Duluth PFC-10 Amendment Consultation Notice

This letter will serve as your official notice, in compliance with Federal Aviation Regulation Part 158.23(a), of the intent of the Duluth Airport Authority to amend the most recent PFC application, which was approved by the FAA on January 20, 2011 and identified as PFC number 11-10-C-00-DLH.  That original application identified a series of projects associated with the construction of a replacement passenger terminal facility.  However, it only identified PFC revenues that would be used to provide the 5% local share needed to match the then current and future 95% federal grants that were or would be issued by the FAA under the Airport Improvement Program (AIP).

This requested amendment updates all "terminal replacement" project costs, and further identifies all additional PFC-eligible costs not identified in the original application.  These additional PFC-eligible costs are described as follows:
   
                                                                                           Added PFC
1. Updated change order costs on completed elements of the replacement
passenger terminal building (Bid Packages 1A and 1B)          $    76,257
2. Costs for PFC eligible/but AIP in-eligible terminal building space.
This primarily relates to the space needed for the handling of outbound
baggage, and amounts to 7.88% of the terminal building floor space.                                                                               $1,973,032
3. Increase of local match from 5% to 10% on remaining future grant(s). 
This is the result of the recent congressional FAA reauthorization that
Increases the  local match on AIP Grants from 5% to 10%.      $   545,821
4. Finance charges on $3,990,000 local bonding to up-front eligible PFC
costs.  The local bonding is needed to alleviate cash-flow problems in
making timely construction payments before PFC revenues are
collected.                                                                           $   108,570
                                                                                        $2,703,680
This continuing PFC authority is being requested at the current $4.50 per enplaned revenue passenger, as permitted in the FAA Reauthorization Act passed this year.  Revenues collected will be used to provide (reimburse) the local share for the passenger terminal replacement project, which is fully described in the attachment.  All projects have been adequately justified and are eligible for use of PFC revenues because they all meet the provisions of 14 CFR Part 158.

An Air Carrier Consultation Meeting will be held Monday, August 27th at
10:30 AM in the Airport Authority conference room on the 3rd floor of the Duluth International Airport Terminal Building.

The following is basic information relevant to this PFC authorization request:

1. Description of Projects:  Attached
2. Additional Impose and Use Authority requested:        $2,703,680
    Approved in Original Application:                              $1,639,571
                                                         Total PFC:        $4,343,251
3. The PFC level will be $4.50 per revenue passenger
4. Request will be made to exempt non-scheduled Part 135 Carriers from PFC collection 
5. The original Charge Effective Date is:                   November 1, 2011
6. Estimated Amended Charge Expiration Date is:  September 30, 2019

Acknowledgement of notification and requests for additional information should be forwarded to me at this office.

Sincerely,

Tom Werner
Interim Executive Director

Enclosure

_________________________________________________________________
 
Intent to Impose and Use a Passenger Facility Charge (PFC)
Amendment to PFC No. 11-10-C-00-DLH
                     
Current and Proposed Projects (Amended):

1. Consultant services for the preparation of PFC 10 Letter of Intent and subsequent Amendment for the Duluth Airport Authority according to requirements found in 14 CFR Part 158:
Original Project Cost:  $      12,400   Amended Project Cost:  $   12,400      
Original PFC Share:    $      12,400      Amended PFC Share:  $   12,400
 
NOTE:  The remaining projects include (1) updated construction costs, (2) PFC eligible/AIP in-eligible costs, (3) increased local match from 5% to 10% on future grants, and (4) finance charges for local bonding.

2. Construct Replacement Passenger Terminal Building - Phase 2:
Structure and Enclosure (Bid Package 1A):
Original Project Cost:  $ 8,333,422  Amended Project Cost:  $ 9,168,412      
Original PFC Share:    $    346,868  Amended PFC Share:    $     205,986

3. Construct Replacement Passenger Terminal Building - Phase 2:
Terminal Building Structure and Enclosure (Bid Package 1B): 
Original Project Cost:  $ 5,070,676  Amended Project Cost:  $ 5,172,793      
Original PFC Share:    $    189,889  Amended PFC Share:     $    407,028

4. Construct Replacement Passenger Terminal Building - Phase 2:
Interior Systems (Bid Package 2A), Interior Finishes (Bid Package 2B), Interior Furnishings and Exterior Appendages (Proposed Bid Package 2C-two stage phasing):
Original Project Cost:  $25,631,417  Amended Project Cost: $31,848,324      
Original PFC Share:    $     793,706  Amended PFC Share:   $  2,904,363

5. Construct Replacement Passenger Terminal Building - Phase 2:
Demolish Old Terminal and Reconstruct and Expand Air Carrier Apron (Proposed Bid Package 2C-two stage phasing):
Original Project Cost:  $  7,906,000  Amended Project Cost: $ 8,941,573      
Original PFC Share:    $     296,708  Amended PFC Share:   $    813,474

                                         Amended Total Project Cost
                                                 (Projects 1 thru 7):         $55,143,502 

                                         Amended Total PFC
                                                    (Projects 1 thru 5):      $ 4,343,251