THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THIS MOTION.
This action will provide for approval of a resolution to amend Chapter 39 of the Broward County Administrative Code to update its rates, fees and charges in accordance with the Airline-Airport Lease and Use Agreement, and to make other necessary modifications to the rates, fees and charges schedule.
The proposed resolution by the Broward County Aviation Department ("BCAD") will amend Chapter 39, of the Broward County Administrative Code; section 39.2, "Rates, Fees and Charges--Fort Lauderdale-Hollywood International Airport," and Exhibit 39.A, "Broward County Aviation Department".
In accordance with the Airline-Airport Lease and Use Agreement ("Agreement"), terminal fees and landing fees are to be reviewed and adjusted accordingly at the beginning of each fiscal year. The contractual rate making formula, based on a residual cost approach, utilizes BCAD’s estimated budgetary revenues and expenses in calculating rents and fees. The residual cost approach defines the rate-setting methodology and places the ultimate risk of budget deficits on the Signatory Airlines. Under the approach, BCAD projects its non-airline operating revenue annually and deducts this amount from its projected operating expenditures including debt service. The residual amount remaining is the amount the Signatory Airlines pay through their annual terminal rentals and landing fees.
BCAD presented the Fiscal Year 2019 budget to the Board during a workshop held on June 15, 2018. BCAD also presented and reviewed the proposed Fiscal Year 2019 operating budget and changes to rates and charges with the Airline-Airport Affairs Committee ("Committee") on May 9, 2018. While its approval of the operating budget is not required under the Agreement, the Committee concurred with the proposed charges, which are included in Exhibit 1.
The overall Cost per Enplaned Passenger ("CPE") based on the amended rates is projected to be $7.43 in Fiscal Year 2019; forecast of $7.80 for Fiscal Year 2018 compared to $4.86 in Fiscal Year 2017. The increase in Fiscal Years 2018 and 2019 compared to Fiscal Year 2017 is mainly due to increased debt service payments and operating and maintenance costs with the completion of several terminal capital projects. Comparisons of rates and charges and CPE to other South Florida Airports are shown in Exhibit 2.
The proposed changes will be effective October 1, 2018. |