Page 37 - BAA CAFR 2017

BIRMINGHAM AIRPORT AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

I. Airport Improvement Program
Certain expenditures for airport capital improvements are significantly
funded through the Airport Improvement Program (AIP) of the Federal
Aviation Administration ("the FAA”), with 5% to 10% of project
expenditures provided by the Authority. Funding provided under
government grants is considered earned as the related allowable
expenditures are incurred.

J. Transportation Security Administration Grant
Certain expenditures for airport capital improvements are funded through a
Transportation Security Administration (“TSA”) grant program, with 10%
provided by the Authority. Funding provided under government grants is
considered earned as the related allowable expenditures are incurred.

K. Passenger Facilities Charges
The Authority is authorized to impose a Passenger Facility Charge (“PFC”)
on enplaning passengers. The PFC can be collected until the date on which
the total PFC revenue collected, plus interest thereon, equals the allowable
cost of the approved projects, which is $212,777,466. However, the
collection period ends on February 1, 2031. The PFC funds are available
for authorized construction projects and debt service under an approved
FAA application.

PFCs, along with related interest earnings, are recorded as non-operating
revenue when earned.

L. Quick Turn Around Agreement and Customer Facility Charge (CFC)
On November 19, 2012, the Authority's Board of Directors adopted a
resolution authorizing Rental Car Agencies operating at the
Birmingham-Shuttlesworth International Airport (“the Airport") to impose
a Customer Facility Charge ("CFC"). The purpose of the CFC is in effect to
provide funding for a Quick Turn Around Facility to house all rental car
companies. Effective January 1, 2013, companies that operate under a
Rental Car Concession Agreement at the Airport began assessing each
customer an initial CFC of $5.00 per transaction day. The total amounts
collected are reported and remitted monthly to the Authority by the rental
car companies.

The Authority has authorized to pledge the CFCs collected, by resolution or
trust indenture, to pay the costs and expenses of purchasing property,
financing, designing, constructing, operating, relocating, and maintaining
the Quick Turn Around Facilities. The CFCs are segregated from all other
funds and assets of the Authority. The total amount collected, net of
expenses and interest earned, as of June 30, 2017, is $15,935,402.

23