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CPA to collect $33.4M in 11-year span
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Posted on Jan 23 2005
The Commonwealth Ports Authority expects to collect $33.4 million from passenger facility charges starting this year until 2016.
Implemented at a $4.50 rate on Jan. 1, the charge will provide CPA’s 10-percent share of all the federal grants it will be getting for the next 10 years for airport improvement projects.
In a report Friday, CPA comptroller George Palican said PFC revenues would also be used to pay $445,000 of the authority’s annual bond payment.
Palican also cited the PFC implementation as one of the major reasons Fitch Ratings removed the negative credit watch off CPA’s airport bonds.
“Fitch believes CPA’s decision to collect PFCs bolsters credit quality by providing an additional revenue source for debt service and maintain compliance with the rate covenant,” Fitch has said in a statement.
The passenger facility charge is similar to terminal/departure fees that are being collected in most airports abroad. It applies to both international and inter-island flights departing from any CNMI airport.
Airline companies collect the fee through sold airline tickets.
Also on Friday, the CPA board of directors approved a move to increase the current $47,200 budget of Ricondo & Associates, the consulting firm that helped CPA with its PFC application, by an additional $20,000.
Palican said $16,500 of the additional funds would be used for the training of CPA’s accounting personnel on PFC requirements. The remaining $3,500 will fund a project to update the ports authority’s Airport Use Agreement to more current industry standards and to include more current language, including references to PFC requirements.
