In 1990, the City of Syracuse created an Airport Enterprise Fund to account for the financial operations of the Airport. By City policy, the Airport is operated as a self-supporting enterprise, and money from the City's general fund is not used for Airport purposes.
The financial operations of the Airport are governed primarily by the airline Use and Lease Agreement and the Lease and Operating Agreement and Trust Indenture of the Syracuse Regional Airport Improvement Corporation.
The major financial resources available to the city to finance Airport capital improvements consist of:
AIP Grants: AIP grants consist of entitlement and discretionary funds and a certain amount of those funds must be used for noise mitigation purposes. Entitlement grants are allocated to airports on the basis of enplaned passengers.
State Grants: New York State's participation in the funding of the local share of federally funded Airport projects is 2.5%.
Passenger Facility Charges: As part of the Aviation Safety and Capacity Expansion Act of 1990, the U.S. Congress authorized commercial service airports to collect PFCs for qualifying enplaned passengers to be used for certain projects. They include those that:
In 1991, the U.S. Department of Transportation issued FAR Part 158, Passenger Facility Charges, regarding the approval, collection, and use of PFCs. PFCs can be used to fund eligible projects on a "pay-as-you-go" or leveraged basis. The City of Syracuse collects a PFC in the amount of $4.50 per qualifying enplaned passenger at Syracuse Hancock International Airport.
Internally Generated Cash Flow: Under the residual rate-making approach set forth in the airline Use and Lease Agreement, the Airport generates discretionary cash flow for Airport capital improvements equal to 20% of "Concession Revenue" (consisting of all Airport concessions, including food/beverage, news/gift, rental cars, and parking). In addition, the airlines contribute to an Equipment and Capital Outlay Account.
Certificates of Participation: New York State laws do not permit the issuance of general revenue bonds by municipalities. However, Certificates of Participation are similar to revenue bonds in that they are secured solely by a pledge of "Airport Revenue."
General Obligation Bonds: The City of Syracuse funds capital improvements, net of grants-in-aid and internally generated funds with general obligation bonds.
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