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Dept. of Public Works
<br />Page 2
<br />Table 1: ELN Expense forecast assumptions
<br />Ex ense
<br />Base ear
<br />Assumed cost increase in five ears
<br />Pavement
<br />$60,000
<br />Four ercent
<br />Grant
<br />$100,000
<br />$312,000
<br />Salaries
<br />$200,000
<br />Two ercent
<br />O eratin
<br />$50,000
<br />Three ercent
<br />En ineerin / lannin
<br />$50,000
<br />:350,957$500,000
<br />Miscellaneous
<br />$50,000
<br />Two percent
<br />Using the assumptions from Table 1 above, the resulting expenses are tabulated in Table 2
<br />below.
<br />Table 2: Forecast major expenses 2019-2043
<br />Comparing the revenue generated in the three scenarios against the forecast cost demand for
<br />the 25 year planning period; we note the following:
<br />Aggressive revenue — forecast cost = $7,100,381 - $11,507,231 = $4,406,850
<br />Moderate revenue — forecast cost = $6,432,081 - $11,507,231 = $5.075,150
<br />Low revenue — forecast cost = $5,859,252 - $11,507,231 = $5,647,979
<br />Presuming we can maintain our current revenue streams for: grazing, T hangars and main
<br />hangar use, we can expect to generate approximately $4.9 million during the 25 year planning
<br />period.
<br />Conclusion:
<br />Pursuing a fixed rate land lease model (aggressive) for a 25 year period predicts minimal risk so
<br />long as other revenue streams are maintained and additional leases are added throughout the
<br />planning period. Recapitalization cost for hangar repairs are not forecast. Additional FAA ACIP
<br />projects are not identified beyond extension of runway 11-29. To minimize risk, the aggressive
<br />model could be modified to reflect a two cent increase in each five year planning period. That
<br />revenue model is not evaluated but the above analysis suggests the moderate and low
<br />scenarios fail to generate sufficient revenue offsetting predicted expenses in the planning
<br />period.
<br />EXHIBIT 1: ELN Land Lease Model
<br />205 West 5"', Rm 108 TEL (509) 962-7523
<br />Ellensburg, WA 98926 FAX (509) 962-7663
<br />2019-2023
<br />2024-2028
<br />2029-2033
<br />2034-2038
<br />2039-2043
<br />t
<br />$300.000
<br />$312,000
<br />$324,480
<br />$337,459
<br />$300,000$1,000,000
<br />:350,957$500,000
<br />Wineerin/
<br />$1,020000
<br />$1,040,000
<br />$1,061,208
<br />1,082432
<br />$250,000
<br />$257,500
<br />$265,225
<br />$273,182
<br />$281,377
<br />n / lannin
<br />$250,000
<br />$250,000
<br />$250,000
<br />$250,000
<br />$250,000ous
<br />$250000
<br />25,302
<br />$270,608$2,550,000
<br />$2,394,500
<br />$2,140,205
<br />$2,187,151
<br />$2,235,375
<br />Comparing the revenue generated in the three scenarios against the forecast cost demand for
<br />the 25 year planning period; we note the following:
<br />Aggressive revenue — forecast cost = $7,100,381 - $11,507,231 = $4,406,850
<br />Moderate revenue — forecast cost = $6,432,081 - $11,507,231 = $5.075,150
<br />Low revenue — forecast cost = $5,859,252 - $11,507,231 = $5,647,979
<br />Presuming we can maintain our current revenue streams for: grazing, T hangars and main
<br />hangar use, we can expect to generate approximately $4.9 million during the 25 year planning
<br />period.
<br />Conclusion:
<br />Pursuing a fixed rate land lease model (aggressive) for a 25 year period predicts minimal risk so
<br />long as other revenue streams are maintained and additional leases are added throughout the
<br />planning period. Recapitalization cost for hangar repairs are not forecast. Additional FAA ACIP
<br />projects are not identified beyond extension of runway 11-29. To minimize risk, the aggressive
<br />model could be modified to reflect a two cent increase in each five year planning period. That
<br />revenue model is not evaluated but the above analysis suggests the moderate and low
<br />scenarios fail to generate sufficient revenue offsetting predicted expenses in the planning
<br />period.
<br />EXHIBIT 1: ELN Land Lease Model
<br />205 West 5"', Rm 108 TEL (509) 962-7523
<br />Ellensburg, WA 98926 FAX (509) 962-7663
<br />
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