Metropolitan Airports Commission

Finance and Administration Committee

Agenda

Regular Monthly Meeting on Monday, July 07, 2014 at 9:30:00 AM

www.metroairports.org

METROPOLITAN AIRPORTS COMMISSION

FINANCE AND ADMINISTRATION COMMITTEE MEETING

Monday, July 7, 2014 - 9:30 a.m.

CANCELED

MEMORANDUM ITEM 1a

TO: Finance and Administration Committee

FROM: Karen Schaefer, Senior Financial Analyst (612-794-9143)

SUBJECT: REPORTS

Budget Variance Report – May 2014

DATE: June 23, 2014

The May Budget Variance Report is presented for your review with the first pages providing a summary of the year-to-date activity. Details for the variances are available in the report.

Operating Revenues are over budget $2.4 million or 1.9%.

Greater than Budget

T2- Other/Passenger – Greater FIS activity

Food & Beverage – Greater activity

Parking – Greater activity

Lower than Budget

Terminal 1-Lindbergh – Other Rentals – Delay in T1 checked baggage inspection fee

Passenger Services – Indoor advertising

Other Concessions – Outdoor advertising-billboards

-

500

1,000

1,500

2,000

2,500

3,000

Pas

se

ng

ers

=000

Enplaned Passengers by Month 2012

2013

2014

Operating Expenses are over budget $1.9 million or 3.3%. Greater than Budget

Personnel – Overtime and Doubletime related to winter weather events

Utilities – Natural Gas – Heating – Jet Fuel

Maintenance – Snow removal expenses

Non-Operating Revenues and Expenses are greater than budget $692,000 (revenues) or 47.7% Greater than Budget

Higher interest rate

Easement – Flying Cloud Airport, City of Eden Prairie

Net Revenues Available for Designation total $70.5 million.

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$=

00

0

Net Revenues Available for DesignationYear-to-Date

2013

2014

Metropolitan Airports Commission

May 2014 Budget Variance Analysis

Operating Revenue

($=000) 2013

Year to Date Dollar % Total 2014

Actual Actual Budget Variance Variance Budget

OPERATING REVENUES

Airline Rates & Charges

Airline Agreement

Landing Fees 21,892$ 22,655$ 22,525$ 130$ 0.6% 56,222$

Ramp Fees 2,571 2,845 2,778 66 2.4% 6,671

Airline R & R 1,449 1,495 1,493 1 0.1% 3,586

Terminal 1-Lindbergh - Rentals 14,795 15,418 15,163 255 1.7% 36,983

Terminal 1-Lindbergh - Other Rentals 1,586 1,846 2,015 (170) -8.4% 5,129

Concessions Rebate - - - - (9,840)

Total Airline Agreement 42,293 44,258 43,975 283 0.6% 98,750

Terminal 2-Humphrey Lobby Fees 6,079 7,390 7,092 298 4.2% 9,010

Terminal 2-Humphrey Other/Passenger Fees 894 1,094 964 130 13.5% 1,551

Total Airline Rates & Charges 49,266 52,742 52,030 712 1.4% 109,311

Concessions

Terminal/Other

Food & Beverage 5,301 5,961 5,485 476 8.7% 14,635

News 1,311 1,354 1,365 (12) -0.9% 3,739

Retail 1,930 1,802 1,817 (15) -0.8% 4,728

Passenger Services 1,717 1,592 1,785 (194) -10.8% 4,527

Total Terminal/Other 10,259 10,708 10,453 255 2.4% 27,629

Parking/Ground Transportation

Parking 34,315 36,766 35,129 1,637 4.7% 77,926

Ground Transportation Fees 2,136 2,348 2,280 68 3.0% 5,347

MSP Employee Parking 1,097 1,066 1,092 (26) -2.4% 2,629

Auto Rental-On Airport 6,368 7,202 7,283 (81) -1.1% 17,801

Total Parking/Ground Transportation 43,915 47,383 45,784 1,599 3.5% 103,703

Other Concessions 623 243 630 (388) -61.5% 1,878

Total Concessions 54,798 58,334 56,867 1,466 2.6% 133,210

Rentals/Fees

Buildings & Facilities 2,872 2,690 2,750 (60) -2.2% 7,228

Building Auto - CFC's 2,645 2,792 2,650 142 5.3% 10,100

Ground Rentals 3,752 3,677 3,567 110 3.1% 8,593

Reliever Airports 2,190 2,357 2,458 (101) -4.1% 6,154

Total Rentals/Fees 11,458 11,516 11,424 91 0.8% 32,075

Utilities and Other Revenue

Utilities 1,382 1,481 1,456 25 1.7% 4,405

GA/Airside Fees 1,095 1,000 960 40 4.1% 2,376

Consortium Fees 886 1,019 947 72 7.6% 2,857

Other Revenues 606 589 585 3 0.6% 1,544

Reimbursed Expense 1,234 908 912 (4) -0.5% 2,800

Total Utilities and Other Revenue 5,204 4,997 4,861 135,439 2.8% 13,981

Total Operating Revenue 120,726$ 127,588$ 125,183$ 2,405$ 1.9% 288,577$

Brackets ( ) Represent Revenue Items under Budget and Expense Items over Budget

2014

Year To Date

May 2014 Budget Variance Analysis

Operating Expenses

Non-Operating Revenues & Expenses

($=000) 2013

Year to Date Dollar % Total 2014

Actual Actual Budget Variance Variance Budget

Total Operating Revenue 120,726$ 127,588$ 125,183$ 2,405$ 1.9% 288,577$

OPERATING EXPENSE

Personnel 28,441$ 28,646$ 28,327$ (319)$ -1.1% 71,375$

Administrative 522 836 839 3 0.3% 1,527

Professional Services 1,404 1,329 1,354 24 1.8% 4,849

Utilities 6,669 8,313 7,176 (1,137) -15.8% 18,565

Operating Services 4,674 6,025 6,031 6 0.1% 19,405

Maintenance 12,512 12,463 12,013 (449) -3.7% 29,971

Other 1,362 1,613 1,615 2 0.1% 3,103

Total Operating Expenses 55,584$ 59,226$ 57,355$ (1,871)$ -3.3% 148,794$

(excludes depreciation and noise amortization)

Net Operating Revenues 65,142$ 68,362$ 67,828$ 534$ 0.8% 139,782$

NON-OPERATING REVENUE (EXPENSES)

($=000) 2013

Year to Date Dollar % Total 2014

Actual Actual Budget Variance Variance Budget

Other Non-Operating Revenue

Interest Income 1,849$ 2,233$ 1,875$ 358$ 19.1% 5,000$

Self-Liquidating Income 2,012 2,148 2,148 - 0.0% 5,486

3,861 4,381 4,023 358 8.9% 10,486

Debt Service

Short Term Financing (116) (87) (87) - 0.0% (703)

Equip. Financing Prinicipal/Interest Pymts (1,674) (1,621) (1,621) - 0.0% (3,137)

Gen. Airport Revenue Bond Requirement - - - - (96,203)

(1,790) (1,708) (1,708) - 0.0% (100,043)

Equipment

Capital Expenditures (390) (358) (423) 65 -15.4% (1,020)

Equipment Purchases (1,867) (1,403) (1,403) - 0.0% (7,847)

Equipment Financing 6,198 3,960 3,960 - 0.0% 4,138

3,941 2,199 2,134 65 3.0% (4,729)

Other

2013-2014 Six Month Reserve Transfer (1,677) (3,298) (3,298) - 0.0% (3,300)

Interstate Payments (Settlement) 300 300 300 - 0.0% 720

Easement Receipt - 178 - 178 -

Grant Reimbursement - 35 - 35 -

Gain (Loss) on Equipment & Other 52 56 - 56 -

(1,325) (2,729) (2,998) 269 -9.0% (2,580)

Total Non-Operating Revenues (Expenses) 4,687$ 2,143$ 1,451$ 692$ 47.7% (96,866)$

Net Revenues Available for Designation 69,829$ 70,505$ 69,279$ 1,226$ 1.8% 42,916$

Brackets ( ) Represent Revenue Items under Budget and Expense Items over Budget

Year To Date

2014

Year To Date

2014

OPERATING REVENUE

Operating revenue for May year-to-date is $2.4 million or 1.9% over budget. The greatest variance exists in the following categories.

Airline Rates and Charges Landing Fees

Landing Fees at the end of the quarter are at budget as noted in the following table:

Landed Weight 5/31/2014

(One thousand pound units)

Actual Budget Variance

1st Qtr 5,070,108 5,015,000 55,108

April 1,734,607 1,721,250 13,357

May 1,744,255 1,763,750 (19,495)

Total 8,548,970 8,500,000 48,970

0

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1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Landed Weight

2011

2012

2013

2014

`

Terminal 1-Lindbergh - Other Rentals Terminal 1-Lindbergh – Other Rentals are lower than budget $169,586 as a result of delaying implementation of the T1 checked baggage inspection fee. (Related expenses are also lower.)

Terminal 2 – Lobby Fees Terminal 2 Lobby Fees are over budget $298,357 or 4.2% due to greater activity than the budget anticipated. Spirit is 112.3 % and Sun Country is 31.9% in year-over-year operations through April. Terminal 2 – Other/Passenger Fees Terminal 2 - Other/Passenger Fees are greater than budget due to the FIS (Federal Inspection Services) fees. FIS Passengers are 22% higher than anticipated.

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

T 2 Lobby Fees and FIS Revenue2011

2012

2013

2014

Concessions Concessions year-to-date revenue is $1.5 million or 2.6% greater than budget.

May 2014 year-to-date

Variance % Variance $

Passengers as of April

(includes non revenue -year

over year) 5.3% n/a

Food & Beverage 8.7% 475,557$

News -0.9% (11,710)$

Retail -0.8% (14,868)$

Passenger Services -10.8% (193,618)$

Parking 4.7% 1,637,161$

Ground Transportation 3.0% 68,160$

MSP Employee Parking -2.4% (25,882)$

Auto Rental -1.1% (80,661)$

Other Concessions -61.5% (387,782)$

Total Variance 2.6% 1,466,357$

Concessio

ns

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Concessions Revenue2011

2012

2013

2014

Food & Beverage Food & Beverage year-to-date revenue is $475,557 or 8.7% greater than budget due to strong public spending at T1 and T2.

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Food & Beverage Revenue2011

2012

2013

2014

Note: May 2011 includes previous month adjustments. December includes key money.

News and Retail News and Retail revenues are at a variance of -0.9% and -0.8%.

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

News & Retail Revenue2011

2012

2013

2014

Passenger Services

Passenger Services is lower than budget by $193,618 or 10.8%. This is largely due to indoor advertising. JC Decaux has reported a loss of advertising renewals nationally in airports and a lack of airport advertising buys which is affecting all of the airports in their system. Specifically at MSP, a tenant did not renew their advertising contact (projection wall on the start of the C Concourse) at a loss of approximately $40,000 per month.

Parking Parking revenue year-to-date is $1.6 million or 4.7% greater than budget. Strong public interest continues in T1 General and MSP Value parking products.

Parking Revenue 5/31/2014

Actual Budget Variance1st Qtr 22,558,727$ 21,211,399$ 1,347,328$

April 7,296,872$ 7,114,624$ 182,248$

May 6,910,506$ 6,802,921$ 107,585$

Total 36,766,105$ 35,128,944$ 1,637,161$

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Parking Revenue2011

2012

2013

2014

Note: A rate increase was implemented in January 2012.

Other Concessions

Other Concessions are lower than budget 61.5% or $387,782 due to the 494 billboard lease contract that has been delayed as a result of permitting challenges. In 2008/2009 there was a change in the definitions of freeway and expressway that (combined with the location of unincorporated lands around MSP) in MnDOT’s opinion, require that the proposed billboards along Highway 5 and Highway 494 be sited more than 500 feet from a grade separated interchange. The proposed locations do not meet this requirement. Legal staff continue to work with MnDOT attorneys to resolve the issues.

OPERATING EXPENSE

Operating expenses are over budget $1.9 million or 3.3%.

Personnel

Personnel expenses are over budget $319,335 or 1.1% as a result of Doubletime and Overtime associated with winter related weather events.

Utilities

Utilities are over budget $1.1 million or 15.8% directly related to Jet Fuel. At Centerpoint’s request, the Energy Management Center switches from Natural Gas to Jet Fuel and MAC receives a rate break (Interruptible Contract). The average rate savings from Centerpoint amounts to approximately $560,000 per year. The average Jet Fuel purchases for the last 5 years have been $50,000 per year. Therefore, the Commission saves an average of $510,000 per year by allowing Centerpoint to make the switch when demand dictates a change. Through April 2014 Jet Fuel purchases (higher due to the abnormal cold temperatures) amounted to $705,740 thereby eliminating the savings for the current year. In addition, heating for natural gas is over budget $495,121.

Maintenance

Maintenance expenses are $449,241 or 3.7% above budget related to snow removal equipment expenses. However, due to a delay in implementation, expenses for the T1 checked baggage inspection system are under budget.

NON-OPERATING REVENUE AND EXPENSE

Non-Operating Revenue and Expense is over budget (higher revenue) due to an unbudgeted payment from the City of Eden Prairie for a roadway easement at Flying Cloud. In addition, interest rates earned on investments are higher than the budget anticipated.

WCF ACCOUNTS 0-30 Days 31-60 Days 61+ Days TOTAL

Past Due Past Due Past Due

934th MSG 14,349.50 1,090.33 - 15,439.83

Evergreen Eagle - - 88,727.57 88,727.57

Servisair Fuel 246,811.68 - - 246,811.68

MSP Jet Center - - 54,809.55 54,809.55

North American Airlines - - 8,733.71 8,733.71

Sterling Works - - 5,406.87 5,406.87

TSA 64,899.04 24,802.13 48,670.29 138,371.46

TSA LEO 71,360.00 - 152,320.00 223,680.00

United Airlines 41,493.48 - - 41,493.48

Misc Amounts Due 13,201.46 11,711.70 (1,110.01) 23,803.15

Accounts Receivable Aging Report Totals as of 6/27/2014 452,115.16 37,604.16 357,557.98 847,277.30

Current 0 - 30 Days 31 - 60 Days 61 + Days TOTAL

Past Due Past Due Past Due

Payment in Process 172,649.11 172,649.11

Miscellaneous Past Due Accounts 80,280.12 23,379.79 103,659.91

Total Accounts Late Notice Sent 9,243.87 23,540.10 32,783.97

Total Accounts in Default 10,952.47 233,197.63 244,150.10

Total Accounts MAC Legal 220,573.80 220,573.80

Total Accounts on Payment Plan 3,635.74 3,644.95 7,280.69

Total Accounts with Reliever Dept 1,178.98 23,560.78 24,739.76

Total Account Credits -

RELIEVER ACCOUNTS TOTAL 172,649.11 80,280.12 48,390.85 504,517.26 805,837.34

ACCOUNTS RECEIVABLE AGING REPORT SUMMARY AS OF 6/27/2014

RELIEVER ACCOUNTS