Council Report: DFW Airport budget preview


At Tuesday’s work session, members of the Fort Worth City Council received a presentation of the proposed Fiscal Year 2020 budget for the Dallas Fort Worth International Airport.

The total FY 2020 budget is $1.042 billion, said Chris Poinsatte, DFW Airport’s Executive Vice President and Chief Financial Officer.

Key themes in the proposed budget are:

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*Lowest increase in airline cost since 2011 (2.3%); all airline key performance indicators improving for first time.

*•Lower cost per enplanement (down $0.28).

*Lower landing fees (down $0.22).

*Lower terminal rentals (down $3).

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*Record passenger forecast of 75.7 million (4.6% increase).

*Record DFW Cost Center net revenues of $164 million, an increase of $18.3 million (12.6%).

*Modest increase in expenditure budget, $23.1 million (2.3%). This assumes DFW takes over Terminals A and C custodial work from American Airlines (without this

budget is up 1.4%). Funds strategic priorities for customer experience, safe and secure, and operational excellence ($9.1 million). Lower net debt service (savings of $10.1 million, 3.0%).

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DFW Airport’s rankings include being fourth in global flights and 15th in global passengers. They have 164 gates, seven runways serving 190 domestic destinations and 63 international for a $37 billion annual economic impact.

In 2019, the airport is expected to serve about 72.4 million passengers.

Tax benefits to area cities in the 2018 fiscal year (2019 not yet announced) included $6.5 million to Fort Worth and $7.6 million to Dallas, respectively, an increase of 5.6% from the previous year.

Poinsatte also noted that there are no planned increases for public parking this year. There will, however, be an increase from $4 to $6 for those passing through.

“We really are trying to dissent people from cutting through,” he said.

The council also heard a presentation to consider interim financing and a commercial paper program by the airport in connection with a pair of supplemental bond ordinances. The first would establish the perimeters of the program, and the second would set it up with a limit of $750 million in taxable commercial paper in a seven-year program.

According to the presentation, an interim financing program lowers interest rates, saving money during construction. Taxable commercial paper obligations are sold at a fixed interest rate with maturities up to 270 days, providing for self-liquidity.

Poinsatte reminded the council of the upcoming new Terminal F, which will have a cost of between $3 and $3.5 billion, he said, along with a number of other projects going on.

“In the past we just issued long-term debt when we were ready to do that, but the approach we’d like to take this year is commercial paper,” Poinsatte said.

The presentation wrapped up with a proposed request that DFW revenue bond debt be an approved Public Facilities Finance Corporation project.

“We used that to build the Grand Hyatt Hotel and subsequently other hotels and projects you approved,” Poinsatte said. DFW has about $6.2 billion of debt outstanding, and about $500 million in annual debt service. PFIC net revenues are not a gross revenue of the airport and not currently pledged to pay debt service.

While it is highly unlikely that the airport would not be able to pay future debt service, approval provides investors and rating agencies more assurance that the airport would

use the PFIC’s unencumbered cash, if necessary, to pay DFW’s debt service.

The Fort Worth City Council will consider approval of the budget at its Sept. 10 meeting. The Dallas City Council was expected to address it at its Aug. 28 meeting.