TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, ICMA - CM, City Manager
FROM: Cheryl J. Spivey, CPA - Chief Financial Officer
Michelle Donegain, CPA - Accounting Manager & Interim Financial Reporting Manager
Ashley Gilmore - Financial Analyst
DATE: June 26, 2017
RE:
Title
Airport Capital Project Fund Ordinance Closeout Amendments
end
COUNCIL DISTRICT(S):
Council District(s)
All Districts
b
Relationship To Strategic Plan:
Goal V, Objective A - To ensure strong financial management with fiduciary accountability and plan for the future resource sustainability by aligning resources with City priorities.
Executive Summary:
Staff proposes to amend nine capital project fund ordinance closeouts from FY2005 -FY2016 to correct the actual revenue sources that were used to fund airport capital projects completed in previous years.
Background:
Passenger Facility Charges (PFCs) are collected by the Fayetteville Regional Airport to provide a supplemental revenue source of funding for airport projects. FAA approval is required to use PFC funds to finance eligible projects and to reimburse the airport fund for the local share of FAA Airport Improvement Projects. Eligibility criteria include projects that enhance safety, security, or capacity; reduce noise; or increase air carrier competition.
In FY2017, Finance staff determined that PFC project funding in previous years was not always amended in the accounting records to reimburse the airport fund for local revenue sources temporarily used to fund projects prior to those projects being deemed eligible for PFC funds. This practice resulted in a difference between actual PFC funds available for use and the amount shown in the accounting records.
The proposed amendments will correct project funding sources in the accounting records by reducing either airport operating fund contributions, or investment income contributions. The revenues offset each other, thus there is no effect on total revenues used for the projects. These changes also reflect the amounts reported to outside agencies; thus, the amendments are only needed to rectify internal reporting discrepancies.
Capital project ordinance closeout amendments 2017-1 through 2017-09 will fully and accurately record the Passenger Facility Charges utilized for the following FAA-approved projects: Airport Improvement Project (AIP) 23, AIP 24, AIP 28, AIP 30, AIP 32, AIP 33, AIP 34, AIP 35/36, and Airport Storm Water Improvements.
Issues/Analysis:
The capital project ordinance closeout amendments will resolve internal accounting revenue source discrepancies, and has no effect on total revenues.
Budget Impact:
There is no budget impact resulting from these capital project ordinance closeout amendments. The increases or decreases to unappropriated revenues in the capital project fund represent Passenger Facility Charges used in prior years.
Options:
1) Adopt Capital Project Ordinance Closeout Amendments 2017-1 through 2017-9.
2) Do not adopt the closeout ordinance amendments and provide guidance to staff.
Recommended Action:
Staff recommends Council move to adopt Capital Project Fund Ordinance Closeout Amendments 2017-1 through 2017-9.
Attachments:
CLOA 2017-1 Airport Improvement Project 23
CLOA 2017-2 Airport Improvement Project 24
CLOA 2017-3 Airport Improvement Project 28
CLOA 2017-4 Airport Storm Water Improvements
CLOA 2017-5 Airport Improvement Project 33
CLOA 2017-6 Airport Improvement Project 32
CLOA 2017-7 Airport Improvement Project 34
CLOA 2017-8 Airport Improvement Project 30
CLOA 2017-9 Airport Improvement Project 35 & 36