RNO Master Plan Approved Alternatives, Financial Analysis, and Facilities Implementation Plan

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Mervin Amos Edwards
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1 RNO Master Plan Approved Alternatives, Financial Analysis, and Facilities Implementation Plan

2 Project Schedule Today Slide 40

Project Vision To provide an achievable, flexible, fiscally, and environmentally

accommodate future activity levels, further its position as a domestic and international

Safety and Security Economic Viability Enhance Customer Experience Stakeholder Input

3 Project Vision To provide an achievable, flexible, fiscally, and environmentally responsible roadmap that will help ensure that Reno-Tahoe International Airport can accommodate future activity levels, further its position as a domestic and international gateway, and support regional economic development initiatives. Safety and Security Economic Viability Enhance Customer Experience Stakeholder Input Master Plan Goals Environmental Stewardship Future Flexibility Realistic Aviation Forecasts Optimize Facility Utilization Slide 5

4 Approved Alternatives

5 Completed Chapters Introduction Inventory Aviation Forecasts (FAA approval 5/15/17) Facility Requirements Airport Alternatives Financial Feasibility Analysis (pending) Slide 6

6 Recommended Concourse Alternative Approved by Board December 2017 POTENTIAL TERMINAL EXPANSION Slide 7

7 Recommended Landside Alternative Approved by Board December 2017 AIR CARGO CBP TERMINAL Slide 8

8 Cargo Alternative Relocation to Southwest Quadrant North-South linear alignment Approximately 75 Acres of developable land Approved by Board December 2017 Slide 9

9 General Aviation Alternatives Approved by Board December 2017 (A) Northeast: Reserve for expansion of current tenant, fixed based operator and/or other general aviation support operation (B) Central: Maintain 63 existing hangars (C) Brookside: Development area for general aviation hangars and apron (D) Southeast: Long-term development area for maintenance repair overhaul facility or fixed base operator Slide 10

10 Recommended Airside Alternative Slide 11

11 Recommended Short-Term Projects Slide 12

12 Recommended Mid-Term Projects Slide 13

13 Recommended Long-Term Projects Slide 14

14 Composite Recommendations Slide 15

15 Master Plan CIP ($ in millions) Category New Concourse C (including new CBP facility, passenger loading bridges, and building demolition) New Concourse B (including passenger loading bridges and building demolition) Total Project Cost $159.9 $159.9 Master Plan Development Phase Short-Term Mid-Term Long-Term New Concourse D (including passenger loading bridges) New Admin., Counter, Bag Claim, Concessions Terminal Wayfinding & Signage, Ticket Hall, Restrooms, Escalators New & Remodeled SSCP Space Terminal Apron & Airfield Improvements New CONRAC (including pedestrian bridge, new QTA, landscaping, and building demolition) $110.0 $110.0 Building Demolition (Prologis Building, air cargo, and Mini Storage Warehouse) Auto Parking Surface Lot Two-Level Parking Structure Expansion Belly Cargo $1.8 $1.8 Various GA Facility Improvements (as demand warrants) Expand Cargo Apron Various Cargo, Operations, and Maintenance Facility Improvements (as demand warrants Total $1,635.6 $362.8 $527.9 $744.9 Source: Mead & Hunt, Inc., April 2018 Slide 16

16 Financial Feasibility Analysis and Facilities Implementation Plan

17 Financial Feasibility Analysis and Facilities Implementation Plan Enplaned Passengers Forecast Capital Improvement Program Master Plan CIP Funding Plan Short, Mid, and Long-Term Project Cost Estimates Airport Revenue Bonds Debt Service Forecast Airline Cost Per Enplaned Passenger Financial Benchmark Comparison Key Financial Forecast Results Summary Slide 18

18 Enplaned Passengers Forecast FY FY FY FY FY (est) FY (bgt) FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY Enplaned Passengers (in millions) Historical MP Forecast Low-Growth High-Growth Historical CAGR (FY13-14 to FY 16-17) 2.8% MP Forecast CAGR (FY18-19 to FY 35-36) 1.9% Low-Growth CAGR (FY18-19 to FY 35-36) 0.7% High-Growth CAGR (FY18-19 to FY 35-36) 2.5% Slide 19

19 Master Plan Capital Improvement Program (Dollars in millions through FY ) Category Terminal Area Total Project Costs 1 $635.5 Landside Airside 26.2 Support Total $1,635.6 $800 $700 $600 $500 $400 $300 $200 $100 $0 Project Cost by Development Phase $744.9 $527.9 $362.8 Short-Term Mid-Term Long-Term Terminal Area Landside Airside Support Only short-term and mid-term phases included in financial analysis Long-term phase for overview of development plan, but timing is more uncertain Significant portion of Support projects anticipated for 3 rd Party Funding Note: Amounts may not add because of rounding. 1 Rough order of magnitude costs only. Slide 21

20 Master Plan CIP Funding Plan ($millions) FAA AIP Grants, $90.6 PFC (pay-as-you-go), $25.5 Third-Party/Other, $291.2 CFC (pay-as-you-go), $15.8 MP Phase Project Costs Short-Term $362.8 RTAA Funds, $13.5 Mid-Term Total $890.7 Note: Debt service on airport revenue bonds is assumed to be paid with available PFCs, CFCs, and other RTAA revenues. Airport Revenue Bonds, $454.1 Note: Amounts may not add because of rounding. 1 Rough order of magnitude costs only. Slide 22

21 Short-Term Development ($millions) Project Est. Cost 1 FAA AIP PFC (PAYG) CFC (PAYG) RTAA Funds GARBs 3 rd - Party New Concourse C 2 $159.9 $0.0 $19.5 $0.0 $4.2 $136.3 $0.0 New Admin, Counter, Bag Claim, concession improvements Terminal Wayfinding & Signage, Ticket Hall, Restroom, Escalator Terminal Apron & Airfield Pavements New CONRAC, Ped. Bridge, QTA Building Demolition-Concourse B Auto Parking Surface Lot Belly Cargo Brookside GA Total $362.8 $5.7 $25.5 $15.8 $5.5 $271.8 $38.6 Note: Amounts may not add because of rounding. 1 Rough Order of Magnitude Costs only. 2 Includes the cost for the new Customs & Border Protection facility, loading bridges, and demolition. 3 Based on demand. Slide 23

22 Mid-Term Development ($millions) Project Est. Cost 1 FAA AIP PFC (PAYG) CFC (PAYG) RTAA Funds GARBs 3 rd - Party New Concourse B 2 $137.1 $0.0 $0.0 $0.0 $3.6 $133.5 $0.0 New & Remodeled SSCP Space Terminal Apron & Airfield Pavements Building Demolition Prologis Building Expand Cargo Apron Improve cargo, operations, and maintenance Improve various GA facilities Total $527.9 $84.9 $0.0 $0.0 $8.1 $182.3 $252.5 Note: Amounts may not add because of rounding. 1 Rough Order of Magnitude Costs only. 2 Includes loading bridges. 3 Based on demand. Slide 24

23 Long-Term Development ($millions) Project Est. Cost 1 New Concourse D $229.0 Terminal Apron & Airfield Pavements 22.8 Two-Level Parking Structure Expansion Building Demolition (Air Cargo and Mini Storage Warehouse) 44.2 Expand Cargo Apron Improve cargo, operations, and maintenance Improve various GA facilities Total $744.9 Long-Term development is not included in financial analysis because of timing uncertainty Note: Amounts may not add because of rounding. 1 Rough Order of Magnitude Costs only. 2 Includes loading bridges. 3 Based on demand. Slide 25

24 Airport Revenue Bond Debt Service Forecast $40.0 $35.0 ($millions) $38.1 $30.0 $25.0 $24.5 $20.0 $15.0 $10.0 $5.0 $0.0 $2.2 Existing Short-Term Development Mid-Term Development Existing (Series 2015) Short-Term (Rental Car) Short-Term Mid-Term Slide 26

25 Airline Cost Per Enplaned Passenger (CPE) $25.00 Master Plan Forecast $20.00 $16.29 $15.00 $14.31 $12.60 $10.00 $10.70 $10.03 $9.41 $8.84 $11.11 $7.07 $5.00 $0.00 Budget FY Short-Term Development (Avg.) Mid-Term Development (Avg.) Nominal Real (1% Discount) Real (2% Discount) Real (3% Discount) Slide 31

26 Airline Cost Per Enplaned Passenger (CPE) $25.00 Low-Growth Forecast $22.11 $20.00 $19.41 $17.08 $15.00 $14.34 $13.44 $12.60 $11.83 $15.06 $10.00 $7.07 $5.00 $0.00 Budget FY Short-Term Development (Avg.) Mid-Term Development (Avg.) (see note) Nominal Real (1% Discount) Real (2% Discount) Real (3% Discount) Note: A low growth forecast outcome would likely require revaluation of the mid-term development program. Slide 32

27 Airline Cost Per Enplaned Passenger (CPE) $25.00 High-Growth Forecast $20.00 $15.00 $13.71 $12.05 $10.00 $7.07 $8.95 $8.39 $7.87 $7.39 $10.61 $9.37 $5.00 $0.00 Budget FY Short-Term Development (Avg.) Mid-Term Development (Avg.) Nominal Real (1% Discount) Real (2% Discount) Real (3% Discount) Slide 33

28 Other Airport CPEs (FY 2017 except as noted) $20 $18 $17.60 $16 $15.37 $14 $12 $10 $8 $6 $4 $3.97 $5.93 $6.26 $6.83 $7.07 $7.92 $8.21 $9.17 $10.13 $10.64 $11.73 $2 $- BOI GEG (2016) ELP ABQ RNO ( ) TUS Small Hub Medium Hub ONT (2016) SJC OAK SMF SFO Includes Small and Medium Hubs in Western U.S. between 1.5 and 2.5 million enplanements Also includes other regional airports such Sacramento and the Bay Area Airports Small Hub and Medium Hub averages are for all U.S. airports Source: FAA Form Slide 34

29 Financial Benchmark Comparison Key Financial Measure A1 Rated Moody s U.S. Airport Medians O&D Small Hub Medium Hub Comp./ Hybrid MP Forecast (Average) Short- Term Mid- Term Debt service coverage 1.91x 2.01x 2.07x 2.08x 2.05x 1.67x 1.50x Days cash on hand DPE 1 $77 $69 $64 $60 $56 $152 $191 CPE = Cost per enplaned passenger DPE = Debt per enplaned passenger 1 Medians for DPE are presented in FY 2016 dollars. Amounts for Master Plan average are in nominal dollars. Slide 37

30 Key Financial Forecast Results Short-Term Development Key Financial Measure FY Budget MP Forecast (Avg.) High- Growth (Avg.) Low- Growth (Avg.) Debt service coverage x 1.67x 1.86x 1.37x 3 Days cash on hand Debt per enplaned passenger 2 $8 $152 $140 $175 1 Averages are based on model results for FY through FY Averages are based on model results for FY through FY Forecast minimum is 1.32x, which is below RTAA s target of 1.50x debt service coverage; however, remains above 1.25x requirement. 4 Below RTAA s target of 365 days of cash on hand. Slide 35

31 Key Financial Forecast Results Mid-Term Development Key Financial Measure FY Budget MP Forecast (Avg.) High- Growth (Avg.) Low- Growth (Avg.) Debt service coverage x 1.50x x 1.20x 4 Days cash on hand Debt per enplaned passenger 2 $8 $191 $177 $235 1 Averages are based on model results for FY through FY Averages are based on model results for FY through FY Certain forecast years are below RTAA s target of 1.50x debt service coverage; however, remain above 1.25x requirement. 4 Many forecast years are below RTAA s debt service requirement of 1.25x. 5 Below RTAA s target of 365 days of cash on hand. Note: A low growth forecast outcome would likely require revaluation of the mid-term development program. Slide 36

32 Financial Summary A large portion of the Master Plan CIP is anticipated to be funded by 3 rd party tenants as demand warrants (e.g., cargo, GA, maintenance). Airport revenue bonds will most likely be another significant source of funding for the Master Plan CIP. Puts pressure on key financial metrics such as airline CPE, debt service coverage, DPE, and days cash on hand. Short-Term development, over the next 5 years, appears relatively financially feasible. Mid-Term development, over the next 6-10 years, is in the upper limit of affordability range. Financial feasibility is dependent on future traffic growth. Appears not to be financially feasible with the Low-Growth traffic forecast under current assumptions. Slide 38

33 Financial Summary More detailed analysis is required prior to implementation of specific Master Plan CIP projects. Financial strategies for future Mid-Term development affordability and implementation: Identify certain projects to be implemented by activity triggers as opposed to specific years. Identify and prioritize portions of projects for implementation as opposed to entire projects. Prioritize 3 rd party demand projects that are self-sustaining. Evaluate opportunities for Public-Private Partnerships (P3s) when consistent with RTAA goals and objectives (e.g., terminal development at Kansas City, Paine Field in Everett, WA, Houston, Denver, New York). Continue to monitor future demand versus facility needs. Slide 39

34 Thank you!

Financial Feasibility Analysis Terminal Programming Study Des Moines Airport Authority

Financial Feasibility Analysis Terminal Programming Study Des Moines Airport Authority September 12, 2017 Contents 1. Funding Sources for Airport Projects 2. Financial Metrics 3. CIP Summary and Funding