HomeMy WebLinkAbout06-18-2020 Airport Board FC MinutesM I N U T E S
Barkley Regional Airport Authority
FINANCE COMMITTEE
Meeting - Tuesday, 06/18/20, 12:00pm Via Zoom Meeting ID 882 7832 6613
Finance Committee (FC) Chairman Durbin welcomed everyone and recognized that a quorum was
present. Committee Members present were Board Chairman George Bray, Marshall Davis (joined at 12:56), John Durbin, Chairman and Ashley Johnson. Staff present was Dennis Rouleau, Executive Director (ED) and Carol Creason, Accountant. Also present were two members of the media.
As the only purpose of this meeting was discussion of FY2021 Budget, no agenda was needed.
ED Rouleau and Durbin set the stage with comments about the impact of the virus and economic slowdown on the operations of the airport. Flights and passengers are down severely since March and thus related revenues are down. The airport benefits from some non-flight revenues such as farm and
facilities rent and tenant services but all and all recent revenues are down 45% compared to budget. While some expenses have been reduced as possible maintaining personnel at current levels was necessary but a delay in replacement of the two open positions is expected to continue until the first two quarters of the new fiscal year starting July 1st.
Durbin explain the core assumption that as the state and nation continues to reopen, a gradual increase in passengers will start in Q1 and continue steadily until Q4 at which time we hope to be back to about 90% of prior “normal”. This is likely a bit optimistic but is based on the nation not experiencing a second wave of virus in the late Fall without some better treatments and increased mitigation. On the non-passenger revenue side, farm income is expected to be the same until Q4 when it will be reduced by 20% due to space consumed by the new terminal. The “rent rebate” for a tenant is expected to end by Q3 if
not sooner. If passengers return the total revenues would roughly double from $93,000 Q1 to $181,000 in Q4 with total budgeted revenues of $551,000 for the full fiscal year.
The allocation of $1,086,000 in CARES Act funding to our airport of which $280,000 has been collected to date on past expenses provides the airport with a unique opportunities to upgrade equipment, address
some deferred maintenance issues and upgrade systems and to promote the return of passengers as the economy re-opens so the FY21 expenses are reflective of this. Advertising and market budget include $20,000 for a website redesign and an extra $20,000 over normal in marketing outreach. Employee compensation expense include an approved pay increase of roughly 2.5% effective Q1 and the rehiring of two positions currently not filled in early Q3. Employee benefits include the impact of a 9% increase in the health benefit and the ”other employee costs” includes an extra $5,000 in uniforms and $5,000 in training. Insurance expense (not payroll related) has a 25% increase anticipated starting Q1. We have added a new line item for the sake of the budget called “engineering (other than AIP)” for $40,000 which is the cost to cover a new engineering firm (we have sent out 22 RFP) for assessments of multiple projects around the airport that may not be grant eligible. The cost would include some “transition” cost from the current provider, if necessary. There is new line item called “IT Expense” for $40,000 for a thorough review of all technology systems. This budget amount does not include the actual cost of new software or hardware but just the professional services in assessing the needs and ensuring we get the best system for today and for the new terminal. Any additions would only be made considering the “portability” of such into the new terminal so nothing would be abandoned. We intend to solicit RFPs from at least three local computer technology firms for this purpose. The professional fees line item was increase over prior years by $10,000 to allow for the hiring of an “aviation consultant” for part 139 inspections and other services. Supplies and travel/conferences are budgeted for less than prior year and supplies and utilities are budgeted less based on ramping up the expense as passengers return.
The total expenses will be slightly higher than a normal year only because of utilizing the CARES Act benefits to upgrade where possible offset in part by expenses that will be lower due to reduce passengers. Total expenses will be $1,180,000 under this budget. The bottom line is an operating loss of $626,000 (before city/county subsidies and revenues from the CARES Act).
We are estimating a usage of approximates $250,000 of the CARES Act benefit for “capital” improvement items that will be prioritized in order of important but includes a long list of needs that have been deferred for years. These expenditures are not a part of the operating budget and will depreciation over their useful lives.
Discussion was had on the city and county subsidy and we believe it is fair to request the same subsidy as the current year and to request the same revenues collected by the county on its motor vehicle rental tax. We realize that source of revenues will be lower because of the economic slowdown but for purposes of the overall budget are estimating it at $125,000. The current year regular subsidy is
$120,000 from the city and $86,466 from the county. The question of where the county amount came from was asked and Carol agree to supply a history of the subsidy for use at the full Board meeting.
The committee agreed that the operation budget and the capital budget should be presented to the full Board on June 22nd.
Board Chairman Bray agreed to set up a call with the county and city finance group to officially “ask” for FY21 subsidies next week.
Meeting adjourned at 1:35PM