Consideration and Approval:  2015 FAA Passenger Facility Charge (PFC) Application.  (Approval per-passenger charge)

Authorize the notification to the Federal Aviation Administration (FAA) of the Airport’s intent to impose new PFC's in the amount of $4.50 per enplanement for the City match for multiple projects, as attached herein, for a total of $588,713.

Since the City has already paid for its share of the projects already completed (or will complete shortly) in the amount of $340,886, and has projects planned and presented to the FAA for the match amount of $247,827 in FY2016 and FY2017, this would help reduce the annual General Fund transfer to the Airport fund. Based on the airport's enplanement projections, we estimate to recover the total City Match of $588,713 by September 1, 2018. Annual PFC's collected have ranged from $150,000 to $250,000 per year. The expiration estimate is conservative to ensure that a future amendment for additional time to collect is not required for this Application.

This request is not associated with a specific Council goal, however is directly accountable to the standards of sound fiscal practices for the management of the organization.

1. June 16, 2009 - Approval for PFC collections in amount of $1,157,023.

2. February 9 & 10, 2012 - Budget Retreat. Direction to pursue an increased PFC level for the purpose of funding General Fund add-backs.

3. June 5, 2012 - Approval for increased PFC level of $4.50 per enplanement.

Option 1: Approve as presented. This option continues the $4.50 charge per enplanement for passengers boarding at the Pulliam Airport. This would maintain the annual General Fund transfer to the Airport fund.

Option 2: Disapprove.  This option would require the City to return funds that are currently being held in a PFC Restricted Account being collected until June 30, 2015. In addition, it would require that General Fund funds the matching portion of airport capital projects. This would create an additional burden on the General Fund of $150,000 to $250,000 annually.

Option 3: Defer this Agenda Item to a future date.

The Passenger Facility Charge (PFC) Program allows the collection of PFC fees, up to $4.50, for every enplaned passenger at commercial airports controlled by public agencies. Airports use these fees to fund FAA-approved projects that enhance safety, security, or capacity; reduce noise; or increase air carrier competition. PFC's are collected by most airports which use FAA grant funding. The Airport must submit a PFC application to the FAA to obtain authorization for imposition and use of PFC revenue for a specific eligible project. To qualify for the $4.50 PFC fee, the FAA requires we meet the following criteria:

1. Preserve or enhance safety, security, or capacity of the national air transportation system;

2. Reduce noise or mitigate noise impacts resulting from an airport; or

3. Furnish opportunities for enhanced competition between or among air carriers.

4. The project costs requested for collection at $4 or $4.50 cannot be paid for from funds reasonably expected to be available for the programs referred to in 49 U.S.C. 48103; and

5. In the case of a surface transportation or terminal project, the public agency has made adequate provision for financing the airside needs of the airport, including runways, taxiways, aprons, and aircraft gates.

These projects meet the criteria as set forth by the FAA.

We are applying under the Streamlined PFC Application Procedures for Non-Hub Airports. The Streamlined Procedures may not be available at the exact time this application is presented to the FAA, in which case, the full PFC Application will be submitted. In January 1991, the City Council approved the use and collection of PFC revenue to pay for a portion of the Terminal Building and associated infrastructure. The City has been collecting $3.00 per enplanement PFC since 1992.

The City of Flagstaff has a history of authorizations from the FAA from November 1, 2009 through today. The funding has totaled $1,208,991, all of which is now collected. In 2012, the PFC level was increased to $4.50 per enplanement. This application requests a new authorization in the amount of $588,713.

As the FAA has not yet approved the application, there is a possibility that minor changes might be requested regarding the application. Changes might include: presentation changes, removal of a specific future project in the event additional environmental studies are required, or some other FAA request as a part of this submission. Due to this possibility, it is requested that the City Manager be granted authority to sign any such changes, which are not substantive, without returning to Council for approval. All changes are strictly restricted to reimbursement of PFC expenditures by the City of Flagstaff.

With the permission of the FAA, the City continues to collect PFC’s while this application process is finalized. We have until June 30th to have the documentation approved by the FAA to continue to collect PFC’s. Any funds collected, at this time, are placed in a restricted, interest bearing account. Upon FAA approval, we can move 100% of the funds into the unrestricted account for PFC’s. Any funds obtained via PFC's reduces the Airport's need for General Fund support.

In the event this application is not approved, the City will be obligated to return the funds in excess of $60,000 which have been collected and placed in a restricted account pending this decision. In addition, the General Fund would need to provide the City match for these Airport capital projects.

This action allows the Airport to continue to collect PFC revenue which is used to help pay for Airport capital projects and reduce the General Fund contribution.

Inform.

We are required as part of the application process to provide written notice to the Air Carriers and hold a consultation Meeting with the Air Carriers. This meeting was scheduled and held on April 20, 2015 at 1:00 pm at the City Hall Housing Conference Room.