|Public Release Date: November 4, 1994||No. 94-54|
The Legislature created the Metropolitan Airports Commission (MAC) as a public corporation in 1943 to develop and operate regional airport facilities. The Governor appoints 13 of the MAC's 15 commissioners, including the chair. The mayors of Minneapolis and St. Paul have seats on the Commission. The Governor appointed Mr. Hugh Schilling to the chair on January 23, 1991. Mr. Richard Braun was appointed to the chair on September 18, 1993. In addition to the Minneapolis-St. Paul International Airport the MAC owns and operates six reliever airports in the metropolitan area. MAC finances its day to day operations entirely from user fees that are established for various services and facilities provided at Commission airports. MAC sets its rates and charges to assure that total system revenues will be sufficient to pay total system expenses.
MAC has a complex set of financial statements. It is particularly difficult to understand the components of its fund equity, and the relationship between contributed capital and reserved and unreserved retained earnings. MAC's total fund equity at December 31, 1993 was $393 million.
Reserved Retained Earnings
The MAC has made an annual transfer of excess operating funds to its Special Construction Account for several years. However, the Commission has not formally restricted those funds for construction projects. The restriction of assets should be a deliberative process. It is important that MAC restrict its assets for specific purposes and formally identify the reasons for the restrictions.
Passenger Facility Charges
Passenger Facility Charges (PFCs) provide a new revenue source from which MAC may finance FAA approved construction projects. PFC revenue replaces direct federal grants to an extent. MAC properly accounts for both its PFC revenue and its federal grants. However, because of a difference in accounting principles, PFC revenue has a markedly different effect on MAC's financial statements than direct federal grants.