Title
Continuation of Passenger Facility Charge Program at Phoenix Sky Harbor International Airport
Description
Request to authorize the City Manager, or his designee, to continue the Passenger Facility Charge (PFC) Program at Phoenix Sky Harbor International Airport (Airport). Further request to authorize the City Manager, or his designee, to process PFC applications with the Federal Aviation Administration (FAA) to impose and use the PFC revenues.
Report
Summary
The Passenger Facility Charge (PFC) program was initiated in 1990 by the Federal Aviation Administration (FAA) to provide funding for FAA-approved capital projects. The FAA initiated this change in order to address specific airport capital needs. In order to qualify for this funding, airports must demonstrate that the projects in a PFC application enhance safety, security, or capacity; reduce noise; or increase air carrier competition. When approved, a PFC is collected by the airlines at the rate of $4.50 from each passenger who boards a flight at the approved airport. These funds are then remitted to the airport to pay for approved capital projects. Today, these revenues are a critical funding source for every large hub airport in the United States.
The City Council originally authorized PFCs at Phoenix Sky Harbor International Airport (the Airport) in 1996, and has extended the program six times in the interim as project financings require. Notable PFC-funded projects at the Airport have included the international concourse at Terminal 4, the Aircraft Rescue and Firefighting (ARFF) station, the PHX Sky Train, and many other terminal and airfield projects. The PFC collections that currently support these projects will expire in August 2032. The City Council approved the 2016-2021 Capital Improvement Program (CIP) on June 1, 2016. This CIP includes the Airport's Terminal 3 Modernization, airfield reconstruction projects, and other safety and security initiatives totaling approximately $70 million in PFC eligible projects.
In order to ensure adequate funding for these important capital projects, staff recommends extending current PFC collections for five additional months, extending the current expiration of August 2032 to a new expiration date of January 1, 2033. The PFC collection rate would continue to be $4.50 per passenger, and would not increase as a result of this action.
Staff requests authorization for the City Manager, or his designee, to act as the official representative of the City of Phoenix to continue the PFC Program at the Airport, and further authorizing the City Manager to process PFC applications with the FAA according to Federal law and regulations and to continue imposing and using PFC revenues in accordance with all applicable Federal laws, rules, regulations, and required assurances mandated by law.
Public Outreach
According to 14 Code of Federal Regulations Section 158.23, the Air Carrier Consultation Meeting (Consultation) will be held with all air carriers operating at the Airport. The Consultation regarding the new PFC application to the FAA ocurred on May 4, 2017. The Consultation materials were advertised as being available to the public online at https://skyharbor.com beginning May 4, 2017. The air carriers had 30 days from the Consultation date to submit their comments. The public had 30 to 45 days to submit their comments after the Consultation materials are made available online. No comments were received from either the air carriers or the public.
Location
Phoenix Sky Harbor International Airport is located at 3400 E. Sky Harbor Blvd.
Department
Responsible Department
This item is submitted by Deputy City Manager Paul Blue and the Aviation Department.