analysis of GMA operations is that of a well
managed relatively prosperous enterprise. Any apparent deficiencies in net revenues results from City
policies regarding the funding of capital improvements. Airport operations generates more adequate
funds to cover the associated costs. These positive net revenues are then available to partially off -set
capital improvement and major maintenance projects.
17326/960507 7 -15
It must be noted that while airfield facilities are the airport's reason for being, in the absence of
landing fees (uncommon at general aviation airports) or similar charges, these facilities generate no direct
revenues. In fact they are the source of substantial expense as result of the need for periodic minor and
major maintenance.
Unlike airfield facilities, hangars and similar support facilities can be the source of a significant
stream of positive net revenue. Accordingly, it is recommended that the City administration carefully
consider investing in hangar construction or infrastructure construction to support the private
development of hangar facilities. Carefully planned and prudently structured, such arrangements can be
the source of substantial positive revenue. Some possibilities for such arrangements are discussed in the
following Management Analysis.
7.3 Management Analysis
The plan for the airport improvements at the GMA, as developed by this Master Plan, is based on
the premise that most aspects of aviation activity will experience a healthy growth over the planning
period. The primary contributing factors include the closing of the Robert Mueller Municipal Airport
(RMMA) in Austin, and the possible purchase of the Austin Executive Airport (Executive) property by
individuals who are expected to use the property for purposes other than aviation. This change in the
aviation environment in the Austin area will have significant and potentially beneficial impacton growth
at GMA.
The number of displaced aircraft from the closing of the two previously mentioned airports total
approximately 350. It is estimated for the purpose of developing a planning base, that the number of
aircraft expected to relocate to GMA, would bring the total aircraft based at GMA to nearly 170 at the
end of the Mid -Term period. Therefore, projected revenues from airport operations at GMA will reflect a
per aircraft comparison between the number of aircraft based at GMA during the pre - planning period and
the number of aircraft projected to be based at GMA.
The current economic situation of the airport operations shows what can be expected in the
future. Simply stated, the airport is now operating in the black. Projections of the future operating
budget reflect a substantial increase in revenue with relatively modest increases in expenses associated
primarily with inflation and increases in maintenance costs resulting from the construction of new
facilities. The City administration should, therefore, be comfortably justified in supporting the projected
local share of $973,000 over the 20 year Master Planning period.
Since GMA is a general aviation facility, revenue sources are very limited as compared to a
commercial service airport or an airport which serves as part of an industrial development park. In
looking for additional potential revenue sources, very few areas appear to present prospects that would
prove to be advantageous to the airport. For example, though agriculture income at many airports
produces significant income, the soil at GMA does not have the soil makeup or balance that would be
conducive to row crop or hay leases.
There are no plans to promote any form of non - aviation related industrial development on the
airport at this time, therefore, no examination of this potential revenue has been done. However, some
land would be available to lease for this purpose in the future if the desire or need arises.
The most promising source of additional income appears to be construction of additional aircraft
storage facilities on the airport, and the leasing of FBO facilities will provide the additional income need
17326/960507 7 -16
to continue the aggressive airport development program. Over the 20 year planning period, the City will
construct at least six 8 -bay T -hangar units. These will be operated by the City, and, after the payoff
period is passed, the income will be invaluable as a source of operating and capital improvement revenue.
Another planned area of revenue development will be the construction of two corporate hangar
aprons, and the leasing of hangar construction sites to private developers. Since the land is already
owned by the airport, the only cost to the airport would be the local share of the apron construction and
such infrastructure improvements as the City deems it appropriate to make. Negotiations with a
prospective developer may result in his participation in the infrastructure costs.
Finally, the airport is considering the lease of approximately three acres of land to a company
which will take over the airports fuel and supplies services. The airport may see a slight drop in revenue
following the release the aircraft fueling rights to this FBO, however, revenues should increase as the
FBO's business increases and the airport realizes a share of this increase through a percentage of FBO
revenues as part of the base rent contract. The airport should develop minimum standards for the
operation of the FBO prior to advertising for proposals. As in the case of the corporate hangars, the
negotiations with a prospective FBO tenant may include participation in the local share of FBO
development costs and the general aviation terminal building.
The overhead of operating the airport has been kept at a minimum by the Airport Manager. With
the continuing support of the City, a progressive increase in revenues over expenses can be expected.
Therefore, the continued participation in the State Block Grant Program through the Texas Department of
Transportation, Aviation Division will prove to be a successful endeavor without putting undue strain on
the airport finances.
17326/960507 7 -17