From time to time, the Billings Logan International Airport must submit a Passenger Facility Charge (PFC) application to the Federal Aviation Administration (FAA) to continue its PFC collections that can be used for Airport related projects.  The PFC program was established by Congress through 14 CFR Part 158.  The application provides the FAA and the air carriers that serve Billings an opportunity to review and comment on the proposed projects.  Once the application has been reviewed and a public comment period has been allowed, the application can be submitted to the FAA for approval.  This application is for $38,800,000 and consists of approximately $1,600,000 that will go toward the construction of the Terminal Expansion and $37,200,000 that will be collected to apply toward the debt service payment for the revenue bond proceeds secured for the Terminal Expansion construction costs.  Currently, the revenue bond is anticipated to be $25,000,000 with an annual debt service payment of $1,840,000. The PFC rate for this application will be increased from the current $3.00 level to $4.50, the highest rate that can be implemented under current Federal law.  The collections for this application are anticipated to go into effect May 1, 2019 and provide annual funding of approximately $1,800,000.  It is anticipated that this application will be in effect until January 1, 2040.  These dates are dependent on the FAA approval date and the rate of collection that takes place over time.  Table A from the airline notice letter is attached and provides a description of the projects for which the Airport is seeking funding. 
 
To submit the application, City Council action is required to approve the new PFC collection rate of $4.50 per passenger, to authorize the Mayor to sign the PFC application, and to authorize the Director of Aviation and Transit to submit the application and work with the FAA on any follow up items needed to comply with 14 CFR Part 158 and its related requirements.
 

City Council may:

• Approve the new PFC rate of $4.50, authorizing the Mayor to sign the PFC application, and the submission of the PFC application to the FAA; or
• Disapprove the new PFC rate of $4.50 and the submission of the PFC application to the FAA, temporarily terminating the PFC program at the Billings Logan International Airport.

Staff recommends that the City Council approve increasing the PFC rate to $4.50, authorize the Mayor to sign the PFC application, and allow the Billings Logan International Airport to submit the application to the FAA for the continued collection of Passenger Facility Charges.