FFY 2018-2020 Airport Concession Disadvantaged Business Enterprise Triennial Goals For Phoenix Sky Harbor International Airport Public Forum City of Phoenix Equal Opportunity Department
Welcome and Introductions Donald R. Logan Equal Opportunity Director Equal Opportunity Department 2
Overview • ACDBE Program Definitions • Goal Setting Methodology for Non-Car Rental and Car Rental Triennial ACDBE goals • Market Availability Analysis for both goals • Specific Concessions Opportunities • Questions/Comments 3
ACDBE Program Definitions What is an ACDBE? • Airport Concession Disadvantaged Business Enterprise (ACDBE) a concession that is a for-profit small business concern • Owners must meet the requirements under 49 CFR Parts 23 and 26 – (1) That is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock is owned by one or more such individuals; – (2) Whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it. • This program applies to contracts and concessions administered by airports that receive financial assistance from the Federal Aviation Administration. 4
Goal Setting Methodology for Triennial ACDBE goals Why set Overall Goals? • The City is required to comply with the United States Department of Transportation’s regulations, its Disadvantaged Business Enterprise Program and its Airport Concession Disadvantaged Business Enterprise Program. • “To ensure nondiscrimination in the award and administration of opportunities for concessions by airports receiving DOT financial assistance.” • FAA recipients that expect to award more than $250,000 in FAA funds in a Federal fiscal year are required to set three-year goals for DBE participation for this DOT-assisted work. 5
ACDBE Goal/Methodology Requirement • Submission of triennial goal proposal due by August 1 • What does the City of Phoenix need to submit? – Letter stating the overall goal for the three Federal Fiscal years – Copy of the methodology used to develop the goal (ex. Worksheet, spreadsheet, charts, etc.) – Copy of the published notice informing the public of the ACDBE goal comment period – Consultation Process/Outreach Conducted 6
Methodology & Calculations Trevor Bui Deputy Equal Opportunity Director Equal Opportunity Department 7
ACDBE Goal Setting Methodology Overall Goals for PHX have been determined by: • Evaluating the total estimated gross revenues and estimated ACDBE gross revenues for continuing and new or anticipated concession agreements that will become effective during the goal period • Analysis* of the opportunity, potential for ACDBE participation and the relative availability of ACDBE firms “ready, willing and able” to perform under the agreement *Goals for each new concession 8
DBE Goal Setting Methodology- Two Step Process Step 1 Develop a base figure Step 2 Adjust your base figure 9
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure • Continuing Contracts Terminal 4 Food and Beverage and Retail Contracts Table 1 - Concession Contracts Continuing Through FFY 2020 Calendar 2016 Gross ACDBE ACDBE Goal Terminal Concessionaire Concession Revenues Goal % $ T4 Host Food/Beverage $68,035,454 T4 SSP Food/Beverage $98,022,877 TOTAL FOOD $166,058,331 23.6% $39,189,766 Gift/News/Retail/ T4 Various Retail Duty Free $50,328,634 TOTAL RETAIL $50,328,634 26.7% $13,437,745 TOTAL AIRPORT $216,386,965 24.3% $52,627,511 10
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t • Expiring Contracts Terminal 2 and Terminal 3 Food and Beverage and Retail Concessions 11
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t • Expiring Contracts Terminal 2 and Terminal 3 Food and Beverage and Retail Concessions 12
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t • Expiring Contracts Terminal 2 and Terminal 3 Food and Beverage and Retail Concessions 13
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t Geographic Region • There are currently twenty-eight (28) firms participating in concessions at PHX. • Twenty-two (22) of the twenty-eight(28) of the participating firms (78.6%) are located in Arizona. • Arizona is the relevant geographic region for purposes of determining the ACDBE goal. 14
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t Availability • Active Participants List (Dollar Value) Table 5 – Active Participants List Non-ACDBE Retail 7 50.0% $39,469,526 63.6% Participants ACDBE Retail Participants 7 50.0% $22,598,511 36.4% Total Retail Participants 14 100.0% $62,068,037 100.0% Non-ACDBE Food/Beverage 2 12.5% $136,233,329 72.9% Participants ACDBE Food/Beverage 14 87.5% $50,666,384 27.1% Participants Total Food Participants 16 100.0% $186,899,713 100.0% 15
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t Availability • AZUCP Directory/Census 16
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t Availability • AZUCP Directory/Census 17
DBE Goal Setting Methodology- Two Step Process Step 1 - Develop a base figure con’t Availability • AZUCP Directory/Census 18
DBE Goal Setting Methodology- Two Step Process • Weighting of Base Goal for Continuing/Upcoming Opportunities The base goal proposed is 24.0%. Gross Concession ACDBE Goal % ACDBE Goal $ Revenues Ongoing Food/Beverage $166,058,331 23.6% $39,189,766 Ongoing Gift/News/Retail $50,328,634 26.7% $13,437,745 New Food/Beverage $20,841,382 18.3% $20,841,382 New Gift/News/Retail $11,739,403 13.7% $11,739,403 ATM $320,916 0.0% $320,916 Advertising $5,601,414 0.0% $5,601,414 Foreign Currency Exchange $674,194 0.0% $674,194 Shoeshine $224,581 0.0% $224,581 Broadcast Television $10,043,211 0.0% $10,043,211 Wi-Fi $1,027,433 0.0% $1,027,433 $266,859,499 24.0% $63,910,280 19
DBE Goal Setting Methodology- Two Step Process Table 14 – Past History of ACDBE Participation* ACDBE TOTAL GROSS YEAR GROSS ACDBE % REVENUES REVENUES 2016 $213,145,206 $72,966,226 34.2% 2015 $169,768,858 $70,406,385 41.5% 2014 $151,134,508 $56,168,686 37.2% 24.0% (Base goal) + 37.2% (Median Past ACDBE Participation) 61.2% 61.2% ÷ 2 = 30.6% Goal (averaged based on FAA guidance) 20
DBE Goal Setting Methodology- Amount of Non-Car Rental Goal Amount of Goal • Federal Fiscal Years 2018, 2019, and 2020 • The City of Phoenix overall goal for ACDBE participation in non-car rental is 30.6% • Overall Goal will be achieved entirely through Race- and Gender-Neutral Measures • Continuation of Small Business Outreach Requirements 21
DBE Goal Setting Methodology- Car Rental Goal Car Rental Background • Phoenix Sky Harbor International Airport currently has eleven (11) car rental firms based in its consolidated car rental facility at the airport. • The current agreements will expire on December 31, 2017. • Current car rental concession revenues are approximately $394 million annually. • Annual purchases of goods/services by car rental firms are approximately $45 million. 22
DBE Goal Setting Methodology- Car Rental Goal Evaluating ACDBE Participation in Car Rentals • There are no ACDBE car rental companies currently operating at the airport • No ACDBE car rental concession operators based in Arizona • Car Rental ACDBE goal is based on the purchase of goods and services from ACDBE or potential/ACDBE firms 23
DBE Goal Setting Methodology- Car Rental Goal Methodology • 49 CFR Part 23 provides the guidance for establishing rental car concession goals. • We have conducted research to determine an appropriate ACDBE goal for car rental concessions at the airport. 24
DBE Goal Setting Methodology- Car Rental Goal Relevant Market Area • Based on the types of goods/services purchased by the firms (e.g. auto repair, insurance, fuel, etc.) • Relevant Market Area for the purchase of goods and services (exception of vehicle purchases) is the State of Arizona 25
DBE Goal Setting Methodology- Car Rental Goal Goal-Setting Step 1 • Utilize DBE Directories and Census Bureau Data for determining availability 26
DBE Goal Setting Methodology- Car Rental Goal Goal-Setting Step 1 • Utilize DBE Directories and Census Bureau Data for determining availability 27
DBE Goal Setting Methodology- Car Rental Goal Goal-Setting Step 1 • Utilize DBE Directories and Census Bureau Data for determining availability 28
DBE Goal Setting Methodology- Car Rental Goal • Goal-Setting Step 1 We have weighted the availability calculations based on information obtained from car rental companies as shown below. 29
DBE Goal Setting Methodology- Car Rental Goal • Goal-Setting Step 1 We have weighted the availability calculations based on information obtained from car rental companies as shown below. 30
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