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<br />All of these lease rates appear to be in <br />line with airports of similar size and <br />capacities as San Marcos. Due to the <br />changing nature of the airport being <br />one of only two relievers for the Austin <br />area, facilities required to meet the <br />growing needs will require higher fee <br />structures. <br /> <br />The agricultural lease is put out for <br />competitive bidding. The lease is <br />signed for five years with a five year <br />option agreed upon by both parties. <br />The current lease also includes <br />provisions for the lessee to provide <br />services such as mowing and herbicide <br />application to portions of the airport <br />property. <br /> <br />Fuel flowage fees account for a large <br />amount of revenue for the airport each <br />year. Currently the airport collects four <br />percent of the wholesale cost of all <br />aircraft fuel delivered to the airport. <br /> <br />Other revenues include miscellaneous <br />revenues and interest income. <br /> <br />EXPENSES <br /> <br />Generalized operating expenses for the <br />San Marcos Municipal Airport include <br />personnel services, supplies, building <br />and equipment maintenance, utilities, <br />and other expenses. When considering <br />capital expenditures for airport <br />improvements, the airport has operated <br />with a negative income in the past. <br />Capital expenditures, however, can be <br />expected and should not be considered <br />when trying to identify operating <br />income/losses. These costs generally <br />improve the facility and are always <br />associated with the operation of an <br /> <br />6-10 <br /> <br />airport. By removing these capital <br />expenditures, the airport has operated <br />at a net profit each of the past five <br />years. <br /> <br />As indicated in Table 6B, airport <br />operating expenditures have steadily <br />increased over the previous five years. <br />Personnel expenses have been, and will <br />continue to be, the single largest cost <br />center for the airport. These costs <br />include salaries, insurance, and payroll <br />taxes. The "Indirect Cost - Fund 100" <br />comprises the second highest cost for <br />the airport budget. This is the amount <br />collected by the City to recover costs <br />associated with providing payroll, <br />billing, and accounting services to the <br />airport. After personnel and Fund 100 <br />costs there are a variety other smaller <br />costs including; supplies, maintenance, <br />and other charges. <br /> <br />FUTURE CASH FLOW <br /> <br />Revenues <br /> <br />Review of current charges for airport <br />tenants and businesses appears to be <br />adequate to cover airport operating <br />expenses. Existing and future leases <br />should always include provisions for the <br />adjustment of the lease amount due to <br />increases in the consumer price index <br />(CPD and property values. The typical <br />review period ranges up to five years. It <br />is recommended that all applicable <br />leases include a review of CPI and <br />property value every three years so that <br />necessary adjustments to lease rates <br />can be made. <br /> <br />It is anticipated that revenues will <br />continue to increase with aviation <br />