1. Airport Enterprises
Making them Fit

2. Airports In addition to being overseen by the local government
The FAA is the real boss

3. Airports In addition to being overseen by the local government
The FAA is the real boss

4. How does an airport make $
For Mercer
About 50% of operating revenue comes from Parking
About 34% from rentals of buildings land etc
The remainder comes from fuel, service and landing fees

5. What does it spend on
Security about 50% of the costs of the airport is security
Fire fighting and emergency response
Administrative Staff
Indirect Cost Allocation Plan – reimburses the county for all the support services of the airport
The FAA provides the screeners
The response vehicle we have is super cool

6. Does the Federal Government help?
They provide the air traffic controllers
TSA screeners
Substantial grants – 10% match by the county

7. What do grants pay for ? Capital items Paving runways and taxiway
The State of New Jersey also provides capital grants
EMAS
Explain what EMAS is

8. How is working with the FAA?
The FAA is generally good to work with
Their staff is knowledgeable
They can be flexible or forgiving
They help
We get $ fast – all via draws generally done in a day
Note they got back very quick on their purchasing rules
They researched cost allocation plans and asked detailed but relevant questions
And considered our input

9. Passenger Facility charges
Commonly called PFC’s
Charge passengers $4.50
Airlines collect. Charge airport 11 cents per.
Airport receives $4.39
Charge on the first two original departing legs
Generally for Capital – can be used indirectly as match for capital projects
Expound on the match issue
PFCs can not be used for operating expenses – generally for large capital projects

10. How do other Airports generate unrestricted revenues?
Most states have a much larger array of permitted taxes
Local income taxes
Local sales taxes
Hotel taxes (towns can counties can’t)
Rental Car taxes
None of these count for the FAA as operating revenues thus are unrestricted
But as you are aware many of these are not available to Mercer County

11. How procurement laws differ
FAA allows up to 100K as opposed to 40K for local units with a limited procurement procedures (Think get Quotes)
Professionals are selected for 5 years
FAA prohibits the “asphalt” escalator

12. Threats/problems
More than once due to budget fights at federal level the air traffic controller staff were potentially going to be eliminated
FAA wants GAAP reports they have been flexible but…
FAA was not thrilled with the Cost Allocation Plan
All airport land is encumbered and we need to pay “rent” to ourselves –
Library
Golf Course
Public Works Garage
Soccer Fields
Any non airport use must pay land rent

13. Trenton Mercer Airport Improvements
Problem
Frontier Airlines comes to us to start service
But our EMAS system construction will run into their busy season
Our terminal is not up to par
Parking lots are not adequate and in poor condition
No parking system ie no revenues
Expand on how airlines come in

14. EMAS Before

15. EMAS After

16. Parking Before

17. Parking During

18. Parking After

19. Terminal Before

20. Terminal After

21. Hold Room Before

22. Hold Room During

23. Hold Room After

24. Barriers to Improvements
Convince elected officials that spending $4 million to improve airport that has never had a service level this high is a good idea
Trusting that Frontier was serious
Procurement time frames are an issue
Its May and Frontier wants to start operations in November
Will they really come back
Had to “re-federalize” the airport
Airlines can just pull out

25. Solutions
Accelerated the EMAS construction by having the contractor work nights and weekends – about $1 million 8% change order – ultimately received FAA funding to pay 90%
Designed additional parking lot awarded bid
Redesigned terminal to install counters, baggage shoot removed old baggage carousel and converted that room to additional seating build new bathrooms
Build exterior baggage building inside an existing footprint to avoid time delays for permitting
Purchased parking system
All contracts awarded via bid – no emergencies

26. Source of Funds Freeholders approved capital budget allocation
Prior approved PFC allocations
On the back end, some funds from FAA

27. RESULTS
Through the efforts of Director Watson and County staff we got it done in 60 days
Construction started in late August and was done before the facility re opened Nov 3
Last thing installed was the parking system – the equipment was 3 weeks late

28. How did this get done? Everyone pulling in the same direction
Purchasing
Finance
Staff
Elected Officials
Contractors

29. Bottom line Each enterprise that you participate in will have nuances
Embrace them
Work with the department that run them and try to meet their needs
Finance needs to be flexible as well – see things from the users perspective find a way to say yes
We at the end of the day are on the same team
Questions?