"Airport User Fees" continue to confound some Fernandina Beach residents

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.

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.]

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.