THE AVIATION DEPARTMENT RECOMMENDS APPROVAL OF THIS MOTION.
This action 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 Broward County Aviation Department's ("BCAD") estimated budgetary revenues and expenses in calculating rents and fees. The residual cost approach defines the rate-setting methodology. 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 2018 budget to the Board during a workshop on August 29, 2017. Additionally, BCAD presented and reviewed the proposed Fiscal Year 2018 operating budget and changes to rates and charges with the Airline-Airport Affairs Committee ("Committee") on June 27, 2017. While its approval of the operating budget is not required under the Agreement, the Committee concurred with the proposed changes, which are included in Exhibit 1.
The overall Cost per Enplaned Passenger ("CPE") based on the amended rates is projected to be $7.52 in Fiscal Year 2018 compared to $3.94 in Fiscal Year 2016 and a forecast of $4.89 in Fiscal Year 2017. Last year, as part of its Budget Workshop, BCAD advised the Board that the projected CPE would be $7.76 in Fiscal Year 2018, $4 in Fiscal Year 2016 and $5.06 in Fiscal Year 2017. The increase in Fiscal Year 2018 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, 2017. |