Fiscal Year 2018 Annual Operating Budget

Prepared for the Little Rock Municipal Airport Commission December 19, 2017 F-17-12-2 F-17-12-2 Annual Operating Budget 2018

Table of Contents

Little Rock Municipal Airport Commission ...... 1 Organizational Structure ...... 2 FY 2018 Annual Operating Budget - Summary ...... 3 Budget Process ...... 4 Budget Calendar ...... 5 Major Drivers of FY 2018 Budget ...... 6 Air Service ...... 6 Passenger Enplanements ...... 8 FY 2018 Annual Operating Budget - Details ...... 10 Revenues ...... 11 Operating Revenues ...... 12 Revenue Assumptions ...... 13 Airline Revenues ...... 13 Non-airline Revenues ...... 16 Operating Expenses ...... 23 Expense Assumptions ...... 23 Non-Operating Revenues (Expenses) ...... 33 Budget Detail by Department ...... 38 Interest and Financing Expenses ...... 54 Capital Purchases ...... 54 Major Capital Purchases………………………………………………………………………………………………………………………..55

Historical Performance Indicators ...... 57 Supplemental Data ...... 59

Annual Operating Budget 2018

Little Rock Municipal Airport Commission

Annual Operating Budget 2018

Organizational Structure

Annual Operating Budget 2018

FY 2018 Annual Operating Budget - Summary

FY 2017 FY 2017 FY 2018 Budget YE Est. Proposed

REVENUES Airline Revenues $ 11,434,634 $ 11,477,035 $ 11,678,101 Non-Airline Revenues 22,143,279 22,166,361 22,357,874

TOTAL OPERATING REVENUES 33,577,912 33,643,396 34,035,975

EXPENSES Operating Expenses 22,835,653 21,191,060 23,480,503

Results from Operations before Deprec. $ 10,742,260 $ 12,452,336 $ 10,555,472

Depreciation 15,050,000 15,050,000 16,000,000

RESULTS FROM OPERATIONS $ (4,307,740) $ (2,597,664) $ (5,444,528)

Non-Operating Activities 12,663,367 15,094,248 16,232,063

CHANGE IN NET POSITION $ 8,355,627 $ 12,496,584 $ 10,787,535

The 2018 operating budget for the Bill and Hillary Clinton National Airport is $34 million. This represents a 1.4% increase over the $33.6 budget for 2017 and a 1.2% increase over the estimated activity for 2017.

The following pages further detail the anticipated sources of revenues and expenditures for 2018 and provides explanation of variances compared to the preceding year actuals and budget. In addition, historical data and ratios are included to provide a better illustrate the current financial position of the Airport.

Annual Operating Budget 2018

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 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 presented to the Commission for their approval typically in November.

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 impact 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 advised that these rates will be in effect for the budget year.

Annual Operating Budget 2018

Budget Calendar Fiscal Year Budget Calendar 2018 Dates Actions Finance: Distribute 2018 Budget Calendar at Director's Leadership Group (DLG) 31-Jul-17 meeting. 7-Aug-17 Finance: Personnel Worksheet forwarded to HR for updates.

Finance: Revenue Review. Finance begins review of YTD revenues (calculated on 7-Aug-17 units of measure and base rates). DLG Budget Kickoff Meeting: Attendance of Directors where each Department will be provided with the following: (1) FY 2018 Operating Budget Request Template 21-Aug-17 (2) FY 2017 YTD Actual Expenditures (Report Viewer) (3) FY 2018 Capital Budget Request Forms (4) Budget Instructions (Department Responsibilities) Finance: Revenue Forecast. Finance prepares revenue forecast based on Week of Sep. 3 historical receipts and anticipated changes. Budget Submittal Deadline. All departmental request forms (Operating and 15-Sep-17 Capital) are due to 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. 25 (1) YTD Budget to Actual (2) Operating Budget Request HR returns Personnel Worksheet to Finance. Includes updated salaries, 2-Oct-17 retirement %, estimated health and other benefits. Finalize Capital Budget. Deputy Executive Dir. meets with the Directors who 23-Oct-17 submitted Capital Budget Requests, along with the Directors of Finance and Procurement. 2017 roll forward Capital items are reviewed as well. Submission of preliminary budget report for Exec. Management Review: Based 27-Oct-17 on the operating and capital budget requests, the preliminary budget is delivered to the Deputy Executive Dir. to review. This includes the preliminary Rates and Budget Documents Complete: Budget documents are finalized and reviewed by 3-Nov-17 Executive Management. Commission: Budget documents are distributed electronically to Commission 4-Dec-17 members. 15-Dec-17 Finance Committee: Present Budget to Finance Committee for Discussion.

19-Dec-17 Commission: Present Budget to Commission for Approval.

Annual Operating Budget 2018

Major Drivers of FY 2018 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

Passengers departing from LIT can reach over 300 unique destinations around the world with only one stop. LIT offers nonstop flights to Las Vegas, Los Angeles (seasonal), Phoenix, Dallas, Houston, Atlanta, Orlando-Sanford, Charlotte, Detroit, Denver, Washington DC and Chicago.

Annual Operating Budget 2018

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. One of the ultra-low cost carriers, Allegiant Airlines, offers seasonal service to various destinations that the leisure traveler finds attractive.

2017 Air Service Highlights  LIT saw a growth in seasonal service. Due to demand, Allegiant Air increased their service to Orlando-Sanford from twice weekly to three times weekly during the summer months. This resulted in a 33% increase in enplaned passengers for Allegiant through September 2017, when compared to the same period in 2016. Returning for the third year was Allegiant’s LAX seasonal flight.  In April, ultra-low cost carrier GLO Airlines filed for Chapter 11 bankruptcy protection with the intention to continue service. GLO was unable to emerge from the reorganization and on July 15, GLO ceased operations. GLO had 4,335 enplaned passengers for 2017 and 7,586 for 2016. This represents less than 1% of the total enplaned passengers at the Airport. GLO began operations at Little Rock in November, 2015.  Ultra-low cost carrier Frontier Airlines is returning to LIT in 2018. Frontier announced in July that they will return to the Airport and resume flights to Denver in March 2018. Initially, this new route is scheduled to operate three days per week.  In September, Southwest Airlines retired its 300 series aircraft. Added in November were the MAX 700 series aircraft. The change resulted in additional seats. The 300 Series aircraft had 137 seats while the new 700s have 145 seats.  American Airlines added a fourth flight to Charlotte in October due to demand.  In October, American Airlines announced they will begin daily service to Reagan National Airport in Washington DC beginning in April 2018.

Annual Operating Budget 2018

2017 Air Service at LIT

ORD DTW

DEN STL

LAS LIT CLT PHX DFW ATL DAL IAH

Legacy Airlines - Blue SFB

Carrier AA DL G4 UA WN

Destination CLT DFW ORD ATL DTW SFB DEN IAH ORD DAL LAS PHX STL TOTAL Average Departures 3.0 7.8 3.0 5.8 0.8 0.4 2.8 4.8 2.5 2.8 1.0 0.8 1.8 37.3 per Day Average Seats 228 544 228 842 63 59 142 242 127 411 146 111 266 3409 per Day Seat Share 7% 16% 7% 25% 2% 2% 4% 7% 4% 12% 4% 3% 8% 100% Source - Mead and Hunt, Industry Update October 2017 Passenger Enplanements One of the most significant statistical measurements for Airports is enplaned passengers. The airline mergers, referred to in the Air Service section, has tended to positively impact large and medium hub airports more than small hubs, like LIT. However, this trend reversed in 2017. According to Moody’s Investors Service, “Enplanement growth in 2017 has reversed trend and has been fastest at small and non-hub airports and we expect this to continue in 2018. Growth has slowed at large hub airports as primary connecting hubs for American Airlines and Delta Air Line have constrained connecting capacity growth and O&D (origination and destination) airports face space constraints. The growth at small- and non-hubs reflects the addition of capacity in these markets by low- and ultra-low cost carriers”. At October 31, 2017, year-to-date enplaned passengers of 847,979 reflects a 1.9% increase when compared to the 832,243 from the same ten month period of 2016. Airport staff anticipates the 2017 enplaned passenger count will be 1,014,280 or 1.7% greater than the 996,897 reported in 2016. The Airport has seen monthly passenger increases for seven of the ten months of 2017 when compared to the

Annual Operating Budget 2018 same month in 2016. September 2017 did see a drop in passengers compared to the prior year due to the impact of hurricanes Harvey and Maria. Based upon input from air service consultants, as well as input from Airport staff, the 2018 operating budget includes an expectation that enplanements will increase 1%. The budget assumes the Airport will see 1,024,422 enplaned passengers in 2018 and also assumes similar operations as 2017.

LIT Enplaned Passengers - CY 2017 Allegiant Air, 1.9% Charters, 0.1%

United Airlines, 15.3%

American Airlines, 28.6%

Southwest Airlines, 26.8%

Delta Airlines, 27.3%

Annual Operating Budget 2018

FY 2018 Annual Operating Budget - Details

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Proposed (Budget to Budget) (Budget to YE Est.) REVENUES Airline Revenues Landing Fees $ 5,436,196 $ 5,478,111 $ 5,532,647 $ 96,451 1.8% $ 54,536 1.0% Airline Rents 5,256,894 5,355,338 5,551,062 294,168 5.6% 195,724 3.7% Facility Use Fees 741,543 643,585 594,391 (147,152) -19.8% (49,194) -7.6% Total Airline Revenues $ 11,434,634 $ 11,477,035 $ 11,678,101 $ 243,467 2.1% $ 201,065 1.8%

Non-Airline Revenues Automobile Parking 9,457,833 9,285,432 9,617,631 159,798 1.7% 332,199 3.6% Rental Car Operations 4,237,220 4,327,961 4,400,470 163,250 3.9% 72,509 1.7% Terminal Concessions 1,263,607 1,266,450 1,268,553 4,946 0.4% 2,102 0.2% Ground Transportation 131,791 151,325 152,674 20,883 15.8% 1,349 0.9% Facility Leases 1,801,442 1,865,240 1,724,569 (76,872) -4.3% (140,671) -7.5% Land Leases 2,012,370 2,017,997 1,934,545 (77,825) -3.9% (83,451) -4.1% Consolidated Facility Charge 2,446,431 2,432,526 2,432,526 (13,906) -0.6% - 0.0% Misc Operating Revenue 792,586 819,430 826,906 34,321 4.3% 7,476 0.9% Total Non-Airline Revenues $ 22,143,279 $ 22,166,361 $ 22,357,874 $ 214,596 1.0% $ 191,513 0.9% TOTAL OPERATING REVENUES $ 33,577,912 $ 33,643,396 $ 34,035,975 $ 458,063 1.4% $ 392,579 1.2%

EXPENSES Operating Expenses Salaries and Wages 8,218,445 7,630,650 8,455,523 237,078 2.9% 824,873 10.8% Employee Benefits 3,796,155 3,298,489 4,176,545 380,390 10.0% 878,056 26.6% Professional & Contractual Services 4,394,478 4,217,478 4,481,235 86,757 2.0% 263,757 6.3% Buildings and Grounds Maintenance 452,061 487,296 484,751 32,690 7.2% (2,545) -0.5% Equipment Repair and Maintenance 757,052 787,293 822,168 65,116 8.6% 34,875 4.4% Marketing and Public Affairs 347,100 221,530 345,742 (1,358) -0.4% 124,212 56.1% Utilities 1,864,572 1,832,925 1,774,262 (90,310) -4.8% (58,663) -3.2% Materials and Supplies 964,718 825,255 885,230 (79,488) -8.2% 59,975 7.3% Insurance 404,000 381,205 422,000 18,000 4.5% 40,795 10.7% Other Operating Expense 1,637,072 1,508,938 1,633,047 (4,025) -0.2% 124,108 8.2% Total Operating Expenses $ 22,835,653 $ 21,191,060 $ 23,480,503 $ 644,850 2.8% $ 2,289,443 10.8%

Results from Operations before Depreciation $ 10,742,260 $ 12,452,336 $ 10,555,472 $ (186,788) -1.7% $ (1,896,864) -15.2%

Depreciation 15,050,000 15,050,000 16,000,000 950,000 6.3% 950,000 6.3%

RESULTS FROM OPERATIONS $ (4,307,740) $ (2,597,664) $ (5,444,528) $ (1,136,788) -26.4% $ (2,846,864) -109.6%

Non-Operating Revenues (Expenses) Passenger Facility Charges 3,874,349 3,882,271 3,909,556 35,207 0.9% 27,286 0.7% Federal Operating Grants (1) 300,000 319,909 191,954 (108,046) -36.0% (127,955) -40.0% Interest Income 306,000 555,996 696,000 390,000 127.5% 140,004 25.2% Aviation Fuel Tax 383,018 304,553 304,553 (78,465) -20.5% - 0.0% Federal, State & Local Grants (2) 7,700,000 9,885,608 11,000,000 3,300,000 42.9% 1,114,392 11.3% Contributions from Lessees (3) - - - - 0.0% - 0.0% Other Non-Operating 100,000 145,912 130,000 30,000 30.0% (15,912) -10.9% Non-Operating Activities $ 12,663,367 $ 15,094,248 $ 16,232,063 $ 3,538,696 28.2% $ 1,153,727 7.5%

CHANGE IN NET POSITION $ 8,355,627 $ 12,496,584 $ 10,787,535 $ 2,401,908 29.1% $ (1,693,137) -13.7%

FY 2018 Operating Revenues $34,035,975

(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.

Annual Operating Budget 2018

Revenues The Airport earns revenues from two categories: Airline and Nonairline. Airline revenues are revenues derived from air carriers and other aviation activities in the airfield and terminal areas. Nonairline 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 nonairline activities. The 2018 budget anticipates 66% of the operating revenue will be nonairline revenues. The chart below shows how revenue from both sources have grown over the past decade compared to the level of enplaned passengers.

Airline and Nonairline Revenues $40 1,300 1,200 $35 1,100 $30 1,000 900 $25 800 700 $20 600

In Million $ Million In $15 500 400

$10 300 ofThousands Passengers 200 $5 100 $0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

Nonairline Rev. Airline Rev. Enplaned Passengers

* - FY 2017 Year-end estimate, FY 2018 budgeted. Source - Little Rock Municipal Airport Commission

Annual Operating Budget 2018

Operating Revenues

2018 Operating Revenues Budget

Land Leases Ground/Other 6% 3% Facility Leases 5% Concessions Landing Fees 4% 16% CFC 7% Airline Rents 16% Rental Car 13%

Parking 28%

Facility Use Fees 2%

Annual Operating Budget 2018

Revenue Assumptions

Airline Revenues Airline rates and charges incorporated in the Fiscal Year 2017 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 2018 will increase 1.0% over 2017 enplanements. The level of passenger activity directly impacts Concession Revenues (parking, rental cars, terminal concessions) and the 2018 budget for these revenue sources reflect the anticipated increase in passengers.

Approved Proposed AIRLINE RATE & CHARGES 2017 2018

Landing Fee Rate (per 1,000 lbs.) $ 4.12 $ 4.17 Passenger Terminal Rental Rate (per sq. foot) $ 38.90 $ 41.07 Gate Fee (per turn) $ 81.45 $ 88.67 Jet Bridge Fee (per turn) - Old $ 68.50 $ 68.50 Jet Bridge Fee (per turn) - New $ 40.00 $ 40.00 Aircraft Ramp Fee (per month) $ 1,500 $ 1,500 Remain Overnight (RON) Fee (per turn) $ 75 $ 75

Landing Fees The costs of the airfield area, which Landing Fees includes all runways, taxiways, $6,000 associated navigational and $5,750 operational aids and other airside $5,500 properties is recovered through $5,250 the landing fees and fuel flowage $5,000 fees collected at the airport. $4,750

InThousand $ $4,500 Landing fees are charged to $4,250 passenger and cargo aircraft $4,000 landings, as well as from the fixed 2016 Actual 2017 Budget 2017 Est. 2018 Budget base operators for all commercial or chartered flights at the airport. As shown above, the landing fee for 2018 is $4.17 per 1,000 pounds.

Annual Operating Budget 2018

The airport’s rate includes a $3.5 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 $6.82 per 1,000 pounds. 2016 Actual to 2017 Actual Variance – In 2016, the Airport generated $5.3 million in Landing Fees, compared to the 2017 estimated actual of $5.5 million. That represents a 2.4% increase during 2017. While a majority of this increase was due to the increase in the landing fee rate, the actual landing weights increased .5% during that period. 2017 Budget to 2018 Budget Variance – The budget for Landing Fees is based on estimated landing weights and the landing fee rates for the various years. The 2017 budget was $5.4 million while the 2018 budget for Landing Fees was $5.6 million, a 2% increase. The cost of operating the airfield was anticipated to increase during 2018. This anticipated cost change, along with the expected change in landing weights contributed to the change in the budget for 2018. 2017 Actual to 2018 Budget Variance – The estimated actual Landing Fees for 2017 are $5.5 million. Compared to the 2018 budget of $5.6 million, revenues from Landing Fees are projected to increase 1.2%. As mentioned above, this is driven primarily due to the change in the landing fee rate.

Airline Rents The terminal rental rate is calculated on Airline Rents a cost recovery methodology that $6,000 includes both operating and capitalized $5,750 costs for the terminal area. The $5,500 Compensatory rate structure allows the $5,250 Airport to transfer a pro-rata share of $5,000 the terminal costs to the airlines based $4,750 on usable space. As airlines lease less InThousand $ $4,500 space, their relative cost per square foot $4,250 goes up. Likewise, as the costs to $4,000 operate the terminal increase, the 2016 Actual 2017 Budget 2017 Est. 2018 Budget 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 2018 as is reflected in the 2018 terminal rate. The 2018 terminal rate is $41.07, compared to $38.90 for 2017. This represents a 5.6% increase over the 2017 rate. As noted under Landing Fees, the Airport has applied a discretionary credit of $500,000 in the terminal rental rate calculations to minimize the impact of rising costs to the airlines. Without the adjustment, the airlines would pay $44.85 per square foot. 2016 Actual to 2017 Actual Variance – In 2016, the Airport generated $5.2 million in revenue from renting space to the Airlines, compared to the 2017 estimated actual of $5.4 million. That represents a 3.5%

Annual Operating Budget 2018 decrease during 2017. This is primarily impacted by the increase in the terminal rate. Additionally, the Airport was able to lease additional terminal space to the Airlines.

The Airport Commission is completing a $25 million concourse renovation that includes additional comfort and conveniences for passengers. 2017 Budget to 2018 Budget Variance – The Airline Rents budget is based on terminal space the Airport is able to rent along with the terminal rates. The 2017 budget was $5.3 million while the 2018 budget for Airline Rents is 5.5% greater or $5.5 million. As mentioned above, the cost of operating the terminal was anticipated to increase during 2018. This anticipated cost change contributed to the change in the budget for 2018. 2017 Actual to 2018 Budget Variance – For 2017 the estimated actual Airline Rents are $5.4 million. Compared to the 2018 budget of $5.5 million, revenues from Airline Rents are projected to increase 3.6%. 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 2018 rates multiplied by the number of events anticipated based on historic trends.

Annual Operating Budget 2018

In 2016 and 2017, the Airport installed new passenger boarding bridges at Facility Use Fees gates 1, 3, 5, 7 and 8. Three of the $1,000 bridges were previous owned by the $800 airlines. During 2018, the Airport plans on installing three more new passenger $600 boarding bridges. Converting the $400

bridges to Airport owned allows the InThousand $ Airport to generate additional revenue $200 on a per use basis, compared to the fixed rent for airline owned bridges. $- 2016 Actual 2017 Budget 2017 Est. 2018 Budget This accounts for a majority of the variance in Facility Use Fees from 2016 to 2018. 2016 Actual to 2017 Actual Variance – Facility Use Fees for 2016 were $547K compared to the 2017 estimated actual of $644K. That represents a 17.7% increase during 2017. As mentioned above, the conversion of passenger boarding bridges from airline owned to Airport owned during 2017 resulted in an increase in per use fees. 2017 Budget to 2018 Budget Variance – The 2017 budget for Facility Use Fees was $742K while the 2018 budget is $594K, a decrease 19.9%. The Airport anticipates replacing three Airline owned bridges to Airport owned bridges during 2018. The 2017 budget was prepared as the Airport was preparing to remodel the concourse and replace several bridges. 2017 Actual to 2018 Budget Variance – For 2017 the estimated actual Facility Use Fees are $644K. Compared to the 2018 budget of $594K, revenues from Facility Use are projected to decrease 7.7%. The addition of three Airport owned passenger boarding bridges during 2018 accounts for a majority of the increase in the budget. As referenced above in the Air Service section, GLO airlines ceased operation in July 2017. The loss of these per use fees for all of 2018 is a factor in the reduction in the budget.

Non-airline Revenues The ability to maximize non-airline revenue sources helps the Airport maintain economic sustainability thereby reducing the reliance on airline revenue. Nonairline revenues for 2018 are projected to increase 2.7% when compared to the 2017 budget. When compared to the estimated 2017 actual non-airline revenues, the 2018 budget is 2.6% greater.

Automobile Parking Parking revenue is the single largest revenue item for the Airport. Of the $33.6 million in total operating revenues for the Airport for 2017, $9.3 million, or 27.6%, came from parking revenue. The Airport operates five separate parking lots. Listed below are the daily parking rates, by lot:

Annual Operating Budget 2018

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 2018. 2016 Actual to 2017 Actual Variance – Automobile Parking Parking revenue for 2016 was $9.3 $10,000 million. During 2017, the estimated actual revenue is $9.3 million, or a .2% $9,500 increase. The Airport re-surfaced $9,000 several parking lots during 2017 and relocated all handicap parking spaces to

$8,500 the West Short Term lot. While this InThousand $ $8,000 provides a long-term benefit to our passengers, the interruption in service $7,500 to some of our premium lots resulted in 2016 Actual 2017 Budget 2017 Est. 2018 Budget a slight increase in overall revenue. 2017 Budget to 2018 Budget Variance – Parking revenue was budgeted for 2017 at $9.5 million while the 2018 budget increases 1.7% to $9.6 million. While no rate increases are anticipated during 2018, the Airport is projecting enplaned passengers to increase 1% in 2018. This increase in enplanements accounts for most of the increase in the 2018 budget for parking revenue. 2017 Actual to 2018 Budget Variance – For 2017 the estimated actual Automobile Parking revenues are $9.3 million. Compared to the 2018 budget of $9.6 million, parking revenues are projected to increase 3.6%. Part of this increase is due to an expected increase in enplaned passengers in 2018. Additionally, as opposed to 2017 when the East and West Short Term Lots were resurfaced, none of the premium parking lots will be resurfaced in 2018. This should result in an overall increase in parking revenue.

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 passenger activity but is not directly tied to the fluctuation in enplaned passengers. Additionally, the length of the car rental (contract days) and rate charged by the rental car company will impact the rental car revenue for the Airport.

Annual Operating Budget 2018

2016 Actual to 2017 Actual Variance – Revenue from Rental Car Operations for 2016 was $4.1 million. The estimated actual revenue for 2017 is $4.3 million, or a 4.5% increase. Enplaned passengers increased 1.9% during 2017, so this was a primary driver for this increase in the 2017 revenue. 2017 Budget to 2018 Budget Variance – Rental Car Operations The 2017 budget for Rental Car $5,000 Operations was $4.2 million while the 2018 budget is $4.4 million, a 3.9% $4,800 increase. This slight increase is based $4,600 primarily on the estimated increase in enplaned passengers for 2018. $4,400

InThousand $ 2017 Actual to 2018 Budget Variance – $4,200 Budgeted revenues for Rental Car

$4,000 Operations are expected to increase 2016 Actual 2017 Budget 2017 Est. 2018 Budget 1.7% from 2017 to 2018. The 2017 budget was $4.2 million while the 2018 budget increased to $4.4 million. Again, this due in part to the projected increase in enplaned passengers for 2018. The increase in the terminal 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 floor through a minimum annual guarantee (MAG). An anticipated increase in food and beverage revenues based on projections from our concessionaire, HMS Host, along with additional sources of advertising revenue, are the primary drivers for this increase. In February 2017, the Commission voted to extend 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 Chic Fil-A to the Airport. While these brands should increase restaurant revenue to the Airport in the near future, the 2018 budget does not reflect this increase. The construction for these two restaurants should begin in January 2018 and is scheduled to be completed by June. 2016 Actual to 2017 Actual Variance – 2016 Terminal Concessions revenue was $1.26 million. Compared to the estimated actual revenue for 2017, $1.7 million, this is a .8% increase. There was a slight decrease in advertising revenue during 2017 while restaurant and retail revenue increased. Vending revenue was unchanged during this period.

Annual Operating Budget 2018

2017 Budget to 2018 Budget Variance – Comparing the 2017 Terminal Terminal Concessions Concessions revenue budget to 2018 budget, the Airport increased the $1,500 budget .4%. The 2017 budget was $1.26 $1,400 million while the 2018 budget will be $1.27 million. $1,300 2017 Actual to 2018 Budget Variance – $1,200 The Terminal Concessions revenue for InThousand $ $1,100

2017 was $1.26 million. The 2018 $1,000 budget is $1.27million, or a .2% 2016 Actual 2017 Budget 2017 Est. 2018 Budget increase. This budget increase is based primarily on the anticipated increase in enplaned passengers during 2018.

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, the Airport agreed to terms with another TNC. Lyft is scheduled to begin operating at the Airport in the fourth quarter of 2017. Revenue from TNCs in 2016 was $41K and is anticipated to be $70K for 2017 while Taxi revenue is expected to remain flat for the same period. 2016 Actual to 2017 Actual Variance – 2016 Ground Transportation revenue was $130K while the estimated actual 2017 revenue is $151K. This represents a 16% increase during this period. As mentioned above, a majority of this increase was generated from ridesharing services. 2017 Budget to 2018 Budget Variance – Ground Transportation The 2017 Ground Transportation revenue budget was $132K while the $200 2018 budget increased 15.8% to $151K. With the addition of Lyft, as well as with $150 the anticipated increase in enplanements, the Airport has $100 increased the Ground Transportation

InThousand $ $50 budget for 2018.

$- 2017 Actual to 2018 Budget Variance – 2016 Actual 2017 Budget 2017 Est. 2018 Budget The Ground Transportation revenue for 2017 was $151K. The 2018 budget is $153K, or a .9% increase. The anticipated continued growth in ridesharing is the major source in this increase. 19

Annual Operating Budget 2018

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 (Fly Arkansas and TAC Air). These and other commercial tenants provide a significant source of non-airline revenue for the Airport. One of the Airport’s commercial tenants, Cantrell Drug Company, filed for Chapter 11 bankruptcy protection in November 2017. While the tenant has indicated their intentions are to continue operations, the Airport has taken a conservative approach to the 2018 budget and has not included any revenue from Cantrell Drug in the budget. Both the 2017 budget and actual revenue for facility leases included $245K related to Cantrell Drug. 2016 Actual to 2017 Actual Variance – 2016 Facility Leases revenue was $1.7 Facility Leases million while the estimated actual 2017 revenue is $1.9 million, a 10.1% $2,000 increase during this period. Most of the $1,800 leases include an escalation clause tied to an index (CPI or PPI). A portion of the $1,600 increase is related to this escalation in $1,400

the lease rates. Additionally, the 2017 InThousand $ $1,200 actuals included revenues from the Envoy maintenance facility in the $1,000 2016 Actual 2017 Budget 2017 Est. 2018 Budget former Hawker hangar. Envoy took occupancy during 2017 so the Airport was able to generate revenue for a portion of that year. 2017 Budget to 2018 Budget Variance –The 2017 budget for Facility Leases was $1.8 million while the 2018 budget decreased 4.3% to $1.7 million. Budgeting a full year of revenue from the Envoy maintenance lease in 2018 was more than offset by the reduction in the budget due to removing the Cantrell Drug lease. 2017 Actual to 2018 Budget Variance – The estimated actual Facility Leases revenue for 2017 was $1.9 million. The 2018 budget is $1.7 million, or a 7.5% decrease. For 2018, the rent increases tied to CPI/PPI, as well as the full year revenue from the Envoy maintenance lease help reduce the impact of the Cantrell Drug bankruptcy.

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.

Annual Operating Budget 2018

Similar to the Facility Leases, the Land Leases have provisions for annual Land Leases increases typically tied to an index. Additionally, no revenue from Cantrell $2,500 Drug for land leases is included in the budget for 2018. The 2017 budget and $2,250 revenue from Cantrell Drug for land $2,000 leases was $119K.

2016 Actual to 2017 Actual Variance – InThousand $ $1,750

2016 revenue from Land Leases was $1,500 $1.98 million while the estimated actual 2016 Actual 2017 Budget 2017 Est. 2018 Budget 2017 revenue is $2.0 million, a 2.1% increase. This increase was generated from the escalation clauses in the agreements with the tenants. 2017 Budget to 2018 Budget Variance – The 2017 Land Leases revenue budget was $2.0 million while the 2018 budget decreased 3.9% to $1.9 million. Except for the loss of revenue from Cantrell Drug, there are no budgeted changes in the land rented. Only slight increases in the budget for the other leases arose from the escalation clauses in the agreements. 2017 Actual to 2018 Budget Variance – The Land Leases revenue for 2017 was $2.0 million. The 2018 budget is $1.9 million. This 4.1% decrease was due to the removing Cantrell Drug lease from the 2018 budget.

Consolidated Facility Charge The Airport collects a Consolidated Facility Charge (CFC) of $3.50 for each rental car transaction day. The rental car companies collect these CFCs and remit them to the Airport. These can be used for rental car facility expenses or held for future costs Consolidated Facility Charge associated with the rental car facility’s capital reserve fund. $3,000 2016 Actual to 2017 Actual Variance – $2,800 In 2016, the Airport collected $2.5

$2,600 million in CFC revenue from the rental car companies. The estimated actual $2,400 2017 CFC revenue is $2.4 million, a 1.9% InThousand $ $2,200 decrease. This variance is tied directly

$2,000 to the number of rental car contract 2016 Actual 2017 Budget 2017 Est. 2018 Budget days for the particular period. 2017 Budget to 2018 Budget Variance – The 2017 CFC revenue budget was $2.45 million while the 2018 budget decreased .6% to $2.43million. While passenger enplanements are anticipated to increase during 2018, the budget is in line with the recent trend in CFCs of remaining flat to declining.

Annual Operating Budget 2018

2017 Actual to 2018 Budget Variance – The CFC revenue for 2017 was $2.4 million, the same as the 2018 budget.

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. 2016 Actual to 2017 Actual Variance – In 2016, operating revenue from miscellaneous sources totaled $926K. The estimated actual 2017 Miscellaneous Operating Revenue is $819K, an 11% decrease. In 2016, the Airport began collecting commissions on fuel sales from Dassault Falcon Jet. The revenue generated in 2016 also include a $104K retroactive payment for the period from 2012 – 2015. This retroactive payment accounted for practically all of the variance from 2016 – 2017. 2017 Budget to 2018 Budget Variance – The 2017 budget for Miscellaneous Misc. Operating Revenue Operating Revenue was $793K, $1,000 compared to the 2018 budget of $827K. $800 The primary reason for this increase of $39K, or 4.3 %, an anticipated increase $600 in general aviation activities in 2018. $400

2017 Actual to 2018 Budget Variance – InThousand $ Estimated actual Miscellaneous $200

Operating Revenue for 2017 is $819K. $- Compared to this actual amount, the 2016 Actual 2017 Budget 2017 Est. 2018 Budget 2018 budget increased to $827K, or .9%. A slight increase in commission of fuel sales and general aviation activity accounts for most of this variance.

Annual Operating Budget 2018

Operating Expenses FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Proposed (Budget to Budget) (Budget to YE Est.) EXPENSES Operating Expenses Salaries and Wages 8,218,445 7,630,650 8,455,523 237,078 2.9% 824,873 10.8% Employee Benefits 3,796,155 3,298,489 4,176,545 380,390 10.0% 878,056 26.6% Professional & Contractual Services 4,394,478 4,217,478 4,481,235 86,757 2.0% 263,757 6.3% Buildings and Grounds Maintenance 452,061 487,296 484,751 32,690 7.2% (2,545) -0.5% Equipment Repair and Maintenance 757,052 787,293 822,168 65,116 8.6% 34,875 4.4% Marketing and Public Affairs 347,100 221,530 345,742 (1,358) -0.4% 124,212 56.1% Utilities 1,864,572 1,832,925 1,774,262 (90,310) -4.8% (58,663) -3.2% Materials and Supplies 964,718 825,255 885,230 (79,488) -8.2% 59,975 7.3% Insurance 404,000 381,205 422,000 18,000 4.5% 40,795 10.7% Other Operating Expense 1,637,072 1,508,938 1,633,047 (4,025) -0.2% 124,108 8.2% Total Operating Expenses $ 22,835,653 $ 21,191,060 $ 23,480,503 $ 644,850 2.8% $ 2,289,443 10.8%

2018 Operating Expenses Budget Other Materials Insurance 7% Utilities 4% 2% 8% Marketing 1% Salaries & Wages Equip. Repair 36% 3%

Build./Grounds 2%

Prof./ Cont. Services 19% Employee Benefits 18%

Expense Assumptions At the direction of the Commission and the Executive Director, the 2018 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 2018

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 2018 is based on the current staffing level and the actual salaries for incumbent positions as of October 31, 2017. 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 2017 resulting in actual expenses being below budget for salaries. For the 2018 salaries budget, seven positions that had been included in the 2017 budget as frozen positions were eliminated.

Budgeted Positions Department 2016 2017 2018

Executive Office 6 4 4 Administration 2 3 3 Human Resources 5 5 4 Customer Service 8 9 8 Finance 10 10 9 Procurement 5 5 5 Properties 2 2 1 Planning & Development 5 6 6 Airside Operations 17 18 18 Landside Operations 35 31 28 Airfield Maintenance 19 18 17 Terminal Maintenance 56 56 56 Information/Electronic Technology 9 9 10 Commercial Facilities 2 2 2 Fleet Maintenance 4 4 4 Total Positions 185 182 175

Full Time Positions 172 175 172 Part Time Positions 13 7 3 Total Positions 185 182 175

Annual Operating Budget 2018

2016 Actual to 2017 Actual Variance – Salaries and Wages for 2016 were $7.5 million. The estimated 2017 actual is $7.6 million, or an increase of 1.7% over the previous year. Annual merit increases for staff accounts for this increase. 2017 Budget to 2018 Budget Variance – Salaries & Wages The 2017 budget for Salaries and Wages $10,000 was $8.2 million. The 2018 budget increases 2.9% to $8.5 million. This $9,000 variance is made up of the annual merit $8,000 increases as well as a slight reduction in staff positons budgeted for 2018. $7,000

InThousand $ 2017 Actual to 2018 Budget Variance – $6,000 For 2018, the Airport has budgeted $8.5

$5,000 million in Salaries and Wages. This is a 2016 Actual 2017 Budget 2017 Est. 2018 Budget 10.8% increase over the 2017 estimated actual expense of $7.6 million. A majority of this increase is due to a number of positions that were vacant for a portion of 2017 that are budgeted to be filled for all of 2018. Additionally, the annual merit increases makes up the remaining balance of this budget increase.

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. 2016 Actual to 2017 Actual Variance – The Airport incurred Employee Benefits Employee Benefits expenses of $2.8 million in 2016. The $5,000 estimated expenses for 2017 increased $4,000 19.1% to $3.3 million. A portion of this variance is due to the 2017 budget $3,000 including benefits for positions that $2,000

were vacant and not expensed during InThousand $ 2016. Additionally, the Airport $1,000 experienced a significant increase in group medical insurance premiums $- 2016 Actual 2017 Budget 2017 Est. 2018 Budget during 2017. 2017 Budget to 2018 Budget Variance – The 2017 budget for Employee Benefits was $3.8 million while the 2018 budget increases 10% to $4.2 million. The Airport is anticipating another significant increase in

Annual Operating Budget 2018 group medical insurance premiums that is driving most of this budget increase. Airport staff is working with their insurance broker to minimize these health care cost increases. 2017 Actual to 2018 Budget Variance – 2017 estimated actual expenses for Employee Benefits are $3.3 million while the 2018 budget of $4.2 million is 26.6% 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 2017 that are budgeted to be filled the full year of 2018.

Professional & Contractual Services The Airport staff provides a wide array Professional & Contractual of professional and maintenance $5,000 services. However, some services are provided by outside firms and $4,000 contractors. The category for $3,000 Professional and Contractual Services includes expenses for professional and $2,000

services provided by other firms. InThousand $ $1,000 The largest components in the

$- Professional and Contractual Services 2016 Actual 2017 Budget 2017 Est. 2018 Budget 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 related to personnel (salary, benefits, etc.) are incurred by the City and are reimbursed by the Airport. All other expenses (canine explosives program, training expenses, as well as maintenance of the ARFF trucks) are paid directly by the Airport. The Airport also has a contract with a private security firm to provide access control to restricted areas of the Airport. Other professional services in this category are legal, 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. 2016 Actual to 2017 Actual Variance – The estimated 2017 expense for Professional and Contractual Services is $4.3 million compared to the 2016 actual of $4.2 million, or a 1.6% increase. Almost all of this increase is due to the salary increase extended by the City of Little Rock to their police and firemen during the year. Additionally, the police staffing was down during 2016 due to some position vacancies. The

police positions were fully staffed during 2017, resulting in a slight increase in year over year expenses. 2017 Budget to 2018 Budget Variance – The budget for Professional and Contractual Services increased 2% from $4.4 for 2017 to $4.5 for 2018. The budgets for police and firefighting increased to reflect the anticipated salary increases approved by the City of Little Rock. Except for janitorial and uniform contracts, all other professional fees are anticipated to decrease during 2018.

Annual Operating Budget 2018

2017 Actual to 2018 Budget Variance – When the 2018 budget ($4.5 million) is compared to the estimated 2017 actual expense ($4.2 million), there is a 6.3% increase. Once again, a majority of this is related to the anticipated increase in police and firefighting.

The ticket lobby was included in the Terminal Renovation Project that was completed in 2013.

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. 2016 Actual to 2017 Actual Variance – The 2016 expenses for Buildings and Grounds Maintenance were $541K compared to the estimated expense of $487K for 2017, which was a 10% decrease. Pavement repairs and maintenance decreased significantly from 2016 to 2017 contributing to the decline in this category. 2017 Budget to 2018 Budget Variance – The budget for this category increased 7.2% from 2017 to 2018. The 2017 budget was $452K while the 2018 budget increased to $485K. Estimated increases for repairs to buildings and HVAC led to this budget increase.

Annual Operating Budget 2018

2017 Actual to 2018 Budget Variance – Buildings and Grounds Maint. The Airport anticipates a .5% decrease $1,000 in expenses for Buildings and Grounds

$800 Maintenance when comparing the 2017 estimated actual expenses to the 2018 $600 budget. The estimated 2017 expenses were $487K compared to the 2018 $400

budget of $485K. Some unanticipated InThousand $ $200 airfield service expenses during 2017 that are not anticipated during 2018 $- 2016 Actual 2017 Budget 2017 Est. 2018 Budget explain part of the reduction. Other reductions are spread over various lines with in this category.

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. 2016 Actual to 2017 Actual Variance – Equipment and Repair Maintenance expenses for 2016 were $754K. These increased 4.4% to the estimated 2017 actual expenses of $787K. The increase in the baggage handling system contract accounted for most of the annual increase in this category. 2017 Budget to 2018 Budget Variance – The budget for Equipment and Repair Equipment and Repair Maint. Maintenance increase from $754K in $1,000 2017 to $822K in 2018, an 8.6% $800 increase. This increase comes primarily from two lines. The maintenance for $600 the inline baggage handling system is $400

expected to increase in 2018. InThousand $ Additionally, the Airport anticipates an $200 increase in the maintenance expense of the elevators and escalators in the $- 2016 Actual 2017 Budget 2017 Est. 2018 Budget terminal during 2018. 2017 Actual to 2018 Budget Variance – Comparing the 2017 estimated actual expenses ($787K) to the 2018 budget ($822K), the Airport anticipates the Equipment and Repair Maintenance expenses to increase 4.4%. Most of this increase comes from expected increases in the maintenance of the inline baggage handling system and elevators and escalators.

Annual Operating Budget 2018

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. 2016 Actual to 2017 Actual Variance – During 2016, the Airport spent $264K on Marketing and Public Affairs and an estimated $222K in 2017. This represents a 15.9% decrease during the year. 2017 Budget to 2018 Budget Variance – The Airport has reduced the Marketing and Public Affairs Marketing and Public Affairs budget .4% $500 from $347K in 2017 to $346K in 2018. $400 2017 Actual to 2018 Budget Variance – $300 During 2017, the Airport anticipates spending below budget but, as $200

referenced above, anticipates keeping InThousand $ relatively the same budget for 2018. $100

The estimated actual expenses for 2017 $- are $222K while the 2018 budget is 2016 Actual 2017 Budget 2017 Est. 2018 Budget $346K. Incentive programs for new airline service is a significant line item that is utilized only when an airline announces a new route. While no incentive credit was utilized in 2017, the Airport continues to meet with the airlines to discuss new routes and will continue to budget for incentive credits.

Utilities 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. 2016 Actual to 2017 Actual Variance – During 2016, the Airport spent $1.6 million on utilities while estimated actual expenses for 2017 are $1.8 million, or an increase of 12.5%. Most of this increase was from additional expenses for electric and natural gas. During 2017, the Airport began refurbishing the former Hawker facility for the new Envoy Airlines maintenance facility. This former vacant space consumed additional utilities during 2017. Once Envoy began occupying the facility, a portion of those utility expenses were passed on to Envoy. 2017 Budget to 2018 Budget Variance – The 2017 budget for utilities was $1.9 million while the 2018 budget is $1.8 million. Based upon the energy savings referenced above, the Airport has reduced the utilities budget 4.8% from 2017 to 2018. A significant reduction in the budget for electricity was partially offset by an increase in the budget for generator diesel fuel.

Annual Operating Budget 2018

2017 Actual to 2018 Budget Variance – Utilities Comparing the 2017 estimated actual $2,500 expense for utilities ($1.9 million) to the 2018 budget ($1.8 million), the Airport $2,000 anticipates a 3.2% reduction. $1,500

$1,000

InThousand $ $500

$- 2016 Actual 2017 Budget 2017 Est. 2018 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. 2016 Actual to 2017 Actual Variance – The expenses for Materials and Supplies during 2016 were $928K while the estimated actual expenses for 2017 are anticipated to be $825K, an 11.1% decrease. The greatest reduction in expenses were for paint, electrical and paving supplies to maintain the airfield. Additionally, the Airport had a reduction in technology supplies and Materials and Supplies terminal equipment supplies. $1,500 2017 Budget to 2018 Budget Variance $1,250 – The budget for Materials and Supplies $1,000 decreased from $965K in 2017 to $885K $750 in 2018, a reduction of 8.2%. Based $500

upon the savings in 2017 expenses for InThousand $ electrical and other airfield supplies, the $250 budget for items are reduced during $- 2018. Reductions in the budget for 2016 Actual 2017 Budget 2017 Est. 2018 Budget facilities and grounds supplies as well as vehicle supplies account for most for the remaining reductions. 2017 Actual to 2018 Budget Variance – Comparing 2017 estimated actuals expenses for Materials and Supplies of $825K to the 2018 budget of $885K, the expenses are expected to increase 7.3%. Contingencies for snow removal and other infrequent expenses are included in the 2018 budget which accounts for a majority of this variance.

Annual Operating Budget 2018

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. 2016 Actual to 2017 Actual Variance – During 2016, the Airport spent $379K on insurance premiums and claims paid in lieu of insurance claims. The 2017 estimated actual amount to be spent on insurance is $381K, or a 0.6% increase. 2017 Budget to 2018 Budget Variance Insurance – The 2017 budget for insurance was $500 $404K while the 2018 insurance budget is $422K. This represents a 4.5% $400 increase in the budget for 2018. $300 2017 Actual to 2018 Budget Variance –

$200 The 2017 estimated actual amount to

InThousand $ be spent on insurance is $381K while $100 the insurance budget for 2018 is $422K. This budget to actual increase is 10.7%. $- 2016 Actual 2017 Budget 2017 Est. 2018 Budget Most of this increase is due to increase in premiums for commercial property and automobile coverage.

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. 2016 Actual to 2017 Actual Variance – During 2016, the Airport spent $1.4 million on other operating items. Estimated actual expenses for 2017 in the category are expected to be $1.5 million, an increase of 10.5%. Increases in computer software support contracts, airport conferences and staff training make up some of this increase. 2017 Budget to 2018 Budget Variance – The 2017 budget for Other Operating Expense was $1.64 million while the 2018 budget is $1.63 million, as well. This is a .5% decrease from 2017 to 2018.

Annual Operating Budget 2018

2017 Actual to 2018 Budget Variance – For 2017, the estimated actual Other Operating Expense amount to be spent on Other Operating $2,000 Expense is $1.5million, which is 8.0% $1,750 less than the 2018 budget, or $1.6 $1,500 million. $1,250 $1,000 $750

InThousand $ $500 $250 $- 2016 Actual 2017 Budget 2017 Est. 2018 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. 2016 Actual to 2017 Actual Variance – Depreciation During 2016, the Airport expensed $20,000 $14.4 million on depreciation. Estimated actual depreciation for 2017 $18,000 is expected to be $15 million, an $16,000 increase of 3.9%. This Increase was due to the purchases of capital items during $14,000

2017 that the Airport began InThousand $ $12,000 depreciating.

$10,000 2017 Budget to 2018 Budget Variance – 2016 Actual 2017 Budget 2017 Est. 2018 Budget The 2017 budget for depreciation was $15 million while the 2018 budget is $16 million. This 6.3% increase is due to the capital assets acquired during 2017 as well as the capital projects closed during the year. Several large airfield projects were completed during 2017 and will have a full year of depreciation during 2018. 2017 Actual to 2018 Budget Variance – The 2017 estimated actual depreciation is $15 million. The Airport has budgeted a 6.3% increase in depreciation, making the 2018 budget $16 million.

Annual Operating Budget 2018

Non-Operating Revenues (Expenses)

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Proposed (Budget to Budget) (Budget to YE Est.) Non-Operating Revenues (Expenses) Passenger Facility Charges 3,874,349 3,882,271 3,909,556 35,207 0.9% 27,286 0.7% Federal Operating Grants (1) 300,000 319,909 191,954 (108,046) -36.0% (127,955) -40.0% Interest Income 306,000 555,996 696,000 390,000 127.5% 140,004 25.2% Aviation Fuel Tax 383,018 304,553 304,553 (78,465) -20.5% - 0.0% Federal, State & Local Grants (2) 7,700,000 9,885,608 11,000,000 3,300,000 42.9% 1,114,392 11.3% Contributions from Lessees (3) - - - - 0.0% - 0.0% Other Non-Operating 100,000 145,912 130,000 30,000 30.0% (15,912) -10.9% Non-Operating Activities $ 12,663,367 $ 15,094,248 $ 16,232,063 $ 3,538,696 28.2% $ 1,153,727 7.5% Passenger Facility Charges The Airport collects a $4.50 Passenger Facility Charge (PFC) on each enplaned Passenger Facility Charges passenger. These funds can be used by $4,000 the Airport to fund FAA-approved projects that enhance safety, security or $3,900 capacity; reduce noise or increase air $3,800 carrier competition. LIT currently has FAA authorization to collect PFC’s on $3,700 each enplanement approximately InThousand $ $3,600 through 2020. During 2018, the Airport plans to apply to the FAA for additional $3,500 PFC collection authority. This 2016 Actual 2017 Budget 2017 Est. 2018 Budget application (PFC #10) should extend the Airport’s collection authority through 2024. 2016 Actual to 2017 Actual Variance – The Airport collected $3.8 million in PFCs during 2016. Estimated actual PFC collections for 2017 are expected to be $3.9 million, a 1.1% increase. There was a slight increase in enplaned passengers during 2017, so that is reflected in the increase in PFC revenue for the year. 2017 Budget to 2018 Budget Variance – The 2017 budget for PFC revenue was $3.87 million. With enplanements expected to increase 1% during 2018, the PFC budget is .9% greater, or $3.91million. 2017 Actual to 2018 Budget Variance – The 2017 estimated actual PFC revenue is $3.88 million. As referenced above, the 2018 budget is $3.91 million. This reflects an anticipated increase in enplaned passengers during 2018.

Federal Operating Grants The Transportation Security Administration (TSA) reimburses the Airport for expenses related to the Law Enforcement 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.

Annual Operating Budget 2018

2016 Actual to 2017 Actual Variance – The Airport collected $299K in TSA operating grants in 2016. For 2017, the estimated actual operating grants collected are expected to be $320K, a 7.1% decrease. At the end of 2016, funding was not available for Canine and LEO reimbursements. In 2017, the Airport was able to collect grants for these reimbursements related to the fourth quarter of 2016. This accounts for the increase. 2017 Budget to 2018 Budget Variance – The 2017 budget for Federal Federal Operating Grants Operating Grants was $300K. TSA has $500 announced it will no longer reimburse $400 LEO activities beginning January 2018. The 2017 grant for LEO was $152K. $300

Based upon this reduction in funding, $200

the 2018 budget is $192K. This InThousand $ represents a 36% reduction when $100 compared to the 2017 budget. $- 2016 Actual 2017 Budget 2017 Est. 2018 Budget 2017 Actual to 2018 Budget Variance – In 2017, the estimated federal grants collected were $320K. The 2018 budget was decreased 40% to $192K. As mentioned above, this is related to the anticipated loss in reimbursement for LEO activities.

Interest Income The Airport generates interest income on cash balances held in the various bank accounts. The interest rate on these accounts floats with the Fed Funds rate. Through October, the Federal Reserve had increased their Fed Funds rate twice during 2017, from .66% to 1.16%. Currently, the Airport earns 1.4% on cash balances. The combined cash Interest Income balances held by the Airport increased $1,000 only slightly during 2017. The increase in the interest rate has positively $800 impacted the interest income earned by $600 the Airport over the past year.

$400 2016 Actual to 2017 Actual Variance –

InThousand $ The Airport earned $306K in interest $200 income during 2016. The estimated actual interest income earned in 2018 is $- 2016 Actual 2017 Budget 2017 Est. 2018 Budget $556K. That is an 82% increase in one year. While the average cash balance has increased only slightly from 2017 to 2018, the interest rate earned on these balances has increased significantly during 2018. That is the primary factor in the increase in interest income during 2018. 2017 Budget to 2018 Budget Variance – The 2017 budget for interest income was $306K million. This was based upon the prevailing interest rates at the end of 2016. The Airport has budgeted interest income for 2018 at $696K. With the current level of construction and operating spending anticipated to continue 34

Annual Operating Budget 2018 at roughly the same pace, the Airport does not expect cash balances to change significantly during 2018. However, the average interest rate for 2018 should be greater than 2017 since two interest rate increases occurred during 2017. The 2018 budget conservatively anticipates interest rates to remain flat during 2018. 2017 Actual to 2018 Budget Variance – The 2017 estimated actual interest income earned is $556K. The 2018 budget reflects a 25.2% increase over the prior year actual. The Airport has budgeted interest income for 2018 at $696K.

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 Aviation Fuel Tax the prior year collections. $500 2016 Actual to 2017 Actual Variance – $400 The Airport collected Aviation Fuel Taxes in 2016 totaling $341K. The $300 estimated actual collections for 2017 $200 are, $305K, a 10.7% decrease.

InThousand $ 2017 Budget to 2018 Budget Variance – $100 The 2017 budget for Aviation Fuel Tax $- for 2017 was $383K, which was based 2016 Actual 2017 Budget 2017 Est. 2018 Budget on an increase from the 2016 collections. However, with 2017 collections decreasing when compared to 2016, the Airport has budgeted a reduction in Aviation Fuel Taxes for 2018. The 2018 budget for Aviation Fuel Tax is $305K, a decrease of 20.5%. 2017 Actual to 2018 Budget Variance – The estimated tax collected from the sales of aviation fuel for 2017 is $305K. The Airport is anticipating no change in collections for 2018 and is budgeting Aviation Fuel Tax revenue at $305K.

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. 2016 Actual to 2017 Actual Variance – During 2016, the Airport was able to collect a total of $13.2 million in grants from the FAA and the State of Arkansas. That was a historically large amount for Clinton National Airport. The estimated revenue from federal and state grants for 2017 is $9.9 million. While this represents a 25% decrease from the 2016 actual, it is larger than the amounts received in 2014 and 2015

Annual Operating Budget 2018 combined. The unusually large receipts in 2016 can be attributed to receipt of a $12.9 million grant for a multiphase taxiway rehabilitation project estimated to cost $17.5 million. Activity in 2017 included the Airport Master Plan and Airport Layout Plan updates, continued work on Taxiways Alpha and Bravo and lighting on Runway 4 Right. 2017 Budget to 2018 Budget Variance – Federal, State & Local Grants The budget for federal and state grants $20,000 for 2017 was $7.7 million. The 2018 budget for this category is $11 million. $15,000 That is an increase of 43% over the 2017 budget. The Airport anticipates $10,000 receiving grant reimbursements for the following projects during 2018: the final InThousand $ $5,000 phase of Taxiways Alpha and Bravo, the Airport Master Plan and Airport Layout $- Plan updates, Runway 4 Right paved 2016 Actual 2017 Budget 2017 Est. 2018 Budget shoulders and lighting and the Engineered Material Arresting System (EMAS) on Runway 4 Left/22 Right. 2017 Actual to 2018 Budget Variance – The estimated revenue collected from the federal and state grants for 2017 is $9.9 million. The Airport has projected a total of $11 million, an increase of 11.3%, in grants collection in 2018.

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 2017 there were no reversions and there are not any reversion scheduled for 2018. 2016 Actual to 2017 Actual Variance – There were no reversions in 2016 or 2017. 2017 Budget to 2018 Budget Variance – There were no reversions budgeted in 2017 or 2018. 2017 Actual to 2018 Budget Variance – There were no reversions in 2017 and none budgeted in 2018.

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. 2016 Actual to 2017 Actual Variance – The Airport received $141K in Other Non-Operating Revenues in 2016. Estimated actual revenues in this category for 2017 are $146K. That is a 3.4% increase over the 2017 level.

Annual Operating Budget 2018

2017 Budget to 2018 Budget Variance – The 2017 budget for Other Non-Operating Revenues was $100K, while the budget for 2018 is $130K. This 30% increase over the 2017 budget was based on the 2017 actual activity. 2017 Actual to 2018 Budget Variance – The estimated actual Other Non- Other Non-Operating Rev. Operating Revenues for 2017 are $200 $146K. The budget for 2018 is $130K, a 10.9% reduction when compared the $150 estimated 2017 actuals. $100

InThousand $ $50

$- 2016 Actual 2017 Budget 2017 Est. 2018 Budget

Annual Operating Budget 2018

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 2018

EXECUTIVE DEPARTMENT FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 778,687 $ 807,154 $ 823,276 $ 44,589 5.7% $ 16,122 2.0% Payroll Taxes 59,570 51,105 62,981 3,411 5.7% 11,876 23.2% Employee Benefits 159,332 170,335 172,525 13,193 8.3% 2,190 1.3% Total Personnel Expenses 997,588 1,028,595 1,058,782 61,194 6.1% 30,187 2.9%

Non-Personnel Expenses Professional & Contractual Services 348,000 280,180 301,000 (47,000) -13.5% 20,820 7.4% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 241,900 127,817 234,900 (7,000) -2.9% 107,083 83.8% Utilities ------Materials and Supplies 3,500 1,052 3,500 - - 2,448 232.6% Insurance ------Other Operating Expense 251,073 227,204 253,851 2,778 1.1% 26,647 11.7% Total Non-Personnel Expenses 844,473 636,253 793,251 (51,222) -6.1% 156,998 24.7%

Total Operating Expenses $ 1,842,061 $ 1,664,848 $ 1,852,033 $ 9,972 0.5% $ 187,185 11.2%

Annual Operating Budget 2018

Administration Department

The Administration Department has oversight over…. 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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 122,563 $ 114,571 $ 130,346 $ 7,783 6.3% $ 15,774 13.8% Payroll Taxes 9,376 8,424 9,971 595 6.4% 1,547 18.4% Employee Benefits 66,806 51,626 76,629 9,823 14.7% 25,002 48.4% Total Personnel Expenses 198,745 174,622 216,946 18,201 9.2% 42,324 24.2%

Non-Personnel Expenses Professional & Contractual Services 1,100 997 4,600 3,500 318.3% 3,602 361.2% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 10,000 8,794 10,000 - - 1,206 13.7% Utilities ------Materials and Supplies 13,100 9,764 12,640 (460) -3.5% 2,876 29.5% Insurance 404,000 381,205 422,000 18,000 4.5% 40,795 10.7% Other Operating Expense 78,350 57,534 71,200 (7,150) -9.1% 13,666 23.8% Total Non-Personnel Expenses 506,550 458,294 520,440 13,890 2.7% 62,145 13.6%

Total Operating Expenses $ 705,295 $ 632,917 $ 737,385 $ 32,091 4.5% $ 104,469 16.5%

Annual Operating Budget 2018

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 determining employee hours are properly recorded for the bi-weekly payroll.

HUMAN RESOURCES DEPARTMENT FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 257,754 $ 212,197 $ 255,047 $ (2,707) -1.1% $ 42,850 20.2% Payroll Taxes 19,718 17,017 19,511 (207) -1.0% 2,494 14.7% Employee Benefits 202,786 182,858 189,825 (12,961) -6.4% 6,967 3.8% Total Personnel Expenses 480,257 412,071 464,383 (15,875) -3.3% 52,312 12.7%

Non-Personnel Expenses Professional & Contractual Services 66,600 41,230 52,000 (14,600) -21.9% 10,770 26.1% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 55,000 50,884 58,600 3,600 6.5% 7,716 15.2% Utilities ------Materials and Supplies 2,900 2,959 3,900 1,000 34.5% 941 31.8% Insurance ------Other Operating Expense 17,025 17,691 20,695 3,670 21.6% 3,004 17.0% Total Non-Personnel Expenses 141,525 112,764 135,195 (6,330) -4.5% 22,431 19.9%

Total Operating Expenses $ 621,782 $ 524,835 $ 599,578 $ (22,205) -3.6% $ 74,743 14.2%

Annual Operating Budget 2018

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 time to assist the passengers travelling through the Airport. Additionally, throughout the year staff hosts special Customer Care days.

CUSTOMER CARE DEPARTMENT FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 259,657 $ 212,902 $ 246,928 $ (12,729) -4.9% $ 34,026 16.0% Payroll Taxes 19,864 15,883 18,890 (974) -4.9% 3,007 18.9% Employee Benefits 74,905 62,903 92,326 17,420 23.3% 29,423 46.8% Total Personnel Expenses 354,426 291,688 358,143 3,717 1.0% 66,456 22.8%

Non-Personnel Expenses Professional & Contractual Services 132,000 113,696 126,000 (6,000) -4.5% 12,304 10.8% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 33,000 31,868 35,492 2,492 7.6% 3,624 11.4% Utilities ------Materials and Supplies 23,100 5,344 15,700 (7,400) -32.0% 10,356 193.8% Insurance ------Other Operating Expense 9,500 6,273 7,500 (2,000) -21.1% 1,227 19.6% Total Non-Personnel Expenses 197,600 157,181 184,692 (12,908) -6.5% 27,511 17.5%

Total Operating Expenses $ 552,026 $ 448,869 $ 542,835 $ (9,191) -1.7% $ 93,967 20.9%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 668,317 $ 521,253 $ 705,032 $ 36,714 5.5% $ 183,778 35.3% Payroll Taxes 51,126 38,645 53,935 2,809 5.5% 15,290 39.6% Employee Benefits 241,848 177,046 257,594 15,746 6.5% 80,548 45.5% Total Personnel Expenses 961,291 736,944 1,016,560 55,269 5.7% 279,616 37.9%

Non-Personnel Expenses Professional & Contractual Services 215,300 191,818 194,192 (21,108) -9.8% 2,374 1.2% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 4,000 2,167 3,250 (750) -18.8% 1,083 50.0% Utilities ------Materials and Supplies 4,400 4,356 4,400 - - 44 1.0% Insurance ------Other Operating Expense 302,720 292,802 304,750 2,030 0.7% 11,948 4.1% Total Non-Personnel Expenses 526,420 491,143 506,592 (19,828) -3.8% 15,449 3.1%

Total Operating Expenses $ 1,487,711 $ 1,228,087 $ 1,523,152 $ 35,441 2.4% $ 295,065 24.0%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 262,025 $ 257,219 $ 282,916 $ 20,892 8.0% $ 25,697 10.0% Payroll Taxes 20,045 19,606 21,643 1,598 8.0% 2,037 10.4% Employee Benefits 99,626 84,017 114,317 14,690 14.7% 30,299 36.1% Total Personnel Expenses 381,696 360,842 418,876 37,180 9.7% 58,034 16.1%

Non-Personnel Expenses Professional & Contractual Services 420 532 - (420) -100.0% (532) -100.0% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies 2,400 2,122 2,700 300 12.5% 578 27.2% Insurance ------Other Operating Expense 13,180 11,829 14,180 1,000 7.6% 2,351 19.9% Total Non-Personnel Expenses 16,000 14,483 16,880 880 5.5% 2,397 16.6%

Total Operating Expenses $ 397,696 $ 375,325 $ 435,756 $ 38,060 9.6% $ 60,431 16.1%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 132,702 $ 148,389 $ 122,483 $ (10,220) -7.7% $ (25,907) -17.5% Payroll Taxes 10,152 11,108 9,370 (782) -7.7% (1,738) -15.6% Employee Benefits 48,826 49,142 37,161 (11,665) -23.9% (11,981) -24.4% Total Personnel Expenses 191,680 208,639 169,013 (22,667) -11.8% (39,625) -19.0%

Non-Personnel Expenses Professional & Contractual Services 42,000 86,710 5,000 (37,000) -88.1% (81,710) -94.2% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs 3,200 - 3,500 300 9.4% 3,500 - Utilities ------Materials and Supplies 2,000 344 2,000 - - 1,656 481.3% Insurance ------Other Operating Expense 14,080 18,499 12,080 (2,000) -14.2% (6,419) -34.7% Total Non-Personnel Expenses 61,280 105,553 22,580 (38,700) -63.2% (82,973) -78.6%

Total Operating Expenses $ 252,960 $ 314,192 $ 191,593 $ (61,367) -24.3% $ (122,599) -39.0%

Annual Operating Budget 2018

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 grant 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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 489,864 $ 462,893 $ 501,161 $ 11,297 2.3% $ 38,268 8.3% Payroll Taxes 37,475 32,624 38,339 864 2.3% 5,715 17.5% Employee Benefits 141,144 128,898 189,090 47,946 34.0% 60,192 46.7% Total Personnel Expenses 668,482 624,415 728,589 60,107 9.0% 104,174 16.7%

Non-Personnel Expenses Professional & Contractual Services 78,500 29,637 59,000 (19,500) -24.8% 29,363 99.1% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies 1,700 258 1,700 - - 1,442 557.9% Insurance ------Other Operating Expense 19,795 11,258 21,895 2,100 10.6% 10,637 94.5% Total Non-Personnel Expenses 99,995 41,154 82,595 (17,400) -17.4% 41,441 100.7%

Total Operating Expenses $ 768,477 $ 665,569 $ 811,184 $ 42,707 5.6% $ 145,616 21.9%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 926,527 $ 895,146 $ 931,075 $ 4,548 0.5% $ 35,929 4.0% Payroll Taxes 70,879 68,233 71,227 348 0.5% 2,994 4.4% Employee Benefits 276,239 264,143 340,500 64,261 23.3% 76,357 28.9% Total Personnel Expenses 1,273,646 1,227,522 1,342,803 69,157 5.4% 115,280 9.4%

Non-Personnel Expenses Professional & Contractual Services 3,757,426 3,745,099 3,932,269 174,843 4.7% 187,170 5.0% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies 55,150 25,732 37,825 (17,325) -31.4% 12,093 47.0% Insurance ------Other Operating Expense 95,560 81,733 109,595 14,035 14.7% 27,862 34.1% Total Non-Personnel Expenses 3,908,136 3,852,564 4,079,689 171,553 4.4% 227,125 5.9%

Total Operating Expenses $ 5,181,782 $ 5,080,087 $ 5,422,492 $ 240,710 4.6% $ 342,405 6.7%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 959,345 $ 868,827 $ 925,558 $ (33,787) -3.5% $ 56,730 6.5% Payroll Taxes 73,390 65,049 70,805 (2,585) -3.5% 5,757 8.8% Employee Benefits 390,312 307,449 394,037 3,725 1.0% 86,588 28.2% Total Personnel Expenses 1,423,046 1,241,325 1,390,400 (32,646) -2.3% 149,075 12.0%

Non-Personnel Expenses Professional & Contractual Services 38,344 40,261 40,991 2,647 6.9% 730 1.8% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities ------Materials and Supplies 45,125 37,174 36,674 (8,451) -18.7% (500) -1.3% Insurance ------Other Operating Expense 12,075 9,091 11,530 (545) -4.5% 2,439 26.8% Total Non-Personnel Expenses 95,544 86,525 89,195 (6,349) -6.6% 2,670 3.1%

Total Operating Expenses $ 1,518,590 $ 1,327,850 $ 1,479,595 $ (38,995) -2.6% $ 151,745 11.4%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 624,736 $ 582,011 $ 643,591 $ 18,854 3.0% $ 61,580 10.6% Payroll Taxes 47,792 43,476 49,235 1,442 3.0% 5,759 13.2% Employee Benefits 295,771 240,140 332,784 37,014 12.5% 92,644 38.6% Total Personnel Expenses 968,299 865,627 1,025,610 57,310 5.9% 159,983 18.5%

Non-Personnel Expenses Professional & Contractual Services 41,580 51,291 42,504 924 2.2% (8,787) -17.1% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 118,700 117,178 118,700 - - 1,522 1.3% Materials and Supplies 186,028 130,399 204,836 18,808 10.1% 74,437 57.1% Insurance ------Other Operating Expense 27,790 14,416 28,840 1,050 3.8% 14,424 100.1% Total Non-Personnel Expenses 374,098 313,283 394,880 20,782 5.6% 81,597 26.0%

Total Operating Expenses $ 1,342,397 $ 1,178,910 $ 1,420,490 $ 78,092 5.8% $ 241,580 20.5%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 1,993,034 $ 1,847,316 $ 2,074,749 $ 81,715 4.1% $ 227,433 12.3% Payroll Taxes 152,467 137,827 158,718 6,251 4.1% 20,891 15.2% Employee Benefits 884,918 766,100 990,388 105,470 11.9% 224,288 29.3% Total Personnel Expenses 3,030,419 2,751,243 3,223,855 193,436 6.4% 472,612 17.2%

Non-Personnel Expenses Professional & Contractual Services 1,021,088 1,061,355 1,068,960 47,872 4.7% 7,605 0.7% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 1,186,500 1,201,354 911,834 (274,666) -23.1% (289,520) -24.1% Materials and Supplies 321,308 306,762 279,664 (41,644) -13.0% (27,098) -8.8% Insurance ------Other Operating Expense 24,930 40,258 21,195 (3,735) -15.0% (19,063) -47.4% Total Non-Personnel Expenses 2,553,826 2,609,729 2,281,653 (272,173) -10.7% (328,076) -12.6%

Total Operating Expenses $ 5,584,245 $ 5,360,972 $ 5,505,508 $ (78,737) -1.4% $ 144,536 2.7%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 461,708 $ 423,847 $ 538,729 $ 77,021 16.7% $ 114,883 27.1% Payroll Taxes 35,321 31,762 41,213 5,892 16.7% 9,451 29.8% Employee Benefits 167,205 142,584 209,889 42,684 25.5% 67,306 47.2% Total Personnel Expenses 664,234 598,192 789,832 125,598 18.9% 191,639 32.0%

Non-Personnel Expenses Professional & Contractual Services 489,192 435,952 531,953 42,761 8.7% 96,001 22.0% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 135,592 148,191 145,912 10,320 7.6% (2,279) -1.5% Materials and Supplies 113,173 122,375 103,873 (9,300) -8.2% (18,502) -15.1% Insurance ------Other Operating Expense 82,825 47,855 71,383 (11,442) -13.8% 23,528 49.2% Total Non-Personnel Expenses 820,782 754,373 853,121 32,339 3.9% 98,748 13.1%

Total Operating Expenses $ 1,485,015 $ 1,352,565 $ 1,642,952 $ 157,937 10.6% $ 290,387 21.5%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 85,006 $ 84,834 $ 87,564 $ 2,558 3.0% $ 2,730 3.2% Payroll Taxes 6,503 6,122 6,699 196 3.0% 576 9.4% Employee Benefits 43,429 42,299 51,521 8,092 18.6% 9,222 21.8% Total Personnel Expenses 134,938 133,255 145,783 10,845 8.0% 12,528 9.4%

Non-Personnel Expenses Professional & Contractual Services 19,200 35,196 66,192 46,992 244.8% 30,996 88.1% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 408,780 361,521 386,000 (22,780) -5.6% 24,479 6.8% Materials and Supplies 30,024 35,776 40,008 9,984 33.3% 4,232 11.8% Insurance ------Other Operating Expense - 8,934 - - - (8,934) -100.0% Total Non-Personnel Expenses 458,004 441,427 492,200 34,196 7.5% 50,773 11.5%

Total Operating Expenses $ 592,942 $ 574,682 $ 637,983 $ 45,041 7.6% $ 63,301 11.0%

Annual Operating Budget 2018

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 FY2018 Budget Expense Summary

FY 2017 FY 2017 FY 2018 Growth Growth Budget YE Est. Budget (Budget to Budget) (Budget to Actual)

Operating Expenses

Personnel Expenses Salaries and Wages $ 196,521 $ 192,090 $ 187,070 $ (9,451) -4.8% $ (5,020) -2.6% Payroll Taxes 15,034 14,531 14,311 (723) -4.8% (220) -1.5% Employee Benefits 74,298 67,538 81,113 6,815 9.2% 13,575 20.1% Total Personnel Expenses 285,853 274,159 282,494 (3,359) -1.2% 8,335 3.0%

Non-Personnel Expenses Professional & Contractual Services 19,868 21,666 26,704 6,836 34.4% 5,038 23.3% Buildings and Grounds Maintenance ------Equipment Repair and Maintenance ------Marketing and Public Affairs ------Utilities 15,000 4,681 211,816 196,816 1312.1% 207,135 4425.4% Materials and Supplies 171,150 152,408 146,150 (25,000) -14.6% (6,258) -4.1% Insurance ------Other Operating Expense 10,802 8,440 10,802 - - 2,362 28.0% Total Non-Personnel Expenses 216,820 187,194 395,472 178,652 82.4% 208,278 111.3%

Total Operating Expenses $ 502,673 $ 461,353 $ 677,966 $ 175,293 34.9% $ 216,613 47.0%

Annual Operating Budget 2018

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 Major 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. 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 Major Capital Purchases List. The Major Capital Purchases budget is developed through the estimated cost of specific projects or fixed asset acquisitions, including routine life cycle replacements.

Annual Operating Budget 2018

Major Capital Purchases

ATTACHMENT A CLINTON NATIONAL AIRPORT FY 2018 MAJOR CAPITAL PURCHASES

Description Details Budgeted

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

72" Brush Cutter 72" Brush cat attachment for Bobcat purchased in 2017 6,500 Lighted Runway Closure Markers (two) Portable lighted runway closure markers fitted with LED bulbs, operated with an on demand generator and DC power 65,000 Ground Fork Dumper Dumper used to dump airport waste dumpsters into Waste Management compactor 14,500 Buffalo Turbine Blower Trailer mounted turbine blower with 26.5 HP fuel injected engine 10,000 Kubota RTV-X1100CWL-H (two) Kubota RTV-X1100CWL-H (two) utility vehicles 50,000 Twelve (12) Dumper Carts Twelve (12) 2 yard carts for dumper with rhino coasting inside 35,000 Western Star 4x4 Chassis- Wausau Rollover Plow Western Star 4x4 Chassis- Wausau Rollover Plow / Epoke Spreader 240,000 Plumbing Drain Camera Drain camera for use by Facilities Dept. plumbers 8,000 Fuel Truck & Rapid Fill Fuel Pump System Mobile fueling transport truck & high volume fuel pumping system to fill mobile fuel truck 175,000 Total Heavy Equipment 604,000

Replace Airfield Lighting System Computers 6 Computers, 5 Battery Backups, 2 Touchscreens, 5 Monitors in Airfield lighting Vaults & FAA Tower 107,000 Replace BHS Workstations & Servers Replace workstations, servers, screens, firewalls, BIT/BRP displays 319,000 Additional and Replacement Security Cameras Additional Cameras in Various Areas of the airport; approximately 63 new or replacement cameras. 455,000 Technology Upgrades for Conference Rooms Crestron matrices, video switching equip. for different forms of media i.e. laptop, tablet, etc in the Commission & PP&D conf. rooms 217,000 EaseFX Software License for Common Use Gates EaseFX for Common Use Gates, 6, 9, 10, 11, & 12 153,000 Fire Alarm & Access Control Integration Software, hardware and labor required to integrate the fire alarm system and access control systems 32,000 Replacement Computers 25 Computers, New Uninterruptible Power Supplies, Software Licenses (Microsoft Office, Adobe) and new laptops 47,000 Replacement SQL Server Replace existing SQL Server with a clustered SQL Server 80,000 TV for Gate Hold Areas TV's, Speakers, AMP, Mounts, CAT6 Cable Runs, IMC Licenses, CNN Server Equipment, Labor to Install TV's 154,000 Access Control, CCTV, and Gate Controls at Gates 177Access & 178 Control, CCTV, and Gate Controls at Gates 177 & 178 225,000 Cargo North BAS Add all HVAC equipment that is maintained by the airport at North Cargo to the BAS 25,000 GIS Server and Software Two Servers, GIS Software Licenses 100,000 Common Use Equipment for Ticket Counter Common Use Equipment for Ticket Counter and implementation of Frontier Airlines on the Common Use System 60,000 Total Computer Systems: Infrastructure 1,974,000

Automate RAC Lobby Doors Install automatic opening/closing equipment on doors, replace doors with glass doors or install view panel in existing doors 15,000 Terminal Baggage Claim Air Handler Upgrades Replace air handlers 6, 7A, and 36B in the baggage claim area of the terminal 120,000 Loading Dock/Commissary Air Handler Upgrades Replace two old and failing air handler units in tenant spaces of the loading dock area and add to the building automation system 25,000 Riverbend Restaurant Air Handler Unit ReplacementReplace air handler units KAC 1-4 in the kitchen area of the Riverbend Restaurant 60,000 Upgrade Controls to Inbound Baggage System Replace baggage system controls with updated Allen Bradley control systems and HMI system 150,000 Parking Deck Generator Install second primary generator for the parking deck and south terminal for redundancy 220,000 Expansion of Cribmaster Industrial Vending System Increase secured tool storage capability with additional Cribmaster electronic vending solutions 40,000 Crushed Ice & Water Dispenser Crushed Ice & Water Dispenser for AMF Bldg. 11,000 Replace Fire Alarm System at ARFF Replace the Fire Alarm System in ARFF to work properly with the crash phone system 47,000 Replace the FSDO Fire Alarm System Replace fire alarm panel and associated devices 82,000 Generators for IDFs Generators for Terminal and Airfield IDFs 101,000 Cameras in Grundfest Industrial Buildings Approximately 36 Cameras Watching the inside & Outside of the Hawker Facility 241,000 Replace LPI System for Parking Replacement LPI System for Parking. Includes software, new handheld units, training, and travel. 30,000 Upgrade Parking Deck Fire Alarm Panel Upgrade the Parking Deck Fire Alarm Panel (panel only). 32,000 Replace the PBX Telephone System Study, Recommendation, replace old phone system 300,000 Standard Aero HVAC Replacement Replace 2 existing split HVAC refrigerant system in the Standard Aero lease space 20,000 Backup Power for Fire Suppression Compressor at GIPInstallation of auto-throw over switches and small backup power generators (NG) at each of the sprinkler riser rooms 28,000 Renovate Facilities Area of South Cargo HVAC, insulation, corrugated panels, overhead doors, install CCTV monitoring system 48,000 Commercial HVAC Replacements & Upgrades Replace non-functioning and old HVAC systems in airport industrial / commercial properties as needed 200,000 Grundfest Building 100 HVAC Upgrade Replace existing rooftop HVAC unit, VAV boxes and thermostat controls 150,000 Building Replacements - CNG Facility Replace CNG facility - adjacent to AMF building 185,000 Sprinkler Master Plan Consolidate all sprinkler drawings and provide a sprinkler plan that shows all risers 63,000 Bldg. 132 Improvements (former Central Flying Ser., prepareNew CAP bldg. for occupancy by CAP. Includes roof repair, minor restroom renovations, window replacement 75,000 ARC Flash Study and Electrical Distribution Mapping Conduct study of arc flash risks and prepare drawings for electrical distribution system in terminal 160,000 Upgrade/replace elevators and escalators in the terminalupgrade and/or replace two escalators and one passenger elevator in the lobby area of the terminal 1,000,000 Conduit Plan Project for identifying and drawing the various conduit networks throughout the airport 100,000 As-Built Terminal Plans To provide updated facility drawings to improve facility and lease management 75,000 Carrier Building Rehabilitation (Bldg. 174) Demolition of the southern end of storm-damaged building, renovate exterior walls 300,000 Ice 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 Curbside Canopy Add the canopy at curbside as proposed in the TRP 1,250,000 Total Building Improvements 5,153,000

Annual Operating Budget 2018

ATTACHMENT A CLINTON NATIONAL AIRPORT FY 2018 MAJOR CAPITAL PURCHASES

Description Details Budgeted

LED Lighting New LED Lighting for Cargo Apron High Mast, cargo parking lot north & south, driveway to AMF and other lighting around AMF 85,000 Parking Lot Improvements Various parking surfaces on airport property. Specific areas are based on a condition Index 656,000 Valet Parking Relocation Valet Parking Relocation from East Short Term to South Long Term 100,000 Electric Vehicle Charging Stations Mini Bar Double Electric Vehicle Charging Stations approximately $6200 ea. for installation in airport customer parking lots 30,000 Parking Study Review parking products and inventory to assure we are competitive and offering the best customer service 40,000 Total Parking/Roadway Improvements 911,000

Property Acquisition Allowance Allowance for land purchases to ensure compatible environment. Includes demolition of structures. 300,000 Tree Removal and Fence Relocation Tree Removal and Fence Relocation 150,000 Spare Vehicle Gate for VMAG operator Aluminum vehicle gate 8,500 Update airport MicroPAVER data Update airport MicroPAVER data 20,000 Joint seal replacement program Replacement of deteriorating and maintenance of joint seal on airfield surfaces 150,000 Drainage improvements Airport Drive & Roosevelt RoadRegrade ditch and replace failing drains, culverts and headwalls that are resulting in erosion in the area 1,460,000 Re-roof East Vault New Roof for the East Vault (airfield) 46,000 Relocate Airport Beacon-Study Relocate the airport beacon from the top of the old control tower to a new location 20,000 Demolition of CAP Bldg. 124 Demolition of CAP Bldg. 124 to clear site for future development 250,000 Demolition of DHS Bldg., 1710 Frazier Pike Demolition of to clear site for future development 250,000 Total Airfield Improvements 2,654,500

PROPOSED 2018 CAPITAL EXPENDITURES $ 11,546,500

Carry forward capital items: New Ticket Lobby Photo Purchase of new mural printed on metal panel and installed in terminal lobby. 25,000 Chiller for Hawker Bldg. No. 300 Replace existing McQuay chiller in the Hawker building 175,000 Industrial BAS Additions Add HVAC systems & water detection capabilities to the BAS system in the Hawker & Blue Cross buildings 45,000 Additional UPS for MDF A One Three Phase Industrial UPS and new Power Strips for MDF A 120,000 Redundant Data Center Investigate best location for a redundant data center on the airport 15,000 Upgrade FSDO Security System New i-Star Panel Upgrade to an i-star Ultra,, 10 new readers, 13 new cameras, CCURE9000 License 85,000 Fiber Optic Cable to Carrier and TSA Annex Bldg. Fiber Optic Cable to Carrier and TSA Annex Bldg. 60,000 IQueue Estimated Wait Time Installation of sensors/cameras and associated equipment to measure patrons through Checkpoint 95,000 New Canvas Awning Replace existing canopy over walkway from terminal to employee lot 17,000 New Canvas Awning Replace Door H and Cab Stand awnings 20,000 Connect AMF Generator to Building Automation Sys.Add commercial power feed and generator to Building Automation System (AMF) 6,000 Enclose east bay of Airfield Maintenance Facility Enclose east bay of AMF to match west bay enclosure, providing weather protection for staff and equipment in that area. 150,000 Construct Equipment Storage Building Construct a 100' X 150' equipment storage building to provide storage for equipment and chemicals 150,000 Roadway Signage Replacement Replace damaged and fading roadway signage 350,000 Mobile Customer Care/Volunteer Counter To assist passengers near baggage claim and in the ticket lobby area 15,000 Enterprise Resource System GL/ Acct Rec/Pay/Contract Mgmt./Lease F10‐09‐3 355,000 Total Carry Forward Items $ 1,683,000

TOTAL 2018 CAPITAL ITEMS $ 13,229,500

Annual Operating Budget 2018

Historical Performance Indicators

Operating Revenue per Enplanement $35

$30

$25

$20

$15

$10

$0 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

Operating Expense per Enplanement $25

$20

$15

$10

$0 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

* - FY 2017 Year-end estimate, FY 2018 budgeted Source – Little Rock Municipal Airport Commission

Annual Operating Budget 2018

Operating Revenue vs. Expense 40

In Millions $ Millions In 15

0 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

Operating Expenses Operating Revenue

Net Revenue per Enplanement $14

$12

$10

$0 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

* - FY 2017 Year-end estimate, FY 2018 budgeted Source – Little Rock Municipal Airport Commission

Annual Operating Budget 2018

Supplemental Data

Airport Rates & Charges

2017 2016 2015 2014 2013 Landing fee rate (per 1,000 lbs) $ 4.12 $ 4.05 $ 3.90 $ 3.65 $ 3.39 Terminal building rental rate (per Sq. Ft.) 38.90 38.20 34.18 31.25 30.34 Gate Fee (per turn) 81.45 81.45 77.90 79.15 75.00 Jet Bridge Fee (per turn) 68.50 68.50 68.50 68.50 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 75.00 75.00 75.00 50.00

2012 2011 2010 2009 2008 Landing fee rate (per 1,000 lbs) $ 3.39 $ 3.39 $ 3.39 $ 3.39 $ 3.62 Terminal building rental rate (per Sq. Ft.) 24.74 24.74 24.74 24.74 23.38 Gate Fee (per turn) 75.00 75.00 75.00 70.00 59.00 Jet Bridge Fee (per turn) 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 50.00 50.00 50.00 50.00 -

Parking Fees (Daily Maximum)

2017 2016 2015 2014 2013 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

2012 2011 2010 2009 2008 Parking Deck $ 13.00 $ 13.00 $ 13.00 $ 10.00 $ 10.00 Short Term Lots (East and West) 13.00 13.00 13.00 10.00 10.00 Long Term Lot (South) 10.00 10.00 10.00 8.00 8.00 Peanut Lot (Economy) 8.00 8.00 8.00 6.00 6.00

Annual Operating Budget 2018

Daily Flights (at December 31)

Airline Gate Destination 2017 2016 2015 2014 2013

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 - -

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 Gate 12 New York (LGA) 1.0 -

United Airlines Gate 5,7 & 12 Denver, CO (DEN) 3.0 3.0 3.0 2.0 1.0 Chicago, IL (ORD) 3.0 3.0 3.0 3.0 2.0 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) - - - - 1.0 Detroit, MI (DTW) 1.0 1.0 1.0 1.0 1.0

Frontier Airlines Gate 9 Denver, CO (DEN) - - - - 0.4

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 6.0 Chicago, IL (MDW) - 1.0 1.0 1.0 1.0 Phoenix, AZ (PHX) 1.0 1.0 1.0 1.0 1.0 Houston, TX (HOU) - - - - 1.0 Baltimore, MD (BWI) - - 1.0 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 - - -

US Airways Gates 5 & 8 Charlotte, NC (CLT) - - - 3.0 3.0 Washington, DC (DCA) - - - - 1.0

Vision Airlines Gate Destin, FL (DSI) - - - - -

Total Daily Departures 41.4 44.5 43.4 41.3 44.7

Annual Operating Budget 2018

Passenger Activity

AIRLINES/CODESHARE 2017 2016 2015 2014 2013

Allegiant Air 18,101 13,917 15,405 12,719 7,965 American Airlines 36 2,621 1,914 114,238 112,751 American Eagle 211,686 204,662 135,124 128,729 120,474 Expressjet - American 2,411 Mesa 9,710 10,711 84,598 1,890 - Pacific Southwest (PSA) 65,434 63,556 16,388 - - Republic - - 64 1,418 - Delta Airline 250,381 252,874 248,331 221,887 195,023 Atlantic Southeast - - - 20,612 Chautauqua - - - 50 Compass - - 260 - GOJet 1,016 - - - - Express Jet – Delta 15,405 15,116 16,787 17,544 25,823 Freedom - - - - - Endeavor/Pinnacle 3,880 2,108 749 2,130 836 Shuttle America - 181 258 35 130 Skywest – Delta 1,067 1,501 138 - 8 Republic - Delta 133 Frontier - - 20,363 26,139 GLO Airlines 4,335 7,586 338 - - Southwest Airlines 274,424 262,202 265,453 293,489 335,854 United Airlines - - - - - Express Jet – United 77,929 94,946 108,149 119,030 134,380 Mesa-United 16,724 9,712 Republic - United - 64 47 - - Skywest – United 41,304 41,156 47,946 33,666 28,191 Trans States - United 21,758 12,529 2,956 - - US Airways - - - - 76,490 Mesa-US Airways - - - 41,787 - Air Wisconsin-US Airways - - - 1,019 - Pacific Southwest (PSA) - - 47,462 23,841 - Republic - - - 3,531 - Charters 1,270 1,455 605 731 597

Total Enplanements 1,017,004 996,897 992,712 1,038,307 1,085,323

Annual Operating Budget 2018

Airline Landing Weights (in thousand pounds)

2017 2016 2015 2014 2013 Passenger Airlines Allegiant 17,510 13,980 15,375 12,512 8,669 American 353,792 341,037 276,207 310,988 278,309 Continental - - - - - Delta 312,024 318,579 298,884 289,556 302,377 Frontier - - - 23,047 29,461 GLO Airlines 9,918 19,401 1,610 - - Northwest - - - - - Southwest 310,625 308,462 322,356 410,011 469,900 United 170,796 172,914 168,735 160,126 168,493 US Airways - - 54,521 82,903 95,171 Vision - - - 242 600 Charter 3,510 3,585 2,262 1,160 774 Total 1,178,175 1,177,958 1,139,950 1,290,545 1,353,754

Cargo Airlines Airborne Express - - - - - Federal Express - - - - - UPS 135,585 137,282 135,529 134,957 135,167 Total 135,585 137,282 135,529 134,957 135,167

Total Landed Weights 1,313,760 1,315,240 1,275,478 1,425,502 1,488,921

Annual Operating Budget 2018

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

Year U.S. State Metro 2017 323,127,513 2,988,248 734,622 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 2008 304,093,956 2,848,650 671,441

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

Year Pulaski Faulkner Grant Perry Lonoke Saline Total 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 2008 373,403 105,637 17,483 10,496 64,379 100,043 671,441

Annual Operating Budget 2018

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

Year U.S. State Metro 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 2008 39,821 31,180 36,649

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 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 2008 42,089 30,833 30,651 28,965 25,299 29,062 36,649

Annual Operating Budget 2018

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

Year U.S. State Metro 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% 2008 4.6% 5.2% 4.5%

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

Year Pulaski Saline Lonoke Faulkner Perry Grant Metro 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% 2008 4.7% 4.1% 4.3% 4.3% 4.8% 4.9% 4.5%