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the total of the principal and interest payments and required reserves or coverage payments called for by the bonds is used. Assets acquired with airport oper- ating surpluses of prior years, general tax revenues, or gifts do not ordinarily impose a cash operating requirement and the treatment of these investments will require a decision by the operator based upon legal considerations and financial operating objectives of the airport. Interest or depreciation charges are not required to be recovered on amounts secured by the airport under the Federal Aviation Act of 1958 as grants-in-aid or under the Airport and Airway Development Act of 1970. Treatment of funds ac- quired under State grants-in-aid programs should be governed by the terms of the act involved. 85. Depreciable Investment. The annual cost of capital invested in plant and equipment (as dis- tinguished from land) can be regarded as depreciation. The annual charge for depreciation depends on the useful life of the asset and the source of capital used in acquiring the asset. If payments of principal and interest on bonds issued to pay for the asset are re- quired over a shorter period than the useful life of the asset, this schedule would govern and form the basis for depreciation charges unless other revenues are available to service the debt. Depreciation charges for capital assets acquired with operating surpluses of prior years, general tax revenues, or gifts do not ordinarily impose a cash operating requirement on the operator and the treatment of this investment will require a policy decision by the operator. Interest or depreciation charges are not required to be recovered on amounts secured under the Federal Aviation Act of 1958 or the Airport and Airway Development Act of 1970. Funds secured under State grants-in-aid will be governed by the terms of the act involved. 86. Expenses for Administration, Operation, and Maintenance. Prospective expenses for ad- ministration, operation, and maintenance should be developed for each airport cost area based on unit costs for direct expenses. For nonrevenue areas, these expenses should be forecasted separately and distributed to various airport operations. For utility expenses, the net amount expected to be owed from utility purchase, after sale of utility services, should be forecast. 87. Potential Airport Revenue. From the above, the sum of the prospective annual carrying charges on invested capital and the prospective aver- age annual expenses of administration, operation, and 72 maintenance should establish the break-even need for each revenue -producing facility and for the airport as a whole. The next step in establishing economic feasibility is to determine if sufficient revenues (which may be supplemented by Federal, State, and local subsidies) can be expected at the airport to cover the break-even needs. Therefore, forecasts should be pre- pared for revenue -producing areas. These areas will include: a. Landing Area. This area should include runways and related taxiways and circulation taxi- ways. Flight fee revenue determination should be distributed between scheduled airlines, other air car- rier users, and general aviation. Flight fee amounts should provide sufficient revenues to cover the landing area break-even need. b. Aircraft Aprons and Parking Areas. Revenues to obtain the break-even need for airline terminal aprons and cargo aprons should be assigned to the scheduled airlines. Those for general aviation ramps should be assigned to private aircraft. Apron and parking area fees should provide sufficient reve- nues to cover the break-even needs for specific aircraft aprons and parking areas. c. Airline Terminal Buildings. Revenues for concessionaires and ground transportation services are usually based on a percentage of gross income with a fixed rate minimum for each type of service. Space for scheduled airlines and other users is payed for on a fixed rental. In order to establish rental rates, forecasts of potential revenue from concessions and ground transportation must be established. Rental rates should be based on the break-even need of the terminal building after giving credit for forecasted revenues from concessions and ground transportation. d. Public Parking Areas. Public parking is usually operated on a concessionaire basis with reve- nues obtained from rentals based on a percentage of gross income with a fixed-rate minimum. The revenue amount required to meet break-even needs will depend on whether parking facilities are constructed by the airport owner or under provisions of the concessionaire contract. These revenues apply to public parking for both airline and general aviation terminals. Revenues in excess of the break-even need for public parking should be allocated to the break-even need for the airport as a whole. e. Cargo Buildings. Rentals are usually charged on a rate per square foot and should cover investments in employee parking, truck unloading