Annual Operating Budget

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Fiscal Year 2020 Annual Operating Budget

Prepared for the Little Rock Municipal Airport Commission November 19, 2019 Annual Operating Budget 2020

Table of Contents

Little Rock Municipal Airport Commission ...... 1 Organizational Structure ...... 2 FY 2020 Annual Operating Budget - Summary ...... 3 Budget Process ...... 4 Budget Calendar ...... 5 GFOA Budget Award ...... 6 Financial Policies and Guidelines ...... 7 Major Drivers of the FY 2020 Budget ...... 8 Air Service ...... 8 Passenger Enplanements ...... 10 FY 2020 Annual Operating Budget – Details ...... 12 Revenues ...... 13 Operating Revenues ...... 14 Revenue Assumptions ...... 15 Airline Revenues ...... 15 Non-Airline Revenues ...... 20 Operating Expenses ...... 29 Expense Assumptions ...... 29 Non-Operating Revenues (Expenses) ...... 40 Budget Detail by Department ...... 46 Interest and Financing Expenses ...... 62 Capital Purchases ...... 62 Capital Purchases List ...... 63 Major Capital Projects ...... 65 Major Capital Projects List ...... 67 Historical Performance Indicators ...... 69 Supplemental Data ...... 73 Glossary ...... 80

Annual Operating Budget 2020

Little Rock Municipal Airport Commission

JESSE MASON GUS VRATSINAS JOHN RUTLEDGE Chairman Vice Chair/Treasurer Secretary

STACY HURST MEREDITH CATLETT JILL FLOYD MARK CAMP Commissioner Commissioner Commissioner Commissioner

Annual Operating Budget 2020

Organizational Structure

Annual Operating Budget 2020

FY 2020 Annual Operating Budget - Summary

FY 2018 FY 2019 FY 2019 FY 2020 Actual Budget YE Est. Proposed

REVENUES Airline Revenues $ 11,910,381 $ 12,261,179 $ 12,581,788 $ 12,906,921 Non-Airline Revenues 22,525,342 22,724,812 23,497,977 23,850,007

TOTAL OPERATING REVENUES 34,435,723 34,985,991 36,079,765 36,756,928

EXPENSES Operating Expenses 22,031,475 24,341,298 23,417,658 25,268,619

Results from Operations before Deprec. $ 12,404,248 $ 10,644,694 $ 12,662,108 $ 11,488,310

Depreciation 18,047,361 17,000,000 17,500,000 18,000,000

RESULTS FROM OPERATIONS $ (5,643,113) $ (6,355,306) $ (4,837,892) $ (6,511,690)

Non-Operating Activities 12,161,657 17,311,567 13,250,555 14,405,934

CHANGE IN NET POSITION $ 6,518,543 $ 10,956,261 $ 8,412,663 $ 7,894,244

The 2020 operating budget for the Bill and Hillary Clinton National Airport is $36.8 million. This represents a 5.1% increase over the $35 million budget for 2019 and a 1.9% increase over the estimated activity for 2019.

The following pages further detail the anticipated sources of revenues and expenditures for 2020 and provides explanation of variances compared to the preceding year actuals and budget. In addition, historical data and ratios are included to better illustrate the current financial position of the Airport.

Annual Operating Budget 2020

Budget Process

The basis of accounting and of the budget for the Airport is the modified accrual accounting basis. The budget is prepared by the Airport staff and is approved by the Little Municipal Airport Commission (Commission) annually. The budget is the spending authority for staff to operate for the budget year.

The operating budget is prepared after reviewing a number of historical reports and projections. These include actual and forecasted passenger activity, airline operations, aircraft landed weight and historical operating expenses. As detailed in the Budget Calendar below, the annual budget is prepared during the second half of the year preceding the budget year.

The Airport operating budget is prepared in a bottom up format. The budget is prepared at the department level and assimilated into the Airport operating budget. Department Directors have budgetary responsibility for expenses in their departments. The Finance Department prepares monthly budget to actual reports that the Department Directors review to determine they are operating within their department budgets.

Department Directors prepare their budget requests in September of each year. The primary input into the operating budget planning process is historical operating expenses. These historical expenses, along with anticipated changes in operations for the budget year, will be the basis for the majority of the budget requests for each department. The Deputy Executive Director and the Director - Finance review each of these department requests with the Department Director to determine the appropriateness of each budget item. Additionally, this review is used to help maintain overall Airport budget expense growth.

The individual department budgets are combined into an Airport level budget for review by the Executive Director and the Deputy Executive Director. As a result of this review, changes to the department level expense budgets may be necessary in order to attain a desired Airport budget. This budget is then presented to the Commission for their approval typically in November or December.

The budget for capital items is prepared in a similar manner. Department Directors submit their anticipated needs for capital items for review and approval by the Deputy Executive Director and the Executive Director. The Major Capital Purchases List is submitted along with the operating budget for approval by the Commission.

Airline and Non-airline revenue budgets are prepared using historical revenue data, enplaned passenger projections and any known changes that may affect the budget year (changes in airline service, new commercial tenants, etc.). Additionally, the terminal rent rate and airline landing fee rate is calculated using the budgeted operating and capital expenses for the terminal and airfield, respectively. These rates, along with fees for gates, jet bridges, ramp usage and aircraft remaining overnight, are presented to the Commission in the form of a rate resolution for their approval when the budget is presented. Once approved, the airlines are informed that these rates will be in effect for the budget year.

Annual Operating Budget 2020

Budget Calendar Fiscal Year Budget Calendar 2020 Dates Actions 29-Jul-19 Finance: Distribute 2020 Budget Calendar at Director's Leadership Group (DLG) meeting.

Finance: Expense and Revenue Review. Finance begins review of YTD revenues 29-Jul-19 (calculated on units of measure and base rates) as well as YTD expenses. Finance: Personnel Worksheet forwarded to HR for updated frozen and vacant 12-Aug-19 positions. DLG Budget Kickoff Meeting: Attendance of Directors where each Department will be provided with the following: (1) FY 2020 Operating Budget Request Template 19-Aug-19 (2) FY 2019 YTD Actual Expenditures (Report Viewer) (3) FY 2020 Capital Budget Request Forms (4) Budget Instructions (Department Responsibilities) Operating Budget Submittal Deadline. All departmental request forms are due to 13-Sep-19 Finance by close of business. Department Meetings. Finance will coordinate a time to meet with individual departments and Deputy Exec. Dir. to discuss their budget documents, including: Week of Sep. 23 (1) YTD Budget to Actual (2) Operating Budget Request Capital Budget Submittal Deadline. All Capital Budget Requests are due to Finance by 23-Sep-19 close of business, including 2019 rollover items. After reviewing with Interim Exec. Director, HR returns Personnel Worksheet to 1-Oct-19 Finance. Includes updated salaries, retirement %, estimated health and other benefits. Procurement: Draft version of 2020 Sole Source List is distributed to Directors for 1-Oct-19 review. Finalize Capital Budget. Deputy Executive Dir. meets with the Directors who submitted 14-Oct-19 Capital Budget Requests, along with the Directors of Finance and Procurement. 2019 roll forward Capital items are reviewed as well. Submission of preliminary budget report for Exec. Management Review: Based on the operating and capital budget requests, the preliminary budget is delivered to the 21-Oct-19 Deputy Executive Dir. to review. This includes the preliminary Rates and Charges for 2020. Budget Documents Complete: Budget documents are finalized and reviewed by 1-Nov-19 Executive Management. Commission: Budget documents are distributed electronically to Commission 5-Nov-19 members. 12-Nov-19 Finance Committee: Present Budget to Finance Committee for Discussion.

19-Nov-19 Commission: Present Budget to Commission for Approval.

Annual Operating Budget 2020

GFOA Budget Award

Annual Operating Budget 2020

Financial Policies and Guidelines

Overview - The financial reports and budget for the Commission are prepared according to the modified accrual basis of accounting. The Commission has one fund and operates as an independent component of the City of Little Rock. The budget adopted by the Commission gives the Airport staff the legal basis for which to expend funds to operate the Airport.

The Commission prepares a budget on an annual basis. The budget consists of an operating budget as well as a budget for capital purchases. The Commission operating budget includes revenues and other sources of funds that exceeds anticipated expenditures and other uses of funds.

Airport staff maintains accounting records and prepares financial statements as prescribed by the Governmental Accounting Standards Board (GASB). These financial statements compare actual revenue and expenses to budgeted and prior year amounts and are reviewed monthly by the Finance Committee and approved by the Commission.

Revenues - The Commission establishes airline rates and charges as part of the annual operating budget process. These rates are set by resolution of the Commission using a compensatory ratemaking methodology. This method requires airlines to pay only for the cost allocable to the portion of the airport system they use. The Commission has employed a strategic rate discipline that allows the Airport to maintain the terminal and airfield facilities while charging competitive rates and charges.

Investment Policy - In September 2017, the Commission approved the Investment policy. This authorizes designated Airport staff to invest excess Commission funds, under the oversight of the Finance Committee. Currently, all Commission funds are held in interest bearing bank accounts that are collateralized..

Collateralization - Ark. Code Ann. 23-47-401(a) states public monies deposited with a bank or financial institution in excess of FDIC insurance coverage must be collateralized. The pledged collateral must be at least 105% of the amount of cash on deposit with the bank or financial institution. The Commission has stated the collateral coverage for Commission deposits shall be equal to 120% of funds on deposit.

Capital Program - Commission capital investments allow for strategic and orderly development of Airport property. Prioritizing these capital investments involves considerations such as public needs, construction costs, condition of existing facilities, commercial opportunities, operating costs and potential funding sources. Additionally, the Commission uses the Airport Master Plan as a long-term capital planning document. The Master Plan is updated approximately every ten years and is approved by the FAA.

Annual Operating Budget 2020

Major Drivers of the FY 2020 Budget

The Bill and Hillary Clinton National Airport (Airport) serves as the gateway to aviation and is a key link in the air transport journey chain for the public traveling through the largest airport in Arkansas. As such, it plays an important role for the community in facilitating tourism, business travel and global supply chains. For incoming travelers, the Airport contributes to their first impression of the City of Little Rock and the State of Arkansas. For outbound travel, passengers may spend as much, or even more, time at the Airport than they do in the air and the Airport is devoted to serving their needs.

A number of factors influence the budget for the upcoming year. Primarily, any variance in air service and enplaned passengers will directly impact the revenue generated by the Airport. On the expense side, major snow and ice events are variables the Airport cannot predict but are included as contingencies in the operating budget.

Air Service In recent years, the U.S. airline industry has transformed its structure and its approach to cost management in an effort to maximize profitability. After multiple bankruptcies, industry consolidation, capacity reductions and a disciplined approach to managing costs, the industry has successfully achieved profits each year since 2010.

With the merger of American Airlines and U.S. Airways in 2015, 81% of the U.S. domestic market is controlled by four airlines (American, United, Delta and Southwest). The mergers and consolidations have allowed the industry to reduce excess capacity, achieve higher load factors (passengers per aircraft) and realize sustained profitability. While these major airlines control a substantial portion of the U.S. domestic market, ultra low-cost carriers have gained traction in markets underserved by the big four airlines. The Airport is no exception and has witnessed an increase in activity from low cost carriers in recent years. Ultra low-cost carrier Allegiant Airlines has operated at the Airport for several years offering seasonal service to leisure destinations. With the return of Frontier Airlines in 2018, the Airport now has two ultra low-cost carriers.

2019 Air Service Highlights  Via Air began service six days a week in April of 2018 to Austin, Texas (AUS). These flights were operated with Embraer E-145 aircraft that have a 50-seat capacity. By the end of 2018 Via Air reduced the flight to Austin, Texas (AUS) from the six days a week to two weekly flights in hopes of improving the load factor. On May 10, 2019 Via Air ceased serving the flight from Little Rock to Austin.  American Airlines added two mainline aircraft in May bringing total flights up from sixteen to eighteen. This increase in flights offered total capacity of 140-150 seats.  Delta Airlines added a seventh non-stop flight to Atlanta (ATL) in May. This provided a total of 1,043 seats to Atlanta six days a week. On Saturdays they operate five non-stops to Atlanta. All flights in this market operate with MD-88 aircraft that have a total capacity of 149 seats.

Annual Operating Budget 2020

 Frontier Airlines seasonal service to Orlando International Airport (MCO) which started November 16, 2018 ceased in April of 2019. This route was offered Mondays and Fridays on an Airbus A320, which seats 186 passengers.  Allegiant began a seasonal service to Destin (VPS) from Little Rock on May 17, 2019. These seasonal flights operated twice weekly from May until the end of August. The route performed well and will likely return next summer.  Southwest added an additional flight on Saturdays in October to Phoenix (PHX). Southwest was originally operating a daily flight to Phoenix every day except Saturday.  Southwest announced in September that beginning in January of 2020 service to Houston (HOU) will be restored.

Southwest provides service to Dallas, St. Louis, Las Vegas, and Phoenix utilizing the 143-seat Boeing 737-700.

Annual Operating Budget 2020

Passenger Enplanements One of the most significant statistical measurements for Airports is enplaned passengers. The airline mergers, referred to in the Air Service section, have tended to positively impact large and medium hub airports more than small hubs, like LIT. However, this trend reversed in 2017 when smaller airports began experiencing increased passenger activity. 2018 and 2019 continued that recent trend. According to the Airport Council International – North America, “North American airports experienced a 6.4% increase in international traffic and 4.8% increase in domestic passenger traffic. More than five times the combined U.S. and Canadian population arrived at or departed from North American airports in 2018.” As of September 30, 2019, LIT year-to-date enplaned passengers of 839,101 reflects a 6.2% increase when compared to the 790,378 from the same nine month period of 2018. Airport staff anticipates the 2019 enplaned passenger count will be 1,123,652 or 5.1% greater than the 1,069,349 reported in 2018. The Airport has seen monthly passenger increases for each of the past eighteen months when compared to the same months from the previous year. Based upon input from air service consultants, as well as input from Airport staff, the 2020 operating budget includes an expectation that enplanements will increase 1.5%. The budget assumes the Airport will see 1,140,507 enplaned passengers in 2020 and also assumes similar operations as in 2019.

In May 2019, Allegiant began service to Destin-Fort Walton Beach using Airbus A320 which is a 186-seat aircraft.

Annual Operating Budget 2020

LIT Enplaned Passengers, CY 2019

Via Airlines, Frontier 0.1% Allegiant Air, Airlines, 2.7% 2.1% Charters, 0.1% United Airlines, 15.9% American Airlines, 31.5%

Southwest Airlines, 22.4%

Delta Airlines, 25.2%

Annual Operating Budget 2020

FY 2020 Annual Operating Budget – Details

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Proposed (Budget to Budget) (Budget to YE Est.) REVENUES Airline Revenues Landing Fees $ 5,667,467 $ 5,774,520 $ 6,084,757 $ 6,244,471 $ 469,951 8.1% $ 159,714 2.6% Airline Rents 5,554,050 5,743,296 5,763,932 5,896,332 153,036 2.7% 132,400 2.3% Facility Use Fees 688,865 743,363 733,099 766,118 22,755 3.1% 33,019 4.5% Total Airline Revenues $ 11,910,381 $ 12,261,179 $ 12,581,788 $ 12,906,921 $ 645,742 5.3% $ 325,133 2.6%

Non-Airline Revenues Automobile Parking 9,692,084 9,714,142 10,138,548 10,267,364 553,223 5.7% 128,816 1.3% Rental Car Operations 4,405,702 4,587,040 4,538,794 4,583,000 (4,040) -0.1% 44,206 1.0% Customer Facility Charges 2,417,258 2,417,734 2,486,474 2,486,474 68,740 2.8% - 0.0% Terminal Concessions 1,284,631 1,297,882 1,255,833 1,261,474 (36,408) -2.8% 5,641 0.4% Ground Transportation 187,585 187,135 215,899 222,109 34,974 18.7% 6,210 2.9% Facility Leases 1,719,765 1,666,095 1,893,182 2,024,109 358,014 21.5% 130,926 6.9% Land Leases 1,964,328 1,979,788 1,987,249 2,023,643 43,855 2.2% 36,394 1.8% Misc Operating Revenue 853,990 874,998 982,000 981,836 106,838 12.2% (164) 0.0% Total Non-Airline Revenues $ 22,525,342 $ 22,724,812 $ 23,497,977 $ 23,850,007 $ 1,125,195 5.0% $ 352,030 1.5% TOTAL OPERATING REVENUES $ 34,435,723 $ 34,985,991 $ 36,079,765 $ 36,756,928 $ 1,770,937 5.1% $ 677,163 1.9%

EXPENSES Operating Expenses Salaries and Wages 7,793,445 8,605,925 8,253,127 8,963,460 357,535 4.2% 710,334 8.6% Employee Benefits 3,608,742 4,434,851 4,133,156 4,776,343 341,492 7.7% 643,187 15.6% Professional & Contractual Services 4,201,219 4,566,828 4,378,449 4,659,336 92,508 2.0% 280,886 6.4% Buildings and Grounds Maintenance 764,307 492,915 693,068 644,989 152,074 30.9% (48,079) -6.9% Equipment Repair and Maintenance 810,093 935,548 835,052 865,508 (70,040) -7.5% 30,456 3.6% Marketing and Public Affairs 323,771 360,980 306,139 320,716 (40,264) -11.2% 14,577 4.8% Utilities 1,767,078 1,954,285 1,977,723 1,954,835 550 0.0% (22,888) -1.2% Materials and Supplies 848,578 837,196 868,214 908,801 71,605 8.6% 40,587 4.7% Insurance 414,173 452,864 449,114 508,260 55,396 12.2% 59,146 13.2% Other Operating Expense 1,500,068 1,699,906 1,523,616 1,666,370 (33,536) -2.0% 142,754 9.4% Total Operating Expenses $ 22,031,475 $ 24,341,298 $ 23,417,658 $ 25,268,619 $ 927,321 3.8% $ 1,850,961 7.9%

Results from Operations before Depreciation $ 12,404,248 $ 10,644,694 $ 12,662,108 $ 11,488,310 $ 843,616 7.9% $ (1,173,798) -9.3%

Depreciation 18,047,361 17,000,000 17,500,000 18,000,000 1,000,000 5.9% 500,000 2.9%

RESULTS FROM OPERATIONS $ (5,643,113) $ (6,355,306) $ (4,837,892) $ (6,511,690) $ (156,384) -2.5% $ (1,673,798) -34.6%

Non-Operating Revenues (Expenses) Passenger Facility Charges 4,197,153 4,194,508 4,354,140 4,419,378 224,870 5.4% 65,239 1.5% Federal Operating Grants (1) 309,090 295,717 295,596 305,044 9,327 3.2% 9,448 3.2% Interest Income 1,061,875 1,343,738 1,568,319 1,403,100 59,362 4.4% (165,219) -10.5% Aviation Fuel Tax 407,113 395,158 358,132 358,132 (37,026) -9.4% - 0.0% Federal, State & Local Grants (2) 8,370,348 11,000,000 6,654,090 7,900,000 (3,100,000) -28.2% 1,245,910 18.7% Contributions from Lessees (3) - - - - - 0.0% - 0.0% Other Non-Operating (2,183,923) 82,447 20,280 20,280 (62,167) -75.4% - 0.0% Non-Operating Activities $ 12,161,657 $ 17,311,567 $ 13,250,555 $ 14,405,934 $ (2,843,467) -16.8% $ 1,155,378 8.7%

CHANGE IN NET POSITION $ 6,518,543 $ 10,956,261 $ 8,412,663 $ 7,894,244 $ (2,999,851) -27.9% $ (518,419) -6.2%

FY 2020 Operating Revenues $36,756,928

Annual Operating Budget 2020

Revenues Airports earn revenues from two categories: Airline and Non-airline. Airline revenues are revenues derived from air carriers and other aviation activities in the airfield and terminal areas. Non-airline revenues consist of 1) parking and ground transportation, 2) concessions such as rental cars, food and beverage, advertising, etc. and 3) rental of commercial land and buildings and other miscellaneous sources.

The Airport has historically generated a majority of its revenue from non-airline activities. The 2020 budget anticipates 65% of the operating revenue will be non-airline revenues. The chart below shows how revenue from both sources have grown over the past decade compared to the level of enplaned passengers.

* - FY 2019 Year-end estimate, FY 2020 budgeted. Source - Little Rock Municipal Airport Commission

Annual Operating Budget 2020

Operating Revenues

2020 Operating Revenues

Annual Operating Budget 2020

Revenue Assumptions

Airline Revenues Airline rates and charges incorporated in the Fiscal Year 2020 budget were developed using a compensatory ratemaking methodology designed to comply with applicable legal requirements. Capital projects are allowable from the surplus cash flows generated from revenues, grants, bonds, PFC’s, or CFC’s. Simply stated, the compensatory methodology requires airlines to pay only for the cost allocable to the portion of the airport system they use (i.e. airfield, apron, loading bridges, and terminal building space). As referenced above in the Passenger Enplanements section, the Airport assumes passenger enplanements in 2020 will increase 1.5% over 2019 enplanements. The level of passenger activity directly impacts Concession Revenues (parking, rental cars, and terminal concessions) and the 2020 budget for these revenue sources reflect the anticipated increase in passengers.

Approved Proposed AIRLINE RATE & CHARGES 2019 2020

Landing Fee Rate (per 1,000 lbs.) $ 4.21 $ 4.26 Passenger Terminal Rental Rate (per sq. foot) $ 42.50 $ 44.00 Gate Fee (per turn) $ 89.45 $ 94.00 Jet Bridge Fee (per turn) - Old $ 68.50 $ 72.00 Jet Bridge Fee (per turn) - New $ 40.00 $ 40.00 Aircraft Ramp Fee (per month) $ 1,500 $ 1,590 Remain Overnight (RON) Fee (per turn) $ 75 $ 80

Landing Fees The costs of the airfield area, which includes all runways, taxiways, associated navigational and operational aids and other airside properties is recovered through the landing fees and fuel flowage fees collected at the airport. Landing fees are charged to passenger and cargo aircraft landings, as well as from the fixed base operators for all commercial or chartered flights at the airport.

Annual Operating Budget 2020

As shown above, the landing fee for 2019 was $4.21 per 1,000 pounds and the 2020 fee will increase to $4.26. The Airport’s rate includes a $2.85 million discretionary credit in the airfield landing fee calculations to minimize the impact of rising costs on the airlines and help the Airport remain in a competitive position. Without the adjustment, the airlines would pay $6.21 per 1,000 pounds. During 2019, the Airport experienced an increase in landed weights when compared to the activity from 2018. The addition of seasonal flights to Orlando with Frontier and to Destin with Allegiant accounted for a portion of the increase in the landed weights. Additionally, American Airlines adding two additional mainline aircraft helped push the landed weights up in 2019. 2018 Actual to 2019 Actual Variance – In 2018 the Airport generated $5.7 million in Landing Fees, compared to the 2019 estimated year-end of $6.1 million. That represents a 7.4% increase during 2019. As mentioned above, this was due to the increase in landed weights, as well as the increase in the landing fee for 2019. Additionally, incentive credits offered for new air service was larger in 2018 than in 2019. 2019 Budget to 2020 Budget Variance – The budget for Landing Fees is based on estimated landing weights and the landing fee rates for the various years. The 2019 budget was $5.8 million while the 2020 budget for Landing Fees is $6.24 million, an 8.1% increase. The cost of operating the airfield is anticipated to increase during 2019. This anticipated cost increase, along with the expected change in landing weights contributed to the change in the budget for 2019. 2019 Actual to 2020 Budget Variance – The estimated year-end Landing Fees for 2019 are $6.1 million. Compared to the 2020 budget of $6.24 million, revenues from Landing Fees are projected to increase 2.6%. As mentioned above, this is driven by the change in the landing fee rate and the expected increase in landed weights. While 2019 included a small amount of incentive credits for landing fees, the 2020 budget does not include a provision for these credits.

Airline Rents The terminal rental rate is calculated on a cost recovery methodology that includes both operating and capitalized costs for the terminal area. The Compensatory rate structure allows the Airport to transfer a pro-rata share of the terminal costs to the airlines based on usable space. As airlines lease less space, their relative cost per square foot goes up. Likewise, as the costs to operate the terminal increase, the terminal rate increases to allow the Airport to recover those costs. A detailed discussion of operating and capital costs are included in the following pages of this document. The Airport anticipates these costs to increase slightly during 2020 as is reflected in the 2020 terminal rate.

Annual Operating Budget 2020

The 2020 terminal rate is $44.00, compared to $42.50 for 2019. This represents a 3.5% increase over the 2019 rate. As noted under Landing Fees, the Airport has applied a discretionary credit of $540,000 in the terminal rental rate calculations to minimize the impact of rising costs to the airlines. Without the adjustment, the airlines would pay $48.01 per square foot. 2018 Actual to 2019 Actual Variance – In 2018, the Airport generated $5.6 million in revenue from renting space to the airlines, compared to the 2019 year-end estimate of $5.8 million. That represents a 3.8% increase during 2019. This is primarily impacted by the increase in the terminal rate. Additionally, the Airport was able to lease additional terminal space to the Airlines and incentive credits for airline rented space decreased in 2019.

In 2019, the Commission began a $9.2 million pre-security lobby renovation project. Included is a renovation of the Riverbend restaurant with the addition of a new meeting space as well as a public seating area, replacement of both escalators, replacement of the existing elevator and the addition of a new elevator.

Annual Operating Budget 2020

2019 Budget to 2020 Budget Variance – The Airline Rents budget is based on terminal space the Airport is able to rent along with the terminal rates. The 2019 budget was $5.7 million while the 2020 budget for Airline Rents is 2.7% greater or $5.9 million. As mentioned above, the cost of operating the terminal is anticipated to increase during 2020. This anticipated cost change contributed to the change in the budget for 2020. 2019 Actual to 2020 Budget Variance – For 2019 the Airline Rents year-end estimate is $5.8 million. Compared to the 2020 budget of $5.9 million, revenues from Airline Rents are projected to increase 2.3%. As mentioned above, this is driven primarily due to the change in the terminal rent rate.

Facility Use Fees For airport operated gates and jet bridges, ticket counters and aircraft parking areas, the airlines will be charged a fee on a per-use basis. Revenue budgeted for the Facility Use Fees is estimated based on 2019 rates multiplied by the number of events anticipated based on historic trends. Recently the Airport installed new passenger boarding bridges at gates 1, 3, 5, 7 and 8. Three of the bridges were previously owned by the airlines. During 2020, the Airport plans on replacing three more Airport owned passenger boarding bridges. These new bridges will be at gates 6, 9 and 12. Converting any airline owned bridges to Airport owned allows the Airport to generate additional revenue on a per use basis, compared to no rent for airline owned bridges. This accounts for a majority of the variance in Facility Use Fees from 2017 to 2019. Additionally, the return of Frontier Airlines to the Airport and the addition of ViaAir helped increase the revenue from passenger boarding bridges during 2018. 2018 Actual to 2019 Actual Variance – Facility Use Fees for 2018 were $689K compared to the 2019 year- end estimate of $733K. That represents a 6.4% increase during 2019. As mentioned above, the conversion of passenger boarding bridges from airline owned to Airport owned during 2018 resulted in an increase in per use fees. 2019 Budget to 2020 Budget Variance – The 2019 budget for Facility Use Fees was $743K while the 2020 budget is $766K, an increase of 3.1%. The Airport anticipates replacing three Airport owned in 2020, but that was not reflected in the 2020 budget. Due to the lead-time in ordering and delivery of these bridges, the effect of these new bridges on the 2020 revenue budget was not considered. 2019 Actual to 2020 Budget Variance – For 2019 the estimated year-end Facility Use Fees are $733K. Compared to the 2020 budget of $766K, revenues from Facility Use Fees are projected to increase 4.5%.

Annual Operating Budget 2020

The addition of two new Airport owned passenger boarding bridges during 2019 accounts for a majority of the increase in the budget.

The Airport recently replaced five of the twelve passenger board bridges. In 2020, three more passenger boarding bridges will be replaced. These new bridges are heated and cooled, providing an enhanced customer experience at the Airport.

Cost per Enplanement Cost per Enplanement, or CPE, is a key financial metric for measuring the performance of an airport. CPE is calculated by dividing airline revenues by enplaned passenger for a particular year. As the table below indicates, the Airport has managed to keep the CPE relatively flat over the past five years. CPE for the period 2016 to 2020 (budgeted) increased only 3.3%.

Annual Operating Budget 2020

Non-Airline Revenues The ability to maximize non-airline revenue sources helps the Airport maintain economic sustainability thereby reducing the reliance on airline revenue. Non-airline revenues for 2020 are projected to increase 3.8% when compared to the 2019 budget. When compared to the estimated 2019 year-end non-airline revenues, the 2020 budget is 0.4% greater.

Automobile Parking Parking revenue is the single largest revenue item for the Airport. Of the $36.1 million in estimated year- end total operating revenues for the Airport for 2019, $10.1 million, or 28%, came from parking revenue. The Airport operates five separate parking lots. Listed below are the daily parking rates, by lot:

Parking Lot Daily Rate

East Short Term $13.00 West Short Term $13.00 Parking Deck $13.00 South Long Term $10.00 Peanut Lot $8.00 Parking revenues are forecast based on (1) historical parking transactions (2) average length of stay (3) current rates at the parking facilities located at the Airport and (4) projected enplaned passengers for 2020.

Annual Operating Budget 2020

2018 Actual to 2019 Actual Automobile Parking Variance – Parking revenue for $10,500 2018 was $9.7 million. During 2019, the estimated year-end

$10,000 revenue is $10.1 million, or a 4.6% increase. While no rate increase occurred during 2019, enplaned

$9,500 passengers increased 5%. This InThousand $ increase in enplanements accounts $9,000 for the increase in parking revenue 2018 Actual 2019 Budget 2019 Est. 2020 Budget in 2019.

2019 Budget to 2020 Budget Variance – Parking revenue was budgeted for 2019 at $9.7 million while the 2020 budget increases 5.7% to $10.3 million. While no rate increases are anticipated during 2020, the Airport is projecting enplaned passengers to increase 1.5%. The 2020 projected increase in enplaned passengers combined with the better than expected increase in passengers in 2019 of 5% accounts for the increase in the 2020 budget for parking revenue. 2019 Actual to 2020 Budget Variance – For 2019 the year-end estimated Automobile Parking revenues are $10.1 million. Compared to the 2020 budget of $10.3 million, parking revenues are projected to increase 1.3%. This increase is due to an expected increase in enplaned passengers of 1.5% in 2020.

Rental Car Operations The Airport has agreements with eight (8) rental car companies to rent automobiles to the traveling public. Since 2005, each rental car company has paid a privilege fee to operate at the Airport, with the privilege fee being the greater of a Minimum Annual Guarantee (“MAG”) or ten percent (10%) of gross revenues. Revenue from Rental Car Operations is impacted by the Rental Car Operations passenger activity but is not directly $5,000 tied to the fluctuation in enplaned $4,800 passengers. Additionally, the length of the car rental (contract $4,600 days) and rate charged by the rental $4,400

car company will impact the rental InThousand $ car revenue for the Airport. $4,200 2018 Actual to 2019 Actual $4,000 2018 Actual 2019 Budget 2019 Est. 2020 Budget Variance – Revenue from Rental Car Operations for 2018 was $4.4 million. The estimated year-end revenue for 2019 is $4.54 million, or a 3.0% increase. Enplaned passengers increased 5% during 2019, so this was a primary driver for this increase in the 2019 revenue.

Annual Operating Budget 2020

2019 Budget to 2020 Budget Variance – The 2019 budget for Rental Car Operations was $4.59 million while the 2020 budget is $4.58 million, a 0.1% decrease. This is based primarily on the estimated increase in enplaned passengers in 2020 offset by declining growth in Rental Car revenue per enplanement. 2019 Actual to 2020 Budget Variance – Budgeted revenues for Rental Car Operations are expected to increase 1.0% for 2020 when compared to the 2019 estimated year-end revenues. The 2019 estimated year-end revenues were $4.54 million while the 2020 budget increased to $4.58 million. Again, this due in part to the projected increase in enplaned passengers for 2019. The increase in the terminal rental rate is also reflected in the increase in this budget line.

Terminal Concessions For concession space, including restaurant and lounge, retail shops, vending and terminal advertising, tenants will pay a percentage of gross receipts that is based on the contract location, square footage and concept. Each concessionaire is contracted to an annual revenue Terminal Concessions floor through a minimum annual guarantee (MAG). An anticipated $1,500 increase in food and beverage revenues based on projections $1,400 from our concessionaire, HMS $1,300

Host, along with additional $1,200 sources of advertising revenue, InThousand $ $1,100 are the primary drivers for this increase. $1,000 2018 Actual 2019 Budget 2019 Est. 2020 Budget In February 2017, the Commission approved extending the Food and Beverage Concession Agreement with Host International, Inc. for an additional ten years. The extension included a provision to bring a Chili’s and a Chick-fil-A to the Airport. The Chili’s restaurant opened in October 2018. The construction of the food court housing Chick-fil-A and Burger King began after Chili’s opened. The food court re-opened in March 2019. 2018 Actual to 2019 Actual Variance – 2018 Terminal Concessions revenue was $1.29 million. Compared to the estimated year-end revenue for 2019, $1.26 million, this is a 2.2% decrease. Food and beverage & retail revenues decreased about 2% during 2019 due to the food court closure in early 2019 and a lower concession fee rate for the new concession brands.

Annual Operating Budget 2020

As part of efforts to enhance the passenger experience, HMS Host, the Airport’s food and beverage concessionaire, opened a new Chick-fil-A and Burger King in March 2019.

2019 Budget to 2020 Budget Variance – Comparing the 2019 Terminal Concessions revenue budget to the 2020 budget, the Airport decreased the budget 2.8%. The 2019 budget was $1.29 million while the 2020 budget will be $1.26 million. This is mostly due a lower projected passenger growth in 2020 than 2019 and the lower concession fee rate for the new concession brands. 2019 Actual to 2020 Budget Variance – The Terminal Concessions revenue for 2019 was $1.256 million. The 2020 budget is $1.261 million, or a 0.4% increase. This budget increase is based primarily on the anticipated increase in enplaned passengers during 2020 but is partly offset by the reduced concession fee rate for the new concession brands.

Ground Transportation Ground Transportation revenues are comprised of the concession fees and permits paid by taxi and limousine services. Additionally, “courtesy vehicles” including off-airport parking and hotel shuttle buses pay a monthly access fee. A relatively new source of revenue in this category are Transportation Network Companies (TNC), such as Uber and Lyft. Since Uber began activity at the Airport in late 2015, the revenue from this source has increased steadily. In September 2017, Lyft began operating at the Airport.

Annual Operating Budget 2020

* - FY 2019 Year-end estimate, FY 2020 budgeted. Source - Little Rock Municipal Airport Commission

Overall Ground Transportation Revenue has increased steadily over the past four to five years. However, the composition of the revenue has changed during that period. Taxi revenue in 2016 was 57% of the ground transportation market but in 2019 taxi market share has declined to 19%. TNCs market share has grown from 43% in 2016 to 81% in 2019. 2020 should see this trend Ground Transportation continue with a 1% to 2% shift in market share of ground $250 transportation revenue from taxis to $200 TNCs. $150 2018 Actual to 2019 Actual Variance $100 – 2018 Ground Transportation revenue was $188K while the InThousand $ $50 estimated year-end 2019 revenue is $- $216K. This represents a 15.1% 2018 Actual 2019 Budget 2019 Est. 2020 Budget increase during this period. As mentioned above, a majority of this increase was generated from ridesharing services. 2019 Budget to 2020 Budget Variance – The 2019 Ground Transportation revenue budget was $187K while the 2020 budget increased 18.7% to $222K. With the strong growth in TNS usage, as well as with the anticipated increase in enplanements, the Airport has increased the Ground Transportation budget for 2020.

Annual Operating Budget 2020

2019 Actual to 2020 Budget Variance – The estimated Ground Transportation revenue for 2019 is $216K. The 2020 budget is $222K, or a 2.9% increase. The anticipated continued growth in ridesharing and the projected increase in enplaned passengers are the major drivers of this increase.

Facility Leases As noted above, the Airport leases airport property to private developers. This includes our largest commercial tenant (Dassault Falcon Jet) as well as two Fixed Base Operators (Lynx FBO Arkansas and TAC Air) and Envoy Air who leases a maintenance facility in the Airport Business Park. These and other commercial tenants provide a significant source of non-airline revenue for the Airport. Growth in facility leases has been driven in 2019 by the addition of AfterGlow Aircraft Solutions lease of space in the Airport Business Park and the Federal Emergency Management Agency’s (FEMA) temporary lease of the Kellett Road facility (formerly the Southwest Reservation Center) for flood relief operations. The Airport anticipates a new tenant, Kiewit Construction, in 2020. They will be leasing Building 100 in the Airport Business Park.

The grand opening of AfterGlow Aircraft Solutions in May 2019 added a new tenant to the Airport Business Park. 2018 Actual to 2019 Actual Variance – 2018 Facility Leases revenue was $1.7 million while the year-end estimated 2019 revenue is $1.9 million, a 10.1% increase during this period. Most of the leases include

Annual Operating Budget 2020 an escalation clause tied to an index (CPI or PPI). A portion of the increase is related to this escalation in the lease rates. As mentioned above, the variance from 2019 to 2018 is related to the addition of AfterGlow Aircraft Solutions and FEMA. 2019 Budget to 2020 Budget Variance –The 2019 budget for Facility Leases was $1.7 million while the 2020 budget increased 21.5% to $2.0 million. The increase for 2020 is mostly due to a full year of facility rents for AfterGlow Aircraft Solutions as well as the addition of Kiewit Construction as a tenant at the Airport Business Park, but also anticipates FEMA no longer leasing the Kellett Road facility. 2019 Actual to 2020 Budget Variance – The estimated year-end Facility Leases revenue for 2019 is $1.9 million. The 2020 budget is $2.0 million, or a 6.9% increase. The additions of AfterGlow and Kiewit Construction will offset the loss of FEMA in 2020.

Land Leases The operation of a federally obligated airport involves complex relationships between the airport and its compatible use land tenants. The Federal Aviation Administration (FAA) encourages the acquisition and development of land for uses that are compatible with airports and aircraft noise. As a result, airport management negotiates ground leases with tenants such as Dassault Falcon Jet that meet this requirement and also promotes economic vitality to the region. Similar to the Facility Leases, the Land Leases have provisions for annual increases typically tied to an index. 2018 Actual to 2019 Actual Variance – 2018 revenue from Land Leases was $1.96 million while the estimated year-end 2019 revenue is $1.9 million, a 1.2% increase. The 2019 increase was due to normal escalations tied to an index (CPI or PPI). 2019 Budget to 2020 Budget Variance – The 2019 Land Leases revenue budget was $1.98 million while the 2020 budget increased 2.2% to $2.0 million. 2020 increases are due to normal escalation clauses tied to an index (CPI or PPI) in the agreements. 2019 Actual to 2020 Budget Variance – The Land Leases revenue for 2019 was $1.99 million. The 2020 budget is $2.0 million. This 1.8% increase is from the price escalation clauses in the leases.

Annual Operating Budget 2020

Customer Facility Charges The Airport collects a Customer Facility Charge (CFC) of $3.50 for Customer Facility Charges each rental car transaction day.

The rental car companies collect $3,000 these CFCs and remit them to the $2,800 Airport. These can be used for rental car facility expenses or held $2,600 for future costs associated with $2,400 the rental car facility’s capital InThousand $ $2,200 reserve fund. $2,000 2018 Actual to 2019 Actual 2018 Actual 2019 Budget 2019 Est. 2020 Budget Variance – In 2018, the Airport collected $2.42 million in CFC revenue from the rental car companies. The estimated year-end 2019 CFC revenue is $2.49 million, a 2.9% increase. This variance is tied directly to the number of rental car contract days for the particular period and is influenced by changes in enplaned passengers. 2019 Budget to 2020 Budget Variance – The 2019 CFC revenue budget was $2.42 million while the 2020 budget increased 2.8% to $2.49 million. Strong passenger growth in 2019 is driving the 2020 budget higher. 2019 Actual to 2020 Budget Variance – The CFC revenue for 2019 was $2.49 million, the same as the 2020 budget. While passenger enplanements are anticipated to increase during 2020, the budget is in line with the recent trend in CFCs of remaining flat to declining.

Miscellaneous Operating Revenue Miscellaneous Operating Revenue includes any other funds collected by the Airport, such as (1) employee credential fees including fingerprinting and ID badges (2) aircraft commission on fuel sales and (3) reimbursements from third parties for the provision of equipment or service from Airport resources. 2018 Actual to 2019 Actual Variance – In 2018, operating revenue from miscellaneous sources totaled $854K. The estimated year-end Misc. Operating Revenue 2019 Miscellaneous Operating $1,200 Revenue is $982K, a 15.0% increase. This is mostly due to the final phase- $1,000 in of an increased fuel flowage for $800 general aviation $600 2019 Budget to 2020 Budget $400

InThousand $ Variance – The 2019 budget for $200 Miscellaneous Operating Revenue $- was $875K, compared to the 2020 2018 Actual 2019 Budget 2019 Est. 2020 Budget budget of $982K. The primary

Annual Operating Budget 2020 reason for this increase of $107K, or 12.2 %, an anticipated increase in general aviation activities in 2020 based on 2019 revenues. 2019 Actual to 2020 Budget Variance – Estimated year-end Miscellaneous Operating Revenue for 2019 is $982K. Compared to this amount, the 2020 budget experiences no change.

Annual Operating Budget 2020

Operating Expenses FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Proposed (Budget to Budget) (Budget to YE Est.) EXPENSES Operating Expenses Salaries and Wages 7,793,445 8,605,925 8,253,127 8,963,460 357,535 4.2% 710,334 8.6% Employee Benefits 3,608,742 4,434,851 4,133,156 4,776,343 341,492 7.7% 643,187 15.6% Professional & Contractual Services 4,201,219 4,566,828 4,378,449 4,659,336 92,508 2.0% 280,886 6.4% Buildings and Grounds Maintenance 764,307 492,915 693,068 644,989 152,074 30.9% (48,079) -6.9% Equipment Repair and Maintenance 810,093 935,548 835,052 865,508 (70,040) -7.5% 30,456 3.6% Marketing and Public Affairs 323,771 360,980 306,139 320,716 (40,264) -11.2% 14,577 4.8% Utilities 1,767,078 1,954,285 1,977,723 1,954,835 550 0.0% (22,888) -1.2% Materials and Supplies 848,578 837,196 868,214 908,801 71,605 8.6% 40,587 4.7% Insurance 414,173 452,864 449,114 508,260 55,396 12.2% 59,146 13.2% Other Operating Expense 1,500,068 1,699,906 1,523,616 1,666,370 (33,536) -2.0% 142,754 9.4% Total Operating Expenses $ 22,031,475 $ 24,341,298 $ 23,417,658 $ 25,268,619 $ 927,321 3.8% $ 1,850,961 7.9%

2020 Operating Expenses

Expense Assumptions At the direction of the Commission and the Executive Director, the 2020 Proposed Budget provides funding for several initiatives considered top priorities. Aside from initiative funding, operating expenses are budgeted with an assumption that all departments will provide a level of service consistent with the current fiscal year.

Annual Operating Budget 2020

Overall, the budget is adjusted for:

 All known contractual increases or decreases  Economic enhancements specified for regional growth  Evaluating trends in passenger demand for goods and services  Removal of funding for one-time expenses  Other cognitive cost saving measures

Salaries & Wages The base salary and wage budget for fiscal 2020 is based on the current staffing level and the actual salaries for incumbent positions as of September 30, 2019. Overtime is budgeted as a percent of total salaries of certain hourly employees who are eligible for overtime pay. A number of positions were vacant during 2019 resulting in estimated year-end expenses being below budget for salaries. For the 2020 salaries budget, there were no staffing changes from the 2019 budget.

Budgeted Positions Department 2018 2019 2020

Executive Office 4 4 4 Administration 3 3 3 Human Resources 4 4 4 Customer Service 8 8 8 Finance 9 8 8 Procurement 5 5 5 Properties 1 1 1 Planning & Development 6 4 4 Airside Operations 18 19 19 Landside Operations 28 28 28 Airfield Maintenance 17 17 17 Terminal Maintenance 56 56 56 Information/Electronic Technology 10 10 10 Commercial Facilities 2 2 2 Fleet Maintenance 4 4 4 Total Positions 175 173 173

Full Time Positions 172 170 170 Part Time Positions 3 3 3 Total Positions 175 173 173

Annual Operating Budget 2020

2018 Actual to 2019 Actual Variance – Salaries and Wages for 2018 were $7.8 million. The estimated 2019 year-end expense is $8.3 million, or an increase of 5.9% over the previous year. Annual merit increases for staff accounts for most of this increase. Additionally, the Commission contracted with a consultant to prepare a salary survey in late 2018. The result of this survey was to increase the salary for a number of positions that were paid below market rates. This increase was instituted in the first quarter of 2019. 2019 Budget to 2020 Budget Variance – Salaries & Wages The 2019 budget for Salaries and Wages $10,000 was $8.6 million. The 2020 budget increases 4.2% to $9 million. This $9,000 variance is made up from the annual $8,000 merit increases as well as the effect of the salary survey. $7,000

InThousand $ 2019 Actual to 2020 Budget Variance – $6,000 For 2020, the budget for Salaries and

$5,000 Wages is $9 million. This is a 8.6% 2018 Actual 2019 Budget 2019 Est. 2020 Budget increase over the 2019 estimated year- end expense of $8.3 million. A majority of this increase is due the annual merit increases and the salary survey increases referred to above.

Employee Benefits Employee benefits includes expenses for active employee health care, retirement contributions (pension contributions for retired employees, if needed), federal insurance contributions (FICA) taxes and the employee assistance program. Other form of insurance provided by the Airport include life, workers compensation, disability and unemployment. Other optional benefits, paid by the employees, are offered by the Airport. 2018 Actual to 2019 Actual Variance – The Airport incurred Employee Benefits expenses of $3.6 million in 2018. The estimated expenses for 2019 increased 14.5% to $4.1 million. The Airport experienced a significant increase in group medical insurance premiums during 2018 which makes up most of the increase in this category. 2019 Budget to 2020 Budget Variance – The 2019 budget for Employee Benefits was $4.4 million while the 2020 budget increases 7.7% to $4.8 million. The Airport is anticipating another increase in group

Annual Operating Budget 2020 medical insurance premiums in 2019 that is driving most of this budget increase. However, the increase is not at the level of increases in recent years. 2019 Actual to 2020 Budget Variance – 2019 estimated year-end expenses for Employee Benefits are $4.1 million while the 2020 budget of $4.8 million is 15.6% greater. As mentioned above, a majority of this budget increase is related to the increase in medical insurance, while the remainder is due to a number of positions that were partially vacant during 2019 that are budgeted to be filled the full year of 2020.

Professional & Contractual Services The Airport staff provides a wide array of professional and maintenance services. However, some services are provided by outside firms and contractors. The category for Professional and Contractual Services includes expenses for professional and services provided by other firms. The largest components in the Professional and Contractual Services category are the expenses for security and firefighting. The Airport contracts with the City of Little Rock to provide Law Enforcement Officers. Additionally, members of the Little Rock Fire Department staff the Airport’s Aircraft Rescue and Firefighting (ARFF) facility. All costs Professional & Contractual related to personnel (salary, benefits, etc.) are incurred by the City and are $5,000 reimbursed by the Airport. All other

$4,000 expenses (canine explosives program, training expenses, as well as $3,000 maintenance of the ARFF trucks) are paid directly by the Airport. The Airport $2,000

also has a contract with a private InThousand $ $1,000 security firm to provide access control to restricted areas of the Airport. $- 2018 Actual 2019 Budget 2019 Est. 2020 Budget Other professional services in this category are legal, auditing, on-call engineering, aviation and government affairs consulting services. Additionally, expenses for janitorial contracts and uniform cleaning services are included in Professional and Contractual Services. 2018 Actual to 2019 Actual Variance – The estimated 2019 expense for Professional and Contractual Services is $4.4 million compared to the 2018 actual of $4.2 million, or a 4.2% increase. The salary increase extended by the City of Little Rock to their police and firemen is reflected in this category. Professional fees for engineers and airport consultants experienced a decrease 2019. 2019 Budget to 2020 Budget Variance – The budget for Professional and Contractual Services increased 2.0% from $4.6 million for 2019 to $4.7 million for 2020. The budget for firefighting increased to reflect the anticipated salary increases approved by the City of Little Rock. The police budget remains unchanged. While the budget allows for the anticipated salary increase, there is a reduction in the staffing level that offsets the salary increase.

Annual Operating Budget 2020

2019 Actual to 2020 Budget Variance – When the 2020 budget ($4.7 million) is compared to the estimated 2019 year-end expense ($4.4 million), there is a 6.4% increase. A majority of this is based to the assumption police will be fully staffed for 2019, as well as the anticipated salary increase in police and firefighting. While professional fees for engineers decreased in 2019, the 2020 budget anticipates an increase.

During the 22-day US Government shutdown in 2019, the airport launched Little Rock Cares, a community-wide initiative to help federal employees and contractors impacted during the shutdown. The effort mobilized 242 volunteers, collected 30,000 pounds of food and over $33,000 of gift cards to provide assistance to the 137 federal employees at the airport and more than 350 others throughout Little Rock that were experiencing severe hardships.

Buildings and Grounds Maintenance The Buildings and Grounds Maintenance category includes expenses related to contracts with outside firms that provide maintenance to various airport systems and buildings. Also included are solid waste contracts and various contracts to maintain the facilities. 2018 Actual to 2019 Actual Variance – The 2018 expenses for Buildings and Grounds Maintenance were $764K compared to the estimated expense of $693K for 2019, which is a 9.3% decrease. A significant repair expense to the generator in the Parking Deck in 2019 was offset by a decrease in expenses for airfield pavement repairs. 2019 Budget to 2020 Budget Variance – The budget for this category increased 30.9% from 2019 to 2020. The 2019 budget was $493K while the 2020 budget increased to $645K. Repairs to airport systems and 33

Annual Operating Budget 2020 other facility contracts are anticipated to increase in 2020 along with anticipated increases in expenses for solid waste removal. 2019 Actual to 2020 Budget Variance – The Airport anticipates a 6.9% decrease in expenses for Buildings and Grounds Maintenance when Buildings and Grounds Maint. comparing the 2019 estimated year-end $1,000 expenses to the 2020 budget. The estimated 2019 expenses were $693K $800 compared to the 2020 budget of $645K.

$600 Repairs to buildings in 2020 are not expected to be at the same level as $400 those in 2019, accounting for most of

InThousand $ the decrease in the budget for this $200 category. $- 2018 Actual 2019 Budget 2019 Est. 2020 Budget

Equipment and Repair Maintenance The final category of expenses for outside services are those for Equipment and Repair Maintenance. The largest expense in the category if for the maintenance agreement for the inline baggage handling system. Other items in this category are maintenance and repair expenses for jet bridges, elevators and escalators as well as other miscellaneous items. 2018 Actual to 2019 Actual Variance – Equipment and Repair Maintenance expenses for 2018 were $810K. These increased 3.1% to the estimated 2019 year-end expenses of $835K. An increase in the baggage handling system contract offset a slight reduction in vehicle repair expenses to account for most of the variance in this category. 2019 Budget to 2020 Budget Variance – The budget for Equipment and Repair Equipment and Repair Maint. Maintenance decreased from $936K in $1,000 2019 to $866K in 2020, a 7.5% decrease. $800 This decrease comes primarily from maintenance for the inline baggage $600 handling system. During 2019, the $400

Airport entered into a new agreement InThousand $ for the maintenance of the baggage $200 handling system, Jet Bridges and the inline baggage system. The new $- 2018 Actual 2019 Budget 2019 Est. 2020 Budget agreement should result in an overall decrease in the maintenance for these systems, when compared to the 2019 maintenance expenses.

Annual Operating Budget 2020

2019 Actual to 2020 Budget Variance – Comparing the 2019 estimated year-end expenses ($835K) to the 2020 budget ($866K), the Airport anticipates the Equipment and Repair Maintenance expenses to increase 3.6%.

Marketing and Public Affairs The Airport takes pride in being a first class facility and goes to great efforts enhance the customer experience. The Marketing and Public Affairs category includes expenses for marketing and communications efforts, market research and incentives for new airline routes. Additionally, customer service initiatives, employee service programs and hiring expenses are included in this category. 2018 Actual to 2019 Actual Variance – During 2018, the Airport spent $324K on Marketing and Public Affairs and an estimated $306K in 2019. This represents a 5.4% decrease during the year. As referenced in the Air Service Highlights section, several new routes were added at the Airport during 2018 as well as the addition of a new air carrier, ViaAIR. The marketing and advertising incentives for these routes account for a majority of the decrease in estimated year-end expenses from 2019 to 2020. 2019 Budget to 2020 Budget Variance – Marketing and Public Affairs The Airport has decreased the $500 Marketing and Public Affairs budget 11.2% from $361K in 2019 to $321K in $400 2020. A decrease in the expense for $300 market research accounts for most of this variance. $200

2019 Actual to 2020 Budget Variance – InThousand $ $100 During 2019, the Airport anticipates spending below the budget in $- 2018 Actual 2019 Budget 2019 Est. 2020 Budget Marketing and Public Affairs but, as referenced above, anticipates keeping relatively the same budget for 2020. The estimated year-end expenses for 2019 are $306K while the 2020 budget is expected to increase 4.8% to $321K. Incentive programs for new airline service is a significant line item that is utilized only when an airline announces a new route. While some incentive credit was utilized in 2019, the Airport continues to meet with the airlines to discuss new routes and will continue to budget for incentive credits. Additionally, an increase in the marketing and media budget accounts for a portion of the increase in the 2020 budget in this category.

Utilities Utility expenses for not only the terminal but also all airfield lights, parking lots and any vacant commercial properties are the responsibility of the Airport. In addition to electricity, natural gas, water and telephone and internet expenses, this category also includes the cost of diesel fuel to operate backup electric generators. The Airport has experienced significant changes in energy consumption and efficiency as a result of energy savings efforts implemented in recent years. In 2016, the Airport negotiated a natural gas delivery agreement that has further reduced the expenditure for natural gas. In 2019, the Airport

Annual Operating Budget 2020 executed an agreement with the electric utility provider to achieve a lower rate for the terminal and Parking Deck in exchange for agreeing to switch to generator power during high demand situations. 2018 Actual to 2019 Actual Variance – During 2018, the Airport spent $1.8 million on utilities while estimated year-end expenses for 2019 are $2 million, or an increase of 11.9%. Increases in electric expenses were the most significant factor related to the year-over-year change in utilities expense. Smaller increases in natural gas and water and sewer were experienced, as well.

In 2019 the airport showcased works of art from the Arkansas Arts Center at the TSA security checkpoint featuring young Arkansas artists.

2019 Budget to 2020 Budget Variance – The 2019 budget for utilities was $1.95 million while the 2020 budget is $1.95 million. The Airport is expecting expenses for all utilities to be consistent with the 2020 budget.

Annual Operating Budget 2020

2019 Actual to 2020 Budget Variance – Utilities Comparing the 2019 estimated year- $2,500 end expense for utilities ($2 million) to the 2019 budget ($1.95 million), the $2,000 Airport anticipates a 1.2% decrease in $1,500 utility expenses in 2020. While most utilities are expected to be flat when $1,000

compared to 2019 estimated year-end, InThousand $ $500 the 2020 budgeted expense for water and sewer are expected to be slightly $- higher in 2020 than in 2019. 2018 Actual 2019 Budget 2019 Est. 2020 Budget

Materials & Supplies In order to maintain the terminal, airfield, commercial and parking facilities, the Airport purchases supplies to maintain facilities. These include janitorial, plumbing and HVAC, Information Technology and vehicle supplies. 2018 Actual to 2019 Actual Variance – The expenses for Materials and Supplies during 2018 were $849K while the estimated year-end expenses for 2019 are anticipated to be $868K, a 2.3% increase. Increases in expenses for minor building supplies, HVAC supplies and janitorial supplies Materials and Supplies drove most of the increase in this $1,500 category. $1,250 2019 Budget to 2020 Budget Variance – $1,000 The Airport anticipates an increase in the expenses for materials and supplies $750

in 2020. The budget for Materials and $500 InThousand $ Supplies increased from $837K in 2019 $250 to $909K in 2020, an increase of 8.6%. Increases in the budget for airfield $- 2018 Actual 2019 Budget 2019 Est. 2020 Budget supplies and minor building supplies are the primary factors in the increase in the 2020 budget for Materials and Supplies. 2019 Actual to 2020 Budget Variance – Comparing 2019 estimated year-end expenses for Materials and Supplies of $868K to the 2020 budget of $909K, the expenses are expected to increase 4.7%. The Airport anticipates an increase in airfield supplies while most other expenses in the category should be similar in 2020 to the estimated year-end 2019 expenses.

Annual Operating Budget 2020

Insurance The Airport maintains property and liability insurance on all of the buildings on the property, as well as on all Airport owned vehicles and equipment. Additionally, the Airport maintains insurance for contents on the buildings occupied by the Airport and other general liability lines of insurance. All variances between budgets and actual listed below are directly related to changes in insurance premiums for the particular period. 2018 Actual to 2019 Actual Variance – During 2018, the Airport spent $414K on insurance premiums and claims paid in lieu of insurance claims. The 2019 estimated year-end amount to be spent on insurance is $449K, or an 8.4% increase. Most of this increase is due to an increase in premiums for commercial property and increased cyber liability coverage in 2019. 2019 Budget to 2020 Budget Variance – The 2019 budget for insurance was $453K while the 2020 insurance budget is $508K. This represents a 12.2% increase in the budget for 2020. The majority of this increase is related to the premium for Insurance coverage to buildings at the Airport. $600 While the Airport did not experience any losses to buildings that influenced $500 this increase, losses experienced by $400 insurance providers during 2019 were $300 passed on to the Airport.

$200 2019 Actual to 2020 Budget Variance – InThousand $ The 2019 estimated year-end expense $100 for insurance is $449K while the $- insurance budget for 2020 is $508K. 2018 Actual 2019 Budget 2019 Est. 2020 Budget This budget to estimated year-end increase is 13.2%. As discussed above, most of this increase is due to increase in premiums for coverage for buildings at the Airport.

Other Operating Expense The Other Operating Expense category includes miscellaneous expenses not specified in the aforementioned categories. Among these expenses are membership and subscriptions, travel and professional development and equipment rental costs. The greatest expense included in this category are fees charged for credit card transactions at parking facilities. The Other Operating Expenses combines a wide-array of expenses that are classified in the previously mentioned categories. The larger miscellaneous expenses include merchant credit card fees, computer support contracts, airport conferences and dues and subscriptions. While the volume of credit card activity has continued to increase, driving up these transactions fees, in 2019 the Airport worked with our credit card service provider to lower the transaction rate.

Annual Operating Budget 2020

2018 Actual to 2019 Actual Variance – During 2018, the Airport spent $1.5 million on other operating items. Estimated year-end expenses for 2019 in the category are expected to be $1.52 million, an increase of 1.6%. Increases in computer software and hardware support contracts make up most of this increase. 2019 Budget to 2020 Budget Variance – The 2019 budget for Other Operating Expense was $1.7 million while the 2020 budget is $1.67 million. This is a 2% decrease from 2019 to 2020. Expenses related to fingerprinting and badging are expected to increase in 2020 while the budget for Other Operating Expense furniture, fixtures and equipment is $2,000 expected to decrease slightly. 2019 Actual to 2020 Budget Variance – $1,500 For 2020, the budgeted amount to be $1,000 spent on Other Operating Expense is $1.67 million, which is 9.4% greater than InThousand $ $500 the 2019 estimated year-end expense, or $1.52 million. $- 2018 Actual 2019 Budget 2019 Est. 2020 Budget Depreciation The Airport capitalizes all asset purchases greater than $5,000 with a useful life greater than one year. A section on Capital Assets later in this document goes into further details concerning these assets and their acquisition. These assets are depreciated over their useful lives using the straight-line method. 2018 Actual to 2019 Actual Variance – Depreciation During 2018, the Airport expensed $18 $20,000 million on depreciation. Estimated depreciation expense for 2019 is $18,000 expected to be $17.5 million, a decrease $16,000 of 3.0%.

$14,000 2019 Budget to 2020 Budget Variance –

InThousand $ The 2019 budget for depreciation was $12,000 $17.0 million while the 2020 budget is

$10,000 $18.0 million. This 5.9% increase is due 2018 Actual 2019 Budget 2019 Est. 2020 Budget to the capital assets acquired during 2019 as well as the capital projects closed during the year. Several large airfield projects were completed during 2019 and will have a full year of depreciation during 2020. 2019 Actual to 2020 Budget Variance – The 2019 estimated depreciation expense is $17.5 million. The Airport has budgeted a 2.9% increase in depreciation, making the 2020 budget $18.0 million.

Annual Operating Budget 2020

Non-Operating Revenues (Expenses)

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Proposed (Budget to Budget) (Budget to YE Est.) Non-Operating Revenues (Expenses) Passenger Facility Charges 4,197,153 4,194,508 4,354,140 4,419,378 224,870 5.4% 65,239 1.5% Federal Operating Grants (1) 309,090 295,717 295,596 305,044 9,327 3.2% 9,448 3.2% Interest Income 1,061,875 1,343,738 1,568,319 1,403,100 59,362 4.4% (165,219) -10.5% Aviation Fuel Tax 407,113 395,158 358,132 358,132 (37,026) -9.4% - 0.0% Federal, State & Local Grants (2) 8,370,348 11,000,000 6,654,090 7,900,000 (3,100,000) -28.2% 1,245,910 18.7% Contributions from Lessees (3) - - - - - 0.0% - 0.0% Other Non-Operating (2,183,923) 82,447 20,280 20,280 (62,167) -75.4% - 0.0% Non-Operating Activities $ 12,161,657 $ 17,311,567 $ 13,250,555 $ 14,405,934 $ (2,843,467) -16.8% $ 1,155,378 8.7%

(1) - TSA Reimbursements for law enforcement, canine and utility usage. (2) - Includes FAA Entitlement and discretionary grants, as well as Ark. Dept. of Aeronautics grants. (3) - Reversions of facilities from lessees. Passenger Facility Charges The Airport collects a $4.50 Passenger Facility Charges Passenger Facility Charge (PFC) on $4,500 each enplaned passenger. These funds can be used by the Airport to $4,250 fund FAA-approved projects that enhance safety, security or capacity; $4,000 reduce noise or increase air carrier competition. LIT currently has FAA InThousand $ $3,750 authorization to collect PFC’s on $3,500 each enplanement approximately 2018 Actual 2019 Budget 2019 Est. 2020 Budget through 2020. The Airport is currently working on an application with the FAA for additional PFC collection authority. This application (PFC #10) should extend the Airport’s collection authority through 2024. 2018 Actual to 2019 Actual Variance – The Airport collected $4.2 million in PFCs during 2018. Estimated year-end PFC collections for 2019 are expected to be $4.35 million, a 3.7% increase. Year to date, enplaned passengers are up 6.2% at the Airport, so that is reflected in the increase in PFC revenue for the year. 2019 Budget to 2020 Budget Variance – The 2019 budget for PFC revenue was $4.2 million. Enplanements are up 6.1% for 2019 and are expected to increase 1.5% during 2020, the 2020 PFC budget is 5.4% greater, or $4.4 million, than the 2019 budget. 2019 Actual to 2020 Budget Variance – The 2019 estimated year-end PFC revenue is $4.35 million. As referenced above, the 2020 budget is $4.4 million. This reflects an anticipated 1.5% increase in enplaned passengers during 2020.

Annual Operating Budget 2020

Federal Operating Grants The Transportation Security Administration (TSA) reimburses the Airport for expenses related to the Law Enforcement Officer (LEO) Reimbursement Program, National Explosives Detection Canine Team Program and for utilities used in support of passenger screening and the baggage inspection system. While the expenses the Airport incurs in these areas are relatively consistent year over year, the availability of grants from the TSA is subject to change on an annual basis. 2018 Actual to 2019 Actual Variance – The Airport collected $309K in TSA operating grants in 2018. For 2019, the estimated year-end operating grants collected are expected to be $296K, a 4.4% decrease. 2019 Budget to 2020 Budget Variance – The 2019 budget for Federal Operating Grants was $296K. The budget for 2020 was increased to $305K, an increase of 3.2%. 2019 Actual to 2020 Budget Variance – In 2019, the estimated Federal Operating Grants federal operating grants collected $500 were $296K. The 2020 budget increased by $305K, or 3.2%. This is $400 based upon the assumption the TSA $300 will continue funding three K9 teams $200 in 2020. InThousand $ $100 Interest Income $- The Airport generates interest 2018 Actual 2019 Budget 2019 Est. 2020 Budget income on cash balances held in the various bank accounts. The interest rate on these accounts floats with the Fed Funds rate. The Federal Reserve has raised the Fed Funds rate several times in the past two years. However, two rate cuts in late 2019 resulted in a reduction in the rate earned on the Airport’s bank balances and is reflected in the 2020 budget. In addition to increasing interest rates, the Airport has also benefitted from an increase in the balance of cash on hand during 2019. The cash balance increased from approximately $49 million in January to nearly $60 million at the end of September. The combination of the increases in both interest rate earned on the cash balances and the balances of cash on hand has made a significant impact on interest income earned by the Airport over the past several years. 2018 Actual to 2019 Actual Variance – The Airport earned $1.1 million in interest income during 2018. The estimated year-end interest income earned in 2019 is $1.6 million. That is a 47.7% increase in one year. The average cash balance increased significantly during 2019. Additionally, the average interest rate earned on these balances during 2019 increased compared to the 2018 average interest rate. These were the primary factors in the increase in interest income during 2019.

Annual Operating Budget 2020

2019 Budget to 2020 Budget Variance – The 2019 budget for interest income was $1.3 million. This was based upon the prevailing interest rates at the end of 2017. The Airport has budgeted interest income for 2020 at $1.4 million, or up 4.4% from Interest Income the 2019 budget. With the current level of construction and operations, $1,750 as well as grant activity, expected to $1,500 continue at roughly the same pace, $1,250 the Airport anticipates cash balances $1,000 to increase approximately $10 $750 million during 2020. This increase in

InThousand $ $500 the cash balance is driving the slight $250 increase in budgeted interest $- income for 2020. 2018 Actual 2019 Budget 2019 Est. 2020 Budget 2019 Actual to 2020 Budget Variance – The 2019 estimated year-end interest income earned is $1.6 million. The 2020 budget reflects a 10.5% decrease over the prior year estimated year-end. The Airport has budgeted interest income for 2020 at $1.4 million. This reduction in the 2020 budget for interest income is due to an anticipated lower average interest rate in 2020 than in 2019. .

Aviation Fuel Tax The State of Arkansas collects taxes on the sales of aviation fuel and remits the local portion to the Airport. The level of aviation fuel tax revenue received by the Airport is solely based on those taxes remitted by the aviation vendors. The Airport receives limited information related to those sales and the taxes collected, so budgeting is only based on the prior year collections. 2018 Actual to 2019 Actual Variance – The Airport collected Aviation Fuel Aviation Fuel Tax Taxes in 2018 totaling $407K. The $500 estimated year-end collections for $400 2019 are $358K, a 12.0% decrease. $300 2019 Budget to 2020 Budget Variance – The budget for Aviation $200

Fuel Tax for 2019 was $395K, which InThousand $ $100 was based on a decrease from the 2018 collections. With 2019 $- 2018 Actual 2019 Budget 2019 Est. 2020 Budget collections decreasing when compared to 2018, the Airport has budgeted a decrease in Aviation Fuel Taxes for 2020. The 2020 budget for Aviation Fuel Tax is $358K, a decrease of 9.4%. 2019 Actual to 2020 Budget Variance – The estimated tax collected from the sales of aviation fuel for 2019 is $358K. The Airport is anticipating no change in collections for 2020 and is budgeting Aviation Fuel Tax revenue at $358K. 42

Annual Operating Budget 2020

Federal, State and Local Grants The Airport receives funding from the FAA in the form of entitlement and discretionary grants under the Airport Improvement Program. In addition, the Airport also receives grants from the Arkansas Department of Aeronautics. The amount of these grants often fluctuates due to the timing of progress payments to contractors and availability of federal and state funds.

The Airport began two significant airfield projects during 2019. The $4.3 million apron rehabilitation project will be reimbursed with future Passenger Facility Charges (PFC). The Airport will receive $6.3 million in federal grants to finance the terminal ramp expansion.

Annual Operating Budget 2020

2018 Actual to 2019 Actual Variance – During 2018, the Airport was able to collect a total of $8.4 million in grants from the FAA and the State of Arkansas. The estimated revenue from federal and state grants for 2019 is $6.7 million. This represents a 20.5% decrease from the 2018 actual. Activity in 2018 included the Airport Master Plan and Airport Layout Plan updates, continued work on Taxiways Alpha and Bravo, paved shoulders and lighting improvements on Runway 4 Right and Engineered Materials Arresting System (EMAS) replacement on Runway 4 Right/22 Left. 2019 activity included airfield drainage projects, terminal ramp expansion and the installation of emergency generators. The majority of grant revenue for 2020 will come from the Taxiway Charlie project and the terminal ramp and apron projects. 2019 Budget to 2020 Budget Variance – The budget for federal and state grants for 2019 was $11 million. The 2020 budget for grants decreased to $7.9 million, a 28.2% decrease. The Airport anticipates receiving federal grant funding in 2020 for the Taxiway Charley project as well as for the Terminal Ramp and Apron projects. 2019 Actual to 2020 Budget Variance – The estimated revenue collected from the federal and state grants for 2019 is $6.7 million. The Airport projects a total of $7.9 million, an increase of 18.7%, in grants collection in 2020.

Contributions from Lessees Airport property developed by lessees periodically reverts to the Airport. As the reversion occurs, the value of the improvements (buildings, parking lots, etc.) is recorded as a contribution from lessees. During 2019 there were no reversions and there are not any reversions scheduled for 2020. 2018 Actual to 2019 Actual Variance – There were no reversions in 2018 or 2019. 2019 Budget to 2020 Budget Variance – There were no reversions budgeted in 2019 or 2020. 2019 Actual to 2020 Budget Variance – There were no reversions in 2019 and none budgeted in 2020.

Other Non-Operating Revenues The Airport receives miscellaneous income from sources not identified in the categories listed above. Primarily, this income comes from proceeds from auctions of vehicles and equipment. In addition, the Airport records any proceeds from insurance claims and miscellaneous refunds and rebates in this category.

Annual Operating Budget 2020

2018 Actual to 2019 Actual Other Non-Operating Rev. Variance – In 2019 the Airport $150 disposed of a couple of airfield assets that were not fully

$100 depreciated, resulting in a loss of disposal of over $2.2 million. Year- end estimated Other Non-

$50 Operating Revenue in 2019 are InThousand $ $20K. $- 2019 Budget to 2020 Budget 2018 Actual 2019 Budget 2019 Est. 2020 Budget Variance – The 2019 budget for Other Non-Operating Revenues of $82K was based on normal 2018 activity, excluding the loss on disposal of assets. The budget for 2020 is $20K. This is a 75% decrease from the 2019 budget. 2019 Actual to 2020 Budget Variance – The estimated year-end Other Non-Operating Revenues for 2019 are $20K. The budget for 2020 is $20K, based upon the 2019 estimated year-end activity.

Annual Operating Budget 2020

Budget Detail by Department Executive Department

The Executive Department provides leadership and direction to Commission staff in accomplishing the seven-member Commission’s strategies and initiatives. The Executive Department consists of the Executive Director, Deputy Executive Director, Director – Air Service Development and Director - Public Affairs and Government Relations. They work to foster a cooperative and collaborative relationship among Commission employees, airlines, various business partners, relevant government agencies and stakeholder groups.

The Executive Department also coordinates and oversees the overall day-to-day operations and development of the Airport. Additionally, the Executive Department promotes positive collaborative relationships with its business partners and the community; approves all contracts, deeds, leases and agreements that contractually bind the Commission and ensures that the region’s long-term airport needs are identified and addressed.

All forms of communications with the public are handled by the Public Affairs and Government Relations Department. The Director – Public Affairs and Government Relations is responsible for all of these efforts at the Airport.

The director monitors traditional news channels, as well as social media, for stories and content related to the Airport or stories that may impact the Airport. Special events at the Airport are handled by this department, as well press releases with the local media and on social media. Additionally, the director works with lobbyists to monitor potential federal and state legislative issues that could impact the Airport.

The goal of the Air Service Development Department is the attraction or expansion of the existing level of air service while working with airlines to add new destinations. These functions are handled by the Director – Air Service Development.

The director is in constant communications with the airlines to monitor their satisfaction with their existing service at the Airport. Additionally, staff also meets regularly with the airlines with the hope of adding flights to existing destinations or to add new destinations. This includes airlines that currently have service at the Airport as well as new airlines.

Annual Operating Budget 2020

EXECUTIVE DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 858,489 $ 873,375 $ 886,362 $ 795,594 $ (77,781) -8.9% $ (90,768) -10.2% Payroll Taxes 44,988 66,813 60,268 60,863 (5,950) -8.9% 595 1.0% Employee Benefits 203,536 184,220 198,031 202,472 18,252 9.9% 4,441 2.2% Total Personnel Expenses 1,107,013 1,124,409 1,144,661 1,058,929 (65,479) -5.8% (85,732) -7.5%

Non-Personnel Expenses Professional & Contractual Services 217,629 265,000 245,041 264,000 (1,000) -0.4% 18,959 7.7% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 246,796 246,175 209,590 196,175 (50,000) -20.3% (13,415) -6.4% Utilities ------Materials and Supplies 2,220 3,500 1,952 3,500 - - 1,548 79.3% Insurance ------Other Operating Expense 226,202 254,070 231,858 225,195 (28,875) -11.4% (6,663) -2.9% Total Non-Personnel Expenses 692,847 768,745 688,441 688,870 (79,875) -10.4% 429 0.1%

Total Operating Expenses $ 1,799,860 $ 1,893,154 $ 1,833,103 $ 1,747,799 $ (145,354) -7.7% $ (85,303) -4.7%

Annual Operating Budget 2020

Administration Department

The Administration Department maintains oversight of the Airport’s risk management programs and sets guidance for the Commission office staff. The department is led by the Director – Human Resources and Administration.

One of the primary functions of this department is to oversee the Airport’s property and liability insurance coverages. The director works with insurance brokers and professionals to determine the proper insurance coverages are in place in order to minimize the Airport’s insurance risk.

ADMINISTRATION DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 121,827 $ 132,365 $ 123,867 $ 138,132 $ 5,767 4.4% $ 14,265 11.5% Payroll Taxes 8,923 10,126 9,387 10,567 441 4.4% 1,180 12.6% Employee Benefits 59,496 84,446 67,348 91,594 7,148 8.5% 24,246 36.0% Total Personnel Expenses 190,245 226,937 200,603 240,293 13,356 5.9% 39,690 19.8%

Non-Personnel Expenses Professional & Contractual Services 2,744 3,500 3,630 3,500 - - (131) -3.6% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 8,804 10,000 8,852 19,000 9,000 90.0% 10,148 114.6% Utilities ------Materials and Supplies 8,973 11,600 12,277 12,600 1,000 8.6% 323 2.6% Insurance 414,173 452,864 449,114 508,260 55,396 12.2% 59,146 13.2% Other Operating Expense 63,790 72,750 66,954 65,750 (7,000) -9.6% (1,204) -1.8% Total Non-Personnel Expenses 498,485 550,714 540,827 609,110 58,396 10.6% 68,282 12.6%

Total Operating Expenses $ 688,731 $ 777,650 $ 741,430 $ 849,403 $ 71,752 9.2% $ 107,973 14.6%

Annual Operating Budget 2020

Human Resources Department

The Human Resources Department administers the personnel policies approved by the Airport Commission. The Director – Human Resources and Administration leads this department. The department has to stay up to date on employment laws and work with Airport Counsel to determine the Airport is in compliance with the various federal and state laws.

The employee benefits approved by the Commission are administered by this department. That includes group health insurance, life and disability insurance, as well as the Airport’s retirement plans. The director and staff work with insurance brokers and investment advisors to administer these benefits.

The Human Resources department has the responsibility of interviewing and hiring all Airport staff. Additional, Human Resources staff is responsible for determining employee hours are properly recorded for the bi-weekly payroll.

HUMAN RESOURCES DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 269,945 $ 269,918 $ 274,764 $ 325,821 $ 55,903 20.7% $ 51,057 18.6% Payroll Taxes 19,944 20,649 20,592 24,925 4,276 20.7% 4,333 21.0% Employee Benefits 177,976 199,908 166,056 209,112 9,204 4.6% 43,056 25.9% Total Personnel Expenses 467,865 490,475 461,412 559,858 69,383 14.1% 98,446 21.3%

Non-Personnel Expenses Professional & Contractual Services 35,701 42,000 36,302 59,500 17,500 41.7% 23,198 63.9% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 31,713 60,300 47,063 63,500 3,200 5.3% 16,437 34.9% Utilities ------Materials and Supplies 3,100 3,900 346 3,900 - - 3,554 1027.1% Insurance ------Other Operating Expense 18,869 21,800 21,868 19,200 (2,600) -11.9% (2,668) -12.2% Total Non-Personnel Expenses 89,383 128,000 105,579 146,100 18,100 14.1% 40,521 38.4%

Total Operating Expenses $ 557,248 $ 618,475 $ 566,991 $ 705,958 $ 87,483 14.1% $ 138,967 24.5%

Annual Operating Budget 2020

Customer Care Department

Providing a positive experience for the passengers at the Airport is a high priority of the Commission. The Customer Care Department interacts with the passengers to provide assistance and enhance their experience while at the Airport. The Director – Operations is over the Customer Care Department.

A combination of Airport staff and volunteer Angels are on hand at all times to assist the passengers travelling through the Airport. Additionally, throughout the year staff hosts special Customer Care days.

CUSTOMER CARE DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 214,781 $ 249,361 $ 232,435 $ 267,957 $ 18,596 7.5% $ 35,522 15.3% Payroll Taxes 16,142 19,076 17,753 20,499 1,423 7.5% 2,746 15.5% Employee Benefits 66,927 101,937 75,012 91,388 (10,549) -10.3% 16,376 21.8% Total Personnel Expenses 297,850 370,374 325,200 379,844 9,470 2.6% 54,644 16.8%

Non-Personnel Expenses Professional & Contractual Services 107,401 120,000 110,979 116,400 (3,600) -3.0% 5,421 4.9% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 33,186 38,480 33,653 37,016 (1,464) -3.8% 3,363 10.0% Utilities ------Materials and Supplies 4,594 10,700 9,928 8,700 (2,000) -18.7% (1,228) -12.4% Insurance ------Other Operating Expense 1,736 6,800 4,621 6,800 - - 2,179 47.1% Total Non-Personnel Expenses 146,918 175,980 159,181 168,916 (7,064) -4.0% 9,735 6.1%

Total Operating Expenses $ 444,767 $ 546,354 $ 484,381 $ 548,760 $ 2,406 0.4% $ 64,379 13.3%

Annual Operating Budget 2020

Finance Department

The Finance Department has the responsibility of all financial and accounting functions of the Airport. The Director – Finance has the oversight of the Finance Department.

All revenue generated by the Airport is recorded by Finance Department staff. Additionally, the Finance Department is responsible for accounts payable, accounts receivable and payroll functions. The Finance Department also prepares the monthly financials that are reported to the Finance Committee and the Commission meetings and works closely with outside auditors in the preparation of the annual financial audit.

Finance works with Planning and Development in developing the Airport’s five-year Capital Improvement Program and related finance plan. The department coordinates with federal and state agencies to secure grants and get approval for Passenger Facility Charges for capital improvements.

FINANCE DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 546,335 $ 583,247 $ 578,809 $ 661,289 $ 78,042 13.4% $ 82,480 14.2% Payroll Taxes 39,406 43,700 43,367 50,589 6,889 15.8% 7,222 16.7% Employee Benefits 204,767 212,537 200,938 247,751 35,214 16.6% 46,813 23.3% Total Personnel Expenses 790,507 839,485 823,114 959,629 120,144 14.3% 136,515 16.6%

Non-Personnel Expenses Professional & Contractual Services 327,865 182,636 177,511 171,612 (11,024) -6.0% (5,899) -3.3% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 3,271 3,525 4,481 3,525 - - (956) -21.3% Utilities ------Materials and Supplies 5,051 4,550 5,117 4,550 - - (567) -11.1% Insurance ------Other Operating Expense 419,030 311,575 325,161 344,365 32,790 10.5% 19,204 5.9% Total Non-Personnel Expenses 755,217 502,286 512,269 524,052 21,766 4.3% 11,783 2.3%

Total Operating Expenses $ 1,545,724 $ 1,341,771 $ 1,335,384 $ 1,483,681 $ 141,910 10.6% $ 148,297 11.1%

Annual Operating Budget 2020

Procurement Department

Following Arkansas State statues and the Little Rock Municipal Airport Commission Purchasing Resolution guidelines, Procurement is responsible for acquiring all maintenance, repair and supply (MRO) items and commodities for daily needs of the Airport. Supervised by the Director – Procurement, staff sources and approves vendors and national cooperative buying associations, maintains a Commission approved list of sole source vendors, manages a centralized receiving process, and writes various Bids, Request of Qualifications or Proposals to provide goods and professional services. Procurement also originates and maintains contractual relationships over multi-year periods, is the department responsible for the Airport record retention procedures, and in conjunction with the Finance department manages the disposition for end of life cycle assets.

PROCUREMENT DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 275,517 $ 298,343 $ 287,372 $ 307,625 $ 9,282 3.1% $ 20,253 7.0% Payroll Taxes 20,273 22,823 22,497 23,533 710 3.1% 1,036 4.6% Employee Benefits 105,195 126,090 112,791 136,438 10,348 8.2% 23,647 21.0% Total Personnel Expenses 400,985 447,257 422,660 467,596 20,339 4.5% 44,936 10.6%

Non-Personnel Expenses Professional & Contractual Services ------Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies 1,907 2,700 3,217 2,700 - - (517) -16.1% Insurance ------Other Operating Expense 9,823 15,880 13,259 15,880 - - 2,621 19.8% Total Non-Personnel Expenses 11,730 18,580 16,476 18,580 - - 2,104 12.8%

Total Operating Expenses $ 412,715 $ 465,837 $ 439,137 $ 486,176 $ 20,339 4.4% $ 47,039 10.7%

Annual Operating Budget 2020

Properties Department

The oversight and management of all Airport owned property falls within the Properties Department. The Properties Department is led by the Director – Properties, Planning and Development. The scope of responsibilities ranges from acquisition of new property for airport development, recruiting tenants and managing leases on both the airside and landside of the airport.

The Airport negotiates with tenants to derive the maximum revenue for the Commission from the various properties owned by the Airport. These tenants include rental cars, airlines, concessions and commercial property tenants. The Properties Department works with current and prospective tenants to arrive at competitive terms to lease these properties. This department is also responsible for the Disadvantaged Business Enterprise (DBE) programs at the airport, and assuring that we are meeting all federal requirements, as well as Commission goals for minority participation.

PROPERTIES DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 126,170 $ 127,195 $ 133,271 $ 137,538 $ 10,343 8.1% $ 4,267 3.2% Payroll Taxes 9,516 9,730 10,089 10,522 792 8.1% 433 4.3% Employee Benefits 35,610 40,681 41,308 43,365 2,684 6.6% 2,057 5.0% Total Personnel Expenses 171,295 177,606 184,667 191,425 13,819 7.8% 6,758 3.7%

Non-Personnel Expenses Professional & Contractual Services 2,022 5,000 1,500 7,200 2,200 44.0% 5,700 380.0% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs - 2,500 2,500 1,500 (1,000) -40.0% (1,000) -40.0% Utilities ------Materials and Supplies 1,180 1,700 1,063 1,700 - - 637 59.9% Insurance ------Other Operating Expense 99,787 89,455 82,548 89,455 - - 6,907 8.4% Total Non-Personnel Expenses 102,990 98,655 87,612 99,855 1,200 1.2% 12,243 14.0%

Total Operating Expenses $ 274,285 $ 276,261 $ 272,279 $ 291,280 $ 15,019 5.4% $ 19,001 7.0%

Annual Operating Budget 2020

Planning and Development Department

Keeping an Airport’s buildings and airfield up to date involves a long-term plan and continuous construction projects. The Planning and Development Department has oversight of the long-term development of the Airport, both airside and landside. The Director – Properties, Planning and Development leads the Planning and Development Department with a primary goal of maximizing our opportunity to receive federal and state grants to have the maximum economic benefit to our community.

Planning staff have the responsibility for overseeing project management, planning, design and construction of projects, while maintaining a safe, secure airport. They manage the selection of consultants for professional services, oversee the preparation of packages for public bid and administer the construction contracts. They are also responsible for ensuring compatible land use around Airport property. For airfield and safety related projects, this department works closely with the FAA in order to remain in compliance with their standards.

PLANNING & DEVELOPMENT DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 433,477 $ 456,564 $ 445,416 $ 453,025 $ (3,539) -0.8% $ 7,609 1.7% Payroll Taxes 29,393 34,927 33,141 34,656 (271) -0.8% 1,515 4.6% Employee Benefits 154,325 175,208 157,261 163,476 (11,732) -6.7% 6,215 4.0% Total Personnel Expenses 617,195 666,699 635,818 651,157 (15,542) -2.3% 15,339 2.4%

Non-Personnel Expenses Professional & Contractual Services 80,652 62,500 29,344 67,600 5,100 8.2% 38,256 130.4% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies - 1,700 200 1,700 - - 1,500 750.0% Insurance ------Other Operating Expense 10,836 21,120 9,458 17,520 (3,600) -17.0% 8,062 85.2% Total Non-Personnel Expenses 91,488 85,320 39,003 86,820 1,500 1.8% 47,817 122.6%

Total Operating Expenses $ 708,683 $ 752,019 $ 674,820 $ 737,977 $ (14,042) -1.9% $ 63,157 9.4%

Annual Operating Budget 2020

Airside Operations Department

The Airside Operations Department is charged with a number of tasks, primarily with operating the Airport in a safe manner and meeting the regulatory compliance standards according to the FAA. The Airside Operations Department is led by the Director – Operations.

The FAA requires the Airport pass an annual PART 139 inspection. The Airside Operations Department coordinates the Airport’s activities during this inspection. The department also conducts daily inspections to assure the safety operation of the Airport.

The Airport contracts with the City of Little Rock to provide police and aircraft rescue and firefighting (ARFF) services. This department is the contact with the City and works with the City on staffing and other security related issues.

Airside Operations is responsible for badging Airport employees and the employees of contractors and tenants working on Airport property.

AIRSIDE OPERATIONS DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 895,230 $ 1,004,848 $ 991,671 $ 1,053,463 $ 48,614 4.8% $ 61,792 6.2% Payroll Taxes 67,712 75,494 74,983 80,590 5,096 6.8% 5,607 7.5% Employee Benefits 342,030 414,065 392,129 425,786 11,721 2.8% 33,657 8.6% Total Personnel Expenses 1,304,973 1,494,407 1,458,783 1,559,838 65,431 4.4% 101,056 6.9%

Non-Personnel Expenses Professional & Contractual Services 3,520,922 3,989,851 3,860,071 4,088,878 99,027 2.5% 228,807 5.9% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies 20,079 32,000 26,902 35,000 3,000 9.4% 8,098 30.1% Insurance ------Other Operating Expense 80,376 95,960 76,770 70,920 (25,040) -26.1% (5,850) -7.6% Total Non-Personnel Expenses 3,621,377 4,117,811 3,963,744 4,194,798 76,987 1.9% 231,054 5.8%

Total Operating Expenses $ 4,926,350 $ 5,612,218 $ 5,422,527 $ 5,754,637 $ 142,418 2.5% $ 332,110 6.1%

Annual Operating Budget 2020

Landside Operations Department

The public areas outside of the Airport terminal are under the oversight of the Landside Operations Department. These include the public parking lots, ground transportation operations and metered parking area. The Director – Operations is over the Landside Operations Department.

Operating the public parking lots is one of the primary functions of Landside Operations. Operating shuttles that transport passengers from the parking lots to the terminal is another Landside function.

LANDSIDE OPERATIONS DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 870,118 $ 962,871 $ 914,993 $ 1,000,413 $ 37,542 3.9% $ 85,420 9.3% Payroll Taxes 65,730 72,283 69,437 76,532 4,249 5.9% 7,094 10.2% Employee Benefits 378,750 433,168 425,757 476,344 43,176 10.0% 50,587 11.9% Total Personnel Expenses 1,314,598 1,468,322 1,410,188 1,553,289 84,967 5.8% 143,101 10.1%

Non-Personnel Expenses Professional & Contractual Services 41,557 43,741 40,735 42,601 (1,140) -2.6% 1,866 4.6% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies 36,580 31,955 23,558 32,740 785 2.5% 9,182 39.0% Insurance ------Other Operating Expense 8,665 15,855 8,729 15,000 (855) -5.4% 6,271 71.8% Total Non-Personnel Expenses 86,802 91,551 73,022 90,341 (1,210) -1.3% 17,319 23.7%

Total Operating Expenses $ 1,401,400 $ 1,559,873 $ 1,483,210 $ 1,643,630 $ 83,757 5.4% $ 160,420 10.8%

Annual Operating Budget 2020

Airfield Maintenance Department

Maintaining a safe airfield is a primary concern of the Airport. That function is carried out by the Airfield Maintenance Department. The department is under the oversight of the Director – Facilities.

The Airfield Maintenance Department maintains the runways, aprons, taxiways and other airfield surfaces. This includes airfield markings, rubber removal and asphalt maintenance. Inspecting and maintaining airfield lighting is an airfield maintenance activity. Proper maintenance of Runway Safety Areas and Runway Safety Zones falls within this department. Airfield Maintenance works closely with the Airside Operations Department to assure compliance with FAA regulations.

During inclement winter weather events, snow and ice removal falls within this department. The Airfield Maintenance Department also has the responsibility of mowing the areas inside and outside of the perimeter fence and maintaining all of the landscaped areas.

Additionally, the Airfield Maintenance Department is one of the leads on environmental, recycling and sustainability efforts for the Airport.

AIRFIELD MAINTENANCE DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 591,837 $ 679,337 $ 646,105 $ 725,336 $ 45,999 6.8% $ 79,231 12.3% Payroll Taxes 44,990 50,745 48,668 55,488 4,743 9.3% 6,820 14.0% Employee Benefits 285,182 353,996 373,335 420,222 66,226 18.7% 46,887 12.6% Total Personnel Expenses 922,010 1,084,079 1,068,109 1,201,046 116,967 10.8% 132,937 12.4%

Non-Personnel Expenses Professional & Contractual Services 111,131 42,648 52,607 79,120 36,472 85.5% 26,513 50.4% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 106,745 127,955 129,668 132,945 4,990 3.9% 3,277 2.5% Materials and Supplies 171,579 191,836 187,965 214,836 23,000 12.0% 26,871 14.3% Insurance ------Other Operating Expense 12,447 24,850 22,203 26,150 1,300 5.2% 3,947 17.8% Total Non-Personnel Expenses 401,902 387,289 392,442 453,051 65,762 17.0% 60,609 15.4%

Total Operating Expenses $ 1,323,912 $ 1,471,368 $ 1,460,551 $ 1,654,097 $ 182,729 12.4% $ 193,546 13.3%

Annual Operating Budget 2020

Terminal Maintenance Department

The Commission has placed a high priority on giving our passengers a positive experience as they travel through the Airport. The quality of that experience in a large part is determined by the quality of amenities in the terminal and the condition of the terminal. With over two million passengers travelling through the Airport annually, maintaining the terminal at a high level can be challenging. The Terminal Maintenance Department has the responsibility of maintaining the terminal. The Director – Facilities is over this department.

Besides maintaining the appearance of the terminal through janitorial services and routine maintenance, the Terminal Maintenance Department is responsible for all equipment and systems operating in the terminal. Some of these systems include the Baggage Handling Systems, elevators and escalators, Passenger Boarding Bridges and all HVAC systems. Terminal Maintenance is also involved in the environmental, recycling and sustainability efforts.

TERMINAL MAINTENANCE DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 1,813,797 $ 2,142,740 $ 1,962,688 $ 2,193,511 $ 50,771 2.4% $ 230,823 11.8% Payroll Taxes 136,559 161,166 149,129 167,804 6,638 4.1% 18,675 12.5% Employee Benefits 828,387 1,107,040 966,925 1,179,034 71,994 6.5% 212,109 21.9% Total Personnel Expenses 2,778,744 3,410,945 3,078,743 3,540,349 129,403 3.8% 461,606 15.0%

Non-Personnel Expenses Professional & Contractual Services 1,174,309 1,169,836 1,210,776 1,147,172 (22,664) -1.9% (63,604) -5.3% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 1,070,690 1,122,800 1,144,316 1,120,249 (2,551) -0.2% (24,067) -2.1% Materials and Supplies 312,309 269,664 318,004 291,284 21,620 8.0% (26,720) -8.4% Insurance ------Other Operating Expense 47,115 23,445 22,851 54,385 30,940 132.0% 31,534 138.0% Total Non-Personnel Expenses 2,604,423 2,585,745 2,695,948 2,613,090 27,345 1.1% (82,858) -3.1%

Total Operating Expenses $ 5,383,167 $ 5,996,690 $ 5,774,690 $ 6,153,439 $ 156,748 2.6% $ 378,748 6.6%

Annual Operating Budget 2020

Information/Electronic Technology Department

The Information/Electronic Technology Department has a wide range of systems and equipment to maintain in order to keep the Airport functioning properly. This includes interfacing with many of the Airport tenants for their system needs on a regular basis. This department is under the oversight of the Director – Facilities.

Some of the systems this department is responsible for include fire and security alarms, access control and flight information displays (FIDS). All servers and related hardware are maintained by the I.T/E.T. Department. Additionally, this department has responsibility for internet and telephone service within the terminal and all Airport owned facilities.

INFORMATION/ELECTRONIC TECHNOLOGY DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 518,616 $ 553,376 $ 512,179 $ 619,739 $ 66,363 12.0% $ 107,560 21.0% Payroll Taxes 39,786 42,333 39,424 47,410 5,077 12.0% 7,986 20.3% Employee Benefits 197,530 232,033 202,850 250,995 18,962 8.2% 48,145 23.7% Total Personnel Expenses 755,932 827,743 754,454 918,144 90,402 10.9% 163,690 21.7%

Non-Personnel Expenses Professional & Contractual Services 617,357 657,703 607,949 680,514 22,811 3.5% 72,565 11.9% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 155,586 147,280 151,692 148,096 816 0.6% (3,596) -2.4% Materials and Supplies 104,027 103,073 106,010 117,273 14,200 13.8% 11,263 10.6% Insurance ------Other Operating Expense 71,297 67,577 39,947 65,841 (1,736) -2.6% 25,894 64.8% Total Non-Personnel Expenses 948,267 975,633 905,598 1,011,724 36,091 3.7% 106,126 11.7%

Total Operating Expenses $ 1,704,200 $ 1,803,375 $ 1,660,052 $ 1,929,868 $ 126,493 7.0% $ 269,816 16.3%

Annual Operating Budget 2020

Commercial Facilities Department

One source of non-aeronautical revenue is leasing properties to tenants to develop for their purposes. Depending on the terms of the lease agreement, the Commercial Facilities Department, which is made up of the Terminal Maintenance staff, is responsible for maintaining many of these developed properties. The Director – Facilities is over the Commercial Facilities Department.

This department provides practically the same services that are handled for Terminal Maintenance with a much reduced janitorial requirement. Commercial Facilities is also part of the Airport’s environmental, recycling and sustainability program.

COMMERCIAL FACILITIES DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 80,259 $ 90,187 $ 87,528 $ 92,898 $ 2,711 3.0% $ 5,370 6.1% Payroll Taxes 6,206 6,899 6,539 7,107 208 3.0% 568 8.7% Employee Benefits 53,526 56,791 56,360 59,836 3,045 5.4% 3,476 6.2% Total Personnel Expenses 139,992 153,877 150,426 159,841 5,964 3.9% 9,415 6.3%

Non-Personnel Expenses Professional & Contractual Services 21,530 41,000 71,513 41,000 - - (30,513) -42.7% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 362,415 426,022 458,719 438,317 12,295 2.9% (20,402) -4.4% Materials and Supplies 24,778 32,508 26,284 32,508 - - 6,224 23.7% Insurance ------Other Operating Expense ------Total Non-Personnel Expenses 408,723 499,530 556,516 511,825 12,295 2.5% (44,691) -8.0%

Total Operating Expenses $ 548,714 $ 653,407 $ 706,942 $ 671,666 $ 18,259 2.8% $ (35,276) -5.0%

Annual Operating Budget 2020

Fleet Maintenance Department

The Airport requires an extensive fleet of vehicles, tractors, mowers and trailers in order to carry out all of the required maintenance repair needs. Maintenance of these assets is handled by the Fleet Maintenance Department. Fleet Maintenance is under the oversight of the Director – Facilities.

Preventive maintenance, as well as routine repairs, are handled by the Fleet Maintenance staff. For more extensive repairs, the vehicles are taken to equipment dealers or repair shops. This department also makes sure there are adequate supplies of unleaded and diesel to power these vehicles and equipment.

FLEET MAINTENANCE DEPARTMENT FY2020 Budget Expense Summary

FY 2018 FY 2019 FY 2019 FY 2020 Growth Growth Actual Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 177,047 $ 182,198 $ 175,665 $ 191,119 $ 8,921 4.9% $ 15,454 8.8% Payroll Taxes 13,617 13,938 13,565 14,621 683 4.9% 1,056 7.8% Employee Benefits 74,362 62,027 78,215 92,825 30,798 49.7% 14,610 18.7% Total Personnel Expenses 265,026 258,162 267,445 298,565 40,403 15.7% 31,120 11.6%

Non-Personnel Expenses Professional & Contractual Services 32,166 27,104 29,068 27,104 - - (1,964) -6.8% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 71,642 130,228 93,327 115,228 (15,000) -11.5% 21,901 23.5% Materials and Supplies 162,264 146,150 158,925 156,150 10,000 6.8% (2,775) -1.7% Insurance ------Other Operating Expense 4,063 11,202 13,395 13,202 2,000 17.9% (193) -1.4% Total Non-Personnel Expenses 270,135 314,684 294,716 311,684 (3,000) -1.0% 16,968 5.8%

Total Operating Expenses $ 535,161 $ 572,846 $ 562,160 $ 610,249 $ 37,403 6.5% $ 48,089 8.6%

Annual Operating Budget 2020

Interest and Financing Expenses

In December 2015, Airport management was granted approval by the Commission to complete the Airport’s debt-payoff plan. The plan authorized the Airport to pay off the last of its outstanding debt, bonds 2007A and B, ten years early at a savings of $1.6 million in debt-service costs. With the extinguishment of this debt, the Airport no longer incurs interest and financing expenses related to long- term debt.

Capital Purchases

The Capital Purchases List (details provided with Attachment A) includes expenditures by the Airport (aside from FAA authorized projects) that either (1) buy fixed assets with an individual unit value of $5,000 or greater and a useful life beyond one year or (2) add to the value of an existing fixed asset with a useful life that extends beyond one year. Capital purchases include the purchase of vehicles, equipment, machinery, information technology equipment, parking equipment, etc. that are purchased throughout the year. As part of the annual budget process, department directors submit capital purchase requests to be consider for purchase in the upcoming year. These requests are reviewed with the Deputy Executive Director and the approved items are included in the Capital Purchases List (on the following page). Although the Capital Purchases are approved through the budget process, Commission approvals are obtained for major capital purchases exceeding $50,000. The Capital Purchases budget is developed through the estimated cost of specific projects or fixed asset acquisitions, including routine life cycle replacements.

Annual Operating Budget 2020

Capital Purchases List ATTACHMENT A CLINTON NATIONAL AIRPORT FY 2020 CAPITAL PURCHASES R Description Details Budgeted

REFleet Vehicles New fleet vehicles to replace end of life vehicles 250,000 Total Vehicles 250,000

TJBatts T-1400 Runway De-Icer 1400 gallon, 50 foot boom width trailer for applying potassium acetate liquid de-icer 64,000 TJGenie S85 BoomLift Lift with 91 ft working height, 74 ft reach telescopic boom to handle increased loads 152,000 TJStripeMaster Touch Series Retroreflectometer Applies pavement markings in compliance with FAA standards 21,000 TJBlastrac Ride-on Shot Blaster Blastrac BMR-75D Ride-on Shot Blaster for pavement marking removal 111,000 CJEcologic OEM Mobile ARFF Foam Test Cart System Complete Ecologic test cart assembly w/hoses and Storz fittings for ARFF foam testing 45,000 Total Heavy Equipment 393,000

JJReplacement Computers 20 Computers, 5 Replacement Laptops,Uninterruptible Power Supplies, Software Licenses, laptops. 65,000 JJCommon Use System Addition and Refresh Upgrade/replace common use equipment at curbside, concourse and ticket counters 400,000 JJUpgrade Dynamics AX to Dynamics 365 Upgrade Microsoft Dynamics AX 2012 R2 to Microsoft Dynamics 365 500,000 JJContent Management Software Software to manage terminal video walls and other displays 100,000 JJLPI System for Parking Replace LPI system for parking 100,000 JJWiFi 6 Upgrade Replace access points in terminal, upgrade wireless controllers, new management software. 150,000 JJFLIR Cameras for Fire Trucks 3 FLIR KF6-RSU cameras for the ARFF Fire Trucks 50,000 JJRedesign of Airport Website & Add Employee Portal Redesign and development of the airport website and employee portal 120,000 JJProject Management Module Module for construction invoicing and project management 150,000 JJMillwork for Kiosk Millwork for common use kiosk in the lobby 30,000 TCTerminal Electrical & Data/Comm System Plans Master drawings for primary electrical data/comm circuits & conduits for terminal building 110,000 Total Computer Systems: Infrastructure 1,775,000

JJFire Suppression System - UPS Room Add Additional Fire Suppression System UPS room in West Electrical Vault 10,000 JJReplace Fire Walls Replace fire walls in terminal server room 45,000 JJFire Alarm Visuals for Ramp 12 external fire alarm systems for concourse/ramp area 20,000 REHVAC and BAS Controls Updates Replace HVAC equipment and BAS controls 80,000 TCUpdate Terminal Revit Model Update 2013 CAD model and add old ATCT and new Concessions 75,000 TSFire Alarm & Mass Notification System for Terminal Ramp Emergency notification for AOA ramp workers 114,000 TSPassenger Bench Seating Add bench seating to Terminal-7 indoor & 15 outdoor benches 81,000 Total Building Improvements 425,000

TCTerminal Signage Improvements Update wayfinding signage and add info for TNC pick up 30,000 TCLED Lighting Improvements LED Lighting for various airport locations 140,000 TCParking Lot Improvements Crack sealing, rejuvenating, sealcoating, microsurfacing &minor reconstruction on various parking surfaces and roadways 120,000 Total Parking/Roadway Improvements 290,000

TCDrainage Improvements Allowance to repair sinkholes and other drainage projects on the airfield. 250,000 TCProperty Acquisition Allowance Land purchases to ensure compatible environment. Includes demolition of structures. 450,000 TCTree and Fence Removal/Relocation Removal trees and fences on newly acquired airport prop.; relocation of existing fencing. 300,000 Total Airfield Improvements 1,000,000 PROPOSED 2020 CAPITAL PURCHASES $ 4,133,000

Annual Operating Budget 2020

Capital Purchases List - continued

ATTACHMENT A CLINTON NATIONAL AIRPORT FY 2020 CAPITAL PURCHASES R Description Details Budgeted

Carry forward capital purchases: JJAdditional and Replacement Security Cameras Addt'l Cameras in Various Areas of the airport; approx. 63 cameras. 455,000 JJTV for Gate Hold Areas TV's, Speakers, AMP, Mounts, Cable Runs, IMC Licenses, CNN Server Equip., & Labor 154,000 JJGIS Server and Software Two Servers, GIS Software Licenses 100,000 JJReplace the PBX Telephone System Study, Recommendation, replace old phone system 923,100 REBldg. 132 Improvements (former CFS, New CAP Prepare bldg. for occupancy by CAP. Roof repair,restroom reno., window replacement 75,000 TCAs-Built Terminal Plans To provide updated facility drawings to improve facility and lease management 75,000 TCIce Dams for Sloped Canopies Add dams or "teeth" at lower edge of sloped canopy to prevent large sheets of ice from sliding off the canopy 25,000 TCRelocate Airport Beacon-Study Relocate the airport beacon from the top of the old control tower to a new location 20,000 TCDemolition of CAP Bldg. 124 Demolition of CAP Bldg. 124 to clear site for future development 250,000 TCNew Ticket Lobby Photo Purchase of new mural printed on metal panel and installed in terminal lobby. 35,000 JJAdditional UPS for MDF A One Three Phase Industrial UPS and new Power Strips for MDF A 150,000 JJRedundant Data Center Investigate best location for a redundant data center on the airport 15,000 JJFiber Optic Cable to Carrier FSDO Fiber Optic Cable to Carrier and FSDO 60,000 REConnect AMF Generator to Building Automation Sys. Add commercial power feed and generator to Building Automation System 6,000 EJEnterprise Resource System GL/ Acct Rec/Pay/Contract Mgmt./Lease F10‐09‐3 329,000 TJFord F450 Dump Truck 2018 Ford F-450 Chassis, SD Crew Cab 4x4 to replace 1973 Chevy Dump Truck 80,000 GBRapid Fill Fuel Pump System High volume fuel pumping system to pump fuel from tanks to mobile fuel tank 150,000 TJFuel Truck Mobile Fueling Transport Truck 100,000 JMRedline Mobile Series Conveyor Motorized conveyor belt to be used for loading sand and salt during weather events 15,500 JMElastec SmartAsh portable incinerator SmartAsh small, portable incinerator for burning international trash and medical waste 10,000 JJReplace CCTV Servers Replace CCTV Servers, Terminal, Parking and GA 525,000 JJReplace 12 existing Kiosks with 9 new Kiosks Replace 12 existing common use Kiosks for passenger flight check-in with 9 new Kiosks 210,000 JJUpgrade FSDO CCTV System Replace existing analog cameras with new CCTV Cameras 50,000 REBird Netting Repair and Replacement Replace/repair terminal bldg. bird netting for wildlife control 40,000 TCNew Public Seating Area Convert the old bookstore space to "Soft Seating" area 140,000 TC"Sense of Place" Terminal Features Add features and amenities throughout terminal to define LIT's "Sense of Place" 200,000 TCRelocate Civil Air Patrol Relocate CAP to vacant space on second floor of GIP or other vacant facility 150,000 JJBird Netting in RAC Replace all bird netting in the 1st floor RAC facility 60,000 Total Carry Forward Items $ 4,402,600

TOTAL 2020 CAPITAL PURCHASES $ 8,535,600

Annual Operating Budget 2020

Major Capital Projects In order to meet the demands of air traffic growth and to maintain a high level of customer satisfaction with existing facilities, projects for the construction of new facilities and renovation of existing facilities are constantly ongoing at the Airport. Capital projects include the design and construction of buildings, facilities, and major renovations, airfield improvements and other major improvements. These projects are funded through a variety of sources (Federal and state grants, Passenger Facility Charges, local funds).

Airport staff prepares a five-year Capital Improvement Plan (CIP) that is reviewed and approved annually by the Federal Aviation Administration (FAA). It serves as a guide for future planning and prioritizes the long term capital needs of the Airport. The 5 Year CIP assists in the planning, acquisition and financing of capital projects.

A few of the upcoming major projects include:

 Terminal Ramp Expansion: The Terminal Ramp Expansion located between taxiways H and J on the western edge of the existing ramp began in 2019 and will continue into 2020. This expansion will provide parking space for additional Remaining Overnight (RON) aircraft and will allow for new hardstand parking locations that will be required during future concourse construction. This project includes an evaluation of high mast ramp lights, taxiway/ramp edge lights, taxiway centerline lights, guidance signs and electrical duct bank infrastructure.

 Taxiway PAPA Rehabilitation: This rehabilitation will replace one of our last “asphalt” taxiways with “PCC pavement,” allowing operational flexibility for the routing of heavy aircraft to parking areas on the west side of the airfield. This project will also provide a stub out for future connection of a taxi lane from the Dassault Falcon Jet facility to allow them a redundant entry/exit to their recently expanded facility.

 Taxiway Charlie Relocation: This multi-year project will be completed in several phases and will relocate Taxiway Charlie, change the layout of Taxiway Mike, rehabilitate tie-in locations at Taxiway PAPA and install base mounted LED taxiway edge lights along the new taxiways Charlie and Mike. The new location of taxiway Charlie will standardize the distances between runway 4L/22R and the adjoining full-length taxiway in accordance with AC 150-5300-13A. The PCC pavement material will provide adequate load bearing capability for large aircraft that may be accessing the west GA ramp and need to utilize runway 22R. Changes to the layout of taxiway Mike will allow for aircraft to exit or cross Runway 4L at perpendicular intersections, removing the acute-angle taxiway to the west side of runway 4L/22R.

 Pre-Security Lobby Renovation & Terminal Improvements: The Pre-security Lobby Renovation & Terminal Improvements project began in 2019 and is projected to be completed in the Spring of 2020. This project consists of the interior renovation of the second and third levels of the Pre- Security Lobby from the escalators to the TSA Security Checkpoint, including storefronts, ceiling,

Annual Operating Budget 2020

walls and floor finishes, lighting and fire protection systems, video display walls and public art. Improvements to the terminal building also include the renovation of the Riverbend Restaurant seating area to include both dining and meeting rooms, as well as a new public seating area. The existing elevator and escalators will be replaced and a new public elevator will be added on the south side of the current elevator.

 Passenger Boarding Bridges: This project will replace the Airport’s oldest passenger bridges at Gates 6, 9, and 12 which are all Common Use Gates. The new bridges will be equipped with iOPS systems that will allow remote monitoring and management of the bridges and their heating, cooling and electrical systems. The passenger boarding bridges at Gates 1, 3, 5, 7 and 8 were recently replaced and iOPS systems will be added to them in 2020 as well.

Annual Operating Budget 2020

Major Capital Projects List CLINTON NATIONAL AIRPORT FY 2020 - 2022 MAJOR CAPITAL PROJECTS (Non-AIP or PFC)

Description Total Budget 2020 2021 2022

AIRFIELD & AIRFIELD MAINTENANCE FACILITY PROJECTS Enclose East Bay of Airfield Maintenance Facility 600,000 60,000 540,000 Planning / Programming for New Equipment Storage Building 150,000 150,000 Building Improvements / Construction of New Storage Building 900,000 900,000 Fiber and CCTV Cameras to East Airfield 1,100,000 150,000 950,000 Fiber Loop from ATCT to Terminal to ARFF 400,000 40,000 360,000 Access Control System Replacement 1,500,000 250,000 950,000 300,000 Clear Obstructions on 3M Property / Granite Mountain 500,000 500,000 Solar Project TBD Subtotal $ 5,150,000 $ 1,150,000 $ 3,700,000 $ 300,000

TERMINAL BUILDING PROJECTS Expansion of IT/ET Office 145,000 145,000 Expansion of Badging Office 165,000 165,000 Add Smoke Baffles at Ticket Lobby & Bag Claim 60,000 60,000 TRP - New Curbside Canopies & Improvements 1,250,000 150,000 800,000 300,000 Replace or refurb AHU-6, 7A,36B (serving Bag Claim) 180,000 180,000 Replace or refurb AHU-20 and 31 (serving Starbucks & Food Court) 160,000 160,000 Baggage Claim & Ground Transportation Roof Rehab 1,250,000 500,000 450,000 300,000 Rehab Escalators from Baggage Claim to Parking Structure 280,000 280,000 Replace/Relocate Two Emergency Generators next to Facilities Office 550,000 50,000 500,000 Facilities Office Expansion & Renovation 800,000 100,000 700,000 TRP - Central Utility Plant/Utility Corridor Preliminary Design 800,000 500,000 300,000 TRP - Replace/Relocate Switchboards 1 & 2 (CUP Phase 1) 1,200,000 200,000 1,000,000 Subtotal $ 6,840,000 $ 2,030,000 $ 4,210,000 $ 600,000

PARKING & ROADWAY PROJECTS Parking Office Renovation 450,000 450,000 Replace Existing & Add Backup Generator for Parking Deck 1,000,000 100,000 900,000 Subtotal $ 1,450,000 $ 550,000 $ 900,000 $ -

COMMERCIAL / INDUSTRIAL BUILDING PROJECTS Fiber from East Airfield to Kellett Road Facility 60,000 60,000 Fiber to Carrier Building & FSDO 60,000 60,000 Crisp Drive Extension & Beautification 1,100,000 900,000 200,000 Standard Aero - Replace HVAC & add platforms at RTU's 150,000 150,000 Rehab Cargo Bldg. 1 for Consolidated Airline GSE Facility 350,000 50,000 300,000 Subtotal $ 1,720,000 $ 1,160,000 $ 500,000 $ 60,000

Annual Operating Budget 2020

Major Capital Projects List - continued

CLINTON NATIONAL AIRPORT FY 2020 - 2022 MAJOR CAPITAL PROJECTS (Non-AIP or PFC)

Description Total Budget 2020 2021 2022

AIRPORT BUSINESS PARK PROJECTS Site Improvements & Access Control 400,000 400,000 Parking Lot Improvements - Phase 1 (North Lots) 490,000 490,000 Parking Lot Improvements - Phase 2 (Central Lots) 490,000 490,000 Parking Lot Improvements - Phase 3 (South Lots) 270,000 270,000 Add CCTV to Building & Campus (approx. 36 cameras) 240,000 40,000 200,000 Building 100 HVAC Upgrades (new RTU and VAV's) 300,000 300,000 Bldg. 200 - Multi-tenant Improvements - Phase 1 2,150,000 250,000 1,900,000 Bldg. 200 - Multi-tenant Improvements - Phase 2 7,000,000 700,000 6,300,000 Bldg. 300 - Multi-tenant Improvements - Phase 1 300,000 40,000 260,000 Bldg. 300 - Multi-tenant Improvements - Phase 2 3,000,000 300,000 2,700,000 Bldg. 100 - Replace Fire Alarm System 110,000 110,000 Bldg. 100 - Emergency Generator (100kW NG), ATS 152,000 152,000 Hangar 200 (N&S) - Upgrade Fire Suppression Systems 526,000 80,000 446,000 Hangar 200 (N&S) - Replace Fire Alarm System 110,000 110,000 Hangar 200 (N&S) - Add Emergency Generator (80kW NG), ATS 125,000 125,000 Hangar 300 - Upgrade Fire Suppression System 262,000 40,000 222,000 Hangar 300 - Replace Fire Alarm System 127,000 127,000 Hangar 300 - Add Emergency Generator (80kW NG), ATS 125,000 125,000 Hangar 400 - Upgrade Fire Suppression System 208,000 32,000 176,000 Hangar 400 - Replace Fire Alarm System 94,000 94,000 Hangar 400 - Add Emergency Generator (80kW NG), ATS 125,000 125,000 Hangar 500 - Upgrade Fire Suppression System 218,000 33,000 185,000 Hangar 500 - Replace Fire Alarm System 90,000 90,000 Hangar 500 - Add Emergency Generator (80kW NG), ATS 125,000 125,000 Bldg. 1000 - Replace Fire Pumps & Backflow Preventers 428,000 78,000 350,000 Bldg. 1000 - Connect Alarm System to Terminal 70,000 70,000 Bldg. 1000 - Add Emergency Generator (475kW Diesel), ATS for pumps 280,000 280,000 Bldg. 1000 - Add Emergency Generator (80kW NG) for Bldg. & Controls 83,000 83,000 Bldg. 1000 - Elect. Service Switchgear, Panel & Circuit Modifications 140,000 140,000 Subtotal $ 18,038,000 $ 2,815,000 $ 5,153,000 $ 10,070,000

$ 33,198,000 $ 7,705,000 $ 14,463,000 $ 11,030,000

Annual Operating Budget 2020

Historical Performance Indicators

Operating Fiscal Operating Enplaned Revenue per % Year Revenue $ (1) Passengers (1) Enplanement Change 2011 27,523 1,103 $25 10.9% 2012 29,021 1,148 $25 1.3% 2013 30,629 1,085 $28 11.6% 2014 30,648 1,038 $30 4.6% 2015 31,238 993 $31 6.6% 2016 32,873 997 $33 4.8% 2017 33,782 1,017 $33 0.7% 2018 34,436 1,069 $32 -3.1% 2019* 36,080 1,124 $32 -0.3% 2020* 36,757 1,141 $32 0.4%

(1) In thousands.

Operating Revenue per Enplanement $35

$30

$25

$20

$15

$10

$0 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020*

* - FY 2019 Year-end estimate, FY 2020 budgeted. Source - Little Rock Municipal Airport Commission

Annual Operating Budget 2020

Operating Expenses per Enplanement

Operating Fiscal Operating Enplaned Expenses per % Year Expenses $ (1) Passengers (1) Enplanement Change 2009 15,363 1,135 $14 -3.9% 2010 15,968 1,125 $14 4.9% 2011 16,294 1,103 $15 4.1% 2012 17,714 1,148 $15 4.4% 2013 19,845 1,085 $18 18.5% 2014 20,102 1,038 $19 5.9% 2015 21,380 993 $22 11.2% 2016 20,115 997 $20 -6.3% 2017 21,048 1,017 $21 2.6% 2018 22,031 1,069 $21 -0.5% 2019* 23,418 1,124 $21 1.2% 2020* 25,269 1,141 $22 6.3%

(1) In thousands.

Operating Expense per Enplanement $25

$20

$15

$10

$0 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020*

* - FY 2019 Year-end estimate, FY 2020 budgeted. Source - Little Rock Municipal Airport Commission

Annual Operating Budget 2020

Operating Ratio

Fiscal Operating Operating Operating % Year Expenses $ (1) Revenue $ (1) Ratio Change 2011 16 28 0.59 -6.2% 2012 18 29 0.61 3.1% 2013 20 31 0.65 6.1% 2014 20 31 0.66 1.2% 2015 21 31 0.68 4.4% 2016 20 33 0.61 -10.6% 2017 21 34 0.62 1.8% 2018 22 34 0.64 2.7% 2019* 23 36 0.65 1.4% 2020* 25 37 0.69 5.9%

(1) In thousands.

Operating Revenue vs. Expense 40

In Millions Millions $ In 15

0 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020*

Operating Expenses Operating Revenue

* - FY 2019 Year-end estimate, FY 2020 budgeted. Source - Little Rock Municipal Airport Commission

Annual Operating Budget 2020

Net Revenue per Enplanement

Net Revenue Fiscal Net Revenue Enplaned per % Year $ (1) Passengers (1) Enplanement Change 2011 11,228 1,103 $10.18 22.6% 2012 11,307 1,148 $9.85 -3.3% 2013 10,784 1,085 $9.94 0.9% 2014 10,547 1,038 $10.16 2.2% 2015 9,857 993 $9.93 -2.2% 2016 12,758 997 $12.80 28.9% 2017 12,733 1,017 $12.52 -2.2% 2018 12,404 1,069 $11.60 -7.4% 2019* 12,662 1,124 $11.27 -2.9% 2020* 11,488 1,141 $10.07 -10.6%

(1) In thousands.

Net Revenue per Enplanement $14.00

$12.00

$10.00

$8.00

$6.00

$4.00

$2.00

$0.00 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020*

* - FY 2019 Year-end estimate, FY 2020 budgeted. Source - Little Rock Municipal Airport Commission

Annual Operating Budget 2020

Supplemental Data Airport Rates & Charges

2019 2018 2017 2016 2015 Landing fee rate (per 1,000 lbs) $ 4.21 $ 4.17 $ 4.12 $ 4.05 $ 3.90 Terminal building rental rate (per Sq. Ft.) 42.50 41.07 38.90 38.20 34.18 Gate Fee (per turn) 89.45 88.67 81.45 81.45 77.90 Jet Bridge Fee (per turn) 68.50 68.50 68.50 68.50 68.50 Aircraft Ramp Fee 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 Remain Overnight (RON) Fee 75.00 75.00 75.00 75.00 75.00

2014 2013 2012 2011 2010 Landing fee rate (per 1,000 lbs) $ 3.65 $ 3.39 $ 3.39 $ 3.39 $ 3.39 Terminal building rental rate (per Sq. Ft.) 31.25 30.34 24.74 24.74 24.74 Gate Fee (per turn) 79.15 75.00 75.00 75.00 70.00 Jet Bridge Fee (per turn) 68.50 25.00 25.00 25.00 25.00 Aircraft Ramp Fee 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 Remain Overnight (RON) Fee 75.00 50.00 50.00 50.00 50.00

Parking Fees (Daily Maximum)

2019 2018 2017 2016 2015 Parking Deck $ 13.00 $ 13.00 $ 13.00 $ 13.00 $ 13.00 Short Term Lots (East and West) 13.00 13.00 13.00 13.00 13.00 Long Term Lot (South) 10.00 10.00 10.00 10.00 10.00 Peanut Lot (Economy) 8.00 8.00 8.00 8.00 8.00

2014 2013 2012 2011 2010 Parking Deck $ 13.00 $ 13.00 $ 13.00 $ 13.00 $ 10.00 Short Term Lots (East and West) 13.00 13.00 13.00 13.00 10.00 Long Term Lot (South) 10.00 10.00 10.00 10.00 8.00 Peanut Lot (Economy) 8.00 8.00 8.00 8.00 6.00

Annual Operating Budget 2020

Daily Flights (at December 31)

Airline Gate Destination 2018 2017 2016 2015 2014

Allegiant Air Gates 6 or 12 Orlando, FL (SFB) 0.3 0.3 0.3 0.3 0.3 Los Angeles, CA (LAX) 0.1 0.1 0.1 0.1 -

American Airlines Gates 1,3 & 9 Dallas, TX (DFW) 7.0 7.0 7.0 7.0 7.0 Chicago, IL (ORD) 5.0 5.0 5.0 5.0 5.0 Gate 8 Charlotte, NC (CLT) 3.0 3.0 3.0 3.0 Gate 12 New York (LGA) - - - - 1.0 Gate 9 Washington, D.C. (DCA) 2.0 - - - -

United Airlines Gate 5,7 & 12 Denver, CO (DEN) 3.0 3.0 3.0 3.0 2.0 Chicago, IL (ORD) 3.0 3.0 3.0 3.0 3.0 Houston, TX (IAH) 5.0 5.0 5.0 5.0 5.0

Delta Air Lines Gate 2 &4 Atlanta, GA (ATL) 7.0 7.0 7.0 7.0 7.0 Memphis, TN (MEM) - - - - - Detroit, MI (DTW) 1.0 1.0 1.0 1.0 1.0

Frontier Airlines Gate 9 Denver, CO (DEN) 4.0 - - - - Orlando, FL (MCO) 0.1 - - - -

GLO Airlines Gate 6 New Orleans, LA (SMY) - - 2.0 2.0 - Destin, FL - - 0.1 - -

Southwest Airlines Gates 10, 11, & 12 Dallas, TX (DAL) 3.0 3.0 3.0 3.0 3.0 Chicago, IL (MDW) - - 1.0 1.0 1.0 Phoenix, AZ (PHX) 1.0 1.0 1.0 1.0 1.0 Houston, TX (HOU) - - - - - Baltimore, MD (BWI) - - - 1.0 1.0 Las Vegas, NV (LAS) 1.0 1.0 1.0 1.0 1.0 Saint Louis, MO (STL) 2.0 2.0 2.0 - -

US Airways Gates 5 & 8 Charlotte, NC (CLT) - - - - 3.0

Via Airlines Gate 6 Austin TX (AUS) 0.3 - - - -

Total Daily Departures 47.8 41.4 44.5 43.4 41.3

Annual Operating Budget 2020

Passenger Activity

AIRLINES/CODESHARE 2018 2017 2016 2015 2014

Allegiant Air 18,079 18,101 13,917 15,405 12,719 American Airlines 2,839 36 2,621 1,914 114,238 American Eagle 228,736 211,686 204,662 135,124 128,729 Expressjet - American 2,718 2,411 - - - Mesa 1,104 9,710 10,711 84,598 1,890 Pacific Southwest (PSA) 66,351 65,434 63,556 16,388 - Republic - - - 64 1,418 Delta Airline 262,757 250,381 252,874 248,331 221,887 Compass - - - - 260 GOJet - 1,016 - - - Express Jet – Delta 714 15,405 15,116 16,787 17,544 Freedom - - - - - Endeavor/Pinnacle 1,954 3,880 2,108 749 2,130 Shuttle America - - 181 258 35 Skywest – Delta 13,834 1,067 1,501 138 - Republic - Delta 179 133 - - - Frontier 23,283 - - - 20,363 GLO Airlines - 4,335 7,586 338 - Southwest Airlines 269,335 274,424 262,202 265,453 293,489 Air Wisconsin-United 19,680 - - - - Express Jet – United 53,862 77,929 94,946 108,149 119,030 Mesa-United 37,048 16,724 9,712 Republic - United 13,738 - 64 47 - Skywest – United 30,697 41,304 41,156 47,946 33,666 Trans States - United 18,838 21,758 12,529 2,956 - Mesa-US Airways - - - - 41,787 Air Wisconsin-US Airways - - - - 1,019 Pacific Southwest (PSA) - - - 47,462 23,841 Republic - - - - 3,531 Via 2,288 - - - - Charters 1,315 1,270 1,455 605 731

Total Enplanements 1,069,349 1,017,004 996,897 992,712 1,038,307

Annual Operating Budget 2020

Airline Landing Weights (in thousand pounds)

2018 2017 2016 2015 2014 Passenger Airlines Allegiant 17,791 17,510 13,980 15,375 12,512 American 381,594 353,792 341,037 276,207 310,988 Continental - - - - - Delta 324,892 312,024 318,579 298,884 289,556 Frontier 22,852 - - - 23,047 GLO Airlines - 9,918 19,401 1,610 - Northwest - - - - - Southwest 309,990 310,625 308,462 322,356 410,011 United 198,129 170,796 172,914 168,735 160,126 US Airways - - - 54,521 82,903 Via Airlines 6,950 - - - - Vision - - - - 242 Charter 3,486 3,510 3,585 2,262 1,160 Total 1,265,684 1,178,175 1,177,958 1,139,950 1,290,545

Cargo Airlines Airborne Express - - - - - Federal Express - - - - - UPS 122,243 135,585 137,282 135,529 134,957 Total 122,243 135,585 137,282 135,529 134,957

Total Landed Weights 1,387,927 1,313,760 1,315,240 1,275,478 1,425,502

Annual Operating Budget 2020

Little Rock Metro Population (Comparative Analysis) Ten Year History (at January 1)

Year U.S. State Metro 2018 328,226,532 3,013,825 738,344 2017 326,965,105 3,004,279 734,622 2016 323,127,513 2,988,248 731,612 2015 321,418,820 2,978,204 729,135 2014 318,857,056 2,959,373 724,335 2013 316,497,531 2,949,828 717,703 2012 314,112,078 2,938,506 710,759 2011 311,721,632 2,922,280 702,305 2010 309,647,057 2,896,843 691,903 2009 306,771,529 2,874,554 681,888

Little Rock Metro Population (Six-County Service Area) Ten Year History (at January 1)

Year Pulaski Faulkner Grant Perry Lonoke Saline Total 2018 393,956 123,654 18,165 10,348 72,898 119,323 738,344 2017 393,250 122,227 18,082 10,132 72,228 118,703 734,622 2016 392,664 121,552 18,102 10,189 71,645 117,460 731,612 2015 392,702 120,768 18,144 10,245 71,557 115,719 729,135 2014 391,536 119,390 18,046 10,344 70,834 114,185 724,335 2013 389,058 118,529 18,035 10,326 70,087 111,668 717,703 2012 386,862 116,293 17,957 10,386 69,410 109,851 710,759 2011 383,600 114,039 17,887 10,447 68,701 107,631 702,305 2010 380,053 110,813 17,751 10,443 67,481 105,362 691,903 2009 376,567 108,477 17,718 10,441 66,086 102,599 681,888

Annual Operating Budget 2020

Little Rock Metro Personal Income Per Capita (Comparative Analysis) Ten Year History (at January 1)

Year U.S. State Metro 2018 51,640 41,046 43,679 2017 49,246 39,722 42,582 2016 48,112 38,252 41,062 2015 46,049 37,782 40,925 2014 44,438 36,529 39,880 2013 44,266 36,291 40,619 2012 42,453 33,961 38,602 2011 40,277 31,991 36,896 2010 39,376 31,629 36,912 2009 41,082 32,434 37,443

Little Rock Metro Personal Income Per Capita (Six-County Service Area) Ten Year History (at January 1)

Year Pulaski Saline Lonoke Faulkner Perry Grant Metro 2018 48,838 40,232 37,686 35,918 33,750 36,975 43,679 2017 47,834 38,282 36,742 35,159 32,773 35,588 42,582 2016 45,862 37,360 35,413 34,235 31,935 34,323 41,062 2015 46,349 36,076 34,897 33,350 31,679 33,876 40,925 2014 45,080 35,196 34,506 32,344 30,813 32,870 39,880 2013 46,593 34,956 33,908 32,391 30,576 32,722 40,619 2012 43,719 33,849 32,739 31,419 29,763 31,756 38,602 2011 41,492 32,543 31,749 30,333 28,552 31,016 36,896 2010 41,809 32,331 31,637 29,729 27,313 29,809 36,912 2009 42,746 32,332 31,626 29,776 26,840 29,203 37,443

Annual Operating Budget 2020

Little Rock Metro Unemployment Rate (Comparative Analysis) Ten Year History (at January 1)

Year U.S. State Metro 2018 3.9% 3.7% 3.3% 2017 4.9% 3.9% 3.5% 2016 5.3% 5.1% 4.7% 2015 6.2% 6.1% 5.5% 2014 7.4% 7.5% 6.8% 2013 8.1% 7.5% 6.7% 2012 8.9% 8.0% 7.0% 2011 9.6% 7.9% 7.0% 2010 9.3% 7.5% 6.4% 2009 5.8% 5.4% 4.6%

Little Rock Metro Unemployment Rate (Six-County Service Area) Ten Year History (at January 1)

Year Pulaski Saline Lonoke Faulkner Perry Grant Metro 2018 3.4% 3.0% 3.3% 3.3% 4.2% 3.2% 3.3% 2017 3.6% 3.2% 3.4% 3.8% 4.8% 3.6% 3.5% 2016 4.7% 4.2% 4.3% 4.8% 6.3% 4.7% 4.7% 2015 5.6% 4.9% 5.2% 5.7% 7.7% 5.6% 5.5% 2014 6.9% 6.2% 6.4% 7.0% 8.9% 6.8% 6.8% 2013 6.9% 6.3% 6.3% 6.7% 8.3% 6.7% 6.7% 2012 7.2% 6.5% 6.8% 7.0% 8.7% 7.2% 7.0% 2011 7.1% 6.6% 6.7% 7.2% 8.2% 7.0% 7.0% 2010 6.4% 6.3% 6.0% 6.7% 7.5% 6.8% 6.4% 2009 4.6% 4.4% 4.4% 4.7% 5.5% 5.1% 4.6%

Annual Operating Budget 2020

Glossary

ACCRUAL BASIS OF ACCOUNTING – Under this method, revenue is recorded when earned and expenses are recorded when liabilities are incurred.

AIRCRAFT OPERATIONS – The landing or takeoff of an aircraft.

AIRCRAFT RESCUE AND FIRE FIGHTING (ARFF) – A special category of firefighting that involves the response, hazard mitigation, evacuation and possible rescue of passengers and crew of an aircraft (typically) involved in an airport ground emergency.

AIRPORT – Refers to the Bill and Hillary Clinton National Airport (LIT).

AIRPORT IMPROVEMENT PROGRAM (AIP) – The FAA’s Airport Improvement Program (AIP) provides both entitlement and discretionary grants for eligible airport projects. This program, authorized periodically by Congress, distributes the proceeds of the federal tax on airline tickets to airports, through grants, for eligible construction projects and land acquisition. See Federal Grants.

AIRPORT MASTER PLAN – An airport master plan represents the approved actions to be accomplished for phased development of the airport. Master plans address the airfield, terminal, landside access improvements, modernization and expansion of existing airports, and establish the premise for site selection and planning for a new airport.

AIRPORT REVENUE BONDS – Bonds issued by municipality or airport authority wherein airport revenues back the tax-exempt, lower interest rate bond.

BUDGET – A financial plan for a specified period of time (FY) that matches planned expenses and revenues with planned services.

BUDGET CALENDAR – The schedule of key dates, or milestones, that the Commission follows in the preparation, adoption and administration of the annual budget.

CAPITAL IMPROVEMENT PROGRAM (CIP) – A rolling, near-term five-year program that provides for critical needed improvements and asset preservation. The program includes projects that address federal security requirements, airfield safety improvement and enhanced revenue potential.

COMMISSION – Refers to the Little Rock Municipal Airport Commission (LRMAC).

COMMON USE SYSTEM SUPPORT (CUSS) – A shared service kiosk system used by multiple airlines that allow for convenient passenger check-in.

COMPENSATORY RATE – A rate based on cost recovery, under which the airport operator assumes the major risk of running the airport and charges the airlines fees and rental rates to recover the actual costs of the facilities and services they use.

Annual Operating Budget 2020

CONCESSIONAIRE – A person or company having a lease, contract or operating permit arrangement with the Commission, entitling them to do business at the airport. Concessionaires are generally required to pay a percentage of gross revenues to the Commission with an annual minimum amount

CONNECTING PASSENGER – An airline passenger who transfers from an arriving aircraft flight to a departing aircraft flight, in order to reach a final destination. (See Enplaned Passenger.)

COST CENTER – The area of an airport to which a revenue or expense is attributed, e.g., airfield, terminal, etc.

COST PER ENPLANED PASSENGER (CPE) – The total annual cost of fees and charges paid by the airlines, divided by the total enplanements.

CUSTOMER FACILITY CHARGE (CFC) – Airport-required fees collected by car rental agencies and used to fund new car rental facilities.

DEBT SERVICE – Principal and interest payments on bonds.

DEBT SERVICE COVERAGE – An amount equal to 125% of the portion of Debt Service attributable to bonds, plus other such amounts as may be established by any financial agreement.

DEPRECIATION – The annual amount charged by the Commission to recover its investment in capital equipment. The annual depreciation expense is calculated according to Generally Accepted Accounting Principles (GAAP).

DISADVANTAGED BUSINESS ENTERPRISE (DBE) – A for-profit small business where socially and economically disadvantaged individuals owning at least a 51% interest also control the management and daily business operations.

DISCRETIONARY GRANTS – Discretionary funds are funds remaining within the obligation limitation after the entitlements are calculated. These funds, subject to certain restrictions in legislation, are available for distribution at the discretion of the FAA. The discretionary funds are not required to be distributed to specific states and sponsors. See Federal Grants. ENPLANED PASSENGER – Any passenger boarding an aircraft at the Airport, including any passenger that previously disembarked from another aircraft (see Connecting Passenger).

ENTITLEMENT GRANTS – Entitlement grants are determined by a formula according to enplanements at individual airports. See Federal Grants. FEDERAL AVIATION ADMINISTRATION (FAA) – The FAA is part of the Department of Transportation (DOT) and, within the airspace of the United States, promotes air safety, regulates air commerce, controls the use of navigable airspace, develops and operates air navigation facilities, develops and operates the air traffic control system and administers federal grants for the development of public-use airports.

Annual Operating Budget 2020

FEDERAL GRANTS – The FAA’s Airport Improvement Program (AIP) provides both entitlement and discretionary funds for eligible airport projects. Entitlement funds are determined by a formula based on enplanements at individual airports. Discretionary funds are available after entitlement funds have been calculated.

FISCAL YEAR (FY) – The annual period beginning January 1st and ending December 31st.

FIXED BASE OPERATOR (FBO) – Commercial business, at the Airport, authorized by the Commission to sell aviation fuels and provide other aviation-related services, primarily to General Aviation.

FLIGHT INFORMATION DISPLAY SYSTEM (FIDS) – Computer system used in airports to display flight information to passengers.

GENERAL AVIATION – The activities of privately owned aircraft that are not used for commercial purposes, such as the movement of passengers or freight.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) – Conventions, rules and procedures that define accounting practices, including broad guidelines, as well as detailed procedures.

GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) – A private, non-governmental organization that establishes and improves standards for financial accounting and reporting for State and Local governments in the United States.

LANDED WEIGHT – Refers to maximum gross certificated landed weight, in one thousand pound units, as stated in the airlines’ flight operations manual. Landed weight is used to calculate landing fees for both airline and general aviation aircraft operated at the Airport.

LANDING FEES – Revenues from passenger and cargo carriers for commercial aircraft landings at the Airport calculated based on airfield costs and aircraft landed weights.

LEGACY CARRIERS – Refers to those airlines that flew interstate routes prior to the Airline Deregulation Act of 1978. U.S. legacy carriers mainly include American, Continental, Delta, Northwest, United, US Airways, Alaska and Hawaiian Airlines.

LIT – Bill and Hillary Clinton National Airport.

MODIFIED ACCRUAL BASIS OF ACCOUNTING – An accounting method commonly used by governmental agencies that combines accrual basis accounting and cash basis accounting. Modified accrual accounting recognizes revenues when they become available and measurable and, with a few exceptions, recognizes expenditures when liabilities are incurred.

NET REVENUE – Net revenue is generally defined as operating revenue less operating expenses.

PASSENGER FACILITY CHARGES (PFC) – A charge ($4.50) attached to each ticketed passenger that boards an airplane at the Airport. Certain types of passengers, including military, are excluded from the Passenger Facility Charge. PFCs can be used for any projects determined to be eligible by the FAA.

Annual Operating Budget 2020

REGIONAL AIRLINE – U.S. term for commercial air carrier with an annual operating revenue below $100 million.

TRANSPORTATION NETWORK COMPANY (TNC) – Connects paying passengers with drivers who provide the transportation on their own non-commercial vehicles.

TRANSPORTATION SECURITY ADMINISTRATION (TSA) – As part of the Aviation and Transportation Security Act passed in November 2001, the TSA handles passenger security screening at all U.S. airports.

U.S. DEPARTMENT OF TRANSPORTATION (DOT) – The DOT was established by an act of Congress on October 15, 1966 and consists of multiple agencies, including the FAA, and is charged with the overall responsibility of ensuring a fast, safe and efficient transportation system.