Weekly comments from Dale Martin – A focus on the Airport Enterprise Fund

By Dale Martin
City Manager
Fernandina Beach
July 10, 2020

“The financial position of the Airport will likely have a practical application with the planned construction of a new fire station.”

City Manager Dale Martin

The City’s financial and accounting structure includes several “funds.” The most significant fund is the General Fund. The General Fund is the City’s primary operating account, with the overwhelming amount of revenues generated by property taxes and expenditures associated with personnel and services (approximately two-thirds of which is related to police, fire, and parks and recreation operations).

In addition to the General Fund, the City has several other “enterprise” funds. Enterprise funds are typically designated as such because of the funding mechanisms associated with the services provided: user charges and fees, not property taxes. Enterprise funds are, in theory, designed to generate sufficient revenues through user fees to fund operating costs. The City’s enterprise funds include the Marina, the Golf Course, the Airport, Sanitation, and Utilities (water and wastewater).

The Marina and the Golf Course have received the most significant scrutiny due to the failure of those operations to satisfactorily sustain their operations through user fees. Due to those financial shortcomings, those two operations have required substantial financial support from the General Fund (property taxes). The financial operation of those two recognized community assets must be addressed to reduce the need for General Fund support.

The Sanitation and Utilities funds are often overlooked as enterprise funds. Those funds provide a basic municipal service and have no need for additional financial support outside of the fees associated with those services.

Unlike the other two “recreational” enterprise funds (the Marina and the Golf Course), the Airport is financially sustainable, requiring no support from the General Fund. In large part, this is due to the extensive land at the Airport, several hundred acres of which are leased for use as the Amelia River Golf Club. Several other ground leases, at fair market rates reviewed by the Federal Aviation Administration (FAA), provide long-term steady and predictable revenue. Annual funding from the FAA (derived from taxes and charges on commercial ticket sales) and the Florida Department of Transportation (derived from aviation fuel sales) provide revenues for the Airport, too.

The financial position of the Airport has been historically strong, even during a period of contentiousness between the Airport operator (Fixed-Based Operator, or FBO) and the City. Despite the contentiousness, the previous FBO, and in tandem, the City, was financially successful with Airport operations. The strength of the financial success was demonstrated by the ability to design and construct the new terminal facility with no need for General Fund (property tax) support.

I believe that another recent key factor in the success of the Airport is the result of the leadership and professionalism of the Airport Director, Mr. Nathan (Nate) Coyle.

Mr. Coyle came to the City approximately three years ago from a similar position in Idaho (although at the time, he was actually serving his community as the City Manager following his service as the community’s Airport Manager). He is an Air Force veteran, and his service included overseas tours of duty in both Iraq and Afghanistan to support Air Force operations in those theaters. His wife, Heather, is originally from Florida, which led, in part, to their decision to come to Fernandina Beach. Their two young children, James and Kylie, are full of boundless energy, precociousness, and trouble- those kids will be fun to watch as they torment their parents! Since Nate’s arrival, his parents, Mike and Becky, have moved to Nassau County from Pennsylvania.

Nate has established a professional rapport with the members of the Airport Advisory Commission (AAC). His experience with airport operations provides outstanding direction in determining future operations and plans. One indicator of the success of the Airport may be evident in the waiting list for individual hangars: that list has grown from roughly twenty interested people to close to seventy. Mr. Coyle is developing plans to accommodate this growing demand with additional hangar space.

The financial position of the Airport will likely have a practical application with the planned construction of a new fire station. By being located on Airport property, the Airport will be able to provide additional funding and perhaps even serve as the financing source for the construction of the facility (the City would then likely “lease” the grounds/facility from the Airport).

Other notable projects scheduled at the Airport include new fuel tanks and the rehabilitation of a runway (funded 100%, over $2 million, by the FAA as part of the national response to the Covid pandemic). As the Airport was originally developed to support military operations, several military units- ground-based with no inherent aircraft assets- have utilized the Airport for training exercise: a unit of the Florida Army National Guard has provided air control support for the Amelia Island Concours d’Elegance for several years, enhancing the safety of air operations during one of the busiest Island events.

Mr. Coyle is a great asset to the Airport. He, like other senior leaders on the City staff, represent the City well and demonstrate a strong commitment to this community. I look forward to continuing to serve with Nate.

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DAVID LOTT(@dave-l)
3 years ago

Kudos to Nate for his leadership since coming to FB and his strong working relationship with the current FBO. But also kudos to Bobby Kozakoff, the airport operations manager, who has been there through several airport managers and is highly regarded by all of them and the other airport tenants as extremely dedicated. The city is fortunate to have these two individuals.

Dave Austin
Dave Austin (@guest_58231)
3 years ago

It is my pleasure to serve on our Airport Commission with Mr. Coyle, he brings a wealth of knowledge to or city, airport, and aviation community. His professionalism and integrity are of the highest standards and we are fortunate to have him at Fernandina Beach Airport. Thank you for all you do, Nathan.

Al MacDougall
Al MacDougall (@guest_58237)
3 years ago

The new Fire Station is going on airport property so they can pay for it.

Since locating it there reduces the response time to a good part of the city,

saving money is more important than citizen safety! Interesting.

But, you say, a study was done by Passero which came to the pre-agreed

conclusion that the proper site is the airport–very convenient.

I say safety trumps saving a buck. Site the Fire Station properly.

DAVID LOTT(@dave-l)
3 years ago
Reply to  Al MacDougall

Al, and where would you suggest a “proper” site for the new fire station be outside the suggested airport location given its proximity to 14th Street and S. Fletcher?

Al MacDougall
Al MacDougall (@guest_58286)
3 years ago
Reply to  DAVID LOTT

A complete rebuild of FS #2

Mickey Baity
Mickey Baity (@guest_58239)
3 years ago

Ditto many times on the comments re Nate. We are so fortunate to have him as well as a focused and knowledgeable advisory board. Also, please note that the athletic fields (Ybarra Alvarez) are also a significant parcel of Airport land (approx 30 acres, I believe) that the City uses essentially at no cost. I doubt many who utilize this valuable community asset even realize this is Airport property. I reiterate my long standing suggestion that the name of these athletic fields include some sort of recognition of the Airport’s contribution to the community.

Mickey Baity
Mickey Baity (@guest_58240)
3 years ago

Sorry, Ybor Alvarez, not Ybarra. Darn auto correct. Can’t live with it , cant live w/o it.

Vince Cavallo
Vince Cavallo(@grandvin)
3 years ago

The sanitation and water fund is essentially a tax disguised as a user fee. If the yearly increases were not needed for the services, why are they imposed year over year without regard to actual costs?? There was enough overage over the years to “loan” the marina $2 million. Was this money being escrowed to pay down the debt used for its purchase? What happens to that 2 million if it is not paid back? I wonder if this fund was the source for funds used to refund millions in improper “impact fees”? Not sure about that so no further comment on that issue. Meanwhile, the rates rocket along.

Whenever we hear an evaluation of how financially well the various enterprise funds do, we always get the money collected verses money spent on each activity from city funds evaluation. Simple, direct and misleading. Only in government accounting does one calculate making verses losing money solely on receipts and expenditures. The airport is always in the black. Of course it is because depreciation is not considered. Roughly $10+ million over 20 years has been dumped into the facility regardless of the source. Has depreciation over time been considered; NO. Even the cost of $1.5 million lease argument fiasco with the former FBO was shifted to general funds. Now the FAA et al are dumping in another $2 or so million for a runway rehab, hopefully not an extension of the existing runway 22 which battle has been fought for years.

Our personnel working for our water and airport enterprises do a very commendable job. That is was good government service is about. I am glad no one denigrates their work or skill levels. My comments suggest we need to be accurate when showing the financial statistics of these activities. Finances alone are not the sole reason any government institution does things. If they were, we would have no government. Just consider the federal deficit/debt for why no one should evaluate it solely on a financial basis.