FY2016 CCDOA Financial Report as of 6302016.pdf - page 25

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Rates and charges are calculated annually at the beginning of each fiscal year pursuant to budgeted revenues,
expenses, and debt service requirements. The established rates and charges are reviewed and adjusted, if
necessary, throughout each fiscal year to ensure that sufficient Department revenues are generated to satisfy all
the requirements of the Master Indenture of Trust dated May 1, 2003, as amended, which governs the issuance of
certain debt. At the end of each fiscal year, the Department tallies the revenues collected through the established
rates and charges and compares them to the residual rent requirement for each direct cost center. If the revenue
collected from the Signatory Airlines exceeds the residual rental requirement, the excess amounts are maintained in
a rate stabilization account (up to a maximum of 18.5 percent of the current fiscal year operating budget). The
balance in the rate stabilization account may be used for the purpose of funding any residual rental shortfalls in
future fiscal years, recovering any uncollected amounts related to an airline bankruptcy or discontinued service,
paying down outstanding Department debt, or other similar uses as identified during the term of the Agreement. As
of June 30, 2016, the account balance totaled $42.5 million.
At the close of each fiscal year, audited financial data in conjunction with the balance in the rate stabilization
account will be used to determine if any additional amount is due to or from the Signatory Airlines in accordance
with the Agreement. In the event an overpayment is due, the Department will refund such overpayment to the
Signatory Airlines, or, in the event an underpayment is owed, the Department will invoice the Signatory Airlines the
underpayment within thirty days of such determination. For the fiscal year ended June 30, 2016, there was no
amount due to or from the Signatory Airlines.
The table below summarizes passenger airline landing fees, terminal building rentals, gate use fees, passenger fees,
and the cost per enplaned passenger for FY 2016 and FY 2015. Cost per enplaned passenger is a standard industry
metric, and the goal of the Department is to maintain a competitive cost per enplanement. The actual cost per
enplanement for FY 2016 was $11.05, compared to the budget estimate of $11.66. The variance between the
actual and budgeted cost per enplanement was due to the fact that actual enplanements were 6.0 percent
higher than budgeted enplanements. Total airline rents and fees collected in FY 2016 increased by $4.0 million, an
increase of 1.6 percent over FY 2015 airline rents and fees.
The Department is committed to managing airline rates and charges in an attempt to keep the cost per
enplanement at levels comparable to other major U.S. airports in order to attract and retain air service in the Las
Vegas market. The Department continuously looks for ways to maximize non-airline revenues and minimize
operating expenses and debt service costs.
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