“Airport User Fees” continue to confound some Fernandina Beach residents

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Submitted by Suanne Z. Thamm
Reporter – News Analyst
June 17, 2018 5:00 p.m.

Although it’s been said, many times, many ways—some local residents still have difficulty understanding (or accepting) the fact that the Fernandina Beach Municipal Airport is not financed with ad valorem taxes.  Because the Airport Enterprise Fund consists of money from airport user fees, the money in that fund may not legally be used to fund marina improvements, street repair, beach walkovers or other activities not associated directly with the airport. In an attempt to clear up the definition and nature of user fees, I contacted Airport Manager Nate Coyle and Passero’s Andrew Holesko, who secures FAA and FDOT grant money for the airport, for assistance in explaining just what constitutes “user fees.”

Last year the city’s airport recorded 47,000 aircraft operations.  There are fees associated with these operations, in addition to activities conducted on airport property.  According to Coyle, the airport’s local operating revenue is derived from the following sources:

  • Airport owned hangars that are rented. Annual budget for rental of these hangars in the current fiscal year is approximately $330,000.
  • Airport ground leases. The airport owns property that is leased for private-owned hangar construction and non-aeronautical facilities outside the airport fence, and the airport charges an annual ground lease rate based on square footage. The airport also charges for non-aeronautical uses of airport property outside the fence. The FY budget for this revenue was $37,000.
  • A separate ground lease with Amelia River Golf Course that was budgeted to produce roughly $200,000 in this fiscal year.
  • A fuel flowage fee, which is assessed to fuel, brought onto the airport for personal use or for sale by the FBO. This fee produces roughly $35,000 per year.
  • Parking fees are assessed on the public aircraft parking apron. The FBO collects the fee and remits 30% to the City. This is a new arrangement, and Coyle does not yet have a solid estimate for revenue.
  • The airport receives other revenue through rental and use of airport property for other events including the Concours D’Elegance, Bonhams, and Russo & Steel (this coming year). These events will provide roughly $95,000 in revenue in the upcoming year.
  • Of note, the airport ground lease and City-owned building lease revenue will increase in the next fiscal year with the rental of new terminal space from Bent Wing Flight Services and through the lease of ground by the FBO.
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But user fees from other airport users throughout the nation are also a factor, because they provide grant revenue to help airports around the country: 

  • FAA Airport Improvement Program (AIP):This program provides grant funding for eligible capital projects and is funded under the Airport and Airway Trust Fund (which funds multiple components of the FAA). The revenue sources feeding that fund are a series of taxes related to aviation.

  • FDOT Grant Program:Grants or grant-matches to FAA grants are provided to the airport by FDOT for eligible projects. The funds from this program are produced by an excise tax that is applied to aviation fuels within the state. For more information, visit: http://www.fdot.gov/aviation/fundinginfo.shtm

Sometimes overlooked in discussions of airport funding are the non-aviation benefits the airport has provided to our local community:

  • 28 acres of baseball/soccer fields at no cost to the community or general fund.
  • A $1 a year lease for the Humane Society/Animal Control, which provides service to the community.
  • 10 acres for disposal of dredge material from the marina. Coyle could not provide specific cost savings for this use of airport property but suggested that it was most likely substantial in comparison to other potential hauling/disposal costs that may have been available at the time.
  • A mulch site where the City stored and processed its debris for a number of years. There was a reduced rate for use of the property at one time. [N.B.  With the execution of a new contract for waste management, however, the mulch site will no longer be needed and will be eliminated this summer.]
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Coyle spoke to funding the new terminal facility as well.  He wrote, “The new terminal facility was funded through existing airport fund balance, a loan taken by the airport fund, and grant funds from multiple agencies (FAA, FDOT, and FDEO). The airport cash balance grew from $200,000 at the end of fiscal year 2011/2012 to just over $1M at the end of fiscal year 2016/2017. Our projections show that existing revenue sources will pay for new debt service and our intent will be to attempt to replenish airport cash balance used in this project while managing capital projects moving forward. In other words, there is not a projection for a need of new revenue to cover the remaining debt service cost of the terminal at this time.”

Editor’s Note: Suanne Z. Thamm is a native of Chautauqua County, NY, who moved to Fernandina Beach from Alexandria,VA, in 1994. As a long time city resident and city watcher, she provides interesting insight into the many issues that impact our city. We are grateful for Suanne’s many contributions to the Fernandina Observer.

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8 Responses to “Airport User Fees” continue to confound some Fernandina Beach residents

  1. Dave Scott says:

    Bent wing? Doesn’t sound like an airplane I’d care to fly on.

  2. Sam Lane says:

    Thank you, Suanne, for attempting to explain once and for all where the airport gets its money. Bottom line: it gets its money from people who fly or use the property deeded to the airport following World War 2, NOT from the taxes that citizens pay to the City and County. Period.

  3. Betsie Huben says:

    Thank you Suanne for the terrific information presented here. The bottom line remains. This project is (or will soon be) 100% over budget compared to the estimates and planning that was presented in 2014 when “need” for a new terminal was presented to the citizens of our city. In the course of the last four years, it’s purpose has morphed from an airport terminal and potential emergency shelter to a airport terminal and possible wedding event venue. No matter how the bill gets paid, it seems fiscally irresponsible to be that far over the top for any project. Is that what we should come to expect from those who vote for and against such matters? As both you and Sam Lane note – the bill will be paid for by people who fly in and out of Fernandina through the airport user fees collected. But I think it remains to be seen if this 100% budget balloon gets paid timely. It also remains to be seen how associated airport usage needed to pay the bill impacts those of us who live in the neighborhoods in and around the airport. Will the 47,000 “airport operations” have to head north of 75,000 to get the bill paid? We could not rely on the descriptions about purpose, function, design, budget or build out for this project as made back in 2014. Why would we rely on assurances that this is all going to be just fine in 2018?

  4. John Goshco says:

    Thank you for the very thorough analysis.
    It will be interesting to see whether the “30% of parking fees” gets spent on marina improvements, etc.

    • Dave Lott says:

      Suanne, can you clarify about this portion of the parking fees. Since the fee is charged to aircraft parking on the non-FBO leased apron but still part of the airport property, I would think these fees still have to go to the airport enterprise fund and spent on airport operations.

      • Suanne Thamm says:

        Dave, you are correct. The money would go to the airport enterprise fund for exclusive use on airport operations.

        • Dave Lott says:

          Thanks for the clarification.

          • allan miller says:

            Only other clarification that would hopefully put this issue to bed is can the enterprise airport fund loan the general fund money? Could the airport fund have loaned the general fund money for marina repairs?

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