2016 BUDGET GRAND JUNCTION REGIONAL AIRPORT AUTHORITY

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Table of Contents LETTER OF BUDGET TRANSMITTAL ............................................................................................................... 4

BUDGET MESSAGE ........................................................................................................................................ 5

BUDGET OVERVIEW .................................................................................................................................. 5

MISSION STATEMENT ............................................................................................................................... 6

VISION STATEMENT .................................................................................................................................. 6

BUDGET DEVELOPMENT AND STRATEGY ................................................................................................. 6

BUDGET APPROACH .................................................................................................................................. 6

BUDGET TIMELINE .................................................................................................................................... 7

TOTAL BUDGET ......................................................................................................................................... 8

CONCLUSION ............................................................................................................................................. 9

REVENUE ..................................................................................................................................................... 10

OPERATING REVENUE ............................................................................................................................. 10

TERMINAL RENT REVENUE .................................................................................................................. 10

PARKING REVENUE ............................................................................................................................. 11

RENTAL CAR CONCESSIONS REVENUE ................................................................................................ 11

FUEL FLOWAGE FEE REVENUE ............................................................................................................ 11

LANDING FEE REVENUE ...................................................................................................................... 12

RESTAURANT REVENUE ...................................................................................................................... 12

LAND AND BUILDING LEASE REVENUE ............................................................................................... 12

RENTAL CAR FACILITIES ....................................................................................................................... 12

NON-OPERATING REVENUE .................................................................................................................... 13

PASSENGER FACILITY CHARGES (PFC) ................................................................................................. 13

RENTAL CAR FACILITY USE FEE ............................................................................................................ 13

FEDERAL & STATE GRANTS ................................................................................................................. 13

EXPENDITURE .............................................................................................................................................. 14

OPERATING EXPENSE .............................................................................................................................. 14

PERSONNEL ......................................................................................................................................... 14

ORGANIZATIONAL CHART ................................................................................................................... 18

EXPENSE DEPARTMENT OVERVIEW .................................................................................................... 19

ADMINISTRATION DEPARTMENT ........................................................................................................ 20

TERMINAL DEPARTMENT .................................................................................................................... 23

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AIRPORT OPERATIONS DEPARTMENT ................................................................................................. 25

AIRPORT RESCUE FIRE FIGHTING (ARFF) DEPARTMENT ..................................................................... 27

AIRPORT SECURITY DEPARTMENT ...................................................................................................... 28

GROUNDS AND ROADWAYS DEPARTMENT ........................................................................................ 30

RENTAL CAR FACILITIES ....................................................................................................................... 32

BUILDINGS AND LAND DEPARTMENT ................................................................................................. 33

FLEET DEPARTMENT ........................................................................................................................... 35

RESTAURANT OPERATIONS EXPENSE DEPARTMENT .......................................................................... 37

NON-OPERATING EXPENSE ..................................................................................................................... 39

DEBT .................................................................................................................................................... 39

CAPITAL EXPENDITURE ....................................................................................................................... 41

FINANCIAL POLICIES .................................................................................................................................... 47

BUDGET DEVELOPMENT & ADMINISTRATION ....................................................................................... 47

REVENUE COLLECTION ............................................................................................................................ 48

EXPENDITURES ........................................................................................................................................ 48

DEBT ADMINISTRATION .......................................................................................................................... 49

FINANCIAL REPORTING & ACCOUNTING ................................................................................................ 49

RATES & CHARGES .................................................................................................................................. 50

EXPENSE ANALYSIS OVERVIEW & ALIGNMENT OF PROGRAM OBJECTIVES ....................................... 50

OVERVIEW OF RATES AND CHARGES ANALYSIS ................................................................................. 51

AIRFIELD .............................................................................................................................................. 52

TERMINAL ........................................................................................................................................... 52

OTHER – AERONAUTICAL .................................................................................................................... 53

OTHER – NON-AERONAUTICAL ........................................................................................................... 53

PLANNING REVIEW, TECHNICAL ANALYSIS AND LEGAL REVIEW FEE ................................................. 54

LETTER OF DETERMINATION FEE ........................................................................................................ 54

BUDGET AMENDMENTS .......................................................................................................................... 55

PERFORMANCE INDICATORS ...................................................................................................................... 56

OVERVIEW ............................................................................................................................................... 56

OPERATING RATIO .................................................................................................................................. 57

OPERATING REVENUE PER ENPLANMENT .............................................................................................. 58

OPERATING EXPENSE PER ENPLANMENT ............................................................................................... 59

AIRLINE COST PER ENPLANEMENT ......................................................................................................... 60

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LANDING FEE RATE ................................................................................................................................. 61

LANDING FEE REVENUE .......................................................................................................................... 62

GRAND JUNCTION REGIONAL AIRPORT ...................................................................................................... 63

AIRPORT OVERVIEW ............................................................................................................................... 63

AIRPORT AUTHORITY GOVERNANCE .................................................................................................. 63

AIRPORT CLASSIFICATION AND SERVICES ........................................................................................... 63

AIRPORT FACILITIES ................................................................................................................................. 64

AIRFIELD .............................................................................................................................................. 64

RUNWAYS ............................................................................................................................................ 64

TAXIWAYS AND TAXI LANES ................................................................................................................ 64

LIGHTING AIDS .................................................................................................................................... 64

PASSENGER TERMINAL BUILDING AND APRON .................................................................................. 65

AIRCRAFT RESCUE FIREFIGHTING (ARFF) ............................................................................................ 65

AIR TRAFFIC CONTROL TOWER ........................................................................................................... 65

AIRPORT AUTHORITY HANGARS ......................................................................................................... 65

RENTAL CAR FACILITIES ....................................................................................................................... 65

PARKING .............................................................................................................................................. 65

ACCESS ROADWAYS ............................................................................................................................ 65

AIRPORT DEBT ......................................................................................................................................... 66

2009 COLORADO STATE INFRASTRUCTURE BANK LOAN .................................................................... 66

2007 REVENUE BONDS........................................................................................................................ 66

AIR SERVICE DEVELOPMENT, PUBLIC RELATIONS, AND MARKETING .................................................... 67

GENERAL AVIATION PROJECTIONS ..................................................................................................... 67

COMMERCIAL AIR SERVICE PROJECTIONS .......................................................................................... 67

SWOT Analysis ..................................................................................................................................... 68

LOCATION................................................................................................................................................ 69

MESA COUNTY .................................................................................................................................... 69

MESA COUNTY STATISTICS .................................................................................................................. 70

USEFUL TERMS (GLOSSARY) ........................................................................................................................ 72

DEFINITIONS ............................................................................................................................................ 72

ACRONYMS ............................................................................................................................................. 78

RESOLUTION TO ADOPT BUDGET ............................................................................................................... 79

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LETTER OF BUDGET TRANSMITTAL To: Division of Local Government Date: December 16, 2015

1313 Sherman Street, Room 521 Denver, Colorado 80203

Attached is a copy of the 2016 budget for Grand Junction Regional Airport Authority in Mesa County, submitted pursuant to Section 29-1-113, C.R.S. This budget was adopted on December 15, 2015. If there are any questions on the budget, please contact: Grand Junction Regional Airport Authority Attn: Ty Minnick 800 Eagle Drive Grand Junction, CO 81506 970-244-9100 I, Ty Minnick, Finance Manager, hereby certify that the enclosed is a true and accurate copy of the 2016 Adopted Budget.

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BUDGET MESSAGE The Grand Junction Regional Airport Authority (“Authority”) is pleased to present the 2016 Budget. This budget is balanced, as required by Colorado Revised Statues 29-1-103, that no budget adopted shall provide for expenditures in excess of available revenues and beginning fund balances.

BUDGET OVERVIEW The Authority is governed by seven Commissioners. The Commissioners establish the Authority’s plans, policies, procedures, and objectives regarding the services to be delivered and the assets to be maintained or acquired in the upcoming and future fiscal years (collectively “Business Affairs”). The Airport is managed by the Authority’s Executive Director, a direct report to the Commissioners. The Executive Director is charged with making recommendations to the Authority’s Commissioners with regard to the Business Affairs of the Airport. The 2016 budget was prepared by the Authority’s Finance Manager in collaboration with the Executive Director, airport staff and the Authority’s Finance and Audit Committee. The 2016 budget takes steps to frame out the cost centers of the airport including (1) Terminal; (2) Airfield; (3) Other - Aeronautical; and (4) Other – Non-Aeronautical. The cost centers, will be further refined as part of the 2017 budget process to begin mid-year 2016. A key focus of the operating budget is to maintain the assets owned by the Authority taking into consideration public safety first together with addressing deferred maintenance issues. Key elements of the 2016 budget include items that will address both operational and future capital plans for the Airport. Those are: (1) reevaluating the Terminal Area Plan (TAP) to devise mid-term alternatives with the help of the Airport Planners, Mead & Hunt, taking into consideration the unfinished administration building; (2) validating and updating the 2011 Terminal Area Assessment Report to address life safety and fire protection; mechanical, plumbing and energy matters; electrical; and structural matters; and (3) solicit for and procure architectural services to develop terminal modernization alternatives. Collectively these reports are referred to as “Strategic Planning Documents.” The 2016 budget framework sets forth a cost recovery goal to manage the Business Affairs of the Authority to leverage revenues and unrestricted cash with prospective grants (entitlements, discretionary and other), revenue bonds and other sources of financing to address future capital needs of the Authority (collectively “Financial Resources”). Airport staff, together with the Authority’s consultants, will lead a strategic planning initiative in 2016 in advance of the 2017 budget process taking into consideration information derived from the Strategic Planning Documents. The 2016 budget will start building the foundation for the mid- to long-term goals of the Authority as ultimately set forth by the Commissioners via the strategic planning initiatives. Also, 2016 will be used to develop cost modeling with line item detail to manage airport

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operations and to establish a reserve policy for the future. The Authority’s Finance and Audit Committee will be charged to develop an implementation strategy for budget years 2017 and beyond that is achievable given available Financial Resources of the Authority and to make its recommendations to implement a reserve policy.

MISSION STATEMENT Grand Junction Regional Airport Authority is committed to facilitating and enhancing regional aviation services.

VISION STATEMENT Grand Junction Regional Airport will be:

Safe, secure, well-maintained, and financially self-sustaining.

The airport of choice for airline travelers.

A regional air cargo hub.

The regional airport of choice for corporate, business and leisure aviation.

Home to a well-planned, private aircraft operator community.

A hub for governmental aviation activities.

A responsible community partner.

An equal opportunity employer and continue to strive to attract and retain high-caliber professionals committed to serve Grand Junction Regional Airport.

BUDGET DEVELOPMENT AND STRATEGY This budget document was prepared after analyzing and evaluating requests from all departments, and represents the requested financial support for the operation of the Airport for the upcoming fiscal year. Revenue estimates are conservative and realistic. The importance of a sound revenue picture cannot be overstated. The Airport staff is refining the budget process to include building the detailed support on the parameters previously discussed in the Budget Overview. For 2016, revenue estimates are based on historical trends with greater weight placed on the most current years. The Authority provides a number of services to the users of the Airport such as airfield operation and maintenance, aircraft rescue & fire fighting, street & grounds maintenance, snow and ice removal, terminal & building operation and maintenance, passenger services and concession management, planning and general administration.

BUDGET APPROACH The 2016 budget used a baseline budget process to assist staff to ensure budget accountability and that expenditures remain conservative in relation to expected revenues. Along with the valuable input received from airport staff, the Authority’s Finance and Audit Committee participated in budget work sessions. The budget work sessions provided the appropriate platform for a detailed review and in depth discussion of the proposed budget. This approach is new to the budget process and increases transparency, accountability and will provide clarity

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about what the Airport is trying to accomplish, how much it is going to cost and how successfully those results are being delivered. The budget development goals based on the projected fiscal status and current priorities were determined and include:

Use of a conservative approach to any increases in expenditures for 2016 and capture any available savings to be used for deferred projects from 2015.

Each fee for services will be examined to ensure fees will recover the costs of services

Review long and short term strategies to maintain personnel costs.

Implementation of a fleet rotation and preventative maintenance policy.

BUDGET TIMELINE The following is the budget timeline for the creation and adoption of the budget.

August 11, 2015 2016 budget worksheet distribution to department managers and supervisors

August 18, 2015 Finance Manager is appointed Budget Officer in accordance with C.R.S. 29-1-104

August 24-28, 2015 Department managers and supervisors meet with Finance Manager to discuss 2016 preliminary budget.

Early to Mid-September 2015 Finance Manager develops revenue estimates and continues discussions with department managers and supervisors.

September 25, 2015 Finance and Audit Committee budget work session to present 2016 preliminary budget

October 1, 2015 Finance and Audit Committee budget work session to continue review of 2016 preliminary budget

October 13, 2015 Presentation of 2016 Budget to Board of Commissioners. Deadline to submit budget is October 15, 2015 in accordance with C.R.S. 29-1-105.

October 15, 2015 Notice of Budget to be published upon board’s receipt of 2016 proposed budget in accordance with C.R.S. 29-1-106.

November 17, 2015 Board presents proposed changes to 2016 proposed budget.

December 15, 2015 Board votes on resolution to adopt 2016 budget. Deadline to adopt budget is December 31, 2015 in accordance with C.R.S. 29-1-108.

January 30, 2016 In accordance with C.R.S. 29-1-113, the adopted budget will be filed in the office of the Division of Local Government no later than January 30, 2016.

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TOTAL BUDGET

2014 Actual 2015 Projection 2016 Budget

Operating revenues

Terminal space rent 1,573,123 1,522,000 1,449,600

Parking revenue 1,271,846 1,142,000 1,288,000

Rental car concessions 788,517 821,000 748,000

Fuel flowage fees 731,523 716,000 729,000

Landing fees 587,016 562,000 561,000

Restaurant revenues 455,007 448,000 441,164

Land and building leases 633,644 639,000 666,000

Rental car facilities 306,065 226,000 211,464

Other income 203,685 200,000 200,000

Total operating revenues 6,550,426 6,276,000 6,294,228

Operating expenses

Administration 1,244,252 1,089,519 1,273,224

Terminal area plan & CIP update - - 170,000

Terminal 784,191 732,259 996,467

Airport operations 463,327 465,393 622,329

Aircraft rescue fire fighting 150,439 117,355 129,669

Security 101,089 193,231 293,749

Grounds and roadways 312,958 291,360 492,569

Rental car facilities 304,564 230,540 216,994

Building and land 44,580 94,450 121,343

Fleet 196,754 203,783 278,929

Restaurant operations 386,183 405,963 399,816

Total operating expenses 3,988,337 3,823,853 4,995,089

Operating income, before depreciation 2,562,089 2,452,147 1,299,139

Non-operating revenues

Passenger facility charges 897,805 866,000 866,000

Interest income 15,714 18,000 10,800

Rental car facility use fee 495,757 557,000 565,000

Capital contributions 155,984 353,000 9,856,786

Gain on disposition of assets 31,276 - -

Total non-operating revenue 1,596,536 1,794,000 11,298,586

Non-operating expense

Interest expense 798,833 749,800 699,382

Debt principal payments 1,199,093 1,250,638 1,298,096

Capital expenditure - AIP 35,784 377,734 10,565,920

Capital expenditure - non AIP 2,342,207 73,893 705,793

Total non-operating expenses 4,375,917 2,452,064 13,269,191

Non-operating loss (2,779,381) (658,064) (1,970,605)

Excess of revenues (under) over expense (217,292) 1,794,084 (671,466)

Adjustments to budgetary basis

Depreciation (4,327,249) (4,400,000) (4,400,000)

Debt principal payments 1,199,093 1,250,638 1,298,096

Capital expenditure 2,377,991 451,626 11,271,713

Change in net position (967,457) (903,652) 7,498,343

Net position at beginning of year 55,263,902 54,296,445 53,392,793

Net position at end of year 54,296,445 53,392,793 60,891,136

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CONCLUSION In 2016 we will continue to build the framework to better manage both operations and the Authority’s capital plans as ultimately adopted by the strategic planning initiative. Conservation of Airport financial resources continues to be a very important objective. The budget is the prime tool in making sure limited resources are wisely utilized. It is the Authority’s belief that the 2016 budget allows the Airport to deliver excellent services in a cost effective and efficient manner. The 2016 budget is a product of collective efforts by the Board of Commissioners, Finance and Audit Committee and Airport staff. Their commitment, good judgment and expertise are invaluable to the budget process. Respectfully submitted, Rick Wagner Rick Langley Chairman of the Board Commissioner & Finance and Audit Committee Chairman David R. Fiore Ty Minnick Executive Director Finance Manager/Budget Officer

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REVENUE

OPERATING REVENUE

2014

Actual 2015

Projection 2016

Budget

Terminal space rent 1,573,123 1,522,000 1,449,600 Parking revenue 1,271,846 1,142,000 1,288,000 Rental car concessions 788,517 821,000 748,000 Fuel flowage fees 731,523 716,000 729,000 Landing fees 587,016 562,000 561,000 Restaurant revenues 455,007 448,000 441,164 Land and building leases 633,644 639,000 666,000 Rental car facilities 306,065 226,000 211,464 Other income 203,685 200,000 200,000

Total operating revenues 6,550,426 6,276,000 6,294,228

TERMINAL RENT REVENUE The largest revenue source in the 2016 budget is terminal rent. Rent revenue is received from the following sources:

1. Airline exclusive space – the airlines that utilize exclusive space are required to pay $30.30 per square foot. The exclusive space rented by the airlines is ticketing, office and garage areas located on the first floor of the terminal. The square feet rented by the airlines varies by airline with a range of 593 to 3,174 square feet.

2. Airline common space – this space is comprised of three areas: a. Baggage processing – aircraft operators that utilize the baggage processing areas

of the terminal building in a particular month shall pay their pro rata share of rent. The pro rata share shall be based on the total number of enplaned revenue passengers during the month. The rate for the baggage processing area is $27.27 per square foot and this area is currently 5,721 square feet.

b. Boarding area – aircraft operators that utilize the boarding area of the terminal building in a particular month shall pay their pro rata share of rent. The pro rata share shall be based on the total number of enplaned revenue passengers during the month. The rate for the boarding area is $27.27 per square foot and this area is currently 17,721 square feet.

c. Ticketing area – aircraft operators that utilize the ticketing area of the terminal building in a particular month shall pay their pro rata share of rent. The pro rata share shall be based on the total number of enplaned revenue passengers during the month. The rate for the ticketing area is $27.27 per square foot and this area is currently 4,587 square feet.

3. Airline security services – security service is a total of $200,000 per year. The pro rata share shall be based on the total number of enplaned revenue passengers utilizing the boarding area.

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4. Rental car exclusive space – rental car operators that utilize exclusive space are required to pay $30.30 per square foot. The exclusive space rented by the rental car operators is located on the first floor of the terminal. There are four counters and office locations available to the rental car operators, each at 536 square feet.

5. Retail space – the rent received from the retail operator is based on a Minimum Annual Guarantee (MAG) rather than square feet. The MAG for the retail operator is $28,000 per year.

6. There is office space on the second and third floor of the terminal that is occupied by the Transportation Security Administration (TSA). The second floor is 2,050 square feet and the third floor is 6,384 square feet. There is a budgeted reduction of terminal rent revenue as the TSA will be eliminating approximately 2,140 square feet from there office space needs on the third floor. This approximates $62,000 in terminal rent revenue and accounts for the almost 10% reduction in terminal space rent.

PARKING REVENUE The other large source of revenue is parking. The variance from 2015 projected revenue to the 2016 budgeted revenue is a result of the prospective elimination of a third party management of the parking lot. The Airport has budgeted to self-manage the parking lot and thereby increasing gross revenue approximately $14,000 - $16,000 per month. This gross revenue amount will be offset by additional labor to account for 24 hour operation and trouble response. The current management agreement has a two-tier system that requires payment to the Airport at the greater of annual MAG of $350,000 or 80.45% of gross revenues up to $500,000 plus 91.5% of gross revenues in excess of $500,000. This agreement expires on March 31, 2016. The parking lot maximum daily rate will be increased from $9 per day to $10 per day as discussed in the Rates and Charges section of this 2016 budget document.

RENTAL CAR CONCESSIONS REVENUE Rental car revenue is comprised of MAG, which is the minimum amount the rental car company must pay the Airport each month. Each rental car company has a different MAG based on the individual contract. The following are the current rental car annual MAG’s:

Avis/Budget………………$203,310

National/Alamo………..$152,301

Hertz…………………………$194,109

Enterprise…………………$152,300 The MAG is adjusted annually in May to either the year one MAG or 85% of 10% of the previous year’s annual gross revenue, whichever is greater.

FUEL FLOWAGE FEE REVENUE The fuel flowage revenue is received from two sources:

1. On airport fuel provider - The Airport receives $0.1017 for every gallon pumped for

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Avgas, Jet A and military Jet A, an additional $0.10 per gallon is added to this fee for capital improvement funding. The historical revenue received from the fuel provider of $7.00 per aircraft operation, excluding air carrier and air taxi/commuter, was used to determine the 2016 budget. The budgeted aircraft operations for 2016 is approximately 30,805 according to the Terminal Area Forecast (TAF), which is a slight increase from the 2015 projection. The TAF is the official FAA forecast of aviation activity for U.S. airports.

2. Aviation fuel tax disbursement - Aviation fuel tax disbursements are made based on the formula of $0.04 per gallon on aviation gasoline and jet fuel and 65% of the sales taxes collected on jet fuel used for commercial operations. Moneys are reimbursed monthly and are based on reporting from the airports and verification by the Colorado Department of Revenue of taxes received into the Aviation Fund. The historical revenue received from fuel tax disbursements of $1.36 per enplanement was used to determine the 2016 budget.

LANDING FEE REVENUE Commercial signatory aircraft over 12,500 pounds landing weight pay a landing fee of $1.70 per 1,000 pounds. This fee is charged for passenger and cargo aircraft, no landing fee is charged for general aviation or military aircraft. The 2016 landing fee budget was based on the historical revenue received from landing fees of approximately $2.58 per enplanement. The budgeted enplanement for 2016 is approximately 218,000.

RESTAURANT REVENUE The Airport is the owner/operator of a Subway franchise and bar located in the terminal boarding area. Historical revenue reflects approximately $1.70 per enplanement for food revenue and $0.30 per enplanement for alcohol revenue. Restaurant & gift operations are open for bid in December 2015 to be operated by a third party, with a potential start date of spring 2016. The anticipated revenue from a third party concession is expected to reflect the current net revenue.

LAND AND BUILDING LEASE REVENUE The Airport has approximately 40 land and building leases. Leases that have an annual rent adjustment based on CPI will be increased 0.2% based on the Bureau of Labor Statistics release.

RENTAL CAR FACILITIES The rental car parking and fuel service area was built by the Airport and financed by a Colorado State Infrastructure Bank (COSIB) loan. The Airport manages the fuel service area, supplies all of the fuel and charges the rental car companies a maximum mark up of $1.00 per gallon fee. The gross revenue received is based on the Airport’s purchase price of fuel. Projected fuel prices for 2016 were obtained from the U.S. Energy Information Administration. The Airport will be receiving reimbursement for costs of repairs & maintenance for the fuel service area and the related staff time for monitoring and administration. See the Rates and Charges section of the 2016 budget document for additional discussion.

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NON-OPERATING REVENUE

2014

Actual 2015

Projection 2016

Budget

Passenger facility charges 897,805 866,000 866,000 Interest income 15,714 18,000 10,800 Rental car facility use fee 495,757 557,000 565,000 Capital contributions 155,984 353,000 9,856,786 Gain on disposition of assets 31,276 - -

Total non-operating revenue 1,596,536 1,794,000 11,298,586

PASSENGER FACILITY CHARGES (PFC) The Airport receives the maximum allowed fee of $4.50 per passenger with a handling fee of $0.11 retained by the air carrier. The use of the PFC revenue is to service the 2007 Bonds with an approximate principal and interest of $1,534,000. Additional discussion of the 2007 Bonds can be found in the Debt section of this budget document.

RENTAL CAR FACILITY USE FEE The rental car facility use fee is also known as a Customer Facility Charge (CFC). The CFC is a pass through cost to the rental car customer that must pay $3.80 per rental day in 2015. This amount was increased from $3.25 on February 2015. The revenue is used to pay the 10 year 2009 Colorado State Infrastructure Bank loan that was received to build the rental car parking and fuel facilities used by the rental car companies. The 2016 CFC rate will be increased from $3.80 per rental day to $4.00 per rental day as discussed in the Rates and Charges section of this budget document.

FEDERAL & STATE GRANTS The 2016 budget includes AIP grant revenue from the FAA of approximately $7,210,000 to accomplish a new runway 11-29 design and terminal apron reconstruction along with an additional $2,300,000 for the completion of the 2015 projects: rehabilitation of runway connectors, seal coat and restriping of the primary runway. The 2016 AIP funding estimated to be received from the state of Colorado will be limited to $250,000 along with approximately $97,500 for the completion of the 2015 projects previously discussed. The Airport is responsible for approximately $700,000 of the 2016 AIP projects. Refer to the Capital Expenditure section of this budget document for detail discussion of the funding sources and expenses.

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EXPENDITURE

OPERATING EXPENSE

2014

Actual 2015

Projection 2016

Budget

Administration 1,244,252 1,089,519 1,273,224 Terminal area plan & CIP update - - 170,000 Terminal 784,191 732,259 996,467 Airport operations 463,327 465,393 622,329 Aircraft rescue fire fighting 150,439 117,355 129,669 Security 101,089 193,231 293,749 Grounds and roadways 312,958 291,360 492,569 Rental car facilities 304,564 230,540 216,994 Building and land 44,580 94,450 121,343 Fleet 196,754 203,783 278,929 Restaurant operations 386,183 405,963 399,816

Total operating expenses 3,988,337 3,823,853 4,995,089

PERSONNEL Personnel expense is the largest operating expense for the Airport. The following table is the total personnel expense for the Airport: 2014 2015 Projected 2016 Budget

Expense % of

Salaries Expense % of

Salaries Expense % of

Salaries

Salaries 1,389,005 1,481,330 1,651,214 Payroll Tax 25,274 1.8% 24,406 1.6% 29,486 1.8% PERA 190,796 13.7% 195,388 13.2% 216,875 13.1% 401(k) 32,273 2.3% 31,342 2.1% 32,438 2.0% Health Insurance 202,366 14.6% 242,576 16.4% 295,129 17.9% Life Insurance 4,044 0.3% 4,557 0.3% 5,128 0.3% Worker Compensation 49,812 3.6% 42,341 2.9% 64,546 3.9% Clothing Allowance 17,703 1.3% 9,563 0.6% 20,469 1.2% Health & Wellness 5,414 0.4% 5,975 0.4% 10,000 0.6% Employee Recognition 3,036 0.2% 8,341 0.6% 4,050 0.2% Total Personnel Expense 1,919,723 2,045,820 2,329,336 Total Excluding Salaries 530,718 38.2% 564,489 38.1% 678,122 41.1%

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Staffing History

2014 2015

Projected 2016

Budget Filled Full time equivalent (FTE) 34 32 33 Part time equivalent (PTE) 12 8 8 Vacant FTE 4 3 3 PTE 4 0 0

Salaries The 2014 salary costs were affected by a number of personnel changes. Starting in December 2013 the Airport terminated the Airport Manager and appointed an Interim Manager. The Airport did not have a full time manager for all of 2014 and no associated salary. In the spring of 2014 the Airport terminated the Finance Manager and the Airport Operations Manager. The Airport Operations Manager position was quickly filled, however the Finance Manager position was not filled until the fall of 2014. With the vacancy of the Airport Manager for all of 2014 and the Finance Manager employed part of the year, the 2014 salaries were lower than expected. The salaries in 2015 were increased with a 2% cost of living adjustment (COLA) and an available 5% discretionary raise. The Airport hired a full time Executive Director in the fall of 2015, however, a facilities specialist resigned in the spring of 2015. 2016 will be the first year since 2013 that all upper level management positions will be filled, in addition, the budget may be adding a parking lot employee and may fill the vacant facilities specialist position. This is reflected in the budget and will therefore cause the appearance of personnel expense anomalies. There will be no merit increase in the budget for 2016. Additionally, the COLA annual adjustment published by the Social Security Administration as determined by the Bureau of Labor Statistics will be zero for 2016. If the vacant positions are filled or not will be part of a review by the Executive Director, together with other department managers. The organization of Airport staff will be take into consideration new programing objectives and to address the Business Affairs of the Authority as ultimately set forth by the strategic planning initiative. Also, 2016 goals and objectives will be established for all employees and will be part of their annual reviews. Raises for 2017, if given at all, will be based on the level of achievement of each employee meeting the established goals and objectives.

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The following table shows the changes in staff previously discussed:

Months Employed

2014 2015 2016

Executive Director 0 4 12 Finance Manager 6 12 12 Facilities Specialist 2 4 12 Parking Attendant 0 0 12

Health Insurance As previously outlined in the Salaries discussion, the changes in number of employees has caused some irregular variances from the 2014 actual to the 2016 budget. The Airport offers 100% health and dental coverage for eligible employees and 30% for dependents. The following table shows the Airport’s cost of annual health coverage per employee based on what coverage the employee selects: Plan year ending August 31 2015 2016 2017 Forecast Health Employee Only 7,394 7,943 8,533 Employee + Spouse 15,528 16,680 17,919 Employee + Child(ren) 14,049 15,092 16,212

Family 22,182 23,829 25,598 Dental Employee Only 485 485 485 Employee + Spouse 966 966 966 Employee + Child(ren) 987 987 987 Family 1,483 1,483 1,483 Total Employee Only 7,879 8,428 9,017 Employee + Spouse 16,494 17,646 18,884

Employee + Child(ren) 15,036 16,079 17,199 Family 23,665 25,312 27,080

The fulfillment of the four positions outlined in the salaries section above accounts for approximately $45,000 increase in health insurance expense for the Airport from 2014 to 2016, in addition to the 7% increase in premiums and the change in employee dependent election.

Public Employees Retirement Association (PERA) The Authority is required to contribute member and employer contributions to PERA at a rate

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set by statute. The contribution requirements of plan members and the Authority are established under Title 24, Article 51, Part 4 of the CRS, as amended. The contribution rate is 8.00% of covered salary for members and 10.00% of covered salary for the Authority. A portion of the Authority's contribution (1.02% of covered salary) is allocated for the Health Care Trust Fund. The Authority is also required to pay an amortization equalization disbursement equal to 2.20% of the total payroll. Additionally, the Authority is required to pay a supplemental amortization equalization disbursement equal to 1.50% of the total payroll. Therefore the total amount due PERA from the Authority is 13.70% of the total payroll.

401(k) The Airport offers a 401(k) plan through Colorado PERA. The Colorado PERA 401(k) Plan is a voluntary defined contribution plan. If an employee elects to contribute funds into a Colorado PERA 401(k) Plan, the Airport will match the funds contributed, up to 4% of an employee’s gross pay per calendar year, beginning January 1st. The employee must contribute to the Plan for the Airport to match the funds. The funds contributed are matched dollar for dollar, up to a maximum of 4% of the employees gross pay per calendar year. The Airport Authority will only match funds for full-time regular employees who have at least one year of service.

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ORGANIZATIONAL CHART

NOTE: The organizational chart is subject to change based on the organizational review described in the salary section above.

Board of Commissioners

Executive Director

Business and Administration Manager

(Chief Compliance Officer)

Restaurant Manager

Restaurant Staff

Administrative Assisstant

Project Coordinator

Airfield Operations Manager

Fleet Supervisor

Fleet Specialist

Operations Supervisor

Operations Specialists

Security Coordinator

Electric Coordinator

Facilities Manager

Buildings Manager

Facilities Specialists

Custodial Specialists

Grounds Supervisor

Grounds Specialists

Finance Manager

Accounting Specialist

Finance and Audit

Committee

Compliance Committee

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EXPENSE DEPARTMENT OVERVIEW The departments in the following section reflects an allocation of cost by department versus cost center. The department costs will ultimately be allocated by the cost centers described in the Budget Overview as foundational costs are affirmed. Further, Authority staff will continue to build foundational information for the cost centers as it begins managing the budget with greater line item detail in 2016.

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ADMINISTRATION DEPARTMENT

Purpose The Executive Director ensures that the Business Affairs of the Authority, as determined by the Board of Commissioners, is adhered to with the support of the Airport administration department. Airport administration provides executive support for all other departments. The Business and Administration Manager manages all Airport leases, projects and contracts. Additionally, she controls all human resource functions, including payroll, benefits, personnel policies and compliance with labor laws. This person is the Compliance Officer of the Airport for all policies set by the Board of Commissioners. The Finance Manager manages the financial affairs of the Airport in accordance with the Government Accounting Standards Board (GASB) and Generally Accepted Accounting Principles (GAAP). This includes protection of the Airport assets, internal controls, accounting for all financial transactions and preparation of the annual audited financial report and annual budget.

Budget Commentary Education & training: The education and training budget was restored to a point lower than 2014 but greater than when compared to 2015. This is due, in part, to ensure that employees have the required training to successfully meet the professional objectives to manage the assets of the Authority through programs that are offered via the American Association of Airport Executives (AAAE) and Airports Council International (ACI). AAAE and ACI provide programs to ensure staff is kept abreast of regulatory and legislative matters; industry trends; and best practices in various disciplines impacting airport operations and development.

Executive Director

Business & Administration

Manager

Administrative Assistant

Project Coordinator

Finance Manager

Accounting Specialist

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Legal services: the budgeted decrease in the legal services reflects the determination by the Department of Justice and Federal Bureau of Investigation that no additional criminal procedures will be pursued as it relates to the criminal investigation from 2013. Further, at the direction of the Finance and Audit Committee and based on the Executive Director’s recommendation, the legal affairs of the Authority will be more proactively managed to a more acceptable level for day to day legal affairs that arise. Professional services – IT: the budget increase is from the additional fiber line with an annual cost of $16,000 required for the security solutions. Also, the accounting software support was reclassified from purchased services in 2015 to IT for 2016. The budget also includes the addition of a computerized maintenance management system for approximately $24,000 Air Service Development, Public Relations, & Marketing: the 2016 marketing budget includes air service development studies (Mesa County Federal Mineral Lease District Grant Project) for $10,000, air service development conferences and airline headquarter meetings for $33,000 and a cooperative local advertising of $10,000. Additionally, there will be the continued expense from 2015 into 2016 for the development of the Airport website. Office Move Expense: the office move is based on TSA returning over 2,100 square feet of office space located on the third floor of the terminal. This will be renovated to accommodate the Airport administrative staff. Additionally, the second floor holding area will have an office and break room renovation of approximately 400 square feet that will house security badging and parking related operations should they be brought in house. Terminal area plan and CIP update: this is based on the need to validate the 2011 engineering study for the terminal building, to hire an architect to devise alternative modernization plans for the terminal and to update the Terminal Area Plan (including to decide what to do with the unfinished building) as previously described in the Overview Section.

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Administration Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 423,475 523,291 592,282 Personnel Services 5,141 6,411 7,834 Insurance 73,936 89,693 93,383 Telephone 30 - - Office Supplies 7,145 6,308 11,000 Education And Training 30,737 2,425 29,568 Routine Travel 597 3,389 6,000 Professional Services - Other 117,671 31,098 6,225 Purchased Services 814 18,037 - Materials & Supplies 4,891 7,246 3,600 Professional Dues 7,845 7,959 8,395 Professional Services - Legal 379,904 215,925 120,000 Bank Service Charges 256 5 - Licenses & Fees 90 - - Professional Services - Acct 37,500 38,575 38,000 Professional Services - IT - 36,997 87,645 Publications 777 4,767 1,200 Board Expense 5,862 12,039 6,750 Meals 650 1,590 3,850 Postage & Shipping 1,789 1,494 2,400 Personnel Recruiting 5,433 5,288 1,375 Customer Service Program 200 - - Air Service Development, PR & Marketing 1,619 23,514 62,675 Air Service Development 2,675 - - Advertising & Promotions 2,919 - - Bad Debt (24,177) 125 - Repairs & Maintenance - 20,488 32,400 Copier Service - 6,669 6,600 Office Move Expense - - 125,000 Horizon Park Plaza Office Rent 32,291 - - Cell Phones - 11,137 12,234 Phone Service - 15,048 14,808 It Department 124,182 - -

Total Administration Expense 1,244,252 1,089,519 1,273,224 Terminal area plan & CIP update - - 170,000

Department Objectives Position the Airport to retain current commercial air carriers and expand routes to include highly sought after destinations through precision marketing efforts. Provide personnel services to all departments. Complete the financial audit in a timely fashion.

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TERMINAL DEPARTMENT

Purpose The Terminal Department, to become part of the Terminal Cost Center identified in the Overview Section, is responsible for the clean and efficient operation of the Airport Terminal in order to provide a safe and worry-free environment for all tenants, passengers and guests. This includes maintenance of all elevators and escalators, cleaning of the terminal building and required repairs and maintenance in and around the terminal building.

Budget Commentary Repairs and Maintenance: 2015 was projected to include the installation of boarding area carpet at a cost of $60,000, however the carpet project is being delayed until 2016. Additionally, terminal building windows were replaced at a cost of $10,000 in 2015 that will not have to be done in 2016. There are, however, charges in 2016 to rebuild the terminal generator, repair bag belt programming and replace the Weatherport tent fabric for $14,000. There will also be the repair and reupholster to boarding area chairs for $30,000. Boarding Bridge Maintenance: the increase in the boarding bridge maintenance account is for the replacement of canvas that covers the connection between the airplane and the boarding bridge. Tools and Equipment: the 2016 budget includes the start-up cost of a recycling program at the airport that includes the purchase of bins and containers for approximately $13,000.

Executive Director

Facilites Manager

Building Supervisor

Facilities Specialists

Custodial Specialists

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Terminal Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 408,857 393,073 461,378 Insurance 3,801 - - Office Supplies 33 - - Education And Training 1,964 280 6,675 Purchased Services 5,309 2,441 3,360 Materials & Supplies 40,954 43,684 39,070 Professional Dues 234 276 - Airport Vending Mach. Costs 5,080 - - Utilities-Gas 22,276 19,590 27,500 Utilities-Electric 130,140 140,950 156,000 Utilities-Water 11,675 14,543 14,100 Utilities-Trash 5,571 5,808 6,120 Utilities-Sewer 5,162 5,235 5,484 HVAC 13,413 11,519 23,855 Repairs & Maintenance 56,220 44,713 163,155 Boarding Bridge Maintenance 15,921 8,542 35,500 Elevator & Escalators 48,946 36,641 32,720 Scheduled Replacements 5,586 - - Tools & Equipment 2,621 4,196 21,050 Snow Removal 428 767 500

Total Terminal Expense 784,191 732,259 996,467

Department Objectives Provide a clean, safe and comfortable terminal building for all users of the airport and continue to maintain the terminal with limited resources.

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AIRPORT OPERATIONS DEPARTMENT

Purpose The Airport Operations Department has a responsibility encompassing the airfield area of the Airport. In general, the department is responsible for the safe and efficient operation of the airfield in order to provide a safe and worry-free environment for all Airport stakeholders who operate from the airfield referenced as the Airfield Cost Center in the Overview Section. This includes cleaning the runways, maintaining the pavement, maintaining the runway and taxiway lighting and wildlife control.

Budget Commentary Repairs and Maintenance: the 2016 budget increase in repairs and maintenance is mainly for the repair of the FOD Boss, which is used to remove foreign object debris (FOD) from the airport’s runways, taxiways and ramps. Pavement Maintenance: the main items in pavement maintenance are the following:

1. Charlie One Alpha taxiway – cost of $15,000 2. Henderson hangar – cost of $6,500 3. Gateway hangar – cost of $30,000

Both the Henderson and Gateway repairs were approved by the board in 2015.

Executive Director

Airfield Operations Manager

Operations Supervisor

Operations Specialists

Electrical Coordinator

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Airport Operations Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 391,586 376,897 459,089 Insurance 1,685 - - Education And Training 772 6,890 3,625 Materials & Supplies 3,623 6,558 8,510 Professional Dues - 475 835 Utilities-Electric 20,508 19,802 24,000 Repairs & Maintenance 7,406 1,497 14,480 Tools & Equipment 2,727 1,338 5,000 Pavement Maintenance 12,896 6,357 65,100 Glycol Disposal 14,055 19,920 14,000 Snow Removal 1,418 730 1,200 Wildlife Control 450 496 1,500 Runway & Taxiway Lighting 6,201 24,433 24,990

Total Airport Operations Expense 463,327 465,393 622,329

Department Objectives Provide a safe and secure airfield for the users for the users of the airport in accordance with FAA standards.

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AIRPORT RESCUE FIRE FIGHTING (ARFF) DEPARTMENT

Purpose The ARFF Department is responsible for responding to fire, rescue, medical and accident incidents involving aircraft on the airfield side of the airport.

Budget Commentary The ARFF Department does not have employees designated to ARFF as their primary job responsibility. It is comprised of dual-role employees mainly from the Airfield Operations Department. However, there are employees from the Terminal Department and Grounds & Roads department that are trained to respond to ARFF emergencies. Tools and Equipment: the 2016 budget increase in tools and equipment is mainly for the purchase of air bottles and the construction of a simulated aircraft to be used for training exercises.

Airport Rescue Fire Fighting (ARFF) Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 71,446 74,060 84,616 ARFF Physicals 5,240 10,322 5,360 Office Supplies 71 - - Education And Training 17,951 19,616 18,350 Materials & Supplies 1,421 2,276 2,610 Professional Dues 65 - - Repairs & Maintenance 7,199 - - Scheduled Replacements 43,612 - - Tools & Equipment - 4,272 12,800 Firefighting Supplies 3,434 5,532 4,433 Phone Service - 1,277 1,500

Total ARFF Expense 150,439 117,355 129,669

Department Objectives Protect life and property in the case of an aircraft incident or accident.

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AIRPORT SECURITY DEPARTMENT

Purpose The Airport Security Department is responsible for the security of all airport access points, both inside the terminal and the surrounding airport fence and gates. Airport Security is generally a cost associated with the Terminal Cost Centers referenced in the Overview Section.

Budget Commentary Security Services: the 2016 increase in security services is for a full year of an onsite security guard, this service was not started until May 2015. Additionally, security services has been increased to respond to after hour calls in relation to the installation of the security solutions. Fingerprint Processing: starting in 2016 all SIDA badges are required to have fingerprint processing on badge renewal. This was not previously required.

Executive Director

Airfield Operations Manager

Security Coordinator

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Security Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 73,874 72,135 73,099 Office Supplies 147 87 350 Education And Training 3,489 - - Professional Services - Other 8,800 4,400 4,400 Purchased Services - - - Security Services - 93,902 181,500 Materials & Supplies 2,108 2,074 2,600 Professional Dues - 275 300 Postage & Shipping 142 - - Repairs & Maintenance 3,281 6,043 5,000 Access System Maintenance 203 8,251 8,000 Tools & Equipment 45 64 500 Fingerprint Processing 9,000 6,000 18,000 Parking Enforcement - - -

Total Security Expense 101,089 193,231 293,749

Department Objectives To ensure the safety and security of the flying public in accordance with TSA regulations.

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GROUNDS AND ROADWAYS DEPARTMENT

Purpose The Grounds and Roadways Department is responsible to maintain all the landside areas or cost centers of the airport as more fully described in the Overview Section.

Budget Commentary Professional Services: the 2016 budget includes temporary labor for landscaping maintenance and weed control. The fall of 2015 had only a small amount of temporary labor used for weed control. Materials and Supplies: the majority of the 2016 budget will be used to replenish landscaping supplies that were used in 2015. This includes a stockpile of hardscape and ground cover supplies, irrigation parts and pesticides. Repairs and Maintenance: the increase in repairs and maintenance is mainly due to signage replacement and irrigation pump and pond maintenance to have the pump rebuilt in the offseason. Pavement Maintenance: the large project for the 2016 budget is to fog seal the main terminal loop, from the main roundabout on Walker Field Drive to the terminal passenger pick up and drop off area and Falcon Way, the terminal/rental car exit road. There will also be approximately 30% of the main parking lot receiving a fog seal. This process has not been done since the road installation in 2007 and is recommended to be completed every five years. Landscaping: 2015 had very little landscaping projects, however had the installation of a new

Executive Director

Facilites Manager

Grounds Supervisor

Facilities Specialists

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sidewalk on the east side of Eagle Drive. Currently, this area is dirt and will have irrigation and landscaping installed to be consistent with other airport property.

Grounds and Roadways Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 250,313 235,278 287,553 Education And Training 970 200 3,875 Professional Services - 2,165 28,800 Materials & Supplies 7,072 4,308 28,660 Utilities-Electric 33,874 31,809 33,200 Utilities-Water 1,445 2,602 1,531 Repairs & Maintenance 13,926 6,491 19,600 Tools & Equipment 453 4,593 2,050 Pavement Maintenance 3,660 2,650 54,000 Snow Removal 545 500 1,500 Landscaping 700 764 31,800

Total Grounds And Roadways Expense 312,958 291,360 492,569

Department Objectives Provide a safe well maintained environment, by make sure all exterior landscaping is mowed and groomed. Also, to maintain all roads and lighting on the outside of the terminal used by the public.

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RENTAL CAR FACILITIES

Purpose The Rental Car Facilities Department is for the benefit of the rental car companies. The area consists of made up rental car parking, fuel facilities and rental car vacuum facility.

Budget Commentary There are no employees in this department, however there is a labor allocation to this department based on the amount of time employees spend maintaining the parking and service area. Fuel - Unleaded: the main expense in the 2016 Rental Car Facilities budget is for the cost of fuel. The cost was budgeted based on the historical amount of gallons used by the rental car companies. The price per gallon was based on the U.S. Energy Information Administration 2016 projection. The fuel at the rental car facility is not for sale to the general public.

Rental Car Facilities Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 4,466 13,073 14,976 Purchased Services - 586 - Materials & Supplies 330 114 200 Utilities-Electric 5,468 6,365 6,900 Utilities-Trash 1,464 1,530 1,596 Repairs & Maintenance 6,288 2,584 3,700 Snow Removal - - 100 Landscaping - - - Fuel - Unleaded 286,548 206,288 189,522 It Allocation - - -

Total Rental Car Facilities 304,564 230,540 216,994

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BUILDINGS AND LAND DEPARTMENT

Purpose The Building and Land Department is responsible for the clean and efficient operation of the buildings other than the terminal building, such as the ARFF station and the air traffic control tower. This includes maintenance of all elevators, cleaning of the building and required repairs and maintenance in and around the buildings.

Budget Commentary Tower Repairs and Maintenance: the 2016 budget includes the cost of cleaning the air traffic control tower based on a contract that will be effective in the fall of 2015 for an expected annual cost of $10,000.

Buildings and Land Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 18,848 44,414 42,175 Professional Services - Other 11,897 - - Purchased Services 316 - - Materials & Supplies 28 195 2,200 Utilities-Gas 1,352 4,180 6,650 Utilities-Electric 2,670 11,900 12,200 Utilities-Water 1,036 2,228 2,386 Utilities-Trash - 1,953 2,028 Utilities-Sewer 233 517 504 Repairs &Maintenance 3,221 14,844 18,680 Tower Repairs & Maintenance 4,979 14,019 33,420 Snow Removal - 200 750 Parking Lot Maintenance - - 350

Total Building And Land Expense 44,580 94,450 121,343

Executive Director

Facilites Manager

Buildings Supervisor

Facilities Specialists

34

Department Objectives Provide clean and comfortable buildings outside of the terminal building for the respective users of these facilities. Implement a program to support the tower operating agreement and provide additional cleaning and maintenance to the extent it is required under the agreement.

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FLEET DEPARTMENT

Purpose The Fleet Department is responsible for the operation of all fleet related assets of the airport. A maintenance, repair and replacement policy for all airport related fleet matters will be developed in 2016 consistent with other like governmental agencies.

Budget Commentary Repairs and Maintenance: the 2016 budget for repairs and maintenance has increased from 2015 due to the performance of a preventative maintenance program to begin in 2016. There is also $37,000 budgeted for damage and repairs for batteries, tires, break downs and engine repairs. Tools and Equipment: as a result of a necessary implementation of a more aggressive preventative maintenance program there will be the need for additional tools. This will include heavy duty floor jacks, tire machines and jack stands. SRE Repairs and Maintenance: this maintenance account is used specifically for snow removal equipment (SRE). This will also show an increase in the budget as part of the preventative maintenance program for vehicles. There is a budget of $24,000 for repairs beyond routine maintenance such as engine and hydraulic repairs and injectors.

Executive Director

Airfield Operations Manager

Fleet Supervisor

Fleet Specialist

36

Fleet Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 89,665 94,070 104,376 Insurance 962 - - Education And Training 3,006 3,518 - Purchased Services 618 - - Materials & Supplies 4,449 6,161 7,200 Professional Dues - - - Licenses & Fees 82 88 225 Utilities-Gas 3,314 - - Utilities-Electric 10,124 - - Utilities-Water 1,144 - - Utilities-Trash 1,857 - - Utilities-Sewer 243 - - Repairs & Maintenance 13,031 46,573 72,833 Scheduled Replacements - - - Tools & Equipment 5,079 3,876 7,000 Building Maintenance 3,481 - - Fuel - Diesel 30,157 21,645 24,897 Fuel - Unleaded 12,853 9,989 11,398 Oil & Lubricants 3,514 2,162 8,000 SRE Repairs & Maintenance 13,175 15,701 43,000 Rentals - - -

Total Fleet Expense 196,754 203,783 278,929

Department Objectives Providing and maintaining the equipment necessary for all departments to perform their duties efficiently and safely.

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RESTAURANT OPERATIONS EXPENSE DEPARTMENT

Purpose The Restaurant Operations Department is located in the boarding area of the terminal to provide customers with the opportunity to purchase food and alcohol in a clean and friendly environment.

Budget Commentary The Airport is the owner/operator of a Subway franchise and bar located in the terminal boarding area. Restaurant & gift operations are out for bid in late 2015 to be operated by a third party, with a potential start date of spring 2016. The anticipated revenue from a third party concession is expected to reflect the current net revenue, this would eliminate the restaurant operations expense.

Excutive Director

Business & Administration

Manager

Restaurant Manager

Restaurant Staff

38

Restaurant Operations Expense 2014

Actual 2015

Projection 2016

Budget

Personnel 187,173 219,529 209,792 Telephone 1,100 - - Office Supplies 22 16 50 Education And Training - 154 200 Professional Services - Other 316 2,619 3,000 Purchased Services 6,368 2,194 3,100 Materials & Supplies 11,275 9,400 11,000 Bank Service Charges 87 - - Credit Card Fees 8,225 7,776 6,617 Licenses & Fees 1,058 2,254 2,015 HVAC 491 - - Repairs & Maintenance 6,182 101 - Non-Alcoholic Beverage Expense 32,706 30,258 30,262 Alcoholic Beverage Expense 16,323 20,381 19,688 Food Expense 75,801 74,588 76,062 Subway Royalties 31,072 30,509 30,513 Subway Franchise Adv. Fees 7,710 7,508 7,517 Cash Short And Over 274 (1,324) -

Total Restaurant Operations Expense 386,183 405,963 399,816

Department Objectives Provide a comfortable eating experience for airport passengers and other stakeholders with a consistently served product and to provide incremental net revenues to meet other service demands.

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NON-OPERATING EXPENSE

2014

Actual 2015

Projection 2016

Budget

Interest expense 798,833 749,800 699,382 Debt principal payments 1,199,093 1,250,638 1,298,096 Capital expenditure - AIP 35,784 377,734 10,565,920 Capital expenditure - non AIP 2,342,207 73,893 705,793

Total non-operating expenses 4,375,917 2,452,064 13,269,191

DEBT

Legal Debt Limit In November 1992, the Colorado voters passed an amendment to the State Constitution, Article X, Section 20, which has several limitations, including revenue raising, spending abilities, and other specific requirements of state and local governments. The amendment excludes enterprises from its provisions. Enterprises, defined as government-owned businesses authorized to issue revenue bonds and receiving less than 10% of their annual revenue in grants from all state and local governments combined, are excluded from the provisions of the amendment. It is the Authority's opinion that it qualifies for the exclusion and is, therefore, excluded from the provisions of the amendment. The Authority has not budgeted issuing additional debt in 2016.

2007 Revenue Bonds The Airport issued Revenue Bonds, Series 2007, dated May 1, 2007, in the amount of $19,560,000, for the purpose of funding a portion of the costs of new road improvements to the Airport and refunding the 2003 Series bonds. The bonds are secured by net operating revenues of the Authority and a reserve account in the amount of $1,460,000, funded from the net proceeds of the bonds. The bonds bear interest from 4.4% to 5.0%, with interest payable semi-annually on June 1 and December 1, with principal payable annually on December 1, maturing on December 1, 2027. The debt service requirements to maturity, excluding any unamortized premium as of December 31, 2015 are as follows:

For the year ending December 31, Principal Interest Total

2016 875,000 659,034 1,534,034 2017 910,000 619,525 1,529,525 2018 955,000 578,008 1,533,008 2019 1,000,000 530,071 1,530,071 2020-2024 5,815,000 1,847,779 7,662,779 2025-2027 4,205,000 389,243 4,594,243

$13,760,000 $4,623,660 $18,383,660

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Colorado State Infrastructure Bank Note The Authority borrowed $4,000,000 from the Colorado State Infrastructure Bank on May 29, 2009 for the purpose of funding complete reconstruction of the Rental Car Parking Lot, including construction and installation of all supporting infrastructure and the design phase of the vehicle service area. The note is secured by a rental car facility fee. The note carries an interest rate of 3% and is to be paid in quarterly installments of principal and interest of $116,122 through June 2019. The debt service requirements to maturity as of December 31, 2015 are as follows:

For the year ending December 31, Principal Interest Total

2016 423,096 40,348 463,444 2017 435,932 27,480 463,412 2018 449,158 14,221 463,379 2019 229,673 2,004 231,677

$1,537,860 $84,053 $1,621,913

Bond Rating The initial Moody’s rating for the 2007 Revenue Bonds was Baa3 and was rated at Baa2 in November 2014. Moody’s Long-Term Rating Definitions:

Aaa Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk.

Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

A Obligations rated A are considered upper-medium grade and are subject to low credit risk.

Baa Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.

Ba Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk.

B Obligations rated B are considered speculative and are subject to high credit risk.

Caa Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk.

Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

C Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.

Note: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

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CAPITAL EXPENDITURE

Capital Improvements The Airport’s capital expenditures are classified in two parts: airport improvement projects (AIP) and capital improvement projects (CIP). CIP are those projects that are not part of the AIP funding and will therefore be funded from operating revenue. For the purposes of the capital expenditure process, capital is defined in the Airport capitalization policy as an asset that has a unit value greater than $2,500 and a useful life greater than 12 months. This aids in the classification of items that can be categorized as capital improvements versus repairs and maintenance. Once the capital expenditures presented to the board in the 2016 budget are approved an additional approval must be received based on the Airport’s policy on purchasing and procurement. This policy requires all purchases over $10,000 have written price quotes presented to the board prior to purchase. In the event the purchase is greater than $50,000 a request for proposal is required in order to receive competitive bids. Capital Improvement Projects – 2016

2016

Administration

Computer server back up system 12,000

Parking lot revenue system 250,000

Terminal

Carpet extractor 4,000

Restroom cleaning equipment 3,000

Security

Lenel DVR hardware 9,500

Lenel DVR software 5,000

Lenel security software 10,000

Security solutions (including analog - IP) 200,000

Grounds & Roads

Eagle Drive phase II sidewalk 6,500

Buildings & Land

Portable evaporative cooler 4,000

ATCT fire notification/monitoring system 20,000

Fire station design 50,000

Administration building fence 10,000

Fleet

Walker mower - Cost $16,450 Trade-in $7,650 8,800

JD 997 mower - Cost $15,993 Trade-in $8,500 7,493

Surplus equipment auction 50,000

Blower to plow conversion - carryover from 2015 47,000

Polaris ATV - Cost $16,500 Trade-in $8,000 8,500

TOTAL COST 705,793

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Capital Improvement Projects – detail

1. Server backup upgrade – this will allow the server to have a digital backup versus a tape backup. This will give us the ability to send data to a secure offsite location if desired. The tape backup system is antiquated and not as reliable as digital. Tape backup requires a physical change, this upgrade removes human interaction and will be automatic.

2. Parking lot revenue system – The $250,000 is based on a review by the Authority’s

Finance Manager at a similar sized airport and what they paid for their parking system. If the parking system is managed by the airport, staff anticipates adding one employee to address coverage related issues. This employee would be part of the airport security team and would also assist in the security office when not needed in the parking lot. The cost of the employee is approximately $35,000 base salary with $15,000 in burden.

3. Carpet extractor – the current carpet extractor has a 10 gallon capacity and the

proposed carpet extractor will be larger and require fewer refills, this will allow the boarding area carpet to be cleaned in approximately 2 hours versus 4 hours.

4. Restroom cleaning equipment – this equipment is used daily to provide a deep clean in

the bathrooms, for the floors, walls and partitions. Purchasing an additional washer will allow it to be used and stored on the second floor.

5. Lenel hardware & software - total cost is approximately $30,000. Cost recovery

through badge fees would increase fees by approximately $10 per badge. This is based on approximately 650 badges per year to recover cost in 5 years. Software is longer being supported and is out of date. The DVR hardware is consistently in need of unscheduled maintenance.

6. Security solutions – the amount is a carryover from 2015 assuming half the cost is

charged in 2015. This amount could potentially be the entire project cost of $200,000 depending on the installation schedule.

7. Sidewalk along Eagle Drive – this is continuation of the sidewalk that was completed in

2015 and will go up to gate 1 near Aviators Park.

8. Portable evaporative cooler – there is no air conditioning in the ARFF bay and this will help cool off the shop area and reduce the chances of an employee overheating.

9. ATCT fire notification system – this is part of the tower upgrades that need to be

completed. The current fire notification system was installed in 1996 and is outdated and unreliable. The Grand Junction fire department did a walk-through of the towed and recommended a replacement.

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10. Fire station design – this is part of the effort to construct a joint use fire station to be

used by the Grand Junction fire department and the ARFF team.

11. Administration building fence – this will be a permanent style fence to be installed around the unfinished administration building. This will be replacing the current temporary fence.

12. Mowers & ATV – there are 2 mowers and 1 ATV that need to be replaced. Wear on

these pieces of equipment are estimating a trade in value equal to approximately 50% the cost of a new item. These units are out of the warranty period and have been used at least three years.

13. Surplus equipment auction - to be used for various equipment needs, including street

sweeper and backhoe. The amount to be spent will be limited to the budget, however the items purchased will be based on availability at the time of the auction.

14. Blower to plow conversion – this was approved as a 2015 project but was delayed until

2016. Converting the Osh Kosh blower that was purchased from DIA and converting to a runway plow. The current tandem Osh Kosh that is used as a secondary plow is in need of a major engine repair, however it was determined that due to the age of the vehicle it was not cost beneficial.

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Airport Improvement Program (AIP) projects 2016 – 2026:

2016 2017 2018 2019 2020 2021-2026 Total

Rehab Connectors A1 - A7 1,474,919 1,474,919

Seal Coat and Remark RWY 11/29 & TWY A 1,079,889 1,079,889

New Runway 11/29 - Overall Design 3,000,000 3,000,000

New Runway 11/29 - RTR Relocation: Final Design

100,000 100,000

Terminal Air Carrier Apron Reconstruction 4,911,112 4,695,890 9,607,002

Realign County 27 1/4 Road 3,450,000 3,450,000

Terminal Air Carrier Apron Reconstruction (Phase II)

New Runway 11/29 - Construct Ponds, North Perimeter Road, Fence & RTR Site Work

5,000,000 5,000,000

New Runway 11/29 - Earthwork for Runway 11/29 & all Taxiways

5,550,000 5,550,000 5,550,000 16,650,000

Current Runway 11/29 - Rehabilitate/Overlay Failed Portions/Seal Coat/Restripe

3,300,000 3,300,000

Rehabilitate Runway 4/22 and Taxiway C 1,800,000 1,800,000

New Runway 11/29 - Storm Infrastructure & Taxiway's Subgrade, Base, & Underdrains

9,600,000 9,600,000

New Runway 11/29 - Runway Subgrade, Base, Underdrain & Electrical Duct

11,500,000 11,500,000

New Runway 11/29 - Asphalt Pavements at Taxiways (Bottom Lifts)

7,250,000 7,250,000

New Runway 11/29 - Asphalt Pavements on Runway (Bottom Lifts)

9,800,000 9,800,000

Current Runway 11/29 Crack Seal/Seal Coat/Restripe

1,050,000 1,050,000

New Runway 11/29 - Asphalt Pavements on Runway & Taxiways (Top Lifts)

10,400,000 10,400,000

New Runway 11/29 - Grooving, Pavement Markings, Electrical, Taxiway "A" Conversion

6,250,000 6,250,000

NAVAID's for New Runway - Design & Construction (Reimbursable Agreement)

2,250,000 2,250,000

TOTAL COST 10,565,920 8,145,890 10,550,000 8,850,000 7,350,000 58,100,000 103,561,810

Federal portion 9,509,328 7,331,301 9,495,000 7,965,000 6,615,000 52,290,000 93,205,629 State portion 347,458 407,295 527,500 442,500 367,500 2,905,000 4,997,253

GJ Airport portion 709,134 407,295 527,500 442,500 367,500 2,905,000 5,358,929

These projects will include the design modification of the Terminal Air Carrier Apron. The Airport has detailed designs for the reconstruction of the Airport's apron. This involves plans for the reconstruction of ramp space that is located on a private lease hold. The design modification will address this issue by modifying the ramp space to include only those areas eligible for AIP funding. The paved surfaces that adjoin taxiway alpha to runway 11/29, known as the connectors (A1, A2, A3, A4, A5, A6 and A7) have materially diminished over the years. This project will address the cracking, raveling and general deterioration of the pavement surfaces. These pavement conditions present a substantial Foreign Object Debris problem for airport operations and will

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be addressed in this project. The seal coat and restripe of the Airports primary runway (11/29) will protect the pavement from the deteriorating effects of the sun and water while also providing an additional increase in surface friction through the cover aggregate added to the pavement surface. In order for pavement to meet its 20 year design life, fog seal must be performed on a regular recurring basis. The fog seal to be applied will rejuvenate the surface of the pavement. Following the seal coat, new markings will be required. Dependent on pricing, this project may also include the fog seal and restripe of taxiway alpha. Portions of the segmented circle are located in the Taxiway Object Free Area and Taxiway Safety Area. This requires the segmented circle to be relocated, as to not interfere with these areas. The Airport’s Certification Inspector brought this discrepancy to the attention of Airport staff during the 2013 inspection and requested the issue be addressed as soon as possible. In regards to the Intersection Lighting, on runway 4/22, the Northern section of the runway serves as a taxiway to the connecting runway 11/29. Consequently, this section of runway has taxiway and runway lights that are simultaneously energized during night operations. The Airport’s Certification Inspector brought this discrepancy to the attention of Airport staff during the 2013 inspection and requested the issue be addressed as soon as possible. This project will allow the airport to become compliant with design standards outlined in Advisory Circular 150/5340-30G Design and Installation Details for Airport Visual Aids.

Funding Source Federal Grants The Federal Aviation Administration through the Airport Improvement Program (AIP) provides grants for the planning and development of public use airports designated as important to the National Airspace System in the National Plan of Integrated Airport Systems. Grand Junction Regional Airport Authority is a political subdivision of the state of Colorado. The Grand Junction Airport receives AIP grants that cover 90 percent of eligible costs. There are two categories of AIP funding, discretionary and entitlement. The entitlement funding is a calculation based on the airport type and enplaned passengers, Grand Junction Airport is classified as a non-hub primary airport. This qualifies the Airport for the following entitlements:

1. Passenger entitlements – the amount of funding is based on passenger enplanements with a minimum required annual funding of $650,000

2. Small airport fund – this is not an actual stand-alone set-aside fund. It is merely a calculation to ensure that a required level of discretionary is used on small airports.

3. Cargo entitlements – this funding is based on the airport’s share of total U.S. landed cargo weight.

Discretionary funding is the remainder of AIP after entitlement distributions and is available based upon need and project priority as determined by the FAA. State Grants In addition to FAA AIP grant funding, the Airport receives grants from the state of Colorado to

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support AIP projects (matching funds) and other projects not eligible for AIP funding. AIP matching funds from the state is generally 5% of the total project cost, however the amount of funding is determined on an annual basis by the state. Other grant projects funded by the state vary in funding up to 100% funded. State Infrastructure Bank (SIB) Loan Program As a public use Airport and a State agency (political subdivision) the Authority is able to borrow money from the SIB to fund projects that benefit the infrastructure of the State. A wide variety of projects are available for this program. Passenger Facility Charges (PFC) The PFC program allows a public agency, or in the case of Grand Junction Airport, political subdivision, that controls at least one commercial service airport to impose a fee for paying passengers of an air carrier enplaned at the airport. This revenue finances eligible airport projects. The air carriers and their agents are required to collect the PFC’s imposed by the airport and remit those charges, less a handling fee, to the airport. Airport Operations The fees and charges to the airport users are designed to recover the full cost of operating the airport and to provide a portion of the resources necessary for the capital improvement and replacement of airport assets. FAA regulations require that any reserves accumulated must be used for airport purposes. The Grand Junction Airport has requested AIP funding of approximately $90 million, both entitlement and discretionary, for apron reconstruction, rehabilitation of crosswind runway, construction of a new primary runway and other construction projects as a result of a new primary runway. The current estimated completion date of the new runway project is 2026. Authority Commissioners will work with staff and the Authorities consultants to determine how to advance the Business Affairs of the Authority in a manner that maximizes future grant money by leveraging unrestricted and other available financial resources. This may include, but is not limited to, devising a plan to accelerate the construction of the new primary runway.

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FINANCIAL POLICIES The overall goal of the Airport’s financial policies is to establish and maintain effective management of the Airport’s financial resources. Formal policy statements and major objectives provide the foundation for achieving this goal. Accordingly, this section outlines the policies used in guiding the preparation and management of the Airport’s overall budget and the major objectives to be accomplished.

BUDGET DEVELOPMENT & ADMINISTRATION A comprehensive annual budget will be prepared for all funds expended by the Airport.

The board of commissioners shall have full authority over the financial affairs of the Airport and shall provide directives for the collection of all revenue and other assets, the auditing and settlement of accounts, and the safekeeping and disbursement of public monies and in the exercise of a sound discretion shall make appropriations for the payment of all liabilities and expenses. The budget enables the board, the administration, and the public to consider all financial aspects of the Airport when preparing, modifying, and monitoring the budget.

The budget will be prepared in such a manner as to facilitate its understanding. One of the stated purposes of the budget is to present a picture of the Airport operations and intentions. Presenting a budget document that is understandable furthers the goal of effectively communicating financial issues.

The budget will provide for adequate maintenance of capital and equipment and for their orderly replacement. All governmental entities experience prosperous times as well as periods of economic decline. In periods of economic decline, proper maintenance and replacement of capital and equipment is generally postponed or eliminated as a first means of balancing the budget. Recognition of the need for adequate maintenance and replacement of capital and equipment, regardless of the economic conditions, will assist in maintaining the equipment and infrastructure in good operating condition. The pending reserve study will take this into consideration.

The Airport will avoid budgetary practices that balance current expenditures at the expense of meeting future years' expenses. Budgetary practices such as postponing capital expenditures, accruing future years' revenues, or rolling over short-term debt are budgetary practices which can solve short-term financial problems. However, they can create much larger financial problems for future administrations and councils. Avoidance of these budgetary practices will assure that current problems are not simply being delayed to a future year.

The Airport will maintain a budgetary control system to help it adhere to the established budget. The budget passed by the board of commissioners establishes the legal spending limits for the Airport. A budgetary control system is essential in order to ensure legal compliance with the Airport’s budget.

The Airport will exercise budgetary control (maximum spending authority) through board approval and exercise of the purchasing and procurement policy.

Reports comparing actual revenues and expenditures to budgeted amounts will be

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prepared monthly.

The Airport’s budget is ineffective without a system to regularly monitor actual spending and revenue collections with those anticipated at the beginning of the year. Monthly reports comparing actual revenues and expenditures to budget amounts provide the mechanism for the board and the administration to regularly monitor compliance with the adopted budget.

REVENUE COLLECTION The Airport will estimate revenues in a realistic and conservative manner. Aggressive

revenue estimates significantly increase the chances of budgetary shortfalls occurring during the year--resulting in either deficit spending or required spending reductions. Realistic and conservative revenue estimates, on the other hand, will serve to minimize the adverse impact of revenue shortfalls and will also reduce the need for mid-year spending reductions.

The Airport will aggressively pursue opportunities for federal or state grant funding. An aggressive policy of pursuing opportunities for federal or state grant funding provides assurance that the Airport is striving to obtain all state and federal funds to which it is entitled.

User rates and charges will be used and implemented in a manner that is equitable to all users of the Airport. The rates and charges will be reviewed annually to ensure costs associated with the service are being adequately reimbursed to the Airport on a cost recovery basis.

EXPENDITURES On-going operating expenditures will be limited to levels which can be supported by

current revenues. Utilization of reserves to fund on-going operating expenditures will produce a balanced budget, however, this practice will eventually cause severe financial problems. Once reserve levels are depleted, the Airport would face elimination of on-going costs in order to balance the budget. Therefore, the funding of on-going operating expenditures will be limited to current revenues.

Minor capital projects or recurring capital projects, which primarily benefit current residents, will be financed from current revenues. Minor capital projects or recurring capital projects represent relatively small costs of an on-going nature, and therefore, should be financed with current revenues rather than utilizing debt financing. This policy also reflects the view that those who benefit from a capital project should pay for the project.

Major capital projects will be financed with current revenues as well as other financing sources (e.g. debt financing) as needed. Debt financing provides a means of generating sufficient funds to pay for the costs of major projects. Major capital expenditures contemplated by a reserve policy may be used for such expenditures.

Construction projects and capital expenditures of $2,500 or more will be included in capital projects; minor capital outlays of less than $2,500 will be included in the regular operating budget. The capital projects differentiates the financing of high cost long-

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lived physical improvements from low cost "consumable" equipment items contained in the operating budget. Capital project items may be funded through debt financing or current revenues while operating budget items are annual or routine in nature and should only be financed from current revenues.

DEBT ADMINISTRATION The Airport will limit long-term debt to capital improvements which cannot be financed

from current revenues. Excess reliance on long-term debt can cause debt levels to reach or exceed the Airport’s ability to pay. Therefore, conscientious use of long-term debt will provide assurance the Airport will be able service the debt obligations.

The Airport will repay borrowed funds, used for capital projects, within a period not to exceed the expected useful life of the project. Adherence to this will also help prevent the Airport from over-extending itself with regard to the incurrence of future debt.

The Airport will not use long-term debt for financing current operations.

The Airport will adhere to a policy of full public disclosure with regard to the issuance of debt. Full public disclosure with regard to the issuance of debt provides assurance that the incurrence of debt is based upon a genuine need.

FINANCIAL REPORTING & ACCOUNTING The Airport’s records are maintained on the accrual basis of accounting and economic

resource measurement focus in accordance with GAAP, including all applicable statements of the Governmental Accounting Standards Board ("GASB"). Revenue is recognized when earned, and expenses are recognized when the liability is incurred. Depreciation is computed and recorded as an operating expense. Expenditures for property and equipment are shown as increases in assets. When both restricted and unrestricted resources are available for use, it is the Airport’s policy to use restricted resources first with the exception of the debt service on the revenue bonds that is paid partially from the restricted passenger facility charges and partially from operating funds. The operations of the Airport are accounted for on a fund basis in a single fund. Enterprise funds may be used to account for operations (a) that are financed and operated in a manner similar to business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or changes in net position is appropriate for capital maintenance, public policy, management control, accountability, or other purposes.

The Airport’s budgeting process is a financial planning tool used to establish the estimated revenues and expenditures for the Airport. The budget is prepared by the Authority and approved by the Board in accordance with Colorado Revised Statutes. The initial budget is submitted to the Board by October 15th and the Authority adopts an appropriation resolution for the next fiscal year by December 31st. The Board may amend the appropriation resolution at any time during the year if warranted by

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circumstances. The budget basis of accounting differs from the GAAP basis in that debt proceeds are included as revenue, outlays for acquisition of capital assets and debt principal payments are included as expenditures, and depreciation is not included in expenditures.

The Airport will ensure the conduct of timely, effective, and annual audit coverage of all financial records in compliance the Local, State, and Federal law. Audits of the Airport’s financial records provide the assurance that its funds are being expended in accordance with Local, State, and Federal law and in accordance with Generally Accepted Accounting Principles. Audits also provide management and the board with suggestions for improvement in its financial operations from independent experts in the accounting field.

The Airport will maintain a policy of full and open public disclosure of all financial activity. Full and open public disclosure of all financial activity provides the assurance that financial matters are being communicated properly.

RATES & CHARGES

EXPENSE ANALYSIS OVERVIEW & ALIGNMENT OF PROGRAM OBJECTIVES Based on an initial assessment by Airport staff and the Finance and Audit Committee, it was determined that the 2015 level of rates and charges results in a subsidization, collectively, of the various airport user groups for the 2016 budget. Airport staff, in collaboration with the Finance and Audit Committee, has initiated a process to definitively align airport cost and revenues on a cost center basis as more fully described below. Staff recommends that it should be a primary objective, but not the only consideration, of the Authority’s Board of Commissioners to achieve break even (hereinafter “cost recovery”). Achieving cost recovery should not, however, be the only consideration when setting the airports rates and charges. There are other market factors impacting each of the airport user groups that should be considered based on a more thorough analysis to benchmark the Airport against similarly situated airports and communities. For 2016, the initial review of the budget first looked at the expenses and made reductions where appropriate based on recommendations from the Finance and Audit Committee. Those expenses were then aligned for initial analysis purposes along industry standards by cost center including: (1) Airfield; (2) Terminal; (3) Other – Aeronautical; and (4) Other – Non-Aeronautical. To initially analyze whether each cost center was achieving cost recovery certain assumptions in the alignment of expenses had to be made. By example, administrative cost were aligned on a straight line allocation. Further analysis will be necessary before adjusting rates other than the parking rates and the rental car CFC for the reasons set forth below. The 2016 rates and charges adjusts (1) the CFC for the rental car concessionaires; (2) the parking rates; (3) establishes a cost recovery for reviews prompted by tenants or new airport users to recover cost including, but not limited to, legal, planning and engineering expenses incurred at the request of a third party. All other rates and charges shall remain unchanged for the reasons set forth below. It was determined the parking rate adjustment is appropriate in

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keeping with the principles of cost recovery and market sensitivities. This adjustment takes measures to align the Airports revenues with the cost of doing business. It was further determined the 2015 CFC rate did not account for allocation of administrative or maintenance expenses. The 2016 adjustment allocating the administration cost to the CFC is a step toward achieving the principles of cost recovery and is market sensitive with a minimal increase of $0.20 per day for each rented car. Objectives of Airport management, which is realized in the draft 2016 budget, includes a comprehensive review of documents which affect the financial management of airport operations and capital development. The review will be led by the Airport staff and the Authority’s planners, Mead & Hunt and its team member Leibowitz & Horton as part of the Terminal Area Plan update initiative. The effort will confirm the structure, constraints, requirements and the airport’s capital improvement program (“CIP”). One of the pertinent deliverables from Mead & Hunt is:

Airline rates and charges and costs per enplaned passenger resulting from the capital program will be calculated at a summary level using the Airport’s current methodology and airline lease agreements for determining user fees. Potential revenue enhancement opportunities for non-airline revenues will also be identified. An overall analysis and recommendation will be provided to guide the airport in revising its cost center accounting alignment as appropriate for GJT. Recommendations to help the airport develop accounting procedures and practices will be prepared to help the Airport set a foundation to obtain the highest bond ratings possible year-over-year.

Airport staff will work closely with the Mead & Hunt team and the Finance and Audit Committee in 2016 to bring forward further recommendations with regard to appropriate adjustments to the rates and charges that may be implemented mid-year 2016 or in 2017. Managing cost is an ongoing process that will change based on the dictates of the capital and operational needs of the Airport year over year. It is the objective of the Authority to develop programs that ultimately ensures the general aviation community can economically thrive on a sustainable path; and establishes measures to support the Airport’s current air carrier service while building a path to enhance air service offerings to the current passenger base in alignment with the economic development initiatives of the Airport’s community partners. Building the financial framework to achieve these goals is paramount. Airport management and the Finance and Audit Committee have initiated a path to begin tracking the cost of the airport in 2016 to make real time alignments of costs on a cost center basis. Airport management is looking at possible software solutions to support this effort. The success of this effort will be limited by the capabilities and resources of the Authority. The data collected year over year will help the Authority better manage its staff resources and to manage the capital and operational budgets in future years with greater efficiency.

OVERVIEW OF RATES AND CHARGES ANALYSIS Notwithstanding that the rates and charges will remain unchanged for 2016 with exception to

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the CFC and parking rates the narrative that follows provides a method to ultimately achieve cost recovery once a more definitive alignment of costs are known. Based on the assumptions of allocating cost mentioned above (e.g. administrative costs), the following analysis was conducted to arrive at the 2016 rates and charges. Once the costs were established the Finance and Audit Committee looked at the level of rates and charges to determine whether cost recovery is being achieved. To do this Airport staff and the Finance and Audit Committee aligned the known cost to the respective cost centers to which they belong. In other cases, mainly administrative cost, an allocation was for the costs to each respective cost center.

AIRFIELD The airfield cost center (“Airfield”) 2016 Budget is projecting a shortage of full cost recovery. Twenty-five percent of general administrative costs along with airport operations and ARFF plus 80% of fleet is charged to Airfield. There are also non-AIP capital costs for 2016 is and AIP costs net of grant contributions. There are three revenue streams for Airfield:

1. Fuel flowage fees (45%) 2. Landing fees (47%) 3. Other miscellaneous items such as deicing fee, lavatory disposal, rapid refuel, etc. (8%)

The fuel flowage fee is $0.1017 per gallon and $0.10 per gallon that is part of the general aviation cost center. Fuel flowage fees are limited to government and general aviation fuel sales. There are approximately 2,000,000 gallons of fuel sold in 12 months, 5% avgas and 95% jetA. The majority of the Airfield revenue is generated from fuel flowage fees and landing fees, which collectively accounts for 92% of the revenue. The Airfield estimated shortage would be recovered through the fuel flowage fees and landing fees. The fuel flowage would be increased by the following, to achieve cost recovery:

Estimated annual gallons 2,000,000 Fuel revenue shortage $103,000 Price per gallon increase $0.0515 Adjusted price per gallon $0.1532

The landing fee would be increased by the following:

2016 landing fee budget $561,000 Current landing fee per 1,000 pounds $1.70 2016 budget landing weight in '000's 330,000 Required landing fee revenue $670,000 Adjusted landing fee per 1,000 pounds $2.03

The Airfield cost center rates and charges will remain unchanged for 2016.

TERMINAL The terminal cost center (“Terminal”) 2016 Budget is projecting a shortage of full cost recovery. Twenty-five percent of general administrative costs along with the terminal area plan update is

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charged to Terminal. Additional expenses include deferred terminal repairs, maintenance and terminal security will be addressed with the additional revenues in 2016. There is currently three different rates charged to tenants:

1. $27.27 per square foot for common space a. Baggage processing – 5,721 square feet b. Boarding area – 17,721 square feet c. Ticketing area – 4,587 square feet with an additional 1,530 for ATO1. This

unrented space would add $42,000 of common space revenue 2. $30.30 per square feet for exclusive space

a. Rental car – four areas with 536 square feet b. Airline ticket counters and offices – 7,180 square feet with an additional 2,400

square feet available for ATO1. This unrented space would add $73,000 of airline exclusive space revenue

3. $28.63 per square feet for office space on the second and third floors rented to the TSA. The west side of the third floor with 2,154 square feet is anticipated to be removed from the TSA lease in 2016 and be occupied by Airport staff, reducing the office space lease revenue $62,000 in 2016. The lease rate with the TSA is locked until September 2016 and thereafter subject to negotiation.

The Terminal cost center rates and charges will remain unchanged for 2016.

OTHER – AERONAUTICAL The other - aeronautical cost center (“Other – Aero”) 2016 Budget is projecting overage for cost recovery. Twenty-five percent of general administrative costs along with other buildings is charged to Other - Aero. There are two revenue streams for Other - Aero:

1. The West Star Capital fuel flowage fee (25%) 2. Land and building leases (75%)

The overage will be held in reserve for maintenance and to address both anticipated and unanticipated cost with regard to the new security plan. Staff and the Finance and Audit Committee will study this cost center in more depth during 2016 to gain a full understanding of the true cost, revenue streams and future programming desired part of the Mead & Hunt team initiative. The Other – Aero cost center rates and charges will remain unchanged for 2016.

OTHER – NON-AERONAUTICAL The other – non-aeronautical cost center (“Other – Non-Aero”) 2016 Budget is projecting overage for cost recovery. Twenty-five percent of general administrative costs along with the costs for repairs & maintenance for all of the grounds and roadways in front of the terminal and rental car service facilities and ready/return area. The largest expense charged to Other – Non-Aero is for the 2007 revenue bonds (“Revenue Bonds”) annual debt service based on the $19,560,000 bonds and the COSIB loan with debt service of $464,000. There are five revenue streams for Other – Non-Aero:

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1. Parking (34%) 2. Passenger facility charges (24%) 3. Rental car concessions which is the MAG (20%) 4. Customer facility charges (15%) 5. Other (7%)

Parking is one of the few revenue streams from which the Authority can recover expenses due to other contractual constraints. The parking lot gross revenue is estimated at $1,400,000 with a 2015 maximum daily parking rate of $9. There will be an increase of the maximum daily parking rate to $10 in order to supplement the shortage of full cost recovery in other cost centers. In addition the customer facility charge is a segment within Other – Non-Aero that will be increased in 2016 to recover the shortage of full cost recovery for the rental car parking and fuel site. The CFC is the method to recover cost for this segment and needs to be adjusted to $4.00. The fuel sold to the rental car companies at a maximum mark up of $1.00 per gallon shall remain unchanged for 2016. Airport staff will be working with the Mead & Hunt team and the Finance and Audit Committee to refine its ground transportation policy to align revenue sources with industry standards putting in place safe guards to protect revenues in this cost center.

PLANNING REVIEW, TECHNICAL ANALYSIS AND LEGAL REVIEW FEE A fee of $200 per hour for technical or legal review and written comments (to include comments for conceptual development plans). This fee is for reviews where an airspace/land use Letter of Determination does not apply, but written comments are requested or otherwise required -- as determined by Airport staff -- for technical analysis, by either a planner, engineer, or legal counsel. The same rate shall apply for allocable related airport staff resources. If the cost to the Authority exceeds $200 per hour for third party legal or technical fees then those fees shall be passed along at the applicable charge to the Authority plus a 10% surcharge.

LETTER OF DETERMINATION FEE Pertaining to Height Restrictions, FAA Compliance, Land Use and Planning: The fee shall be $200 per each Development Review and Letter of Determination (LOD) request. Reviews will be customized based on request. This review will include the assurance that proposed developments comply with the Airport’s zoning requirements. It also includes a verification of the Federal Aviation Regulations Part 77 FAA notification, review and aeronautical study determination of proposed obstruction to ensure the safety and capacity at the airport are not adversely impacted (FAA Form 7460). If the time to process an LOD exceeds 4 hours of staff time then it shall be charged at the rate of $60 per hour.

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BUDGET AMENDMENTS Colorado Revised Statutes 29-1-109. Changes to budget - transfers - supplemental appropriations. (1) (a) If, after adopting the budget and making appropriations, the governing body of a local government deems it necessary, it may transfer appropriated moneys between funds or between spending agencies within a fund, as determined by the Colorado Revised Statutes 2013 6 Title 29 original appropriation level, in accordance with the procedures established in subsection (2) of this section. (b) If, after adoption of the budget, the local government receives unanticipated revenues or revenues not assured at the time of the adoption of the budget from any source other than the local government's property tax mill levy, the governing body may authorize the expenditure of such funds by enacting a supplemental budget and appropriation. (c) In the event that revenues are lower than anticipated in the adopted budget, the governing body may adopt a revised appropriation ordinance or resolution as provided in section 29-1-108. (2) (a) Any transfer, supplemental appropriation, or revised appropriation made pursuant to this section shall be made only by ordinance or resolution which complies with the notice provisions of section 29-1-106. (b) For transfers, such ordinance or resolution shall set forth in full the amounts to be transferred and shall be documented in detail in the minutes of the meeting of the governing body. A certified copy of such ordinance or resolution shall be transmitted immediately to the affected spending agencies and the officer or employee of the local government whose duty it is to draw warrants or orders for the payment of money and to keep the record of expenditures as required by section 29-1-114. A certified copy of such ordinance or resolution shall be filed with the division. (c) For supplemental budgets and appropriations, such ordinance or resolution shall set forth in full the source and amount of such revenue, the purpose for which such revenues are being budgeted and appropriated, and the fund or spending agency which shall make such supplemental expenditure. A certified copy of such ordinance or resolution shall be filed with the division.

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PERFORMANCE INDICATORS

OVERVIEW The following performance indicators are a selection of the various operational and financial metrics. The airports used for comparisons were selected based on the number of annual enplaned passengers for the fiscal year ended 2014. The information used in Performance Indicators was obtained from the Compliance Activity Tracking System (CATS) http://cats.airports.faa.gov/ using the FAA Form 127 information.

Airport ID Airport Name State Enplanements

DRO Durango-La Plata County CO 193,537

LAN Capital City MI 198,637

TVC Cherry Capital MI 199,801

TRI Tri-Cities Regional TN/VA TN 204,930

GNV Gainesville Regional FL 208,262

GPI Glacier Park International MT 210,406

BMI Central Illinois Regional IL 214,780

AVP Wilkes-Barre /Scranton Intl PA 216,256

GJT Grand Junction Regional CO 219,252

MOT Minot Intl ND 222,144

MLB Melbourne Intl FL 223,630

ASE Aspen-Pitkin Co CO 224,311

FAY Fayetteville Regional NC 242,811

CRW Yeager WV 243,222

BIS Bismarck Muni ND 245,205

LFT Lafayette Regional LA 252,052

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DRO LAN TVC TRI GNV GPI BMI AVP GJT MOT MLB ASE FAY CRW BIS LFT

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OPERATING RATIO This is a measure of operating efficiency that compares operating expense to operating revenue. Operating revenue must exceed operating expenses to provide a financial cushion and cover debt service expenses.

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OPERATING REVENUE PER ENPLANMENT This is a measure of operating revenues per enplaned passenger.

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OPERATING EXPENSE PER ENPLANMENT This divides operating expenses by enplanement and measures the relative operating efficiency.

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AIRLINE COST PER ENPLANEMENT Airline cost per enplanement is the total annual costs paid by the airlines divided by the total fiscal year enplanements.

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$18

$20

BMI MOT DRO FAY MLB GPI BIS GNV TVC LFT GJT AVP TRI CRW ASE LAN

2014 Airline Cost per Enplanment

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LANDING FEE RATE The rate the airport charges passenger and cargo carriers for commercial aircraft landings at the airport, some airports charge landing fees on general aviation and military flights.

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2010 2011 2012 2013 2014 2015

Forecast

2016 Budget

GJT Signatory Landing Fee Rate per 1,000 lbs

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

BMI GPI BIS TVC MOT MLB FAY DRO GNV GJT LAN TRI CRW AVP ASE

2014 Signatory Landing Fee Rate per 1,000 lbs

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LANDING FEE REVENUE Revenues from passenger and cargo carriers for commercial aircraft landings at the airport by applying the landing fee rate per 1,000 pounds of aircraft weight, some airports charge landing fees on general aviation and military flights.

-

100,000

200,000

300,000

400,000

500,000

600,000

2010 2011 2012 2013 2014 2015

Forecast

2016 Budget

GJT Signatory Landing Fee Revenue

Passenger airline landing fees Landing fees from cargo

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

BMI GPI GNV MOT DRO TVC MLB FAY TRI GJT LAN BIS AVP LFT CRW ASE

2014 Landing Fee Revenue

Passenger airline landing fees Landing fees from cargo Landing fees from GA and military

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GRAND JUNCTION REGIONAL AIRPORT

AIRPORT OVERVIEW

AIRPORT AUTHORITY GOVERNANCE Grand Junction Regional Airport, Colorado, Public Airport Authority was created in 1971 under the Public Airport Authority Act of 1965. The Authority is composed of seven appointed members: three from Mesa County, three from the City of Grand Junction and one at-large selection. The term of each Director of the Authority Board is four years; no member may serve more than two consecutive four year terms.

Troy Ball, Commissioner – at large Expires March 2017 Rick Langley, Commissioner – county appointed Expires April 2016 David Murray, Commissioner - city appointed Expires May 2019 Paul Nelson, Commissioner – city appointed Expires June 2017 Rick Taggart, Commissioner – city council rep Appointed annually Rick Wagner, Chairman – county appointed Expires April 2017 Steve Wood, Vice-Chairman – county appointed Expires April 2019

The Board of Directors selects and appoints an Executive Director who implements the policies established by the Board, manages the airport, and serves at the pleasure of the Board. Other individuals are employed by the Authority to assist the Executive Director in managing the operations of the airport and to serve at the pleasure of the Executive Director.

AIRPORT CLASSIFICATION AND SERVICES The National Plan of Integrated Airport Systems (NPIAS) classifies Grand Junction Regional Airport as a short-haul primary commercial service airport. These airports provide commercial airline service, mostly to destinations within 500 miles, in addition to general aviation services. The Grand Junction metropolitan area is classified as a non-hub commercial service market, as Grand Junction Regional Airport enplanes less than 0.05% of all commercial airline enplanements in the United States. The types of businesses include:

Passenger air carriers Government Aircraft maintenance

Ground transportation Retail concessions Aircraft charters

Cargo air carriers Aircraft sales and storage Flight instruction

It is also home to private and corporate aircraft operators, flying clubs, medical/air life, and the Civil Air Patrol.

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AIRPORT FACILITIES The Airport is located on approximately 2,847 acres of land. The airfield is open 24 hours per day. The terminal building is open from 4:30am until after the last flight arrives in the evening at approximately 11:00pm. The air traffic control tower is open 16 hours per day from 6:00am to 10:00pm.

AIRFIELD Grand Junction Regional Airport’s two (2) active runways are primary Runway 11/29, capable of handling commercial, military, and general aviation traffic, and crosswind Runway 4/22, designed to accommodate smaller aircraft.

RUNWAYS The primary runway is Runway 11/29, which measures 10,501 feet long and 150 feet wide with a northwest-southeast orientation. The runway is painted with standard precision runway markings and shoulder markings. Paved blast pads measuring 100 feet long and 250 feet wide extend from both ends of the runway. The surface is constructed of grooved asphalt. The load bearing strength is 110,000 pounds for single wheel gear loading (SWG), 180,000 pounds dual gear wheel loading (DWG), and 260,000 pounds dual-tandem wheel gear loading (DTG). The runway was resurfaced in 2009, and a fog seal coat was applied in 2009. Crosswind Runway 4/22 measures 5,501 feet long and 75 feet wide in a southwest/northeast orientation. It is painted with standard basic runway markings. The surface is composed of grooved asphalt, which was resurfaced in 1998. The load bearing strength is 20,000 pounds SWG and 30,000 DWG. The runway is designed to facilitate the operations of smaller aircraft during crosswind conditions on Runway 11/29.

TAXIWAYS AND TAXI LANES Taxiway ‘A’ is a full-length parallel taxiway along the south side of primary Runway 11/29. It is 75 feet wide and provides eight (8) exits. An aircraft run-up area is located adjacent to the A-7 exit. Taxiway ‘C’ is also a full-length parallel taxiway, running along the west side of crosswind Runway 4/22. It measures 35 feet wide and has four (4) exits. Taxiway ‘C1A’ is located in the general aviation area of the airport. It is 1,600 feet long and 35 feet wide. An additional 575 x 35 feet of asphalt runs perpendicular to the taxiway to facilitate access to newly-constructed private hangars in that area.

LIGHTING AIDS • Airport beacon signaling the location and presence of the airport at night and during low visibility

conditions. • Precision Approach Path Indicator (PAPI) visual approach aids for Runways 11 and 4 • Runway end identifier lights (REILs) on Runway 4/22 • High intensity runway edge lighting (HIRL) on Runway 11/29 • Medium intensity runway edge lighting (MIRL) on Runway 4/22 • Medium intensity taxiway tights (MITL) and signage on Taxiway ‘A’ • Taxiway reflectors on Taxiway ‘C’ • Distance to go signs on Runways 11/29 and 4/22

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PASSENGER TERMINAL BUILDING AND APRON The passenger terminal building opened in 1982 and contains over 76,000 square feet of space. Additional boarding area space, along with two (2) aircraft loading bridges, opened in spring 2004. The passenger terminal apron encompasses approximately 13,000 square yards of asphalt and concrete pavement adjacent to the terminal building and provides for aircraft parking, access, and circulation.

AIRCRAFT RESCUE FIREFIGHTING (ARFF) The ARFF Maintenance Building is located adjacent to the base of the air traffic control tower. It was constructed in 2000 and houses the aircraft rescue firefighting and maintenance equipment. A 3,200 square foot addition was completed in 2010.

AIR TRAFFIC CONTROL TOWER Consisting of approximately 10,000 square feet, the tower was originally constructed in 1963 and was most recently renovated in 1996. The tower elevator was modernized in 2013. Limited tower office space and adjacent bays were leased to West Star in 2013.

AIRPORT AUTHORITY HANGARS Constructed in 1957 and most recently renovated in 1998, this hangar is leased to Federal Express and consists of approximately 6,724 square feet. It includes space for offices and sorting operations. In December 2012, a hangar and adjacent offices used by Mesa Airlines for aircraft maintenance reverted to the airport. The 25,600 square foot hangar was constructed in 1970 and the 7,168 square foot adjacent offices constructed in 1980. The hangar is leased to West Star for aircraft maintenance. In 2013, the airport purchased a 4,800 square foot hangar in the C1A area to store equipment. The hangar was built in 1996.

RENTAL CAR FACILITIES The airport currently owns four rental car service facility buildings that are leased to National/Alamo, Avis/Budget, Hertz, and Enterprise Rent a Car. The rental car parking lot was re-constructed during the summer of 2009. The rental car parking lot has parking for 226 vehicles with 146 spaces assigned as rental car ready spaces. The remaining spaces are used for rental car employee parking.

PARKING Vehicle parking for the passenger terminal building includes public and employee parking. A paved parking lot, immediately southwest of the terminal building, provides 638 standard, 30 handicap, and 12 motorcycle. An adjacent compacted asphalt lot provides approximately 232 spaces for employee parking.

ACCESS ROADWAYS The following vehicle roadways are owned and maintained by the Airport Authority:

Walker Field Drive Navigator’s Way Aviator’s Way

Falcon Way Cl Way N. Heritage Court

Landing View Lane Eagle Drive S. Heritage Court

Many of the roadways were re-built as part of the 2007 Bond Proceeds. Roundabouts were added and several roadways were re-aligned to better serve traffic flow. Construction was completed by fall 2008 with landscaping continuing through 2009.

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AIRPORT DEBT

2009 COLORADO STATE INFRASTRUCTURE BANK LOAN The rental car parking lot was reconstructed during the summer of 2009 and completed August 2009. A $4,000,000 ten year loan was obtained from the Colorado State Infrastructure Bank (SIB) to finance construction of the rental car parking lot in June 2009. Quarterly payments of $116,122 started September 1, 2009. The airport board approved a facility use fee of $3.25 per on-airport rental car per day in 2007 to fund the quarterly principal and interest payments. The facility use fee was increased to $3.80 in February 2015.

2007 REVENUE BONDS On May 17, 2007, General Airport Revenue Bonds were sold and combined with airport funds to primarily finance construction of road and public parking improvements, defeasance of series 2003 bonds and establish a bond reserve. The funds are accounted for as follows:

Sources Uses Principal amount $19,560,000 Defeasance of series 2003 bonds $1,178,959 Premium on bond 11,256 Road and parking improvements 16,739,000 Funds provided by airport 170,000 Bond reserve account 1,540,537 _ _ . Cost of bond issuance __ 282,760 $19,741,256 $19,741,256 The bond requires semi-annual payments on June 1 and December 1. The first payment required an interest only payment on December 1, 2007. Thereafter, the June payments are interest only and the December payments are principal and interest. The bond has a final principal and interest payment due on December 1, 2027. The road improvements included improvements to Walker Field Drive, the West Star Parking Lot, Eagle Drive, Heritage Way Connection, Aviators Way and expansions of the West Star Parking Lot and the Terminal Parking Lot. Project construction started in 2007 and was mostly complete by the fall of 2008. Approximately $9M of the project was recognized as an expenditure in 2007 and the remaining $8M was recognized as an expenditure in 2008 and 2009.

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AIR SERVICE DEVELOPMENT, PUBLIC RELATIONS, AND MARKETING The Airport uses public relations and marketing to communicate with customers; a diverse group that includes tenants, airlines, business prospects, and the community. Grand Junction Regional Airport’s primary marketing goals are:

1. Air service development: Improving air service, attracting passengers, and retaining existing carriers.

2. Raising “awareness” in the region. Educate area residents on local airport commercial air service options and educate the public on local service is not competitive with that offered at larger airports.

3. Promoting a positive view of the airport in the community.

GENERAL AVIATION PROJECTIONS Over the last few years, General Aviation (GA) activity has seen a decrease in the overall operations at Grand Junction Regional Airport. However, the Federal Aviation Administration forecasts (2014-2034), are projecting an average annual increase of active GA fleet to be 0.5% over the 21-year forecast period, with the highest increased activity in rotorcraft, turbine, and jet aircraft. Additionally, the FAA is forecasting an increase in activity for the light-sport category, with an increase of nearly 4% annually.

COMMERCIAL AIR SERVICE PROJECTIONS Grand Junction’s commercial air service out of Grand Junction Regional Airport is superior to comparable communities in terms of frequency of flights, available seats per day, number of non-stop cities served, number of air carriers, and availability of jet service. Grand Junction Regional Airport has seen a slight decrease in seat departures, but has remained relatively stable over the last several years. A few peak years include the commencement of service to Dallas/Fort worth in 2008, the launch of seasonal direct flights to Los Angeles in 2009, and the addition of daily direct flights to Houston in 2011.

Grand Junction Historic Seat Departure (CY 2005 – CY 2015)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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SWOT Analysis

OPPORTUNITIES

Air Service Growth: local interest in increased air service. Demand for expanded service to current and new markets: Los Angeles, CA.

Economic Development: partnering with community groups to develop vacant land at the Airport and recruit aviation related businesses.

Alternative Funding Sources: identifying funding sources not already capitalized (e.g.tax, grants).

Aviation Activity: working to increase commercial, cargo, military and general aviation activity.

Travel Demand: Strong demand for business travel, both commercial and general aviation.

THREATS

Passenger Leakage: customers choosing alternative airports for commercial service, primarly, Denver International Airport.

Airline Business Models: the evolution of Ultra Low Cost Carriers, competeing airports, and the main line legacy carriers focusing on development of their hub cities.

Federal Mandates: federally driven, unfunded mandates, primarily for security.

STRENGHTS

Airport Infrastructure: runway length, navigational aids, ATCT.

Airport Facilites: World-class Fixed Base Operator (FBO), improved roads and parking lots.

Operational Capability: aicraft rescue & firefighting, snow removal fleet.

Geography: year-round good weather.

Developable Land: aviation and non-aviation related vacant land.

WEAKNESSES

Personnel Resources

Financial Position: future revenue sources, current financial commitments.

Airport Facilities & Infrastructure: aging terminal building and a runway that needs replacement.

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LOCATION

MESA COUNTY Grand Junction is situated in the Grand Valley on the western slope of the Rocky Mountains in Mesa County, Colorado. Grand Junction Regional Airport and the city of Grand Junction are located between Denver and Salt Lake City, approximately 260 miles from each. The closest airports, which provide regularly scheduled commercial or regional jet service, are Aspen-Pitkin County Airport, Eagle County, and Montrose County Regional Airport. Grand Junction Regional Airport is situated within the boundaries of the city of Grand Junction in the northeast area of the city approximately one mile north of Interstate 70.

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MESA COUNTY STATISTICS

People

Mesa County Colorado United States

Population Population estimates, July 1, 2014, (V2014) 148,255 5,355,866 318,857,056 Population estimates base, April 1, 2010, (V2014) 146,723 5,029,324 308,758,105 Population, percent change - April 1, 2010 (estimates base) to July 1, 2014, (V2014)

1.0% 6.5% 3.3%

Age Persons under 5 years, percent, July 1, 2014, (V2014) 6.3% 6.3% 6.2% Persons under 5 years, percent, April 1, 2010 6.8% 6.8% 6.5% Persons under 18 years, percent, July 1, 2014, (V2014) 22.4% 23.3% 23.1% Persons under 18 years, percent, April 1, 2010 23.5% 24.4% 24.0% Persons 65 years and over, percent, July 1, 2014, (V2014) 16.9% 12.7% 14.5% Persons 65 years and over, percent, April 1, 2010 14.9% 10.9% 13.0%

Race and Origin White alone, percent, July 1, 2014, (V2014) (a) 94.2% 87.7% 77.4% Black or African American alone, percent, July 1, 2014, (V2014) 1.0% 4.5% 13.2% American Indian and Alaska Native alone, percent, July 1, 2014, (V2014)

1.5% 1.6% 1.2%

Asian alone, percent, July 1, 2014, (V2014) 0.9% 3.1% 5.4% Native Hawaiian and Other Pacific Islander alone, percent, July 1, 2014, (V2014)

0.1% 0.2% 0.2%

Two or More Races, percent, July 1, 2014, (V2014) 2.2% 2.9% 2.5% Source: US Census Bureau

Industry

2009-2013 American Community Survey 5-Year Estimates Civilian employed population 16 years and over Mesa County Colorado U.S. Agriculture, forestry, fishing and hunting, and mining 4,606 6.9% 2.4% 1.9% Construction 5,076 7.6% 7.4% 6.2% Manufacturing 3,384 5.0% 7.2% 10.5% Wholesale trade 1,881 2.8% 2.6% 2.8% Retail trade 8,881 13.2% 11.3% 11.6% Transportation and warehousing, and utilities 3,940 5.9% 4.6% 4.9% Information 1,328 2.0% 3.0% 2.2% Finance and insurance, and real estate and rental and leasing 3,902 5.8% 7.0% 6.7% Professional, scientific, and management, and administrative and waste management services

5,108 7.6% 13.2% 10.8%

Educational services, and health care and social assistance 15,787 23.5% 20.3% 23.2% Arts, entertainment, and recreation, and accommodation and food services 6,953 10.3% 10.7% 9.3% Other services, except public administration 3,360 5.0% 5.1% 5.0% Public administration 3,011 4.5% 5.0% 5.0%

Source: US Census Bureau

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Occupation

2009-2013 American Community Survey 5-Year Estimates Civilian employed population 16 years and over Mesa County Colorado U.S. Management, business, science, and arts occupations 21,700 32.3% 39.9% 36.2% Service occupations 12,002 17.9% 17.3% 18.1% Sales and office occupations 17,172 25.5% 24.4% 24.6% Natural resources, construction, and maintenance occupations 8,532 12.7% 9.4% 9.1% Production, transportation, and material moving occupations 7,811 11.6% 9.0% 12.0%

Source: US Census Bureau

Household Income

2009-2013 American Community Survey 5-Year Estimates Mesa County Colorado U.S. Less than $10,000 4,203 7.2% 6.2% 7.2% $10,000 to $14,999 3,076 5.2% 4.4% 5.4% $15,000 to $24,999 6,551 11.2% 9.4% 10.8% $25,000 to $34,999 6,522 11.1% 9.6% 10.3% $35,000 to $49,999 9,228 15.7% 13.4% 13.6% $50,000 to $74,999 11,066 18.9% 18.4% 17.9% $75,000 to $99,999 7,000 11.9% 13.2% 12.2% $100,000 to $149,999 6,746 11.5% 14.5% 12.9% $150,000 to $199,999 2,551 4.4% 5.7% 4.9% $200,000 or more 1,655 2.8% 5.2% 4.8% Mean household income (dollars) $66,456 $78,383 $73,487

Source: US Census Bureau

Educational Attainment

2009-2013 American Community Survey 5-Year Estimates Population 25 years and over Mesa County Colorado U.S. Less than 9th grade 3,049 3.1% 4.1% 5.9% 9th to 12th grade, no diploma 7,082 7.2% 5.7% 8.0% High school graduate 29,509 30.0% 22.1% 28.1% Some college, no degree 24,787 25.2% 22.8% 21.2% Associate's degree 8,557 8.7% 8.2% 7.8% Bachelor's degree 16,623 16.9% 23.6% 18.0% Graduate or professional degree 8,656 8.8% 13.4% 10.8%

Source: US Census Bureau

Labor Force

Mesa County Colorado U.S. Time Period Labor Force Employed Unemployed Unemployment Rate 2010 76,113 67,776 8,337 11.0% 8.7% 9.6% 2011 75,397 67,752 7,645 10.1% 8.3% 8.9% 2012 74,844 67,748 7,096 9.5% 7.8% 8.1% 2013 73,731 67,448 6,283 8.5% 6.8% 7.4% 2014 73,608 69,068 4,540 6.2% 5.0% 6.2% September 2015 73,345 69,828 3,517 4.8% 3.3% 5.1%

Source: US Bureau of Labor Statistics & Colorado Department of Labor

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USEFUL TERMS (GLOSSARY)

DEFINITIONS ACCOUNT: An organizational or budgetary breakdown found within budget. Each department serves a specific function as a distinct organizational unit. Its primary purpose is to facilitate organizational and budgetary accountability. A term used to identify an individual asset, liability, expenditure (and other uses), revenue (and other sources), or fund balance. ACCOUNTS PAYABLE: Amounts owed to others for goods or services received. ACCOUNTS RECEIVABLE: Amounts due from others for goods furnished or services rendered. ACCOUNTING SYSTEM: The total set of records and procedures which are used to record, classify and report information on financial status and operations of an entity. ACCRUAL BASIS OF ACCOUNTING: The method of accounting under which revenues are recorded when they are earned and expenditures are recorded when goods and services are received. ACTIVITY: A specific and distinguishable line of work performed by one or more organizational components of a department for the purpose of accomplishing a function for which the department is responsible. For example "Tower Repairs & Maintenance” is an activity performed in the "Buildings & Land" department. ADOPTION: Formal action taken by the Board of Commissioners to authorize or approve the budget. AIRCRAFT RESCUE AND FIREFIGHTING (ARFF): A special category of firefighting that involves the response, hazard mitigation, evacuation and possible rescue of passengers and crew of an aircraft (typically) involved in an airport ground emergency. AIRPORT IMPROVEMENT PROGRAM (AIP): The FAA’s Airport Improvement Program (AIP) provides both entitlement and discretionary grants for eligible airport projects. This program, authorized periodically by Congress, distributes the proceeds of the federal tax on airline tickets to airports, through grants, for eligible construction projects and land acquisition. APPROPRIATION: An authorization granted by a legislative body to make expenditures and to incur obligations for specific purposes. An appropriation is limited in amount to the time it may be expended. ASSETS: Property owned by a governmental unit, which has a monetary value.

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AUDIT: The examination of documents, records, reports, systems of internal control, accounting and financial procedures, and other evidence for one or more of the following purposes: a) To attest to whether the statements prepared from the accounts present fairly the financial position and the results of financial operations of the constituent funds and balanced account groups of the governmental unit in accordance with generally accepted accounting principles applicable to governmental units and on a basis consistent with that of the preceding year; b) To determine the propriety, legality and mathematical accuracy of a governmental unit's financial transactions; c) To ascertain whether all financial transactions have been properly recorded; d) To evaluate the stewardship of public officials who handle and are responsible for the financial resources of a governmental unit. BALANCED BUDGET: A budget in which estimated revenues equal estimated expenditures including operating transfers. No budget adopted shall provide for expenditures in excess of available revenues and beginning fund balances. BOND: A written promise, generally under seal, to pay a specified sum of money, called the face value or principal amount, at a fixed time in the future, called the date of maturity, and carrying interest at a fixed rate, usually payable periodically. BONDED INDEBTEDNESS: Outstanding debt by issues of bonds, which are repaid by revenue. BUDGET: A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them. BUDGET DOCUMENT: The official written statement prepared by the Finance Department which presents the proposed budget to the Board of Commissioners. BUDGET BODY MESSAGE: A general discussion of the proposed budget presented in writing as a part of the budget document. The budget message explains principal budget issues against the background of financial experience in recent years and presents recommendations made by the Airport Staff. BUDGET CALENDAR: The schedule of key dates, which a government follows in the preparation and adoption of the budget. BUDGETARY CONTROL: The control or management of a governmental unit or enterprise in accordance with an approved budget for the purpose of keeping expenditures within the limitation of available appropriations and available revenues. CAPITAL ASSETS: Assets with a value of $2,500 or more and a useful life of more than one reporting period. CAPITAL EXPENDITURES: A capital expenditure occurs when a capital asset is purchased. Capital assets are used in operations and have initial useful lives extending beyond a single

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reporting period. These assets must also meet capitalization thresholds, which vary by asset classification and typically costs more than $2,500. Land, improvements to land, vehicles, machinery, equipment, infrastructure and other tangible and intangible assets used in operations are examples of capital assets. Expenditures that do not benefit more than one reporting period or meet the capitalization thresholds are classified a current expenditure. CAPITAL IMPROVEMENT BUDGET: A plan of proposed capital expenditures and a means of financing them. The capital budget is enacted as part of the complete annual budget. CASH BASIS: The method of accounting under which revenues are recorded when received in cash and expenditures are recorded when paid. CHART OF ACCOUNTS: The classification system used by a government entity to organize the accounting for various funds. CONSUMER PRICE INDEX (CPI): A statistical description of price levels provided by the U.S. Department of Labor. The index is used as a measure of the increase in the cost of living (i.e. economic inflation). CONTINGENCY: Budget for expenditures which cannot be placed in departmental budgets, primarily due to uncertainty about the level or timing of expenditures when the budget is adopted. The contingency also serves as a hedge against shortfalls in revenues or unexpected expenditures. CURRENT: A term which, applied to budgeting and accounting, designates the operations of the present fiscal period as opposed to past or future periods. CUSTOMER FACILITY CHARGE (CFC): Airport-required fees collected by car rental agencies and used to fund new car rental facilities. DEBT: An obligation resulting borrowing money or purchasing goods and services. DEBT LIMIT: The maximum amount of gross or net debt, which is legally permitted. DEBT SERVICE FUND: A fund type used to account for the accumulation of resources and for the payment of general long-term debt principal and interest. DEPARTMENT: Basic organizational unit of government, responsible for carrying out related functions. DEPRECIATION: Expiration in the service life of capital assets attributable to wear and tear, deterioration, action of the physical elements, inadequacy or obsolescence. ENPLANED PASSENGER (ENPLANEMENT): Any revenue passenger boarding an aircraft at the

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Airport, including any passenger that previously disembarked from another aircraft ENTERPRISE FUND: A proprietary fund type used to report an activity for which a fee is charged to external users for goods or services. In theory, these funds operate in a manner similar to private business enterprises, where the intent of the governing body is to recover the cost of delivering services through user fees or charges. EXPENDITURE: Where accounts are kept on the accrual or modified accrual basis of accounting, the cost of goods received or services rendered whether cash payment have been made or not. Where accounts are kept on a cash basis, expenditures are recognized only when the cash payments for the above purposes are made. FISCAL POLICY: A government’s policies with respect to revenues, spending, and debt management as these relate to government services, programs and capital investment. Fiscal Policy provides an agreed-upon set of principles for the planning and programming of budgets and their funding. FISCAL YEAR: The budget and accounting year that begins on the first day of January and ends on the last day of December of each year. FIXED BASE OPERATOR: Those commercial businesses, at the Airport, authorized by the Authority to sell aviation fuels and provide other aviation-related services, primarily to General Aviation. FULL TIME EQUIVALENT (FTE): The number of employee hours (2,080) needed to be equal to one full time employee. Several part time employees may be combined to make one FTE. FUND BALANCE: Governmental fund assets minus liabilities (equity). GENERAL AVIATION: The activities of privately owned aircraft that are not used for commercial purposes, such as the movement of passengers or freight. GOVERNMENTAL ACCOUNTING: The composite of analyzing, recording, summarizing, reporting, and interpreting the financial transactions of governmental units and agencies. GRANT: A contribution of assets by one governmental unit or other organization to another. Grants are usually made for specified purposes. INFRASTRUCTURE: Assets which are immovable and of value only to the governmental unit (i.e. runways, taxiways, apron, etc.). LINE ITEM: A specific item or group of similar items defined by detail in a unique account in the financial records.

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LONG-TERM DEBT: Debt with a maturity of more than one year after the date of issuance. MARKET VALUE: The value a property is worth. MISCELLANEOUS: Revenues or expenditures not classified in any other revenue or expenditure category. MODIFIED ACCRUAL BASIS: The basis of accounting under which expenditures other than accrued interest on general long-term debt are recorded at the time liabilities are incurred and revenues are recorded when received in cash except for material and/or available revenues, which should be accrued to reflect properly the tax levied and revenue earned. OPERATING BUDGET: A financial plan that estimates revenues and expenditures for a specified period. OPERATING EXPENSE: The cost for personnel, material and equipment required for a department to function. OPERATING REVENUE: Monies received from ongoing operations. Operating revenues are used to pay for day-to-day services. PASSENGER FACILITY CHARGE: A $4.50 charge (net $4.39 to Airport) attached to each ticketed passenger that boards an airplane at the Airport. Certain types of passengers, including military, are excluded from the Passenger Facility Charge. PERSONNEL SERVICES: Expenditures for salaries, wages, and fringe benefits of employees. PURPOSE: A broad statement of the goals, in terms of meeting public service needs, that a department is organized to meet. REIMBURSEMENT: Cash or other assets received as a repayment of the cost of work or services performed or of other expenditures made for or on behalf of another governmental unit or department or for an individual, firm, or corporation. RESERVE: An account which records a portion of the fund balance which must be segregated for some future use and which is, therefore, not available for further appropriation or expenditure. RESOLUTION: A special or temporary order of a legislative body; an order of a legislative body requiring less legal formality than an ordinance or statute. RESOURCES: The actual assets of a governmental unit, such as cash, plus contingent assets such as estimated revenues applying to the current fiscal year not accrued or collected, and bonds authorized and not issued.

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RESTRICTED FUND BALANCE: Fund balance should be reported as restricted when constraints placed on the use of resources are either: a) Externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or b) Imposed by law through constitutional provisions or enabling legislation. REVENUE: The term designates an increase to a fund's assets which: 1) does not increase a liability; 2) does not represent a repayment of an expenditure already made; 3) does not represent a cancellation of certain liabilities; and 4) does not represent an increase in contributed capital. REVENUE BOND: A bond that is backed by a particular revenue source such as passenger facility fees. TRUST FUND: A fund consisting of resources received and held by the governmental unit as trustee, to be expended or invested in accordance with the conditions of the trust. UNBALANCED BUDGET: A budget which undesignated fund balance or reserves are used or increased, in order to balance estimated revenues to estimated expenditures or expenses. UNRESERVED FUND BALANCE: The portion of a fund’s balance that is not restricted for a specific purpose and is available for general appropriation. USER FEE: The service charge for delivering a specific service to a one benefiting party.

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ACRONYMS AIP Airport Improvement Project ARFF Airport Rescue Fire Fighting ATCT Air Traffic Control Tower ATO Airline Ticket Office CATS Compliance Activity Tracking System CIP Capital Improvement Plan CFC Customer Facility Charge COLA Cost of Living Adjustment COSIB Colorado State Infrastructure Bank CPI Consumer Price Index FAA Federal Aviation Administration FBO Fixed Base Operator FOD Foreign Object Debris FTE Full Time Equivalent GA General Aviation GAAP Generally Accepted Accounting Principles GASB Governmental Accounting Standards Board GJT Grand Junction Airport IT Information Technology LOD Letter of Determination MAG Minimum Annual Guarantee PERA Public Employees’ Retirement Association PFC Passenger Facility Charge PTE Part Time Equivalent SIDA Security Identification Display Area SWOT Strengths Weaknesses Opportunities Threats TAF Terminal Area Forecast TAP Terminal Area Plan TSA Transportation Security Administration

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RESOLUTION TO ADOPT BUDGET

RESOLUTION NO. 2015-012

RESOLUTION TO ADOPT BUDGET AND

APPROPRIATE SUMS OF MONEY A RESOLUTION SUMMARIZING REVENUES AND EXPENDITURES FOR EACH FUND AND ADOPTING A BUDGET AND APPROPRIATING SUMS OF MONEY TO THE VARIOUS FUNDS IN THE AMOUNT AND FOR THE PURPOSE AS SET FORTH BELOW, FOR THE GRAND JUNCTION REGIONAL AIRPORT AUTHORITY FOR THE CALENDAR YEAR BEGINNING ON THE FIRST DAY OF JANUARY, 2016 AND ENDING ON THE LAST DAY OF DECEMBER, 2016. WHEREAS the Grand Junction Regional Airport Authority, a political subdivision of the State of Colorado, has appointed the Finance Manager, to prepare and submit a proposed budget to said governing body at the proper time; and WHEREAS the Finance Manager, submitted a proposed budget to this governing body on October 13, 2015 for its consideration; and WHEREAS upon due and proper notice, published and posted in accordance with the law, said proposed budget was open for inspection by the public at a designated place, a public hearing was held on November 17, 2015, and interested parties were given the opportunity to file or register any objections to said proposed budget; and WHEREAS whatever increases may have been made in the expenditures, like increases were added to the revenues so that the budget remains in balance, as required by law; and WHEREAS it is required by law to appropriate the revenues provided in the budget to and for the purposes described below, thereby establishing a limitation on expenditures for the operations of the Grand Junction Regional Airport Authority; NOW, THEREFORE, BE IT RESOLVED BY THE Grand Junction Regional Airport Authority, a political subdivision of the State of Colorado: That the budget as submitted, amended, and herein summarized by fund, hereby is approved and adopted as the budget of the Grand Junction Regional Airport Authority for the year stated above; and That the sums of money derived from revenues are appropriated for expenditures as outlined in the budget for the purposes stated; and