Cover Image

Not for Sale

View/Hide Left Panel
Click for next page ( 9

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement

Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 8
CHAPTER 2 Airport Finance Finance Budget Development An essential function of airport management is to successfully develop and implement an air- port budget. Proper planning and allocation of financial resources for both short-term and long- term needs is an important part of the financial management of the airport. Budgets essentially plan the dollar amounts required to operate and maintain the facility for defined periods of time. Every airport, as any business operation, must develop an operating budget for the short term, which is typically one to two fiscal-year periods. Coordinated long-term planning is needed to determine capital expenditures such as runway construction, land acquisition, or major equip- ment purchases. There are many types and formats of budgets an airport can use. Forms of budgeting vary and may depend on the style adopted by a larger governmental entity such as a city, which typically follows a line-item budget, program budget, or activity budget format. This guide will not attempt to cover in great detail the various theories and appropriation methods asso- ciated with budgeting. Rather, this section is meant to give the airport manager a general overview of the small airport budget process and a working knowledge of the application of that process. Income Sources Airport operations budgets are normally prepared for a one-year fiscal period. This budget shows the basic operating expenses and revenues of the airport and includes financial estimates on personnel costs, operating expenses, supply expenses, and other planned services. Most gov- ernmental entities compete with each other for public funds. In most cases, the goal is not neces- sarily to create a profit but to ensure that financial resources are available to safely and efficiently operate the facility as a component of the public infrastructure. The airport manager must assess the fiscal requirements to both keep the lights on and responsibly protect public welfare. In many cases, simply balancing the budget is the goal. The amount of revenue generated at a small general aviation airport is typically small and is often supplemented with intergovernmental aid. Income sources normally attributed to the oper- ation of the airport include Commercial land leases and rents, T-hangar lease agreements, Private hangar land lease, Agricultural land lease, Terminal concession rents, 8