06122024-006 FY24 Budget Amendment Fiscal Note — original pdf

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OPERATING BUDGET FISCAL NOTE DATE OF COUNCIL CONSIDERATION: DEPARTMENT(S): FUND: 7/18/24 Aviation Airport Operating SUBJECT: Approve an ordinance amending the Fiscal Year 2023‐2024 Aviation Department Operating Budget  Airport Operating Fund (Ordinance No. 20230818‐008) to recognize additional revenue in the amount of  $10,082,451 and increase appropriations in the amount of $10,082,451 to accommodate adjustments implemented  because of the Aviation staffing market study, reflect expenses resulting from the greatly improved vacancy rate,  wage and vacancy adjustments associated with contractual agreements, and increased commodity purchase needs. Facilities Management, Operations, and Airport Security Support Services Airport Planning & Development Business Services CURRENT YEAR IMPACT: Beginning Balance Total Revenue Total Transfers In Total Available Funds Department Requirements Total Department Requirements Total Other Requirements Total Transfers Out Total Requirements Excess (Deficiency) of Total Available  Funds Over Requirements  Ending Balance Full‐time Equivalents FIVE‐YEAR ESTIMATED IMPACT: 2023‐24 Approved 0  This   Action  2023‐24 Amended 0 289,208,645 10,082,451 299,291,096 16,658,692 16,658,692 305,867,337 10,082,451 315,949,788 85,141,445 46,218,424 8,161,976 14,238,156 153,760,001 3,992,124 6,129,000 1,752,000 101,000 618,000 8,600,000 91,270,445 47,970,424 8,262,976 14,856,156 162,360,001 3,992,124 82,987,480 1,482,451 84,469,931 240,739,605 10,082,451 250,822,056 65,127,732 65,127,732 65,127,732 65,127,732 674.00 0.00 674.00 0 0 0 0 0 0 0 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total Revenue Total Expenses 10,082,451 10,082,451 0 0 0 0 0 0 ANALYSIS / ADDITIONAL INFORMATION: This budget amendment is to accommodate adjustments resulting from a greatly improved vacancy rate that outperformed expectations, wage and vacancy adjustments associated with contractual agreements, increased commodity purchase needs and implementation of the Aviation staffing market study. This amendment will increase appropriation to the Department of Aviation and will be funded from operating revenues within the Airport Operating Fund without impact to the General Fund. The Department of Aviation in collaboration with the City of Austin Human Resources Department, is in the final stage of completion of the Aviation staffing market study. The market study compared the salary ranges for positions at the Department of Aviation with comparable airports in other markets. Changes to salary ranges resulting from conclusions of the market study will be implemented within FY2024 and will have a material financial impact on the operating expenses of the Department of Aviation. In the wake of the COVID‐19 pandemic, the Department of Aviation’s vacancy rate surged to as high as 40% as a result of increased number of FTEs necessitated by greatly increased passenger traffic and by challenges recruiting and retaining staff. The Department has worked to address the hiring and retention issues and year to date has far outpaced the forecasted improvement in vacancy rate included in the FY2024 Budget. As of May 2024, the Department has a vacancy rate of 20% and forecasts this will continue to improve through the end of the fiscal year. This has driven a significant variance compared to the approved FY2024 Budget due to the additional personnel cost from improved staffing levels. The Department has also experienced a significant increase in staffing costs across various contracted and City of Austin services, including the parking operations contract and the services provided by the APD and AFD at the airport. The improved staffing at AUS and within contracted services has resulted in a return to the high level of service our passengers expect at the airport. This has driven an increase in the volume of commodities purchased for facility services as restrooms and airport facilities are cleaned at a more frequent interval. Additionally, the increase in passenger traffic that the airport has experienced post pandemic has also driven increased need for repair and maintenance of aging buildings and equipment (i.e. baggage handling system, passenger boarding bridges, Central Utility Plant equipment, airfield lighting, elevators/escalators). Finally, the Department continues to experience supply chain issues and inflationary pressures for some commodities which has further driven up commodity expenses. The transfer to the Airport Operating Reserve will increase as a result of the increase in operating expenses. The operating  reserve must maintain 2 months of airport operating expenses in compliance with bond covenants. Based on analysis of operating revenue realized year‐to‐date, Aviation is projecting additional revenue from beyond what was