CITY OF PALM SPRINGS FINANCING AUTHORITY $12,720,000 Airport Passenger Facility Charge Revenue Bonds, Series 1998 (Palm Springs Regional Airport) Issue Date: June 3, 1998 CITY OF PALM SPRINGS $12,115,000 Airport Passenger Facility Charge Subordinate Refunding Revenue Bonds (Palm Springs International Airport) Issue Date: May 2, 2006 $6,895,000 2008 Airport Passenger Facility Charge Subordinate Refunding Revenue Bonds (Palm Springs International Airport) Issue Date: May 28, 2008 2014/15 ANNUAL REPORT March 29, 2016
CONTACT INFORMATION Geoffrey Kiehl, Finance Director City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Telephone: (760) 323-8229 Geoffrey.Kiehl@palmspringsca.gov CUSIP NUMBERS The information contained herein applies to Bonds with the following CUSIP numbers: 1998 Bonds: 2006 Bonds: 2008 Bonds: Maturity CUSIP Maturity CUSIP Maturity CUSIP 1/1/2022 69666PAS3 7/1/2016 696653AK0 7/1/2018 696653AX2 1/1/2028 69666PAT1 7/1/2020 696653AP9 7/1/2023 696653AY0 1/1/2018 69666PAU8 7/1/2028 696653AR5 7/1/2027 696653AZ7 Page 1
CONTENT OF ANNUAL REPORT Pursuant to the Continuing Disclosure Certificate for each series of the Bonds, the Annual Report is due no later than March 31 each year. This Annual Report is required to contain: (1) The audited Financial Statements of the City for the year ended June 30, 2015; (2) Historical Enplanements; (3) Airline Market Share by Airline; (4) Historical Airline and Non-Airline Revenues; (5) Historical PFC Revenues; (6) Historical Maintenance and Operating Expenses; (7) Airport Enterprise Fund Statement of Net Position; (8) Airport Enterprise Fund Statement of Revenues, Expenditures and Changes in Net Position; (9) Coverage Ratio; (10) PFC Revenue and Bond Redemption; (11) Special Mandatory Redemptions; and (12) Material Event Notice Filing Summary. Page 2
FINANCIAL STATEMENTS The audited Comprehensive Annual Financial Report of the City for the year ended June 30, 2015 has been filed separately on the MSRB s Electronic Municipal Market Access ( EMMA ) website. HISTORICAL ENPLANEMENTS % of Enplanements Calendar Year Enplaned Passengers Major Airlines Regional/Commuter Airlines Charters 2007 805,546 58.0% 40.2% 1.8% 2008 774,056 60.7 36.3 3.0 2009 734,610 58.4 38.5 3.1 2010 749,657 57.4 39.3 3.3 2011 758,032 54.5 42.0 3.5 2012 866,095 50.2 45.4 4.4 2013 877,474 50.6 45.5 3.9 2014 957,243 55.0 41.7 3.3 2015 944,625 62.3 34.6 3.1 The following table compares historical enplanements by month, for fiscal years ending June 30. 2009/10 2010/2011 2011/12 2012/13 2013/14 2014/15 July 33,058 32,500 29,731 34,295 34,586 37,300 August 32,765 32,040 28,913 33,245 33,658 36,727 September 37,489 36,614 35,024 36,387 39,793 43,455 October 51,500 52,796 55,127 60,450 59,208 65,310 November 73,092 72,235 78,862 84,835 81,903 91,230 December 67,982 67,636 79,353 87,106 86,323 90,318 January 76,974 79,478 90,102 94,207 98,277 103,394 February 82,913 81,903 100,850 99,449 108,843 118,122 March 107,835 103,886 124,056 131,149 141,818 148,128 April 90,222 94,228 107,883 110,708 121,402 120,831 May 60,959 57,753 67,458 67,199 79,328 74,278 June 36,933 33,774 39,428 39,291 43,235 37,533 Fiscal Year 751,722 744,843 836,787 878,321 928,374 966,626 Updated monthly enplanement data may be found at: http://www.ci.palmsprings.ca.us/home/showdocument?id=42481 Page 3
AIRLINE MARKET SHARE BY AIRLINE Airlines 2011 2012 2013 2014 2015 Air Carrier Air Canada 0.0% 0.0% 0.0% 0.0% 0.8% Alaska 22.5 19.7 20.2 20.3 22.5 American 17.2 15.6 14.2 14.9 13.7 Delta 0.2 0.1 0.3 2.2 2.2 United 2.1 1.6 2.1 2.8 5.8 WestJet 12.5 13.2 13.8 14.8 17.4 Total Air Carriers 54.5 50.2 50.6 55.0 62.3 Regional Frontier Air 0.3 1.5 1.9 1.5 0.1 Horizon Air 1.9 2.7 2.4 0.9 - Mesa (American) - - - - 2.6 MN Airlines (Sun Country) 1.3 1.6 2.0 2.0 1.9 SkyWest (Delta Connection) 4.6 4.0 4.2 3.7 4.4 SkyWest (United Express) 0.1 7.4 8.8 7.8 14.8 Sky West (American) - - - - 8.7 United Express 22.0 22.9 21.8 20.0 - US Airways (Mesa) 11.7 3.4 2.2 4.0 - Virgin America 0.1 1.9 2.2 1.8 2.2 Total Regional 42.0 45.4 45.5 41.7 34.6 Charters 3.5 4.4 3.9 3.3 3.1 All Airlines 100.0% 100.0% 100.0% 100.0% 100.0% Page 4
HISTORICAL AIRLINE AND NON-AIRLINE REVENUES 2012 2013 2014 2015 Landing Fees (1) $ 1,889,409 $ 1,967,414 $ 2,027,810 $ 3,374,880 Terminal Rents 2,266,975 2,338,809 2,357,067 2,384,193 Total Airline Revenues 4,156,384 4,306,223 4,384,877 5,759,073 Rental Car 5,724,928 6,234,595 6,716,584 6,786,851 Land Rent 1,689,781 1,613,267 1,647,745 1,561,007 Parking 2,537,397 2,782,902 2,896,652 2,946,085 Fixed Base Operators 37,589 243,679 307,149 289,360 Food and Beverage 64,287 55,672 72,753 66,161 In-Flight Catering 28,745 437,820 485,978 584,234 Loading Bridge Fees 177,480 177,660 208,701 5,310 Other 684,283 781,081 877,422 942,585 Total Non-Airline Revenues 10,944,490 12,326,676 13,212,984 13,181,593 Interest Income (2) 108,965 87,761 69,716 67,135 Total Revenues (3) $15,209,839 $16,720,660 $17,667,577 $19,007,801 (1) The financial statements include other revenues in the category of landing fees such as airport access fees, taxi fees and landing fee surcharges. (2) Excluding interest income on bond reserve fund and unrealized gain/loss on investments. (3) Excludes PFCs and Customer Facility Charges. Page 5
HISTORICAL PFC REVENUES Fiscal Enplaned % PFC PFC Year Passengers Eligible (1) Revenues (2) 2005/06 740,079 89.7 2,906,554 2006/07 798,088 87.8 3,068,865 2007/08 797,651 85.7 3,001,112 2008/09 729,162 83.5 2,674,410 2009/10 751,722 85.1 2,809,942 2010/11 744,843 85.2 2,785,021 2011/12 836,787 88.6 3,252,594 2012/13 878,321 92.9 3,417,312 2013/14 928,374 89.1 3,630,223 2014/15 966,626 88.1 3,736,615 (1) Frequent Flyer passengers are not required to pay PFCs. (2) Net of $0.11 per enplanement airline administration charges. HISTORICAL MAINTENANCE AND OPERATING EXPENSES 2012 2013 2014 2015 Personnel $ 7,916,435 $ 8,308,976 $ 8,820,234 $ 9,231,093 Utilities 1,581,753 1,755,721 1,789,640 1,567,219 Supplies and Services 4,377,936 4,401,073 4,361,055 4,788,155 Insurance 304,066 300,328 318,579 337,957 Administration 1,238,458 1,377,368 1,377,368 1,350,263 $15,418,648 $16,143,466 $16,666,876 $17,274,687 % of Operating Revenues 101.4% 96.5% 94.3% 90.9% Page 6
AIRPORT ENTERPRISE FUND STATEMENT OF NET POSITION Shown on Page 30 of audited financial statements. AIRPORT ENTERPRISE FUND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION Shown on Page 31 of audited financial statements. COVERAGE RATIO FOR 2014/15 Enplanements 966,626 PFC Eligible Percent (1) 88.1% PFC Eligible Enplanements 851,165 Gross PFC Revenues @ $4.50 $3,830,243 Airline Administration Cost @ $.11 (93,628) PFC Revenues $3,736,615 1998 Bonds Debt Service (2) $ 729,888 1998 Bonds Coverage Ratio 512% Surplus PFC Available for 2006 Bonds/2008 Bonds $3,006,727 2006 Subordinate Bonds Debt Service (2) $ 878,019 2008 Subordinate Bonds Debt Service (2) 591,475 Total Debt Service $1,469,494 Subordinate Bonds Coverage Ratio 205% Combined Senior/Subordinate Bonds Coverage Ratio 170% (1) Rounded. (2) Debt Service is calculated using the January 1, 2015 and the July 1, 2015 payments and reflects prior years special mandatory redemptions from amounts above the Cumulative Cap or from Remaining Revenues, as the case may be. Page 7
FISCAL YEAR 2014/15 PFC REVENUE AND BOND REDEMPTION AS OF JUNE 30, 2015 Annual PFC Revenues $ 3,736,615 Cumulative PFC Revenues through June 30, 2015 $53,098,667 Annual Cumulative Cap $49,850,000 Amount Above Annual Cumulative Cap $ 1,086,615 1998 PFC Bonds to be Redeemed on July 1, 2016* $ 1,085,000 Available Under Annual Cumulative Cap $ 2,651,615 1998 PFC Bond Debt Service $ 729,888 2006 PFC Bonds Debt Service 878,019 2008 PFC Bonds Debt Service 591,475 PFC Administrative Costs 28,000 Total Payments $ 2,227,381 Remaining Revenues Fiscal Year 2014/15 $ 424,234 Remaining Revenues Carried Forward 2,131 Remaining Revenue Balance $ 426,365 Bonds to be Redeemed on July 1, 2016: 2006 Bonds $ 260,000 2008 Bonds 165,000 425,000 Redemption Premium - Total Redemption Price $ 425,000 Remaining Revenue Balance Carried Forward $ 1,365 Total Remaining PFC Authorized as of July 1, 2015 $35,301,333 Total Remaining Debt Service as of July 1, 2015 $24,054,351 * The Trustee did not timely file the notice of redemption for a January 1, 2016 redemption date. The 1998 Bonds will be redeemed on July 1, 2016. Page 8
SPECIAL MANDATORY REDEMPTIONS Pursuant to the Report of Independent Financial Consultant dated October 27, 2015, $1,085,000, of 1998 Bonds were to be redeemed on January 1, 2016 from amounts received above the Annual Cumulative Cap in Fiscal Year 2014/15 and $260,000 and $165,000 of the 2006 Bonds and 2008 Bonds, respectively, will be redeemed on July 1, 2016 from Remaining Revenues in Fiscal Year 2014/15. The calculation of such amounts is shown above under the heading FISCAL YEAR 2014/15 PFC REVENUE AND BOND REDEMPTION. Due to an error in filing the redemption notice, the 1998 Bonds will be redeemed on July 1, 2016. MATERIAL EVENT NOTICE FILING SUMMARY No Material Event Notices with respect to the Bonds were required to be filed in 2015. CERTIFICATION This Annual Report constitutes the Annual Report required to be furnished under the Continuing Disclosure Certificates with respect to the Bonds for the Fiscal Year ending June 30, 2015. /s/ Geoffrey Kiehl Finance Director ******************************************************************************************* Page 9