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Home My WebLink About10/22/2024 04.D. Airport Budget Presentation i4 �e+ i,i i \C.;:Liiiiw..:+>1 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 4.D. For Meeting of: October 22, 2024 ITEM TITLE: Airport Budget Presentation SUBMITTED BY: Robert Hodgman, Yakima Air Terminal Director SUMMARY EXPLANATION: ITEM BUDGETED: STRATEGIC PRIORITY 24-25: RECOMMENDATION: ATTACHMENTS: Yakima Air Terminal Budget Presentation.pdf 110 46 Yakima Air Terminal • 25 Priority- Based Budget Rob Hodgman Airport Director FLY >r Yakima Air Terminal Economic Impact YJif • 2012 WSDOT Aviation Economic Impact Study concluded 97% of all Gross Business Income occurs within ten miles, and 70% within five miles. • 2020 WSDOT Aviation Economic Impact Study determined the airport provides 2,366 jobs and $591M in economic impact. • The airport provides important services to the community: Air Cargo, Aerial Wildland Firefighting, Aeromedical Transport, Aerospace Manufacturing, Business Travel, Commercial Passenger Service, Pilot Training, and Search and Rescue. Airport Economic Impacts Impact Types Jobs :0. Labor Income Value Added 0 Business Revenues 4110 On-Airport Activity 848 $71,838,000 $140,495,000 $344,048,000 Visitor Spending 192 $5,473,000 $10,432,000 $16,852,000 Total Direct Effects 1,040 $77,311,000 $150,928,000 $360,900,000 Supplier Sales 606 $44,990,000 $68,069,000 $116,227,000 Re-Spending of Worker Income 720 $38,870,000 $70,202,000 $113,906,000 Total Economic Impact 2,366 $161,172,000 $289,198,000 $591,034,000 2 112 'fa Yakima Air Terminaima Air Terminal Funding • The airport is an Enterprise Fund1111M14-Fill • Receives no funding from the city • Pays for services from other city departments mo nJATI • Responsible for generating revenue to cover expenses • The airport is eligible for federal funding • Primary funding is from the Federal Aviation Administration • Receives $1.2M capital funds annually through the Airport Improvement Program • Funds are primarily for runway, taxiway, apron, lighting, and communications maintenance • The airport is eligible for state funding — primarily WSDOT Aviation • WSDOT grants are infrequent and fairly small 3 113 Airport Lines of Business • Airfield — Essential for an airport, without it there is no v airport. The airfield support all flight operations. 825 acres of land and 5.5 million square feet of pavement. , ; = =E• Air Terminal — Essential for passenger service. 36,000 .. ill square feet; the most expensive infrastructure to maintain. TI momm n i Nina; 11 • Airport Administration — Essential for running the airport. All leases are managed in addition security, concessions, budget and billing, and parkingiii 1 _ 4 114 Airport Revenue Sources and Cost Centers Revenue Sources Cost Centers i Lease revenue • Wages and benefits • Parking • Airfield • Rental car % sales • Air Terminal • Advertising % sales • Airport Security ,`� ~`1001"11- 1r--;--- - i • Landing fees • Airport Parking .,' f O.AL • • • Fuel flowage • Airport Administration _ ; _ •- - iw . ...4,-' 'i:%'2R•4'1 J1 ua'Si�R� �aa.riY: • Miscellaneous • Security badges • Grants 115 2024 Revenue and Expenses 2025 Revenue 2024 Year End Expenses Landing Fees Airport Estimate 7% Fuel Flowage Administration 5 0 Advertising%of sales \ 11% 1% —� Airport Parking \®' 2% s Wages&Benefits Rental Car%of sale Lease Airport Security 48% 5% 37% 0% 111\, Parking Air Terminal 28% 28% Grants ■ 0% -------. 101)Miscellaneous Security Badges .1 16% 2024 End of Year Forecast Airfield 1% 2024 Revenue $2,589,681 11% 2024 Expenses $2,272,952 $316,729 Lease $520,546 Miscellaneous $689,955 Wages&Benefits $1,079,900 Security Badges $7,000 Airfield $252,877 Grants $641,680 I Air Terminal $642,630 Parking $377,000 Airport Security $2,000 Rental Car%of sales $180,000 Airport Parking $44,599 Advertising%of sales -$25,000 Airport Administration $250,945 Landing Fees $132,500 TOTAL $2,272,952 Fuel Flowage $66,000 TOTAL $2,589,681 116 2025 Revenue and Expenses 2025 Revenue Landing Fees 2025 Expenses 7% Fuel Flowage Airport 5% _ Airport Parking Administration Advertising%of 1% 15% sales... Rental Car%of Airport Security sales Lease 0% 5% 110 37% Air Terminal 10% Wages& Benefits Parking 51% 28% Grants Airfield 0% Miscellaneous 2025 Forecast 23% Security Badges 16%1% 2025 Revenue $1,503,935 2025 Expenses $2,310,327 Lease $555,545 Wages&Benefits $1,171,769 Miscellaneous $247,900 Airfield $539,999 Security Badges $14,000 Air Terminal $228,562 Grants $6,013 Airport Security $4,000 Parking $417,000 Airport Parking $25,500 Rental Car%of sales $70,000 Airport Administration $340,497 Advertising%of sales $10,927 Landing Fees $113,250 TOTAL $2,310,327 Fuel Flowage $69,300 117 2026 Revenue and Expenses 2026 Revenue 2026 Expenses Landing Fees Fuel Flowage Airport Airport Parking Advertising%off° 5% Administration 1% 12% sales... Lease Rental Car%of 37% Airport Security sales 0% 4% Air Terminal 11% Wages& III Benefits 58% Parking 4 lih, Airfield WY. 29% 1 18% Miscellaneous Grants 16% Security Badges 2026 Forecast 0% 1% 2026 Revenue $1,599,319 2026 Expenses $2,095,858 -$496,539 2026 2026 Lease $582,892 Wages&Benefits $1,218,643.5 Miscellaneous $257,900 Airfield $365,730.8 SPrurity Radapc 515.ono Air Terminal $224,390.4 I Grants SO Parking $467,000 Airport Security $4,000.0 Rental Car%of sales $70,000 Airport Parking $25,500.0 Advertising%of sales $15,000 Airport Administration $257,592.9 Landing Fees $118,762 TOTAL $2,095,858 Fuel Flowage $72,765 TOTAL $1,599,319 118 2024/2025 Comparison Revenue decreases 2024Year End REVENUE Estimate 2025 • Minimum revenue guarantee Lease $520,546 $555,545 contributions in 2024 = $440K; Offset by Miscellaneous $689,955 $247,900 -$442K 2024 minimum revenue guarantee Security Badges $7,000 $14,000 expense $500K. Grants $641,680 $6,013 -$635K Parking $377,000 $417,000 • ARPA grant for salaries and benefits to Rental Car%of sales $180,000 $70,000 be exhausted Feb 2025; $635K Advertising%of sales $25,000 $10,927 Landing Fees $132,500 $113,250 Expense Increases Fuel Flowage $66,000 $69,300 TOTAL $2,589,681$1,503,935 • Airfield: Replace ARFF PFAS foam (State DOE unfunded mandate) $200K 2024Year End • Airport Administration: Air Service EXPENSES Estimate 2025 incentives consultant fee for obtaining Wages& Benefits $1,079,900 $1,171,769 Airfield $252,877 I $539,999 new air service; $90K Air Terminal $642,630 $228,562 Airport Security $2,000 $4,000 Airport Parking $44,599 $25,500 Airport Administration $250,945 $340,497 TOTAL $2,272,952 $2,310,327 9 119`','` Yakima Air Termina Balance Strate Revenue Source Strategy Method I Las Vegas flight Obtain new service 2 x Landing fees, fuel flowage fees, parking $120,588 week fees Car rental increase Increased rental activity Additional 10% revenue (10% of sales) from $8,148 Planned from new flight rental increases Revenue Land and facility leases Additional lease revenue Recoup lost lease revenue $139,278 Increases Land and facility leases Additional lease revenue Update lease rate $27,249 Land and facility leases Additional lease revenue 1 Sign new leases $101,362 + $400K Expense Strategy Method PFAS foam replacement Defer implementation Lobby for state and federal funding $200,000 + $200K Unfunded Deficit = $200K Completion of the roof replacement on the upper level of the terminal presents revenue potential from the kitchen and café space. 120�'� �f Yakima Air Termina Budget Year: 2025 Department: Airport Manager: Robert Hodgman Priority Level Program Name Justification of Priority Level A Safe & A Resilient A Thriving An Engaged Healthy Yakima Yakima Yakima Yakima Three-phase electrical service to 3 Airfield Terminal west area - failing $200K PFAS foam removal, cleaning, and 3 Airfield new foam purchase (Unfunded $200K IVIcif 1 Airport Parking Operating fees to collect and process $40K parking revenue 2 Airport Terminal Contractors for electrical, plumbing, $40K gas, hood to complete kitchen reno. Repair contractors for unanticipated 3 Airport Terminal repairs in the 1950s terminal bldg. $25K 11 121 Yakima Air Termina Budget Year: 2025 Department: Airport Manager: Robert Hodgman Non-monetized services provided by the department that appear critical but are not Program Name budgeted Air Service Growth Airport 2nd flight is currently being supported by minimum revenue guarantee inclusive of the General Fund and Private Public Partnerships. The full $500K was exhausted in the year 2024. General Aviation Use Transient aircraft do not pay landing fees. Increased fuel flowage fee intended to contribute to airfield maintenance. Several leases below market Working to clean-up legacy leases that put the airport at a financial disadvantage. Some value leases are not able to be revised due to the lease language. 12 122 ' Rob Hodgman Robert . Hocigman@yakimawa . gov 509 -575 - 6260