Authority OKs airport budget, debates future revenues
By Jon Hawley
Saturday, June 30, 2018
The Elizabeth City-Pasquotank Airport Authority has adopted a balanced, $1.68 million budget for Elizabeth City Regional Airport next year, but it's still facing tight or shrinking revenues that caused debate among board members this week.
During its regular meeting Wednesday evening, the Airport Authority voted unanimously to adopt the spending plan that includes a $291,000 grant for taxiway repairs around the airport's T hangars, plus a nearly 2-percent raise for employees and up to $30,000 for a new fuel pump and a mower.
Otherwise, the budget largely holds the line, save for projecting a decrease in fuel sales — a primary revenue source for the airport. Airport Manager Gordon Rowell projects fuel sales bringing in only about $810,000 for the budget year starting Sunday, down from the $838,500 budgeted for 2017-18.
Not including the taxiway grant, Rowell reported the airport's budget is down 5 percent.
In addition, the airport is poised to finish the current fiscal year at a slight loss. Treasurer Donald Payne told the authority the airport is down about $31,000 for the 2017-18 budget year, although that amount doesn't include this month, the end of the 2017-18 fiscal year.
The airport may lose another revenue source down the road as well. Rowell noted the airport is still expecting the U.S. Coast Guard to purchase airport property it currently leases for about $90,000 a year. Those properties include the land under the U.S. Coast Guard’s Heavy Maintenance Facility hangars, plus a stormwater pond and a parking lot.
While the airport stands to get a sizable payment for those properties, that payment would be one time.
That prompted Rowell to suggest ways to use the lease payment to cut costs or raise revenues. The airport could pay off the remaining debt for its T hangars or build another T hangar to bring in more pilots and rental revenue, he suggested. He also noted there are 10 pilots on the waiting list for hangar space, and Elizabeth City State University also needs space for aircraft used in its aviation science program.
Additionally, Rowell said the airport could look at increasing T hangar rent by $25 a month.
Board members reacted favorably to paying off the hangar debt, which they noted comes with a relatively high interest rate of around 5 percent.
However, City Manager Rich Olson, an ex officio member of the airport authority, raised concerns about building another T hangar. Rowell had said the hangar would cost $600,000 to build and possibly generate $27,000 a year.
That's a very long “return on investment,” Olson noted.
Board member Steve Saunders countered, however, that the airport exists to promote aviation and serve pilots. If there's a need for the hangar, there's merit to building it even with a long return on investment, he said.
Board member Lloyd Griffin, a Pasquotank commissioner, asked Rowell to compare the airport's rental rates to those at other airports in the region. Elizabeth City Regional Airport should not increase rent before knowing if the new rent will still be competitive, he said.
Other board members agreed, asking Rowell to research the matter.
Though Rowell was seeking suggestions for what the airport should do once the Coast Guard lease ends, both he and Olson noted the agency still has not formally made an offer for the airport property. The sale still appears to be moving forward, Rowell said, deferring to Olson on specifics.
Olson said Thursday the U.S. Coast Guard and the airport have agreed on the purchase price for the properties, resolving a dispute over appraisals from last year. Olson declined to disclose the purchase price, pending an offer in writing from the Coast Guard.
Based on Olson's prior comments, the city has previously valued the properties at seven figures or more. A city appraiser valued the parking lot alone at $2 million in 2016.