REPORT TO THE FINANCE COMMITTEE RECOMMENDED 2022 BUDGET

Slide 1RECOMMENDED 2022 BUDGET
Purpose The purpose of this
paper is to request that the Finance Committee approve and recommend that the Board of Directors approve the Recommended 2022 Budget
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As the aviation industry recovers from the COVID-19 pandemic, the Airports Authority continues to operate from a position of strength and respond effectively:
2019 - Pre-pandemic Strong Financial Position 10th consecutive year of enplanement growth as of 2019 Achieved $14.82 Cost per Enplanement (CPE) at IAD and $11.49 at DCA Sufficient construction funds on hand to cover new money needs Realized debt service coverage of 2.05x, surpassing the minimum debt service coverage ratio
of 1.25x
2020 - Pandemic Response and Management Enacted safety measures to protect passengers and staff and comply with federal, state and
local guidance Maintained stable rates and charges for airlines using $74.4 million in CARES Act funds
Background
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2020 - Pandemic Response and Management (continued) Constrained discretionary spending, limited hiring, and eliminated travel to reduce 2020
expenditures to at least 10% below budgeted expenses Deferred airline payments and extended financial relief to concessionaires Deferred $232.0 million in CCP project expenditures in 2020 and 2021 Reprogrammed $34.0 million in unexpended funds to invest in new and existing capital projects
2021 - Restoration and Recovery Established 2021 Budget at 12% lower than 2020 Budget Budgeted CPE of $18.63 at IAD and $19.98 at DCA for 2021 Optimizing the remaining $363.4 million in federal relief grant funds Recovering and expanding airlines, routes and passengers Finalizing remaining “Project Journey” and Metrorail Project construction Continuing conservative projections for financial planning
Background (continued)
Ensure public safety, security, and emergency preparedness Maintain financial flexibility and competitive Cost per Enplanement (CPE) Continue to invest in sustainability initiatives Prepare for future use and lease negotiations Pursue available infrastructure grants Initiate plans for future infrastructure developments at Dulles International and Reagan National Invest in our employees through development, Merit Pay programs and provide adequate funding
for health insurance and retirement plans
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Continue to reasonably estimate non-airline revenue sources and pursue new opportunities Continue Airport Master Plan effort to identify long-term vision for the Airports Limit new capital program additions and utilize existing projects to fund additional requirements Expand diversity outreach, inclusion, and social impact through leadership growth and
engagement Fund debt service, and satisfy bond covenants Maintain strong credit ratings resulting in lowest cost of capital
Institute All-Electronic Tolling on the Dulles Toll Road Transition Dulles Corridor Metrorail Project Phase 2 to WMATA
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3.77 5.62 9.63 10.30 10.50 10.70 10.90
3.58 3.72 3.86 3.99 4.18
0.99 1.91
3.10
4.68
7.9
12.2
19.5 21.0 21.6 22.2 22.8
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
DCA IAD International IAD Domestic
The Recommended 2022 Budget Anticipates Forecasted Activity Levels of at least 80.2% of 2019
7 * Includes both revenue and non-revenue passengers on domestic and international flights. Excludes enplanements on general aviation and military flights. Totals may not
sum due to rounding. Source: 2021AB Report of the Airport Consultant (ROAC).
Enplanements at DCA and IAD* (millions)
Actual 2.8% average increase 2015 - 2019
Forecast 4.0% average increase 2022 - 2026
In 2022, IAD enplanements are expected to grow to 80.4% of 2019 enplanements.
• In 2022, DCA enplanements are expected to grow to 80.6% of 2019 enplanements.
The Budget Includes Six Distinct Programs
Operation and Maintenance (O&M) Program
Capital, Operating and Maintenance Investment Program (COMIP)
Capital Construction Program (CCP)
Capital Improvement Program (CIP)
Aviation Enterprise Fund Dulles Corridor Enterprise Fund
1.
3.
2.2.
1.
3.
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Note: Totals may not sum due to rounding.
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Total Operating Program Budget Budget (dollars in millions) 2021 2022 Dollar Percent Reagan National 84.9$ 93.1$ 8.2$ 9.7% Dulles International 147.8 162.6 14.7 10.0% Consolidated Functions 92.5 96.9 4.4 4.7% Public Safety 58.6 58.0 (0.6) -0.9%
Sub-total Operating Expenses 383.8$ 410.5$ 26.7$ 7.0% Reagan National Debt Service* 87.0 85.3 (1.7) -1.9% Dulles International Debt Service** 245.1 228.2 (16.9) -6.9%
Sub-total Debt Service 332.1$ 313.5$ (18.6)$ -5.6% Total Operating Program 715.9$ 724.0$ $ 8.2 1.1%
*Net of budgeted Passenger Facility Charges (PFC's) of $16.3m in 2021 and $21.6m in 2022 for the Airfield and Project Journey. **Net of budgeted Passenger Facility Charges (PFC's) of $26.3m in 2021 and $39.0m in 2022 for the AeroTrain.
Change
Aviation Operation and Maintenance (O&M) Program (continued)
10Note: Totals may not sum due to rounding.
Total Operating Program Total Operating Expenses Operating Expenses 383.8$ 53.6% 410.5$ 56.7% Personnel Expenses 193.1$ 50.3% 192.0$ 46.8% Debt Service 332.1 46.4% 313.5 43.3% Non-Personnel Expenses 190.7 49.7% 218.6 53.2% Total 715.9$ 100.0% 724.0$ 100.0% Total 383.8$ 100.0% 410.5$ 100.0%
2021 Budget 2022 Budget 2021 Budget 2022 Budget
$383.8 $410.5
$332.1 $313.5
Operating Expenses Debt Service
Operating Expenses Comparison by Category (% of Total Operating Expenses)
2021 Budget 2022 Budget
O&M Personnel Compensation and Benefits
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Personnel Compensation 141,148.4$ 148,436.4$ 7,288.0$ 5.2%
Health Insurance 26,783.4 24,746.7 (2,036.7) -7.6%
Life Insurance 838.7 634.6 (204.1) -24.3%
Employer Taxes 9,989.5 10,411.7 422.2 4.2%
Retirement and Other Employee Benefits 14,324.7 7,732.0 (6,592.7) -46.0%
Sub-total Employee Benefits 51,936.3$ 43,525.0$ (8,411.3)$ -16.2%
Sub-total Personnel Compensation and Benefits 193,084.7$ 191,961.3$ (1,123.4)$ -0.6%
Change Budget to Budget
Personnel Compensation – $7.3 million
Employee Benefits – ($8.4 million) – As of September 2021, the General Employee and Police and Firefighter Pension Plans were
108.2 and 106.9 percent funded, respectively. Accordingly, there is a reduction in required employer funding levels for pension contributions for 2022
– Funding for the entire portion of 2022 retiree medical and life insurance benefits to be paid from the Voluntary Employees’ Beneficiary Association (VEBA) Trust
Key Drivers for 0.6% reduction in Personnel Compensation and Benefits from 2021 Budget
There are nine vacant positions eliminated in the 2022 Budget
Aviation Enterprise 2022 Positions
Office of Engineering Administrative Assistant II (1) Full-Time Career S17 Engineering Project Management System Technician (1) Full-Time Career S16
Office of Human Resources and Administrative Services Compensation and Benefits Specialist (1) Full-Time Career S20 Compensation and Benefits Technician Term (1) Non-Career Term H17
Office of General Counsel Deputy Vice President and Deputy General Counsel (1) Full-Time Career Deputy Vice President
Office of Supply Chain Management Deputy Vice President of Supplier Diversity (1) Full-Time Career Deputy Vice President
Reagan National Senior Project Manager - Strategic Airport Operations Initiatives (1) Full-Time Career S24 Secretary Temporary (1) Non-Career Term N15
Dulles International Physical Security Technician Temporary (1) Non-Career Term N14
Total Eliminated Vacant Positions (9)
Aviation Enterprise 2022 Positions (continued)
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There are nine additional positions in the 2022 Budget for a net zero increase
Aviation Enterprise Total # of Positions Position Type Position Grade
Office of Operations Support Emergency Preparedness Specialist 1 Full-Time Career S19
Office of Engineering Senior Vice President and Chief Capital Development Officer 1 Full-Time Career Senior Vice President Deputy Vice President for Real Estate Business Development 1 Full-Time Career Deputy Vice President Real Estate Specialist 1 Full-Time Career S22
Office of Human Resources and Administrative Services Vice President for Diversity, Inclusion and Social Impact 1 Full-Time Career Vice President Manager, Diversity Outreach 1 Full-Time Career S23 Manager, Social Impact 1 Full-Time Career S22 Employment Specialist 1 Full-Time Career S20
Office of Supply Chain Management Supplier Diversity Compliance Specialist 1 Full-Time Career S20
Total Additional Positions 9
O&M Non-Personnel Expenses
Reagan National 52,339.2$ 61,059.7$ 8,720.6$ 16.7%
Dulles International 94,059.8 109,050.5 14,990.7 15.9%
Consolidated Functions 42,000.2 45,454.7 3,454.5 8.2%
Public Safety 2,329.2 3,023.2 694.0 29.8%
Sub-total Non-Personnel Expenses 190,728.3$ 218,588.1$ 27,859.8$ 14.6%
Sub-total Personnel Compensation and Benefits 193,084.7$ 191,961.3$ (1,123.4)$ -0.6%
Total Operating Expenses 383,813.0$ 410,549.4$ 26,736.4$ 7.0%
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Key Drivers for 14.6% increase in Non-Personnel Expenses from 2021 Budget
Budget Budget
Public Parking and Employee Parking Recovered Operations, Living Wage 19,427.5$ 29,807.1$ 10,379.5$ 53.4%
Custodial Services Contract Escalation, Living Wage, Additional Facilities, COVID-19 Mitigation 24,558.5 29,539.6 4,981.1 20.3%
Other Airport Contract Services Contract Escalations including Living Wage 57,664.1 61,404.4 3,740.3 6.5%
Information Technology Services, Software as a Service, Other Services Additional Requirements 14,787.7 17,760.1 2,972.4 20.1%
Utilities and Fuel Supplies Increased Usage, Fuel Rate Increase 26,384.3 28,178.8 1,794.5 6.8%
Other Operating Expenses 47,906.2 51,898.2 3,992.0 8.3%
Total Aviation Enterprise Non-Personnel Expenses 190,728.3$ 218,588.1$ 27,859.8$ 14.6%
*Excludes Transfers, includes Signatory, Non-Signatory and General Aviation, **Includes Employee Parking ***The Recommended 2022 Budget anticipates the use of approximately $22.1 million ($18.1 million of principal and $4.0 million of estimated interest earnings)
Estimated Operating Revenues
2022 Estimated Revenues by Primary Source
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Total Operating Revenues Actual Budget Forecast Budget Percent Change Budget vs. Budget
Percent Change Budget vs. Forecast
(dollars in millions) 2020 2021 2021 2022 2022 vs. 2021 2022 vs. 2021
Airline* Rents 206.2$ 198.4$ 198.4$ 223.4$ 12.6% 12.6% Landing Fees 51.9 55.8 55.8 65.4 17.1% 17.1% International Arrival Fees 4.6 7.1 7.1 16.3 129.5% 129.5% Passenger Conveyance Fees 2.7 1.3 1.3 5.0 286.8% 286.8%
Airline Revenues 265.5$ 262.6$ 262.6$ 310.0$ 18.0% 18.0% Non-Airline
Concessions 143.7$ 201.1$ 205.8$ 290.3$ 44.4% 41.1% Rents 50.5 54.0 53.9 54.2 0.4% 0.6% Utilities 12.0 13.8 13.2 13.6 -1.3% 3.4% TSA Security Fees 0.9 0.9 0.9 0.9 0.3% 0.3% Other Revenue** 11.0 9.7 6.8 10.7 10.7% 57.8%
Sub-total Non-Airline Revenues 218.2$ 279.5$ 280.5$ 369.8$ 32.3% 31.8% Total Operating Revenues 483.7$ 542.1$ 543.2$ 679.8$ 25.4% 25.2%
CARES Act 74.4$ 154.7$ 98.7$ 22.5$ -85.4% -77.2% CRRSA Act - - 37.7 - 100.0% -100.0% ARP Act - - 29.4 81.4 100.0% 176.7%
Total Grant Revenues 74.4$ 154.7$ 165.9$ 104.0$ -32.8% -37.3% Western Lands*** - 39.0 4.0 22.1 -43.5% 100.0%
Total Operating/Grants Revenue and Western Lands 558.0$ 735.9$ 713.1$ 805.8$ 9.5% 13.0%
Application of Federal Relief Grants
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Reagan National general grants applied/used in 2020 (38,212,993)$ -$ -$ (38,212,993)$ Dulles International general grants applied/used in 2020 (36,158,200) - - (36,158,200) General grants remaining 154,732,071$ 37,710,383$ 145,858,148$ 338,300,602$
Reagan National general grants applied/used in 2021 -$ (18,581,343)$ (11,100,522)$ (29,681,865)$ Dulles International general grants applied/used in 2021 (98,698,846) (19,129,040) (18,332,866) (136,160,752)
General grants remaining 56,033,225$ -$ 116,424,760$ 172,457,985$
Reagan National general grants applied/used in 2022 -$ -$ (25,692,259)$ (25,692,259)$ Dulles International general grants applied/used in 2022 (22,538,181) - (55,749,708) (78,287,889)
General grants remaining 33,495,044$ -$ 34,982,793$ 68,477,837$
CONCESSION RELIEF -$ 5,028,712$ 20,114,851$ 25,143,563$
Reagan National concession relief applied in 2021 -$ (2,483,444)$ -$ (2,483,444)$ Dulles International concession relief applied in 2021 - (2,545,268) - (2,545,268)
Concession relief remaining -$ -$ 20,114,851$ 20,114,851$
Reagan National concession relief applied in 2022 -$ -$ (9,933,777)$ (9,933,777)$ Dulles International concession relief applied in 2022 - - (10,181,074) (10,181,074)
Concession relief remaining -$ -$ -$ -$
Parking 33.4%
Other concessions includes foreign currency, banking services, etc. Note: Totals may not sum due to rounding.
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Percent Change
2022 Budget
(dollars in millions) 2019 2020 2021 2021 2022 2022 vs. 2021 Percent of Total
Concessions Parking 126.3$ 39.1$ 60.2$ 75.7$ 96.9$ 61.1% 33.4% Rental Cars 46.2 21.8 38.5 36.1 45.3 17.7% 15.6% Ground Transportation 46.2 15.3 26.9 19.3 36.2 34.8% 12.5% Fixed Base Operator 32.4 25.1 33.1 33.1 36.1 9.3% 12.4% Food & Beverage 35.6 10.7 10.1 10.9 27.7 175.0% 9.6% Inflight Kitchen 19.4 9.7 7.8 9.9 13.9 78.0% 4.8% Advertising 14.6 8.2 14.2 8.9 12.0 -15.3% 4.1% Retail & News 14.8 4.8 3.6 4.4 11.9 226.0% 4.1% Other Concessions 8.1 4.5 3.5 3.9 4.1 14.5% 1.4% Duty Free 14.9 3.1 1.8 2.1 3.4 87.2% 1.2% Services 3.6 1.5 1.5 1.4 2.8 91.4% 1.0% Total Concessions 362.1$ 143.8$ 201.1$ 205.8$ 290.3$ 44.4% 100.0%
Enplanements (in millions) 24.3 7.9 13.5 12.2 19.5 45.2% Concessions per Enplanement 14.9$ 18.3$ 14.9$ 16.9$ 14.9$ -0.6%
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(dollars in thousands) Amount (dollars in thousands) Amount Reagan National New Authorization* -$ Reprogrammed From Existing Projects (12,455)$
Reprogrammed To Existing and New Projects 12,455 Total New Authorization -$ Total Net Reprogramming -$
Dulles International New Authorization 19,554$ Reprogrammed From Existing Projects (5,319)$
Reprogrammed To Existing Projects 5,319 Total New Authorization 19,554$ Total Net Reprogramming -$ Total Aviation Enterprise COMIP New Authorization 19,554$ Total Aviation Enterprise COMIP Net Reprogramming -$
2022 New Authorization 2022 Reprogrammings
*Reagan National COMIP additional requirements to be funded from existing projects through reprogrammings.
Aviation Capital Construction Program (CCP) Summary
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2022 New Authorization (dollars in thousands) Amount Bonds Grants/Other Reagan National 108,231$ 43,731$ 64,500$ Dulles International 63,628 53,698 9,930 Total Aviation Enterprise CCP New Authorization 171,859$ 97,429$ 74,430$
Total Aviation Enterprise CCP - Reductions to Current Program Levels (53,790) (46,305) (7,485)
Net Change to the CCP 118,069$ 51,124$ 66,945$
Estimated Funding
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The Recommended 2022 Budget Achieves an Estimated Debt Service Coverage of 1.81x at Dulles International and 2.04x at Reagan National
*Bond indenture basis
2020 2021 2021 2022
Reagan National 1.74x 1.31x 2.08x 2.04x Dulles International 1.32x 1.61x 1.57x 1.81x Combined 1.40x 1.49x 1.74x 1.87x
$26.55
$23.67
$21.00
IAD Actual and Budget DCA Actual and Budget
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The Recommended 2022 Budget Achieves an Estimated CPE of $18.30 for Dulles International and $12.96 for Reagan National
Actual Budget
24
Total Operating Program Budget Budget (dollars in millions) 2021 2022 Dollar Percent Toll Operating Revenue* 150.2$ 168.5$ 18.3$ 12.2% Non-Operating Revenue 2.5 1.0 (1.6) -62.7%
Total Revenue 152.8$ 169.5$ 16.7$ 11.0% Operating Expenses 26.6 31.5 4.9 18.3% Debt Service for Metrorail Project and Financing Fees** 104.8 115.8 11.1 10.6%
Total Operating Program 131.4$ 147.3$ 16.0$ 12.1% Reserves 21.4 22.1 0.8 3.6%
Total Operating Program including Reserves 152.8$ 169.5$ 16.7$ 11.0% Remaining Dulles Toll Road Revenue Fund - - - 0.0%
*Source: Dulles Toll Road Short-Term Traffic and Revenue Forecast through 2025. **Net of federal subsidy payments and $35.5m of unrestricted reserves used to fund a portion of debt service in 2022.
Change
25
There are no new positions requested for the 2022 Budget
There are seven vacant positions eliminated in the 2022 Budget
Dulles Corridor Enterprise Total # of Positions Position Type Position Grade
Dulles Toll Road Structural Maintenance Mechanic (1) Career T18 Toll Road Operations Assistant (3) Career T15
Dulles Metrorail Project Senior Vice President for Dulles Corridor Metrorail Project (1) Career Senior Vice President Administrative Assistant II (1) Career S17 Contract Compliance Specialist (1) Career S20
Total Eliminated Vacant Positions (7)
Dulles Corridor Operation and Maintenance (O&M) Program (continued)
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Total Operating Program Total Operating Expenses Operating Expenses 26.6$ 17.4% 31.5$ 18.6% Personnel Expenses 2.9$ 10.9% 3.0$ 9.4%
126.1 82.6% 138.0 81.4% Non-Personnel Expenses 23.7 89.1% 28.6 90.6%
Total 152.8$ 100.0% 169.5$ 100.0% Total 26.6$ 100.0% 31.5$ 100.0% *Net of funds commited to pay debt service requirements
2021 Budget 2022 Budget 2021 Budget 2022 Budget
Debt Service, Financing Fees and Reserves*
$26.6 $31.5
$126.1 $138.0
Operating Expenses vs. Debt Service, Financing Fees and Reserves (in millions)
Operating Expenses Debt Service, Financing Fees, Reserves
10.9%
61.2%
Allocated Cost
Services – $4.5 million – Increased estimates for Electronic Toll Collection fees due to projected increase in toll road
transactions and violation processing requirements – Contract escalation for environmental monitoring services
Insurance and Claims – $294 thousand increase based on current actuarial estimates
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Estimated Dulles Toll Road Rate Stabilization Reserve Utilization for Debt Service
The Airports Authority will utilize Rate Stabilization Reserves to fund a portion of Dulles Toll Road debt service requirements for 2022
Budget Budget
Debt Service* 146,753.2$ 151,325.7$ 4,572.5$ 3.1%
Less: Reserves Committed to Debt Service (42,000) (35,500.0) 6,500.0 -15.5%
Total 104,753.2$ 115,825.7$ 11,072.5$ 10.6% *Net of federal subsidy payments.
Dulles Corridor Reprogramming Summary There is no new program authorization. Previously approved but not expended projects have
been reprogrammed to fund additional requirements
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(dollars in thousands) Amount Renewal and Replacement (R&R) Program Reprogrammed From Existing Projects (3,341)$ Reprogrammed To Existing Projects 3,341 Total Dulles Corridor Enterprise R&R Net Reprogramming -$
Capital Improvement Program (CIP) Reprogrammed From Existing Projects (3,871)$ Reprogrammed To Existing Projects 3,871 Total Dulles Corridor Enterprise CIP Net Reprogramming -$
2022 Reprogramming
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Millions Total % of Total Change Total
Federal 900$ -$ 900$ 15.6% 900$
Commonwealth of Virginia - Federal Funds (2) 75 - 75 1.3% 11.0 86
Commonwealth of Virginia - State Funds (3) 177 323 500 8.7% 500
Northern Virginia Transportation Authority (4) - - 0.0% 60.0 60
Fairfax County 400 527 927 16.1% (11.4) 916
Loudoun County 276 276 4.8% (3.4) 273
MWAA (Aviation Funds) 236 236 4.1% (2.9) 233
MWAA (Dulles Toll Road) 1,430 1,415 2,845 49.4% (53.3) 2,792
TOTAL SOURCES OF FUNDS 2,982$ 2,778$ 5,760$ 100.0% -$ 5,760$
Fixed Amount Fixed Percentage of Total Cost
Residual
RAIL PROJECT BUDGET after NVTA and CMAQ
(1) Phase 2 parking garages are to be funded directly by the Counties and are not included in the Total Metrorail Project Budget. (2) $75 million Section 5307 Surface Transportation Program grant and $11 million Congestion Mitigation and Air Quality Improvement (CMAQ) Program funds. (3) Does not include $150 million from the Commonwealth that is being used to pay interest on DTR Revenue Bonds. (4) Grant from Northern Virginia Transportation Authority (NVTA) can only be used to pay or reimburse capital costs for Innovation Center Metrorail Station.
Key Takeaways and Challenges
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Continue to manage rates and charges and cost per enplanement to incentivize rapid recovery Impact of passenger activity levels and achieving current recovery assumptions,
airline costs challenges
Increases in expenses to accommodate passenger activity, recover operations, new facilities, contract escalations, living wage, labor costs, and inflationary adjustments
Nature of certain operating expense requirements to operate the Airports as well as supply chain constraints
Utilization of CARES, CRRSA, ARP Act grant revenues and Western Lands funding
The Recommended 2022 Budget anticipates the application of significant portions of remaining federal relief funding. This impacts the availability of these grants beyond 2022
Growth in non-airline revenues consistent with passenger activity levels Uncertainty in regards to future concessions waivers during the course of 2022 and whether passenger activity growth projections will materialize
Investing in employees through Merit Pay Program and Performance Management Partnership, as well as health and retirement benefits With turnover and retirement on the rise, the competitive workforce environment
poses significant challenges in retaining employees
Initiate plans for major facility investments Allocation of the Infrastructure Investment and Jobs Act and high level of debt service on existing infrastructure at Dulles International
Increases to Dulles Toll Road operating expenses from violations processing while transitioning to All-Electronic Tolling
Budget limitations on the Dulles Toll Road O&M, R&R, and CIP budgets to maintain reserve balances and meet debt service obligations and debt service coverage requirements
Key Takeaways Challenges
October 19 2022 Budget Board Workshop and Draft 2022 Budget
November 17 2022 Recommended Budget Presented to Finance Committee
December 15 Board Approval of 2022 Budget
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Recommendation
That the Finance Committee approve and recommend that the Board of Directors approve the Recommended 2022 Budget
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Appendix
Detailed Level Recommended 2022 Budget Follows (The full Recommended 2022 Budget Document is included in Board materials)
Funding Sources for Aviation Enterprise Fund Budgets
*Funds held by the Trustee.
• Bond Funds* • Passenger Facility Charges • Grants
Aviation CCP
service coverage) • Non-Airline Revenue
Aviation O&M (including debt service payments)
Aviation Operation and Maintenance (O&M) Program Aviation Capital, Operating and Maintenance Investment Program (COMIP)
Aviation Capital Construction Program (CCP)
Aviation COMIP MWAA’s share of Net Remaining
Revenue (NRR) Funds COMIP
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Contract Services 23,415.1$ 29,745.7$ 6,330.5$ 27.0%
Repairs and Maintenance Services 11,422.6 12,552.7 1,130.1 9.9%
Utilities 9,266.9 9,789.4 522.5 5.6%
Professional Services 1,471.0 1,915.0 443.9 30.2%
Fuel Supplies 401.5 723.0 321.5 80.1%
Non-Capital Equipment 104.3 246.9 142.6 136.7%
Environmental Services 1,487.8 1,515.6 27.8 1.9%
Travel, Lease and Rental 1,200.3 1,207.4 7.1 0.6%
Training, Certifications and Other Services 191.2 185.0 (6.2) -3.3%
Snow and Ice Control and Other Supplies 3,378.4 3,179.1 (199.3) -5.9%
Total Reagan National Non-Personnel Expenses 52,339.2$ 61,059.7$ 8,720.6$ 16.7%
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Contract Services 32,149.0$ 42,807.3$ 10,658.3$ 33.2%
Repairs and Maintenance Services 29,168.3 31,956.6 2,788.4 9.6%
Fuel Supplies 1,383.8 1,877.2 493.4 35.7%
Utilities 16,134.5 16,489.7 355.3 2.2%
Training, Certifications and Other Services 161.2 351.0 189.7 117.7%
Professional Services 2,315.0 2,503.2 188.1 8.1%
Environmental Services 3,572.2 3,695.8 123.6 3.5%
Snow and Ice Control and Other Supplies 8,968.5 9,004.9 36.3 0.4%
Travel, Lease and Rental 134.9 130.2 (4.7) -3.5%
Total Dulles International Non-Personnel Expenses 94,059.8$ 109,050.5$ 14,990.7$ 15.9%
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(dollars in thousands) 2021 2022 Dollar Percent
Information Technology Services, Systems, Software as a Service (SaaS) and Other Support Services 17,002.7$ 20,422.0$ 3,419.3$ 20.1%
Advertising and Management Support Services 1,933.9 2,494.7 560.8 29.0%
Travel 156.1 277.1 121.0 77.5%
Federal Lease Payment 6,108.7 6,162.5 53.8 0.9%
New Corporate Office Building Lease 3,727.2 3,634.8 (92.4) -2.5%
Insurance Premiums and Claims 7,916.9 7,809.9 (106.9) -1.4%
Administrative Supplies and Other Expenses 5,154.8 4,653.8 (501.0) -9.7%
Total Consolidated Functions Non-Personnel Expenses 42,000.2$ 45,454.7$ 3,454.5$ 8.2%
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Contract and Other Services 1,136.9$ 1,386.1$ 249.2$ 21.9%
Arsenal Supplies, Protective Clothing, Uniforms and Other Supplies 1,120.1 1,365.6 245.5 21.9%
Travel, Lease and Rental 42.5 52.9 10.4 24.4%
Total Public Safety Non-Personnel Expenses 2,329.2$ 3,023.2$ 694.0$ 29.8%
(dollars in thousands) Amount Amount Reprogrammed From DCA Rate Stabilization Reserve Program (8,024)$ 2019 PSD-CF Capital Equipment - Vehicles (DCA/IAD) (53)$ DCA Roadway Perimeter Security (2,300) Support Services Capital Equipment - Copiers (DCA/IAD) (38) 2017 PSD-DCA Capital Equipment - ARFF Vehicle (625) Terminal B/C Club Mechanical Rooms Sealant (28) DCA Airport Environmental Decision Tool Noise Contours (250) 2017 DCA Capital Equipment - Flatbed Plotter (20) Emergency Operations Center Audio/Video System Replacement (250) 2018 PSD-DCA Capital Equipment - FRD Rescue Boat and Trailer (18) DCA Public Wi-Fi Cellular Services Business Study and Program Management (177) Industrial Waste Drying Bed Upgrades (17) DCA Roadway Traffic Counting Stations (125) 2018 PSD-DCA Capital Equipment - FRD Sport Utility Vehicles (12) 2017 Support Services Capital Equipment - COB Copiers (124) 2019 DCA Capital Equipment - Copiers (10) 2017 DCA Capital Equipment - Vehicles (107) 2020 PSD-CF Capital Equipment - Laser Scanner (DCA/IAD) (8) 2020 DCA Capital Equipment - Public Parking Vehicles (75) 2019 CF Capital Equipment - Postage Meter and Copiers (DCA/IAD) (6) Replacement of Firehouse 301 Appliances (69) Terminal B/C Elevator Door Replacement (3) 2019 PSD-DCA Capital Equipment - Vehicles (59) 2019 PSD-DCA Capital Equipment - Power Load Cot Fastener System (2) 2018 PSD-DCA Capital Equipment - Police (55) Terminal B/C Tunnel Door Replacement (1) Total Reprogrammed From (12,455)$
Reprogrammed To DCA COMIP Consolidation Reserve Program 4,431$ Facility and Infrastructure Inspection Program (DCA/IAD) 250$ DCA Public Parking Revenue Control System Replacement 1,500 Repair Baggage Belt System 250 2022 PSD-DCA Capital Equipment - Fire Vehicles 855 Infrastructure Life Cycle Management (DCA/IAD) 248 Terminal A/B/C Baggage Claim Carousel Rehabilitation and Replacement 800 Federal Highway Bridge and Sign Structure Inspections 200 Central Plant High Temperature Hot Water Boiler Retubing 600 2022 PSD-CF Capital Equipment - Police Vehicles 174 DCA Airfield Pavement Maintenance and Joint Sealing Repairs 500 2022 PSD-DCA Capital Equipment - Police Vehicles 110 Garage A Glass Block Replacement 500 Fire Hydrants Replacement 100 Passenger Loading Bridge Signage Replacement 500 Enterprise Asset Management System (DCA/IAD) 95 Ground Power Unit Replacement 450 2022 DCA Capital Equipment - Public Parking Vehicles 80 Deluge Valve Replacement 400 2022 CF Capital Equipment - Copiers and Other Equipment (DCA/IAD) 37 DCA Environmental Compliance Program 350 2022 PSD-CF Capital Equipment - Fire Vehicles 25 Total Reprogrammed To 12,455$ Net Reprogramming -$
Aviation COMIP Reprogrammings – Dulles International
42 Note: Totals may not sum due to rounding.
(dollars in thousands) Amount Amount Reprogrammed From Services and Supplies Reserve Program (1,000)$ Live Fire Training Facility Water Lateral, Hydrant and Cistern Connection (50)$ Metes and Bounds Survey (750) Support Services Capital Equipment - Copiers (DCA/IAD) (38) Audio/Visual Paging System Upgrade (726) Dynamic Zone Sign Installation for Access Highway (37) Airline Space Relocation (500) 2020 PSD-IAD Capital Equipment - Fire Vehicles (33) IAD Revenue and Branding Opportunities (250) Security Holdroom Furniture (29) Rehabilitation of Interior Finishes of Mobile Lounge Docks (200) 2019 PSD-IAD Capital Equipment - Vehicles (26) Autopilot Drive Restoration Design (190) 2018 PSD-IAD Capital Equipment - FRD Sport Utility Vehicles and Pickup Truck (17) Metal Shop and Body Shop Air Condition Units (150) 2018 PSD-IAD Capital Equipment - FRD Foam Trailer (14) Taxilane A, B and C Trench Drain and Concrete Repairs (143) 2018 PSD-IAD Capital Equipment - FRD Medic Unit (14) IAD Roadway Traffic Counting Stations (125) 2019 IAD Capital Equipment - Postage Meter and Copiers (13) Ramp Tower Voice Recording System (124) Shop 3 Equipment Maintenance Building Expansion (11) IAD Public Wi-Fi and Cellular Services Business Study and Program Management (118) 2020 PSD-CF Capital Equipment - Laser Scanner (DCA/IAD) (8) Hardstand Permanent Power at Gate R-28 (100) 2007 IAD Capital Equipment and Facility Repairs (7)
Main Terminal Ticket Level Frosted Glass Panel Closets (100) Concourse A, Z Gates and C-30 Bus Stop Ultraviolet Infrared Fire Detection Retro- Commissioning (7)
Crosswalk Lighting System (100) Dulles East Building Rehabilitation Phase 1 (6) Guest Assistance Counters in the Ground Transportation Counters (100) Police Station Road Access (6) IAD Roadway Perimeter Security (100) 2019 CF Capital Equipment - Postage Meter and Copiers (DCA/IAD) (6) 2020 PSD-IAD Capital Equipment - Police Vehicles (93) Main Terminal and Concourse A/B Building Lighting Control System Replacement (2) 2018 PSD-IAD Capital Equipment - Police (72) Chiller Overhaul in the Utility Building (0) 2019 PSD-CF Capital Equipment - Vehicles (DCA/IAD) (53) Total Reprogrammed From (5,319)$
Reprogrammed To IAD COMIP Consolidation Reserve Program 5,069$ Emergency Operations Center Audio/Video System Replacement 250 Total Reprogrammed To 5,319$ Net Reprogramming -$
Aviation COMIP New Authorization – Dulles International
43
(dollars in thousands) Amount Amount IAD Airfield Pavement Maintenance and Joint Sealing Repairs 2,400$ Infrastructure Life Cycle Management (DCA/IAD) 248$
Baggage Handling System Rehabilitation Program 2,383 Lightning Detection and Alerting System 220
Utility Building Cooling Tower Restoration 2,212 2022 PSD-IAD Capital Equipment - Police Vehicles 220
Inspection, Rehabilitation and Repair of Access Highway Bridges 1,500 Purple Lot Access Control System Replacement 200
Elevators, Escalators and Moving Walkway Rehabilitation 1,500 2022 PSD-CF Capital Equipment - Police Vehicles 174
Security Improvements Access Control (ISTAR and Biometrics) 1,000 Carpet Replacement Program 156
Condenser Pumps Replacement at Utility Building 900 Aviation Drive Buildings Duct Cleaning 150
Inner and Outer Perimeter Security Fencing Enhancements 750 Fire Station Compressor Relocation 130
Manhole 6 High Temperature Hot Water System Rehabilitation 650 Marriott Lake Guardrail Installation 130
2022 PSD-IAD Capital Equipment - Fire Vehicles 520 Installation of AVI Readers 120
Security/Access System Enhancements 500 Daily Garage 2 Emergency Generator Back-up System and Emergency Light Replacement 120
Reroofing of Buildings 500 HVAC Improvements for Shop 2 100
Automated People Mover Tunnels Ventilation Fan Replacement 400 Elevated Taxiway Light Base Repairs 100
IAD Environmental Compliance Program 395 Enterprise Asset Management System (DCA/IAD) 95
Permanent Modified Egress in International Arrivals Building 370 2022 IAD Capital Equipment - Other Equipment 70
Automatic Valve and Actuator Replacement 350 Gate Management System 50
Fire Station Controller Replacement 300 Hourly Parking Electrical Service Replacements 50
2022 IAD Capital Equipment - Public Parking Vehicles 280 2022 CF Capital Equipment - Copiers and Other Equipment (DCA/IAD) 37
Facility and Infrastructure Inspection Program (DCA/IAD) 250 2022 PSD-CF Capital Equipment - Fire Vehicles 25 Total COMIP New Authorization - Dulles International 19,554$
Aviation Capital Construction Program (CCP) Reduction to Current Program Levels
44
(dollars in thousands) Amount Bonds Grants/Other Reagan National Campus Utility Distribution and Central Plant Improvements Phase 2 (4,000)$ (4,000)$ -$ Switchgear Upgrade (1,200) (1,200) - Parking Revenue Control System Replacement (400) (400) - Sub-total Reagan National (5,600)$ (5,600)$ -$
Dulles International IAB Capacity Enhancements (26,447) (26,447) - Concourse C/D Lounge Shell Construction (6,350) (6,350) - 2015 Airfield Pavement Panel Replacement (6,000) (1,500) (4,500) Replace Telecommunications Duct bank at Autopilot Drive (4,089) (4,089) - Runway 30 Hold Apron Drainage Improvements (3,980) (995) (2,985) Main Terminal Ticket Counter Capacity Expansion (1,324) (1,324) - Sub-total Dulles International (48,190)$ (40,705)$ (7,485)$ Total Aviation Enterprise CCP - Reduction to Current Program Levels (53,790)$ (46,305)$ (7,485)$
Estimated Funding
45
(dollars in thousands) Amount Bonds Grants/Other Reagan National Airfield Pavement Rehabilitation Program 86,000$ 21,500$ 64,500$ Replace Emergency Generators 7,100 7,100 - DCA Sustainability Program 5,000 5,000 - Hangar 5 Fire Protection System Upgrade 4,500 4,500 - Perimeter Security Fence 2,900 2,900 - DCA Infrastructure Modernization and Integration Services 2,731 2,731 - Sub-total Reagan National 108,231$ 43,731$ 64,500$
Estimated Funding
46Note: Totals may not sum due to rounding.
(dollars in thousands) Amount Bonds Grants/Other
Dulles International Airfield Stormwater Sewer Reconstruction 10,279 10,279 - Air Operations Area Perimeter and Fence Line Enhancements 9,100 9,100 - Rental Car Site Improvements 7,150 - 7,150 44965 Aviation Drive Commercial Leasehold Improvements 6,458 6,458 - Airfield Signage Replacement 5,750 5,750 - IAD Infrastructure Modernization and Integration Services 5,409 5,409 - IAD Sustainability Program 5,000 5,000 - Electrical 500MCM Distribution Feeder Replacement 4,700 4,700 - Concourse A Replacement 4,000 4,000 - Western Lands Perimeter Road Fencing and Security Enhancements 2,780 - 2,780 44965 Aviation Drive Building Rehabilitation 1,831 1,831 - High Temperature Hot Water Generators Replacement 1,171 1,171 - Sub-total Dulles International 63,628$ 53,698$ 9,930$
Sub-total Reagan National 108,231 43,731 64,500 Total Aviation Enterprise CCP New Authorization 171,859$ 97,429$ 74,430$
Total Aviation Enterprise CCP - Reductions to Current Program Levels (53,790) (46,305) (7,485)
Net Change to the CCP 118,069$ 51,124$ 66,945$
Estimated Funding
The Recommended 2022 Budget Includes Notable Capital Investments in Sustainability Initiatives
Dominion Solar Farm: Negotiations are currently underway between the Airports Authority and Dominion Virginia Power for the development of a solar farm at Dulles International. It is anticipated that a draft agreement will be presented to the Board later this year, and if approved, may become effective in 2022. Because an Agreement is not currently approved by the Board, any anticipated revenue or in-kind contribution, for Dominion's use of the land for a solar farm is not included in this Draft 2022 Budget.
Electric Buses: In May 2021, the Airports Authority was awarded $4.0 million in Clean Air Communities Program funding by the Virginia Department of Environment Quality (DEQ) for the purchase of five electric buses at Dulles International. This funding is part of the capital program budget for 2022.
(dollars in thousands) Amount Description Capital, Operating and Maintenance Investment Program (COMIP)
DCA and IAD Environmental Compliance Program 745$ To continue the environmental management program to maintain compliance with Federal and State Regulations
2022 Public Safety Vehicle Replacements 743 14 total replacements. 1 Hybrid Polaris Ranger, 10 Hybrid Sport Utility Vehicles, 1 Hybrid Pickup, 2 Electric Sport Utility Vehicles
Sub-total COMIP 1,488$
IAD Sustainability Program 5,000 Sub-total CCP 10,000$ Total Aviation Enterprise 11,488$
Funding for sustainability and environmental projects as identified. Some examples to include conversion to LED lighting, replacing aging utilities, life cycle replacement of low efficiency HVAC systems.
Funding Sources for Dulles Corridor Enterprise Fund Budgets
*Funds held by Trustee.
Dulles Corridor Operation and Maintenance (O&M) Program Dulles Corridor Renewal and Replacement (R&R) Program
Dulles Corridor Capital Improvement Program (CIP)
Remaining Toll Revenue Funds • Required Reserves • R&R Program • CIP Program
Dulles Corridor O&M (including debt service payments)
Dulles Corridor CIP • Metrorail • Other Corridor Improvements
• Bond Funds* • Grants (federal, state and local) • Funding Partners • Toll Road Revenue
Toll Road Revenue • Tolls
49
(dollars in thousands) Amount Reprogrammed From Dulles Toll Road Pavement Repairs (1,815)$ Storm Sewer and Stormwater Management (426) Sign and Roadway Lighting Rehabilitation (313) Federal Highways Bridge Inspection (213) Roadway Sign Replacement and Rehabilitation (200) Guardrail, Traffic Barrier and Fencing Rehabilitation (182) Attenuator Rehabilitation (118) Bridge Structural Management System Program (73) Total Reprogrammed From (3,341)$
Reprogrammed To Bridges, Joints, Bearings, Structures, and Canopy Repairs 2,464$ Repair Of Sound Walls 375 Culvert and Erosion Repairs 310 Utility Rehabilitation 94 Landscape Maintenance 68 Administration Building/Toll Booths Structural Repair and Rehabilitation 30 Total Reprogrammed To 3,341$ Net Reprogramming -$
Dulles Corridor Capital Improvement Program (CIP)
50
(dollars in thousands) Amount Reprogrammed From Rehabilitation of Toll Road (2,809)$ Life Cycle Cost Report Updates (677) Ortho Mapping (317) Geographic Information System (68) Total Reprogrammed From (3,871)$
Reprogrammed To Toll System Ramp Improvements 2,731$ General Planning Studies 1,122 Outreach Program 18 Total Reprogrammed To 3,871$ Net Reprogramming -$
2022 Recommended
For Consideration by the Finance Committee November 2021
The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the Metropolitan Washington Airports Authority, District of Columbia for its Annual Budget for the fiscal year beginning January 1, 2020. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as a financial plan, as an operations guide, and as a communications device. The award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award.
2022 BUDGET JANUARY 1 - DECEMBER 31, 2022
BOARD OF DIRECTORS as of November 1, 2021
William E. Sudow, Chairperson Thorn Pozen, Vice Chairperson
Warner H. Session Joslyn N. Williams
The Honorable Katherine K. Hanley The Honorable J. Walter Tejada
Mark E. Uncapher The Honorable Robert W. Lazaro, Jr.
The Honorable David G. Speck Albert J. Dwoskin
John A. Braun Judith N. Batty
Mamie W. Mallory Timothy Poole
EXECUTIVE STAFF
John E. Potter, President and Chief Executive Officer Chryssa Westerlund, Acting Executive Vice President and Chief Revenue Officer
Monica R. Hargrove, Vice President and Secretary Andrew T. Rountree, CPA, Senior Vice President for Finance and Chief Financial Officer
FINANCE OFFICE STAFF George Kangha, Budget Manager
Erin Flanagan, Budget Analyst Eric Hutcherson, Budget Analyst
Teri Arnold, Rates and Charges Program Manager
INTENTIONALLY LEFT BLANK
Adopting the 2022 Budget for the Metropolitan Washington Airports Authority
WHEREAS, The Finance Committee has provided direction to staff regarding major challenges that the 2022 Budget needs to address;
WHEREAS, The Finance Committee received the summary level draft 2022 Budget, prepared by staff, in October 2021;
WHEREAS, The Finance Committee considered the recommended 2022 Budget, prepared by staff, at its November 2021 meeting and recommended its approval to the Board of Directors;
WHEREAS, The recommended budget has been developed in accordance with the
terms and conditions contained within the Airport Use Agreement and Premises Lease that became effective January 1, 2015, as amended by the First and Second Universal Amendments;
WHEREAS, In order to continue to mitigate the financial impact of the COVID-19
pandemic, the Metropolitan Washington Airports Authority (Airports Authority) plans to apply an estimated $22,538,000 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding and $81,442,000 of the American Rescue Plan (ARP) Act in 2022;
WHEREAS, In order to assist the airlines serving Ronald Reagan Washington National Airport (Reagan National) and Washington Dulles International Airport (Dulles International) by reducing the level of debt service included in the 2022 airline rates and charges, the recommended 2022 Budget provides (a) for the use of $21,600,000 of Passenger Facility Charge revenues to pay debt service related to capital projects at Reagan National; (b) for the use of $39,000,000 of Passenger Facility Charge revenues to pay debt service attributable to the AeroTrain at Dulles International; and (c) for a transfer to Dulles International of $19,680,000 from the Airports Authority’s share of the 2021 Net Remaining Revenue generated at Reagan National;
WHEREAS, In order to assist the airlines serving Dulles International, the Second
Universal Amendment to the 2015 Airport Use Agreement and Premises Lease with the airlines at Dulles International provides that any or all Western Lands Accounts Withdrawals, including Interest Earnings (as defined in the amendment) realized on investment assets held in the Western Lands account (established pursuant to the amendment) may only be used to reduce the costs that the Airports Authority would otherwise include in calculating rentals, fees and charges assessed to airlines operating at Dulles International, and the recommended 2022 Budget includes $4,000,000 in estimated interest earnings and $18,050,000 from the Western Lands Account to be used in this manner; WHEREAS, The recommended 2022 Budget provides for a reasonable level of expenditures to be made or to accrue in 2022 (a) from the Aviation Enterprise Fund, to
operate Reagan National and Dulles International Airports, to repair and maintain the facilities at these Airports, and to undertake needed capital improvements at the Airports, and (b) from the Dulles Corridor Enterprise Fund, to operate the Dulles Toll Road, to repair and maintain Toll Road facilities, to undertake capital improvements for the betterment of the Toll Road and otherwise within the Dulles Corridor, and to finalize construction of the Dulles Corridor Metrorail Project, and further provides that there will be sufficient revenues in 2022 to cover these expenditures; now, therefore, be it RESOLVED, That the 2022 Budget, as presented at the December 2021 meeting of the Board of Directors, is hereby adopted; 2. That the following sums, totaling $1,213,021,000 are hereby authorized to be expended from the Aviation Enterprise Fund in 2022 for the operation, maintenance, care, improvement and protection of Reagan National and Dulles International Airports:
(a) $724,048,000 for the Aviation Operation and Maintenance Program, consisting of $410,549,000 for operating expenses and $313,499,000 for debt service after the use of $21,600,000 and $39,000,000 of Passenger Facility Charge revenues at Reagan National and Dulles International respectively to pay debt service;
(b) $126,358,000 for the Aviation Capital, Operating and Maintenance
Investment Program (COMIP); (c) $362,614,000 for the Aviation Capital Construction Program (CCP);
3. That the following sums, totaling $453,882,000 are hereby authorized to be expended from the Dulles Corridor Enterprise Fund in 2022 for the operation, maintenance, care, improvement and protection of the Dulles Toll Road and for the planning, design and construction of the Dulles Corridor Metrorail Project:
(a) $147,346,000 for the Dulles Corridor Operation and Maintenance
Program, consisting of $31,521,000 for operating expenses and $115,826,000 for debt service and financing fees after the use of $35,500,000 of unrestricted reserves to pay debt service;
(b) $7,157,000 for the Dulles Corridor Renewal and Replacement (R&R)
Program; (c) $277,231,000 for the Dulles Corridor Capital Improvement Program (CIP),
consisting of $23,626,000 for Dulles Corridor Improvements and $253,604,000 for the Dulles Corridor Rail Project; and
(d) $22,148,000 to be transferred to reserve accounts within the Dulles
Corridor Enterprise Fund, as identified in the 2022 Budget; 4. That any revenue received or accrued by the Dulles Corridor Enterprise in 2022 that, at the conclusion of 2022, exceeds the expenditures, obligations and transfers to a
reserve account pursuant to this Resolution or to a reserve fund or account under either the Master Indenture of Trust Securing Dulles Toll Road Revenue Bonds, dated as of August 1, 2009 (Dulles Toll Road Indenture), made in 2022 (collectively, the 2022 Expenditures, Obligations and Transfers), shall be transferred to the Dulles Corridor Reserve and Toll Rate Stabilization Fund (DCE Reserve) which is maintained pursuant to the Dulles Toll Road Indenture; and further that, in the event the revenue received and accrued by the Dulles Corridor Enterprise in 2022 is less than the 2022 Expenditures, Obligations and Transfers, a sum equal to the amount of such revenue shortfall shall, at the conclusion of 2022, be applied to reduce the amount budgeted to the DCE Reserve and/or withdrawn from unrestricted reserves;
5. That the President and Chief Executive Officer is hereby authorized to reprogram expenditures within each of the six Programs identified in this Resolution, so long as the total expenditures within any such Program in 2022 do not exceed the level authorized herein; provided, that any such reprogramming which increases or decreases an expenditure item or project in the COMIP, CCP, R&R, or CIP by more than $10,000,000 in 2022 shall be submitted to the Finance Committee and the Board of Directors for approval before it may take effect. All other material reprogramming of expenditures within any of the six Programs shall be reported to the Finance Committee on a quarterly basis, no later than two months after the end of each quarter at the May, August, November and February Committee meetings, and shall include year-to-date cumulative material budget reprogramming equal or greater than the following:
(a) Aviation Operation and Maintenance Program ($250,000);
(b) Aviation Capital, Operating and Maintenance Investment Program
($500,000 or any new project, regardless of dollar amount);
(c) Aviation Capital Construction Program ($500,000 or any new project, regardless of dollar amount);
(d) Dulles Corridor Operation and Maintenance Program ($250,000);
(e) Dulles Corridor Renewal and Replacement Program ($500,000 or any
new project, regardless of dollar amount); and
(f) Dulles Corridor Capital Improvement Program ($500,000 or any new project, regardless of dollar amount);
6. That the new and expanded authorized capital projects identified in the 2022
Budget, in the amount of (i) $19,554,000 within the Aviation Capital, Operating and Maintenance Investment Program, (ii) $171,859,000 within the Aviation Capital Construction Program, are hereby approved and authorized, and hereafter shall be considered a part of their respective approved and authorized programs.
For Consideration by the Finance Committee on November 17, 2021
NOTE: A recorded vote is required.
2022 BUDGET Metropolitan Washington Airports Authority
i
ORGANIZATION OVERVIEW ..................................................................................................................................................... 25
Washington Dulles International Airport .................................................................................................................................. 28
Dulles Toll Road .................................................................................................................................................................................. 30
Airport Service Region ...................................................................................................................................................................... 32
Financial Policies ................................................................................................................................................................................. 39
Organization Chart ............................................................................................................................................................................. 43
Overview of Airports Authority Offices and Departments ................................................................................................. 45
Consolidated Functions.................................................................................................................................................................... 45
Office of Airline Business Development ........................................................................................................................ 48
Office of Real Estate Development ................................................................................................................................. 49
Office of Marketing and Consumer Strategy .............................................................................................................. 50
Office of Communications and Government Affairs ................................................................................................ 51
Office of Operations Support ............................................................................................................................................ 52
Office of Finance..................................................................................................................................................................... 53
Office of Technology ............................................................................................................................................................ 56
Office of Audit ......................................................................................................................................................................... 58
Office of Supply Chain Management ............................................................................................................................. 60
Reagan National.................................................................................................................................................................................. 61
ii
Signatory Airline Cost Per Enplanement ................................................................................................................................... 70
Grants ...................................................................................................................................................................................................... 71
Program Summary ............................................................................................................................................................................. 73
AVIATION ENTERPRISE OPERATION AND MAINTENANCE PROGRAM ....................................................................... 83
Program Summary ............................................................................................................................................................................. 83
Identification of Expenses .............................................................................................................................................................. 85
Comparison of Operating Expenses – Metropolitan Washington Airports Authority ......................................... ...88
Consolidated Functions (including Public Safety) .................................................................................................... 90
Reagan National (including Public Safety) ...................................................................................................................91
Dulles International (including Public Safety) .............................................................................................................92
2022 Operating Expenses By Entity .......................................................................................................................................... ..93
2022 Operating Expenses for Consolidated Functions (excluding Public Safety) ................................................. ..94
2022 Operating Expenses for Reagan National (excluding Public Safety) ............................................................... ..96
2022 Operating Expenses for Dulles International (excluding Public Safety) ............................................................97
2022 Operating Expenses for Public Safety .......................................................................................................................... 98
Aviation Enterprise Snow Removal Program ........................................................................................................................ 99
AVIATION ENTERPRISE CAPITAL, OPERATING AND MAINTENANCE INVESTMENT PROGRAM .......................... 100
COMIP Projects Summary ............................................................................................................................................................ 105
COMIP Project Descriptions ........................................................................................................................................................ 112
The Airports Authority’s Master Plans ..................................................................................................................................... 133
CCP Projects Summary .................................................................................................................................................................. 139
iii
Statement of Operations .............................................................................................................................................................. 157
DULLES CORRIDOR OPERATION AND MAINTENANCE PROGRAM ............................................................................. 160
Program Summary .......................................................................................................................................................................... 160
R&R Projects Summary ................................................................................................................................................................. 164
R&R Project Descriptions ............................................................................................................................................................. 165
DULLES CORRIDOR CAPITAL IMPROVEMENT PROGRAM ............................................................................................. 169
CIP Projects Summary .................................................................................................................................................................... 170
CIP Project Descriptions ................................................................................................................................................................ 172
DEBT PROGRAM ........................................................................................................................................................................ 217
Dulles Corridor Debt Program.................................................................................................................................................... 224
GLOSSARY……… ......................................................................................................................................................................... 232
1
November 17, 2021 Members of the Finance Committee Metropolitan Washington Airports Authority To Members of the Finance Committee: The Recommended 2022 Budget (2022 Budget) for the Metropolitan Washington Airports Authority (Airports Authority) for the period January 1 through December 31, 2022, is herewith presented to the Finance Committee. This submission is consistent in all material respects to the Draft 2022 Budget provided in October 2021. The 2022 Budget includes annual budgets for both the Aviation Enterprise Fund (Aviation Enterprise) and the Dulles Corridor Enterprise Fund (Dulles Corridor Enterprise). The Aviation Enterprise accounts for activity at Ronald Reagan Washington National Airport (Reagan National) and Washington Dulles International Airport (Dulles International) while the Dulles Corridor Enterprise accounts for the activities related to the Dulles Corridor Metrorail Project (Metrorail Project) and the operation, maintenance, and improvements of the Dulles Toll Road (Toll Road) and the Dulles Corridor. The Airports Authority, established in 1986 with the consent of the Congress of the United States and the governments of the Commonwealth of Virginia and the District of Columbia, manages and operates Reagan National and Dulles International, collectively the Airports, which in a pre-pandemic year, together served more than 46 million passengers a year. Operating responsibility was transferred to the Airports Authority in June 1987. The Airports Authority also operates and maintains the Dulles International Airport Access Highway (DIAAH) and the Toll Road and manages construction of the Metrorail Project, a 23-mile extension of the Washington region’s Metrorail system to Dulles International and further west into Loudoun County, Virginia. The mission of the Airports Authority is to provide a safe, reliable, and enjoyable travel experience to our customers while embracing the core values of mutual respect, integrity, pride, and collaboration. No tax dollars are used to operate the Toll Road, which is funded by toll revenues, or the Airports, which are funded through aircraft landing fees, rents, revenues from concessions, and interest income, except for certain discretionary grants from the federal government and the Commonwealth of Virginia. While the Coronavirus Disease 2019 (COVID-19) pandemic continues to pose significant and unprecedented challenges to the aviation industry, the Airports Authority’s financial landscape is strong and various effective management actions have served as a blueprint for recovery and restoration. In response to the pandemic, amongst other actions, the Airports Authority enacted safety measures to protect passengers and staff and comply with federal, state and local guidance, maintained stable rates and charges for airlines using federal relief funds, constrained spending, limited hiring, eliminated travel expenses, deferred airline payments, and extended financial relief to concessionaires, deferred capital program project expenditures, and reprogrammed $34.0 million in unexpended funds to invest in new and existing capital projects The 2022 Budget considers in-depth the ongoing challenges posed by the aviation industry’s recovery from the COVID-19 pandemic and achieves strategic budget priorities to continue our journey of success.
2
2022 Strategic Priorities In recognition of the continuously changing economic and industry landscape in which it operates, the Airports Authority has identified corporate goals supporting commitment to Revenue Growth, Cost Control, Customer Satisfaction, and People Development. In developing the 2022 Budget, the following strategic priorities continue to serve as guidance for the Airports Authority as we operate and manage Reagan National, Dulles International, the Toll Road and the construction of the Metrorail Project.
• Provide adequate funding to recover airport operations efficiently and effectively from the COVID-19 pandemic, passenger growth and incorporate additional expenses from ‘Project Journey’ new facilities.
• Manage inflationary pressures affecting fuel costs and other essentials, competitive labor costs, and disruptions in the supply chain.
• Ensure public safety, security, and emergency preparedness.
• Maintain financial flexibility and competitive Cost per Enplanement (CPE) through: • Achieving passenger activity projections for Reagan National and Dulles International, • Strategic application of federal relief grants and other rate abatement measures, • Continued cost discipline in operational and capital plans, • Prudent financial management, including execution of re-financing opportunities.
• Continue to invest in sustainability initiatives.
• Prepare for future use and lease negotiations.
• Initiate future infrastructure development plans at the Airports and pursue available grants.
• Invest in our employees through development, Merit Pay programs and provide adequate funding for
health insurance and retirement plans.
• Continue to reasonably estimate non-airline revenue sources and pursue new opportunities.
• Prepare Airport Master Plan to identify long-term vision for the Airports.
• Limit capital program additions and using existing projects to fund additional requirements.
• Expand diversity outreach, inclusion, and social impact through leadership growth and engagement.
• Fund debt service, satisfy bond covenants, and maintain strong credit ratings resulting in lowest cost of capital.
• Institute All-Electronic Tolling on the Dulles Toll Road.
• Dulles Corridor Metrorail Project Phase 2 transition.
3
A discussion of the 2022 Budgets for the Aviation Enterprise and Dulles Corridor Enterprise follows: Aviation Enterprise The 2022 Aviation Enterprise Budget supports the operations of the Airports, Public Safety, and corporate functions with prioritization on safety, security, and emergency preparedness; efficient operations; and quality customer service standards to manage the airline cost structure and maximize the Airports’ competitive position. The 2022 Budget is developed using forecasted activity for airline passenger levels and non-airline revenues, along with expenses for operating programs and infrastructure maintenance, consistent with provisions of the Airport Use Agreement and Premises Lease (the Airline Agreement), and review of the economic outlook data of the region and the overall airline industry. Airport Use Agreement and Premises Lease The Airports Authority’s business relationship with the airlines operating at both Airports is governed by a formal negotiated Airline Agreement. In November 2014, the Airports Authority’s Board approved a new Airline Agreement effective January 1, 2015, with a ten-year term for Reagan National, and a three-year term for Dulles International. In July 2016, the First Universal Amendment to the 2015 Airline Agreement was approved by the Airports Authority’s Board, extending the agreement by seven years to 2024 for Dulles International to be co- terminus with Reagan National expiration terms. In 2019, the Airport Use Agreement and Premises Lease for Dulles International was further amended (Second Universal Amendment) to address the proceeds from the sale of lands west of Dulles International. The amendment required that any distribution the Airports Authority makes, be used solely for the purpose of reducing the costs it would otherwise include in calculating the rental, fees, and charges assessed to airlines operating at Dulles International. The Airline Agreement addresses the following core business issues:
• Financial responsibilities of the airlines, including airline rates and charges methodology;
• Operational protocols, including space and equipment use and maintenance obligations;
• Airports’ Capital Development Plans, and
• General Business Provisions (environmental, insurance, business rights).
The 2022 Budget has been developed in accordance with the terms and conditions contained within the Airline Agreement, including these provisions:
• Any required expenditures associated with the Capital Construction Program (CCP) at both Airports have been included.
• Net Remaining Revenue (NRR) generated at Reagan National in 2022 through 2023 will be shared 45 percent with the Airports Authority and 55 percent with the airlines.
• The Airports Authority will use its share of NRR generated in 2021 from Reagan National at Dulles
International in 2022, up to $25.0 million. The current estimate is $19.7 million.
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• NRR generated at Dulles International is shared between the Airports Authority and Dulles International airlines (generally 50 percent up to a plateau of $15.6 million in 2022, and 75 percent to airlines and 25 percent to the Airports Authority for the amounts above the plateau).
• Debt Service Coverage payments from airlines for airline-supported activity areas at both Airports, in years 2022 through 2023 is 30 percent.
• Investment earnings from the sale of the Western lands will be applied at Dulles International to offset
costs charged to the airlines. The centerpiece of the 2015 Airline Agreement at Reagan National includes the Board approved $1.0 billion ten- year CCP that provides for a new fourteen gate north concourse; new security checkpoints in National Hall; Terminal A renovations; and various airfield, roadways, utility, and other enabling projects. The CCP at Reagan National is debt-funded by the Airports Authority; however, the Airports Authority will seek available grants and has received authorization from the Federal Aviation Administration (FAA) to impose and use Reagan National Passenger Facility Charges (PFCs) to reduce debt for the Reagan National CCP. The new concourse began serving passengers in April 2021 and the security checkpoints opened in November 2021. The initial 2015 Airline Agreement at Dulles International includes the Board approved $142.0 million 2015-2019 three-year CCP that provides for maintenance investment in existing infrastructure. The First Universal Amendment to the 2015 Airline Agreement added $445.6 million, and was authorized by the Board in the 2017 Budget, for terminal buildings including utility upgrades to Concourse C/D, capacity enhancements to the International Arrivals Building, baggage handling improvements, existing aircraft upgrades to accommodate additional international service, construction of four additional domestic gates, airfield pavement, passenger conveyance systems, airport-wide utility systems, roads, and other support projects. The CCP at Dulles International is primarily debt-funded, and the Airports Authority will seek grant funding where available. Based on Airport needs, Board approved projects are added to the CCP periodically. Forecasted Passenger Activity The COVID-19 pandemic caused a severe decline in air travel due to actions taken by government and private organizations to slow the spread of the disease. These actions included travel restrictions, office closures, and teleworking requirements for employees. In the most recent Series 2021AB Official Statement, Report of the Airport Consultant, it was noted that some determinants of travel demand may change even once control of the pandemic and economic recovery eventually allow a ‘new normal’ travel environment to be restored. For example, permanent reductions in some business travel for in-person meetings is expected to result from the adoption of videoconferencing by workers who have been required to work from home and have now become accustomed to remote meetings. In the ‘new normal’, the total combined system-wide enplanements for both Reagan National and Dulles International are projected to recover slightly in 2022 and reach 80.2 percent of 2019 enplanements with the assumption that, over the long term, airline traffic at the Airports will increase in relation to the growth in the economy of the Airports service region and continued airline service.
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Actual 2022 Projections vs.
Reagan National Total Enplanements 3,768 5,620 9,630 71.4%
Landed Weights 6,741 10,700 12,050 12.6%
Dulles International Domestic 3,095 4,680 6,960 48.7% International 988 1,910 2,950 54.5%
Total Enplanements 4,083 6,590 9,910 50.4%
Landed Weights 9,287 10,882 17,210 58.2%
Total Airport System Total Enplanements 7,851 12,210 19,540 60.0%
* Source: Series 2021AB Report of the Airport Consultant
Projections*
11.50 11.77 11.95 11.77 11.95
3.77 5.62 9.63 10.30 10.50 10.70 10.90
3.58 3.72 3.86 3.99 4.18
0.99 1.91
3.10
4.68
7.9
12.2
19.5 21.0 21.6 22.2 22.8
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
DCA IAD International IAD Domestic
Forecasted Enplanements (in millions) Actual Enplanements (in millions)
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Reagan National enplanements are projected to increase 71.4 percent in 2022 over the 2021 forecast or 80.6 percent of 2019 enplanements. For Reagan National, the recovery strategy includes the re-introduction of the Federal Aviation Administration (FAA) slot-use rule in November 2021. The number of takeoffs and landings at Reagan National are controlled by federal permits known as “slots.” A five-year FAA reauthorization was enacted in 2019 enabling some stability in slot and perimeter regulations at Reagan National until 2023. Future legislative vehicles could change operational rules at the Airport. Domestic enplanements at Dulles International are projected to increase 48.7 percent in 2022 above the 2021 forecast, and international enplanements are projected to increase 54.5 percent above the 2021 forecast. The 2022 combined domestic and international enplanement projections at Dulles International are projected to be 50.4 percent above the current 2021 forecast or 80.4 percent of 2019 enplanements. It is expected that Dulles International will focus on building hub capacity and transfers to accelerate post-COVID growth. Outlook for the Economy of the Airports Service Region The economic outlook for the Airports service region generally depends on similar factors to those for the nation, although changes in federal spending may have a greater effect on regional economic growth and employment. In the October 2021 publication of the Washington Economic Watch, Vol V, No. 7, by the Stephen S. Fuller Institute for Research on the Washington Region’s Economic Future, it was noted that the Washington Coincident Index, which represents the current state of the metropolitan area economy, decreased 1.1 percent between July 2021 and August 2021, marking its first decline in seven months. However, in August 2021, the Coincident Index increased 22.4 percent from August 2020 and all four of the index’s components improved when compared to August 2020:
• Domestic passenger volume at Reagan National and Dulles International increased 188.0 percent,
• Consumer confidence (in the present) increased 84.1 percent,
• Non-durable goods retail sales increased 14.5 percent and continued to be the only component to exceed its 2019 levels, and
• Wage and salary employment in the Washington region increased 3.3 percent.
In the near-term, the Stephen S. Fuller Institute estimates that the Washington region’s growth prospects may be limited because of supply chain constraints and labor availability. Despite these ongoing challenges, recent developments on Capitol Hill with the passage of the Infrastructure Investment and Jobs Act which includes $20.0 billion for airport infrastructure across the country will continue to provide the Airports Authority with access to much needed federal relief funding.
In a nutshell, the regional outlook continues to have considerable uncertainty and even a modestly longer or more severe pandemic recovery would result in a significantly larger contraction and a slower recovery. The Airports Authority continues to monitor all economic trends and projections to position the Airports to be ready to serve the traveling public through the pandemic recovery and beyond.
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Aviation Enterprise Budget Programs The 2022 Budget for the Aviation Enterprise Fund consists of three Programs:
• The Aviation Enterprise Fund Operation and Maintenance (O&M) Program provides for the day-to- day operation and maintenance of the Airports Authority’s facilities. Included in this program are operating expenses and debt service. The 2022 Budget for the O&M program is $724.0 million, $410.5 million for operating expenses and $313.5 million for debt service. Operating expenses represent a 7.0 percent increase above the 2021 Budget while debt service represents a 5.6 percent decrease from the 2021 Budget for a combined 1.1 percent increase in the total O&M program compared to the 2021 Budget. The O&M program is net of a reduction of $9.4 million for allocation of overhead and other indirect costs for the Airports Authority that is initially paid from the Aviation Enterprise Fund but is appropriately allocable to the Dulles Corridor Enterprise Fund as costs associated with the operation of the Toll Road ($6.2 million for 2022), or as costs of the Metrorail Project ($3.2 million for 2022). Annually, the final allocation of costs is prepared by an external consultant. The O&M program is funded from airline rates and charges and non-airline revenue, including concessions, certain discretionary grants, and other revenues. The 2022 Budget for operating revenues is $679.8 million or 25.4 percent higher than the 2021 Budget.
• The Aviation Enterprise Fund Capital, Operating and Maintenance Investment Program (COMIP)
provides for repair work, capital equipment, improvements, certain reserves, and operating initiatives. The COMIP is funded with the Airports Authority’s share of Net Remaining Revenue (NRR) from prior year(s). The 2022 new program authorization for the COMIP is $19.5 million.
• The Aviation Enterprise Fund Capital Construction Program (CCP) provides for the planning, design,
and construction of major facility improvements at the Airports. The CCP is funded from bond proceeds, Passenger Facility Charges (PFCs), grants, rental car contract fees, and interest income from the Western Lands account. The 2022 new program authorization for the CCP is $171.9 million.
Aviation Operation and Maintenance (O&M) Program Operating Revenues Total operating revenue, excluding airline transfers (transfers are the signatory airlines share of prior year NRR and are applied as a credit to calculate the current year airline rates and charges) for 2022, is projected at $679.8 million, a 25.4 percent increase above the 2021 Budget. Operating Revenues by Source The Airports Authority generates its operating revenues from two primary and distinct sources, airline, and non- airline revenues. Airline revenues which include terminal rentals, landing fees, international arrival building fees, and passenger conveyance fees are generated on an actual cost recovery basis with an additional amount for debt service in airline-supported cost areas. Airline revenue in 2022 is projected to increase by 18.0 percent above the 2021 Budget due to the increase in the operating expenses budget to recover operations. This is offset by the plan to utilize Coronavirus Aid, Relief, and Economic Security (CARES) Act revenue, American Rescue Plan (ARP) Act revenue, apply a portion of Western Lands funding (including estimated interest earnings) as appropriate at Dulles International.
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Non-airline revenue includes concessions, non-airline rents, utility sales, security fees and other revenues. Over the past few years, the Airports Authority made a concerted effort to maximize non-airline revenues through a strong and diverse concessions program, including an enhanced Terminal Concessions strategy for dining, retail, and newsstand, growth in passenger activity, addition of Transportation Network Companies, and pursuit of other non-airline revenues such as information technology and land development. The result of these efforts had been a consistent year over year growth in non-airline revenues. The pandemic adversely impacted non-airline revenue generation in 2020 and 2021 but with the increase in passenger activity and the opening of new facilities from ‘Project Journey’, the 2022 Budget for non-airline revenue will increase by 32.3 percent above the 2021 Budget. Table 1-2: Operating Revenues by Source
Operating Revenues by Airport The 2022 operating revenue budget for Reagan National is estimated at $263.6 million or a 9.6 percent increase above the 2021 Budget. It is estimated that Reagan National will generate $19.7 million in NRR to the Airports Authority in 2021, which will be credited to airline-supported cost centers at Dulles International to mitigate airline rates and charges in 2022. Under the formula set forth in the Airline Agreement, the Airports Authority retains a share of NRR from Reagan National and has the ability to use such NRR to reduce the requirement for airline rentals, fees, and charges at Dulles International, up to a maximum of $25.0 million generated in year 2021. Reagan National airline revenues also include the application of $25.7 million of ARP Act funding.
For Dulles International, the 2022 operating revenue budget is projected at $416.2 million or a 38.0 percent increase above the 2021 Budget. Dulles International airline revenue reflects the application of $22.1 million of Western Lands Funds, $4.0 million of which is estimated interest earnings from the Western Lands account. The Western Lands was part of an 854-acre tract acquired by the Airports Authority between 2005 and 2007 to construct a fourth runway and additional facilities. After building the runway and support area, the Western Lands portion of the property remained undeveloped. With no future airport uses envisioned for the undeveloped land which lies along Virginia Route 606, the Airports Authority sought to lease or sell the 424 acres to realize a return on the earlier investment. After its sale in 2019, proceeds estimated at just over $200.0 million after transaction costs and defeasance of related outstanding debt was put into a special fund dedicated to reducing Dulles International’s CPE in future years, hence the application of the $22.1 million. It is estimated that Dulles International will generate $53.8 million in NRR in 2021, of which the Airports Authority share is estimated at $21.9 million. To further mitigate airline rates and charges, the 2022 Budget provides for the application of $22.5 million of CARES Act funding and $55.7 million of ARP Act funding.
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REPORT TO THE FINANCE COMMITTEE RECOMMENDED 2022 BUDGET

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