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HomeMy WebLinkAbout2006-12-13 - Agendas - Final • AGENDA FAYETTEVILLE MUNICIPAL AIRPORT BOARAD 1 :30 p.m. Wednesday, December 13, 2006 Airport Terminal Conference Room 1 . Welcome and Agenda Review — Chairman Bob Nickle. A. Announcement: Request everyone to turn off all cell phones. B. Comments from the public on items on the agenda. 2. Minutes of the October 11, 2006 meeting. 3 . Receiving of Reports. A. Bob Nickle, Chairman. B. Ray Boudreaux, Director. C. James Nicholson, Financial Coordinator. D. Louise Powers, T-Hangar Report. E. Construction Report. F. Maintenance Report. • 4. Old Business. A. Re-consider T-Hangar rent increase. 5 . New Business. None 6. Other Business. A. Items from the Public. B. Items from the Airport Board. 7. Meeting Adjourned. Note: Next Strategic Planning Meeting Next Airport Board Meeting Wed., January 10, 2007 J J FAYETTEVILLE MUNICIPAL AIRPORT BOARD MINUTES • November 8, 2006 MEMBERS PRESENT: Bob Nickle, David Hollman, Dave Bowman, Janice Stanesic, Richard Greene MEMBERS ABSENT: Vaughn DeCoster, Otto Loewer STAFF PRESENT: Ray Boudreaux, James Nicholson, Louise Powers OTHERS PRESENT: Frank P. Sperandeo III — tenant, Charles Caldwell-tenant, George Scott- tenant, Wayne Jones-McClelland Engineers, Tyrone Rogers-Fayetteville Government Channel ITEM #1 : Welcome and Agenda Review-Chairman Bob Nickle. A. Announcement to turn off cell phones. B. Comments from public on agenda items. None. ITEM #2: Minutes of the October 11, 2006 meeting. A motion to approve the minutes was made by Dave Bowman and seconded by Richard Greene. The motion carried. • BOARD CONSENSUS : Move "6A, Items from the Public" to the first of the meeting, to allow Frank Sperandeo brief time to speak before the Board. F. Sperandeo explained he was a former Airport Board member and currently serves as an AAOP representative for Drake Field in the "Airport Support Network". He implied he was representing the T-Hangar tenants in opposing the amount of the rental increase. He quoted from documents he had prepared on COLA increases for the years 1995 through the current year. He asked the Board to justify the 18% increase over the current rent. Chairman Nickle explained the Board had lengthy discussions prior to arriving at the new rental rates, which would not start until January 1st. He pointed out that they didn't want to use COLA or CPI, as there are numerous CPI judgements. He explained that if the $ 115.00 rent was averaged out over the ten year period, starting when Mr. Sperandeo began renting, to the current $ 127.00 rent, the increase in rent was very small. CPI increases are accumulative and if using that to make the rent adjustments, the rent would have been even higher. He further explained that just between January 2000 and January 2006 the CPI increase had been 18%. He stated the Board had considered numerous things before making the decision for the amount of the rent increase, among a few of those was the age of the buildings, their maintenance costs, the electric rehabilitation, and electricity cost increases. F. Sperandeo again voiced objections to the rental increase, and that the decision had been made at a meeting prior to November. He remembered in previous years that discussion had taken place at the November meeting. Director Boudreaux explained that notice of increasing the T-Hangar rental rate on January 0 had been included in the tenant letter for the last several months. Those newsletters are mailed out in the invoices. He further requested to make a motion to put the issue on hold until he could meet with the Board at another time to discuss the hangar rent. Chairman • Nickle explained motions come from Board Members, and stated Ray would contact Frank about the meeting. ITEM #3: Receiving of Reports. 1 CL , U A. Bob Nickle, Chairman. No report this time. B. Ray Boudreaux, Director. Million Air reported fuel sales of about 48,000 gallons for last • month. Work is progressing on the terminal drive and parking lot. The Boeing aircraft is gone and we spent a long time cleaning up after them. While dismantling the aircraft they caused a fire and we will invoice the contractors about $3 ,000 to cover the expense for the Fire Department's response. Chairman Nickle suggested next time to require a security bond. Director Boudreaux reminded everyone to attend the FAA Safety Seminar in the terminal on November 28`h, again being sponsored by SkyVenture. He told of attending the FAA Conference in Fort Worth, where he visited with the FAA about our five year development plan. He said they needed to get the Chamber of Commerce, the City Council, the citizens, and our Congressmen to support relocating a portion of Highway 71 , across from the north end of the airport, which would improve our runway safety zone. The "planning" to get this support will be an item for our next Strategic Planning Meeting. Ron Sanders of the FAA said we are now on their list to get an LPV for RW 16 and an LNAV for RW 34, these are scheduled for 2008. The PAPI has been installed and will be flight checked in a couple of weeks. Sky Way Productions decided not to put on an Air Show in 2007, and announced the Snowbirds will be back on September 26, 2007 for a demonstration. We have had meetings with Scurlock Industries and the railroad people, and the railroad will install a spur, at their expense, to Scurlock's, which is located northeast of the airport. The spur will be out of our safety area. The Airport charged the auction people a $3,000 fee. Next year we will charge them more and receive a guarantee they will clean up all oil leaks. C. James Nicholson, Financial Coordinator. Related a pattern showing up in fuel sales in the fall, one year up and next year lower, but we are still ahead of all previous years. We think the pattern is due to the number of Razorback games played in Fayetteville and Little Rock. • Chairman Nickle answering questions about the amount we pay towards the tower costs, said we pay 7%, but that was after Ray fought hard showing we had more operations than the FAA had predicted. J. Nicholson said Million Air sells twice the amount of Avgas from their truck than is sold at the self serve pump. He reviewed the Financial Charts in the agenda. D. Louise Powers, T-Hangar Report. The single engine hangars are all rented, but we have two vacancies in the twin hangars. We have several people on our waiting lists that want particular units, one that has been modified and is larger. We have three names on the single unit list and seven on our twin list. E. Wayne Jones, Construction Report. The west apron has been completed and re-seeding will take place next week. The corporate hangars will be the next project with the projected advertising date of November 27`h and receive the bids back by December 14`h. Discussion followed about changing dates so the item could go before the City Council at their first January meeting. F. Maintenance Report, Director Boudreaux. Staff time was used to clean up after the removal of the 727 aircraft, they worked three days using the back-hole cleaning drainage ditches, normal door repairs on the T-Hangars, and everyday airport maintenance. R. Greene related a tenant's complaint of roof leaks in their repair business, and that should be moved to the top of the maintenance list. F. Sperandeo asked that "Doc's windsock" be replaced. Director Boudreaux explained that particular windsock is not the airport's official windsock, was installed by an individual and is a size different than the Airport has in stock. He mentioned the FAA wants the airport's lighted windsock moved because it is in the safety area. Wayne is working with the FAA for a correct placement. ITEM 44 : Old Business 2 l I ` A. Ground Lease Policy. Chairman Nickle commented the Board had spent the last Strategic • Planning Meeting discussing this policy. A motion to approve and adopt the "Fayetteville Municipal Airport, Drake Field Ground Lease Policy" as written was made by Richard Greene and seconded by David Hollman. The motion carried. B. Hangar Ground Lease with Live Oak Development. Director Boudreaux explained this item had been "Tabled" until this meeting, and he would like to have it "Tabled" indefinitely. A motion to "Table" the Hangar Ground Lease with Live Oak Development indefinitely was made by Janice Stanesic and seconded by Dave Bowman. The motion carried. Chairman Nickle said the item could be brought back before the Board again, or it would die from a lack of a motion. ITEM #5: New Business. A. Items from the public. Chairman Nickle suggested having a brief Strategic Planning Meeting to discuss the T-Hangar rental increases. R. Greene said he had no problem with anyone coming in to discuss a problem, and Frank Sperandeo had not represented the view of all the tenants on the east side, as he is a T-Hangar tenant, also. Chairman Nickle commented that Frank's mentioning that the money we had in the Airport Fund Balance was suppose to be for hangar maintenance was a misunderstanding; the bulk of the money has been for keeping the • Airport doors open, to build improvements that will provide fuel sales and airport rentals. Discussion followed with some of the following comments. R. Greene said he had no problems backing off the $ 150.00 rent to $ 140.00, but if we had done an increase compounded from 1995 to this point, it would not be anywhere close to the $ 150.00, it would be higher. He read from the minutes, "the cost to operate is more than the CPI". No date was set for a Strategic Planning Meeting. B. Items from the Airport Board. J. Nicholson displayed a flyer he had been asked to develop for advertising the Tech School hangar. R. Greene said the advertisement should reflect there is an office located inside the hangar area, to show the actual hangar area. Chairman Nickle suggested waiting on placing the advertisement. Director Boudreaux said he was allowing Million Air to store aircraft in that hangar if they needed the space. He mentioned the North Arkansas Symphony Guild would hold a fund raiser in the terminal, it is by invitation only at $ 100.00 per person. There has not been any further interest in a restaurant in the terminal. Chairman Nickle said Dave Bowman would be speaking at the Veteren's Day Program on the ARVEST patio. Meeting adjourned at 3:08. • Dave Bowman, Secretary Date 3 FAYETTEVILLE AIRPORT ADMINISTRATION OFFICE THE CITY OF FAYETTEVILLE, ARKANSAS December 1, 2006 MONTHLY REPORT Aviation and Economic Development Department Fayetteville, Arkansas November 2006 AVIATION: Airport activity has not changed and reflects the time of year. We are still ahead of last year but only barely. Fuel sales remain strong as Million Air sold more than 52,000 gallons. The Terminal Parking Lot project is complete. Blackmon Auctions spilled some hydraulic fluid on the pavement and the process did not work well. Blackmon has agreed to correct the problem. We are investigating the best solution. We may need to remove and replace the pavement. The Little Rock FAA/FSDO held the Wings Safety Seminar at the Airport Terminal again this month with 37 in attendance. Thanks again to the FSDO for the program and to SkyV enture Aviation for sponsorship • and great barbeque. The next Wings program will be held February 28, 2007. Check www.faasafetv.eov. for the particulars. The PAPI project is complete. It is NOTAM'ed out of service until the FAA can get the flight check aircraft to verify it through flight check. We met with Don Harris, FAA Program Manager, to discuss our development program This meeting was a follow up to our visit during the FAA Regional Conference held November 1 st and 2nd. Board Member Richard Green stopped by and helped with the presentation as did Wayne Jones, Airport Engineer. At the end of the meeting, James and I felt assured that our program to move the highway will be recognized as a viable program worthy of funding. We still a long way from getting the necessary funds but each step we take is progress. I had the opportunity to meet with Congressman Boozman to discuss the project and to request funding. He promised his staff would work the project and that he and his transportation expert would visit the airport to see fust hand the work that has been done and that needs to be done. We presented our Master Plan to the Chamber of Commerce Transportation Committee and requested their support for the development plan and specifically, the realignment of Highway 71 . The committee was very positive in their support. We will prepare a resolution for the Transportation Committee to consider to forward up to the Chamber Board of Directors for enactment. The more support, the better. We plan to present our plan to the Council for their consideration at the December 19'" meeting. Our corporate hangarconstruction project advertised for bids on November 29'". We will open bids on December 15, 2006. • The Fayetteville City Council and Staff met in the Airport Conference room for budget discussions. 4500 SOUTH SCHOOL AVENUE, SUITE F • AIRPORT TERMINAL BUILDING • FAYETTEVILLE, AR 72701 PHONE 50 1 -718-7640 Ext. 5 • FAX 50 1 -718-7646 ECONOMIC DEVELOPMENT: • We continue to work with FEDC with a prospect for the Industrial Park. A final State and Local proposal was given to the client enumerating the benefits of the Fayetteville site. The new Census report is in for Fayetteville. Total population is 67, 158 with 51 % Male, 49% Female; 6.5% Black, 6.5% Hispanic, 3 .4% Asian, 2.3% Native American. The Local Redevelopment Authority met several times to discuss the disposition of the Leroy Pond Reserve Center. The VA is now interested in the property. We attended the Quarterly Business Analysis where we were briefed on the local, state and US economy. Our area unemployment remains low at 3.3% which reflects full employment. There were 6, 100 jobs added to the NWA market in the last 12 months. The only drag on the local economy is the number of housing units available for occupancy but empty. There are 652 houses completed, but unoccupied in Washington County representing a 17. 1 % increase over last year. Benton County has 2,304 houses completed but unoccupied representing an increase of 229%. ubmitted, Ray M. oudreaux, Dir or • f � aeeVle • ARKANSAS Airport Progress Report TO: Fayetteville Municipal Airport Board THRU : Ray M . Boudreaux, Director FROM: James Nicholson , Financial Coordinator DATE: December 13, 2006 Tower Operations: OPERATION5 - MONTHLY 2000 - 2006 [--.622 000oot 8 02002 m 02003 E2004 m 02005 6 ■ 2006 r nn 4 - - 2. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC • 02000 1 ,266 1 ,735 1 ,681 1 ,613 1 ,472 2,251 1 ,858 2,151 2,132 1 ,951 2,172 1 ,479 02001 2,355 2,330 2,821 2,634 2,901 4,293 3,549 3,741 2,377 2,770 2,482 2,356 02002 2,155 2,266 2,215 2,282 2,304 3,487 2,264 2,920 3,628 3,168 3,282 2,630 02003 3,122 2,379 2,908 3,360 3,317 5,378 4,347 3,674 4,279 4,567 3,084 3,451 ■ 2004 3,443 3,688 4,270 4,570 4,325 5,312 4,223 3,885 3,828 2,796 2,168 2,729 02005 2,262 2,702 3,104 3,505 4,681 6,068 4,583 4,068 4,066 4,682 3,577 3,474 ■ 2006 3,932 2,811 3,051 3,297 4,167 6,934 6,316 5,280 4,387 2,807 2,739 OFERATION5 - CUMULATIVE 2000 - 2006 50 m ❑ 2000 40 02001 - m 02002 30 02003 ■ 2004 ❑ 2005 20 - ® 2006 10 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 02000 1266 3001 4682 6295 7767 10018 11876 14027 16159 18110 20282 21761 02001 23554685 7506 10140 13041 17334 20883 24624 27001 29771 32253 34609 c2002 2155 4421 6636 8918 11222 14709 16973 19893 23521 26689 29971 32601 • 0 2003 3122 5501 6409 11769 15086 20464 24811 28485 32764 37331 40415 43866 812004 3443 7131 11401 15971 20296 25608 1 29831 33716 37544 40340 42508 45237 02005 2262 4964 8068 11573 16254 22322 26905 30973 35039139721 43298 46772 872008 1 3932 6743 9794 13091 17258 24192 30508 35768 1 40135 43042 45781 - • FBO Fuel Sales Charts: FUEL 5ALE5 - MONTHLY 2001 - 2006 80 60 - 40 0 -40 — — un 20 p JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV j DEC ■ 2001 18028 10457 18815 19285 10530 10530 10530 15607 20493 25112 22362 26266 0 2002 29321 26284 14906 23949 14892 41512 18285 20400 39365 29447 24570 21616 0 2003 31522 28464 34128 30293 27200 32305 21665 1 30298 27492 j 51528 25292 26792 ■ 2004 38643 26837 28109 35084 29510 28176 21234 31334 43730 36181 22490 30033 0 2005 42936 29563 32178 28253 28113 36188 22233 28466 33177 46837 38255 31298 02006 41 ,134 39,899 50.869 38,505 58,253 61 ,495 33,797 41 ,490 53,338 47,196 52,892 - FUEL 5ALE5 - CUMULATIVE 2001 - 2006 600 • 400 a L R N 9 O 200 i JAN FEB MAR i APR MAY - JUN JUL AUG i SEP - OCT NOV DEC ■ 2001 18028 28485 47300 66585 77115 87645 98175 113782 134275 159387 181749 208015 0 2002 29321 55605 70511 94460 109352 150864 169149 189549 228914 258361 282931 304547 02003 31522 59986 94114 124407 151607 183912 205577 235875 263367 314895 340187 366979 ■ 2004 38643 65480 93589 1128673 158183 1 186359 1 207593 238927 282657 318838 341328 ❑ 2005 42936 72499 104677 132930 161043 197231 219464 247930 281107 327944 366199 O 2006 41134 81033 1319021170407 228660 290155 323952 365442 418780 465976 51886801 Survey of Fuel Prices : Fuel prices within 50 miles of FYV as of 12/11 /06 Ident FBO Name Jet FS 10OLL FS 10OLL SS 87 MoGas SLG City of Siloam Springs 3 .75 3 .70 3 .20 TQH City of Tahlequah (both selfserv) 3 . 19 3 .24 FSM TAC Air 4 .33 4 .06 3 .52 • FYV Million Air Fayetteville / City SS 4 .31 4 . 17 3 .60 2.42 VBT Summit Aviation 3 .70 3.95 3 .85 ASG Pinnacle Air Services 3 .98 4 .02 3 .90 ROG Beaver Lake Aviation 3 .81 3 .86 XNA Regional Jet Center 3 .88 4 . 10 • h FBO Statistics: November 2006 Million Air Category Gallons % Category % TOTAL Jet Fuel sold to FVY-based customers 17 , 120 38 .3% 32 .3% Jet Fuel sold to itinerant customers 27 ,559 61 .7% 51 .9% Total Jet Fuel Sold 44 ,679 89 .3% 84 .2% 10OLL sold to FYV-based customers 10631 30 .6% 3 . 1 % 100LL sold to itinerant customers 31700 69 .4% 7 .0% Total 100LL Sold 51331 10 .7% 10 .0% TOTAL ALL: 50 ,010 94 .2% City Category • 10OLL sold Self-Serve 21882 93 .9% 5 .4% 87 Octane MoGas sold Self Serve 186 6 . 1 % 0 .4% TOTAL ALL: 31068 5 .8% 10OLL 10OLL sold self-serve 2 ,882 35 . 1 % 5 .4% 100LL sold Million Air FBO 51331 64 .9% 10 .0% TOTAL ALL: 81213 15 .5% • . • _ o 0 0 o O p rn o in m o o 0 0 0 0 0 N � O N N mi 1000 ^ TM � O N OOOi ONi I� 'O C6 V O eh O O n O N m to Y O N t00V m V N Q } O m O pp� th N r th N W fV Of th Ol to N N R N N n N GO M N N VO N d N O d O CL a3 U 0 = 0 } m � N r m O tM00 (00 cow N r N Z Q c N V O N O ON V fV O I� fV N N M Oi N y fO m N u O N N a 6 d y C m O M p V O eD C) N O O f0 tD N V O N N N � � M 66t6 t0 N O OI m O O N V O N N O) O N N n N V m M N 0 O C '- N tC N O O N O O fV � N th N C O tV tV •- N m V ... 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Why raise the rent on T Hangars? A. The airport is limited in the amount of money available and the sources available to run the airport. Drake has operated at a deficit for the last 8 years. The deficit has been reduced each year but the airport is not yet able to generate the revenue necessary to maintain a balanced budget without utilizing reserves. Our revenues continue to increase but so do our costs. The electric bill increased 46% this year over last year in the T Hangar area. The new rent amounts are fav and equitable and represent a rate of $ 1 .70 per SF for the smaller units and $ 1 .50 Per SF for the larger units. We do not want to create a hardship on anyone nor have we taken this action lightly. The Airport has leaned out the staff and cut costs in every way possible in order to achieve a revenue/expense neutral situation. We feel that we have the very best T Hangar area in all of NWA and that our units are one of our greatest assets. Q. How can you justify raising the rent on the T Hangars when there are other hangars where the rent has not changed? A. The rent for commercial/corporate Hangars is determined through a contract where the rent is adjusted through a pre-determined formula negotiated when the business/enterprise decided to locate at Drake Field. The rental rate for commercial enterprise also reflects the number of jobs associated with the business and other revenue potential expected by having the business on the airport. It is important for example to have a maintenance shop on the field that generates operations, fuel sales, activity, sales tax revenue and through the aviation talk, a reputation for the airport as a full service GA facility. In fact we have raised the rent on all other hangars through their contracts. Million Air rent goes up • by a set amount every year through the fifth year of the contract. This year it went up $ 1000.00 which represents a 33% increase. Next year will increase by 15%. Year four 12%, year 5 11%. Most of the other leases have an accelerator in the contract. Flying Investments, our first big private hangar with big aircraft, has increases every 5 years. Superior increases every year. All leases are much the same. Q. How much more is the airport spending each year than it takes in? A. The budget reflects that the airport has budgeted a $201 ,000.00 deficit for 2007 and forecasts a $ 142,000.00 shortfall for 2006. Our projected year end results will be very close to our budget. We do not generate the revenue necessary to totally support the operations and maintenance of the airport. Q. What did you spend the money on? A. It isn't necessarily that we spent too much but did we take in enough to cover the cost of doing business. We are still working on projections as to revenues since we are just through the first year of a contract FBO. Everything costs more every year so we need to grow revenue to cover the costs. We can cut costs as we have done. We are down to the bone to get the required work done. Next on the list is to cut people and with a staff of six we are already pretty lean. Q. What have you done to increase revenue? A. We have increased the flowage fee for all users to $.10 per gallon. We have increased the land lease annual rate from $.05 to $.20 per square foot per year. We have constructed a new T Hangar building and have it filled with rent paying tenants. We have • advertised for bids for two additional hangars and have tenants already signed up to occupy them. Million Air is selling more gas every day and thus increasing our revenues. • Q. Why an 18% increase all at once for the smaller hangars? A. It is a little bit of catch up. If we had applied the formula (CPI + 1 %) every two years over the last ten years, the rates would be $ 156.30 small and $ 189.89 large. The truth is that the CPI All Urban Consumers does not really reflect the increase in the cost of living in NWA. Costs have risen well above the average in NWA and will correct a bit due to recent economic slow down indicators such as the housing glut, but the correction will not last long. Q. Why do you need to raise the rent? A. With the airport need to maintain and operate the airport, pay personnel costs and purchase parts and supplies to complete the job, there needs to be a revenue stream to cover the costs. We will need to petition the City Council for support of our budget at some point as our savings account is nearly depleted. The City Council will expect that we have done everything necessary to increase revenue and reduce expenses. We have continued to tighten the budget and save in every way possible. Our expense budget is very lean. The next item is to request relief from Cost Allocation to other city departments. After that, we will have to cut personnel. The problem with cutting personnel is that the work still must be done and if you don't have enough people, you end up in contracts and contracts have a tendency to grow so you are right back where you started spending more than you make. There is no doubt that the Council will support the airport, but we can not ask unless we have taken all possible measures to balance the budget. Q. What is Springdale charging for T Hangars? A. I spoke with the Springdale CFO, Wyman Morgan December 4, 2006 and the Springdale Airport Commission is raising the hangar rent to $ 1 .56 per SF per Year in January • up from $ 1 .35 per SF per Year. They have some hangars that are slightly less but they do not have any electric. Q. What would be the hangar rent if we had increased the rent every two years by the increase in the CPI plus I %. A. Beginning in 1996 we computed a rent increase using the CPI formula beginning with $ 115.00 for the small units and $ 141 .00 for the large units. We used the January figure beginning in 1996 and the rent would have been $ 156.30 small and $189.89 large effective January 2006. YEAR INDEXCHANGE SMALL Large 1996 154.4 115.00 141 .00 1998 161 .6 1 .0467 121 .52 148.99 2000 168.8 1 .0446 128. 15 157. 12 2002 177. 1 1 .0492 135.73 166.42 2004 185.2 1 .0457 144.63 175.72 2006 198.3 1 .0707 156.30 189.89 • _...:... ... . . ._ ._. .... ... . .. ..._.. ....: _ . .-- _::_:: DEC-01-2006 1541 NORWN STPNLEY 479 444 7435 P.01 " • Nam .G.^>••e::1ya. :n'Ci) �. '6 _ i" a�a•.�si)��ii+`v�3�t�:.t.Z, � OCCUpOloAlEmplofOr cX7473. _ Res*nt Street Address Cfty state Zip Code Address...- ' Cktr.. 7...1 A42d 6{ZL ��ao� "A%of�v mcckRay Home idmnaF ilmw"*phone- '£malt Address .... . p /lIC�4'.rAA'S7Ra�, Cont Choke of Committee Length of necwanay In the C4 Unita of Fayetteville t.—what ars yourqmg ae in the-su6Jee1 maHer'1. a .kFi2 Cle- P14OT L /LENS£ Lr- Why ecead I* appol Maervi to Mis-eammNlee9L .. . 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T G G 1 1d l r f t� iy ..x i k ,.. i, tW f ✓ kr' Gc a 0.t- A. .y�'3 r f g � f + . 5 : . t s ♦ x z I A I A 1, 0, +•Fr a ..w..+v..+,.?r:a�.4y..• ww..�.r.lrwr. ... ..+n..+.m.+ v was a.u•m:L`viwraa .}xr .: A Appm cried -� r:qY4:txL:vw.'.'w�SSRw.�+xi�s.+so9a!nTaH39-^:`�1.1FFaT= . . . . < . A All AAA - y� �^. A.f ; ; r 1 �t e'e t' t' 4 111 AY C / J Y AAA �.� e y + I s '. t' H Z - R • f ti . b rAA. ,�.-.ism •- Be AN malm • 1 111 � . is pp . ; . . �1 I - 1 . 1 1 - i . 'l l 11 ' 00 • • NORTHWEST.ARKANSAS SECTION W' us ess M� C err ` Very light jet ' eomf es with very strict rules • BY LAURIE WHALEN new at the Springdale Municipal "X"Ses Dmtocturc 17TF Airport, says the dawning of any . The advent of a new single- revolution in cheaper jet-pro- pilot aircraft called a "very light pelled aircraft will be limited to jet" has aviation enthusiasts those who can afford the training across Arkansas interested' in requirements adopted by two of how the market will embrace the the nation's six insurance carri- jet — touted as ranking among ers offering aviation coverage. the most monumental aircrafr Very light jets are comparable to debut in recent aviation his- in size to two- and four-seater air- tory because of its size, price and craft broadly used byowneroper- potential accessibility to a wide ators in the charter aviation busi- range of pilots. ness. And while manufacturers Already, the Arkansas De- claim the jet is easier to fly than partment of Aeronautics has son eofthe smaRerpiston-engine forecast that business jet activ aircraft, Federal Aviation Admin- ity will triple over the next 20 istration jet training requirements years because of very light jets, mandate knowledge of the same which just came on the market safety skills as a professional pilot this year. flying a commercial jet Manufacturers are betting the . The aircraft takes its name lure of a lower price, and an abil-: ` from its comparably. lighter ity to offer cheaper seats, will be : :weight A very light jet .weighs enough to get individual pilots ' less than 10,000 pounds, and can and charter business owner-op- :land. on shorter runways than erators — such as Springdale's' • heavier small jets. Tommy Lee — to invest Very light jets sell for between But Lee, who owns a pilot $1.5 million and $3 million, com- • training school and charter busi See JET, Page 12 k 4'� Z i�ha �Y rks r,�, � li. . ..Fa '�a�X ��Qa��J V'4�§�•"'�i. 'Vyli, Iq 1. Y. 1 I I •' 1 •1 . 1 • 1 1 • 1 A 1 1 1 1 1 14•_ • 4•_ - U 1 • • 111 " . 1 • • 1 1 1 1 • 1 1 1 . . • 1 . • pis I • • 11 1 • . 1 1 1 1 ' 1 . 11 111 • 1 • " 1 11 . - 1 1 1 1 . • • 7 1 1 • • " 1 1 11 11 1 1 J 1 • 1 1 11 • 1 � 1 1 1 11 . 1 Y. 1 1 ' 1 1 11 • 1 ' • • • 1 11 . • _ • 1: 1�' 11 W . • 1 . 11 • 1 • 1 1 1 • •14 1 . 11 . 1 . •1 11 ' 1 • • • 1 • • 1 1 • ' 1 1 . 11 . 1 1 1 ' 1 ' 1 1 1 . . • Y .11 1 . 11 ' • 11 LI 1 11 • 1111 1 J • • . 1 1 � 11 11 51.11 . 1•• l i •J I 1 1 • 1 • 1 . • u 1 1 •_ 1 - J I y w. 1 1 1 1 '. /'1'11. • 1 • 1 1 1 � _ 1 1 . i k• . 1 1 • 1 • 1 • 1111 . u 1 1 1 1 �\ 1 • 'JI . 11 . 1 ' • 1 , J • 1 • v 1 1 1 1 ' 1 • 1 1 " 1 1 1 1 11 1 ' 1 • 1 11 . • 4.• F 1 11 • . 1 • 11 • . 1 7 'JI _J • ' 1 • _ ' 1111 ' 11 • 11 . qVIIIII 1 / - 1 111 • . 1 ' 1 'J 1 . 1 1 • 1 1 • 1• . 1 1 1 _JI 1 • 1 ' 1 • 11 11'1 • _ 1 1 1 1 11 i ' . . 1 • 1 . 1 _ o 1 11 -�i ' 1 1 - • I♦ 1 1 • - 11 1 1 11 1n 1 1 • n1 1 1 1 •J 1 1 • 11 1 • 1 1 " • 1 • 1 1 'J 1 1 1 1• • • 1 1 • " • 1 1 1 1 • 1 '!. - 1 • 1 . 1 1 1 n • - 1 11 1 " 1 1 - 1 1 • • 1 1. 1 11 Y.\ . 1 " r • " 1 • 1 1111 ' J EDITORIAL OPINION ' Why user fee*r, are wrong for a ion v.. t eo"w"�� Poe•.emr '.. LI eom• ,� : .>�. •' i c.nw N Coyne, GAMIN Pres & • Pete Bunce and AOFA € a By Ed Bolen Transportation Association (NATA) to speak out against President, NBAA the airlines' scheme. Why are the general aviation associations so united in opposing user fees and ATC commercialization? Let me The nation's commercial airlines want to shift their give you 8 good reasons. tax burden onto general aviation and seize control of the nation's air traffic system from Congress. If Eight reasons for a united front there was any doubt about this fact, it was removed on • Mar 8, when Jim May, president of the airlines' trade One. The airlines' user fee proposal would dramatically association, called a press conference to outline the air- and disproportionately increase the amount GA pays to lines' position on FAA reauthorization. use the aviation system . According to the Reason Reporting on the press conference, the Dallas Morning Foundation, the average Part 91 operator flying an entry- News said, "The nation's airline industry is lobbying to level business jet pays just less than $21 ,000 per year into cut as much as $2 billion in taxes from its annual tab, the Airport and Airways Trust Fund through the aviation shifting those costs to smaller business aviation users fuel tax. Under the airlines' user fee proposal, the manda- and other aircraft." The Wall Street Journal said the air- tory charges for flying in the air traffic system would sky- line proposal "would reduce congressional power over rocket to $149,000 per year—a 7-fold increase! the system," and quoted May saying, "We need to get Two. Operators would have the added cost of process- Congress out of this process." Lest anyone think he was ing user fee invoices (open invoice, create purchase misquoted, May re-emphasized the airlines' position in order, cut check, retain a record, etc). This represents a an August speech to the Florida Airports Council, where new, hidden tax to operators that provides no revenue to he said, "It is critical we have a governance structure the air traffic system. According to a 2003 statement by , that is, to the best of our ability, free of the pressures of the International Air Transport Association (IATA), it costs Congress" commercial airlines $85-125 to process each user fee Supporting the airlines in their quest to have industry invoice from a foreign commercialized air navigation rather than government control the air traffic system is service provider. To calculate this impact, simply count Robert Poole, founder of the Reason Foundation, a liber- the number of flight segments you flew last year and tarian think tank that publishes an Annual Privatization multiply that number by $125. Report. In arguing for user fees, Poole recently wrote Three. User fees would increase at a faster rate than that "shifting from aviation taxes to direct user payments fuel taxes. In the US, fuel taxes haven't changed since for ATC services is the essential precondition for com- 1997. In foreign countries where commercialized air mercialization." traffic systems charge user fees, those fees routinely The National Business Aviation Association (NBAA) increase annually or at least bienially. opposes the airlines' plan. Our members represent thou- Four. In foreign countries airlines dominate commer- sands of small to midsize business owners, along with cialized air traffic systems and use their power to dictate corporations, nonprofits and academic institutions. system funding decisions. In the US it's difficult to And we're not alone in our opposition—NBAA has believe that the airlines would use their domination of a is appeared at events with presidents from the Aircraft commercialized system to promote the best interests of Owners and Pilots Association (AOPA), the Experimental all users of the system. After all, the opening salvo in the Aircraft Association (EAA), the General Aviation Manu- reauthorization debate was fired when Northwest facturers Association (GAMA), and the National Air Airlines' then-CEO attacked Minnesota's reliever and GA PROFESSIONAL PILOT / November 2006 13 7 ' FAA gadget INS-2007 Hurricane Katrina. Yet through it • a,e00000e all, FAA funding has increased every year in a stable and pre- su,000,aao dictable manner. The current funding structure is not only healthy—it also appears 412000.oao sufficiently robust to meet all pro- jected expenditures over the next decade. Today, revenues from the aviation excise taxes are at an all- time high. This is true despite the g fact that for the past 5 years air- craft operations (what FAA calls its re.0000ao "workload") have remained below their 2000 peak. Naooaao In addition, the uncommitted balance in the Airport and Airways Trust Fund is rising, according to Administration projections. It is also worth noting that Congress ao continues to provide FAA with a 1m 1995 11M 19116 1m Me zom aoz soes zoos wos moe ZX17 ' larger General Fund contribution pan V "^'...�•�r than the agency requests. Congress has enwred the arability and reliability of FAA funding mer the years and is exFmded to But, perhaps most importantly, continue to do so. the Congressional Budget Office (CBO) recently testified before a airports in his company's inflight magazine. It's easy to House Subcommittee that the current funding structure see how the airlines could use their domination of a can provide enough revenue to pay for the transforma- commercialized ATC system to impede GA's access to tion to the Next-Generation Air Transportation System airports and airspace. (NGATS). The CBO official's comments prompted the Five. User fees would inappropriately put FAA in the Ranking Democrat on the Subcommittee to say, "I do • tax-collection business. The new, massive undertaking of have serious reservations with imposing a direct user creating an IRS-like branch within FAA could dilute the fee. .. Given the healthy state of the Trust Fund, I have agency's safety focus. reservations about the necessity of alternative financing." Six. User fees would require creation of a new federal bureaucracy that includes billing agents, collection Our system and FAA are successful agents, auditors, lawyers, new computer databases—all of which would be paid for by operators. EuroControl is The good news on FAA funding corresponds with the the government billing and collection entity in Europe. good news in the agency's management. Over the past Their building in Brussels is known in aviation circles as few years FAA has been able to attract world-class talent the Taj Mahal for its user-funded opulence. to the agency. The new management team has devel- Seven. User fees would create a huge disincentive for oped a clear strategic plan and instituted sound business efficiency. This is just the opposite of what proponents of practices. It has also begun the vital transformation to user fees will tell you. But think about it—when was the the NGATS. last time consumers exercised any real authority over a FAA's transformational activities include rolling out monopoly service provider? If a bureaucracy is able to RNAV and RNP to take advantage of GPS satellites, and charge you for the time you spend in the system, what implementing the System Wide Information incentive is there to reduce time in the system? Several Management program, which integrates FAA's computer countries currently charge certification fees. Without programs. exception, these fees are based on the number of people ADS-B is scheduled for implementation in 2014, and and hours involved. And, without exception, it takes just last year the enroute airspace capacity was doubled more people and more time to certify a product in those through adoption of RVSM. countries than in the US. The airlines never talk about the progress that is being Eight. Why give up on a system that works so well? For made at the FAA. They would have you believe that FAA nearly 4 decades the funding structure—a combination continues be the same hidebound bureaucracy it was a of aviation excise taxes and a federal General Fund con- decade ago, incapable of managing modernization pro- tribution with congressional oversight—has enabled the grams and budgets--4he fact is, FAA is currently deliver- US to build and operate a system that is the safest, most ing 92% of its programs on time and 97% within budget. efficient and largest in the world. This funding mecha- nism has proven to be remarkably stable and pre- Allocating costs using mainstream economic • dictable—particularly in turbulent times. In just the past principles 6 years, the national budget has been under pressure from the collapse of the technology bubble, terrorist In advocating for the shift of $2 billion in taxes from attacks, wars in Afghanistan and Iraq , SARS and the airlines to GA and the commercialization of ATC, 14 PROFESSIONAL PILOT / November 2006 l ' ' the commercial airlines are pro- moting the idea that charges for air ro- motingtheideathatchargesforair FAA ""'c "M^� c'^ dWFAAITas,. soPIroT. om. zao MS M TC N traffic services should be on a T19 T "per-airplane" basis with all air- craft paying a fee based on take- offs and time in the aviation sys- tem. tem. They attempt to justify this fee by promoting the concept that every aircraft imposes the same cost on the system regardless of type of operation (Part 91 , 135, 121 ), airplane size or number of people on board. This is not a new concept—air- lines have been promoting it internationally for decades. It is, however, a thoroughly discredited ' concept which has been rejected by every country because it does not withstand rigorous scrutiny by T,.. economists with cost-allocation expertise. The fact is that the US air traffic system, like those everywhere Mai V else, was built and is currently " operated to meet the demanding requirements of commercial air- Sine 2000 FAA revenues have increased, mea as FAA operations (what the agency calls its 'work- line operations. Airline operations kad") have decreased. dictate the size, scope and cost of our air traffic system. tions were responsible for about 6% of ATC costs. Of According to a 1997 Government Accountability course, about 6% of the revenues going into the Airport • Office report, the airlines' hub-and-spoke operations and Airways Trust Fund are from the GA community, so are particularly expensive. This stands to reason—when there is every reason to believe that the current GA a single airline schedules a large number of aircraft excise taxes cover or come close to covering the costs into an airport within a narrow window of time, it GA operations impose on the air traffic system. forces FAA to hire controllers and install expensive The airlines' proposed concept of looking at every equipment that would otherwise not be necessary. aircraft as though they each impose the same costs on In the 1990s, when American Airlines announced the system is not only at odds with FAA's 25-year histo- that it would establish hubs in Nashville TN and ry of cost-allocation studies—it flies in the face of Raleigh-Durham NC, FAA spent hundreds of millions mainstream economic analysis. of dollars on new equipment to handle the congestion For those of us in the GA community, there should American Airlines generated at those airports. Even be no doubt about what is at stake in the FAA reautho- though American later ceased hub operations at both rization process. The airlines are out to give business airports, the costs the airline necessitated have aviation a $2-billion tax increase—make no mistake, a remained in the system. fee is just a tax by another name—and seize control of Now the airlines want all aircraft to pay for such air- the nation's air transportation system from the federal line-generated costs on an equal, per-aircraft basis. government. This is like going out to dinner with someone who Now is the time for everyone in the GA community orders the most expensive items on the menu, then to join in the debate by contacting their elected offi- wants to split the check equally among everyone in cials and telling them to just say "No" to aviation user the dinner party. fees and the airlines' plan to take control of our Unlike the airlines, GA operations do not drive the nation's airspace. An easy way to do so is to go to the cost of the air traffic system. In fact, if the entire GA NBAA website—www. nbaa .org—and click on the fleet were grounded tomorrow, the costs of running the "Contact Congress" icon. As a pilot, your voice mat- ATC system would not go down significantly. ters. Make sure it's heard in Washington! Aw. As evidence, consider the case of DCA (National, Washington DC). GA operations were banned from the airport for 4 years after Sep 11 , but the costs of running Ed Bolen is the President and DCA did not decrease during that time. CEO of the Washington DC- Over the past 25 years, FAA has done several cost- based National Business allocation studies on its air traffic system, all of which Aviation Association. • have recognized that airline operations are the primary driver of system costs. The most recent FAA cost-alloca- tion study, conducted in 1997, showed that GA opera- PROFESSIONAL PILOT / November 2006 15 a Airports As Economic Engines discussed in this space, in a previous issue, the As an added economic development bonus to advent of Very Light Jets (VLJs), their positive Gainesville, Eclipse is building a 61 ,000 square foot impact on our industry and their potential maintenance facility at the airport. The factory .a service center is slated too en in earl y, , int impact on our airspace and airports. , P Y 2007. Half An additional positive aspect of VLJs was brought of the $11.2 million construction project was fund- to my attention recently in a meeting with Rick ed by the Florida Department of Transportation N Crider, CEO of Gainesville Regional Airport, in (FDOT) Aviation Work Program, with the other half Florida. Crider and I got together at the annual funded by traditional bank financing. Crider says National Business Aviation Association (NBAA) con- that tax incentives were also part of the package vention in Orlando, as this issue was going to press. offered to Eclipse and DayJet. VLJs are the subject of much conversation and Crider makes it clear that Gainesville's success speculation here at the convention because they story is the hard-won product of a cooperative are relatively new and because they have attracted effort by the airport authority, Eclipse and DayJet significant amounts of capital investment from officials, the local Chamber of Commerce, and both traditional aviation and non-aviation sources. regional and state government. A host of individu- Several rosy general aviation industry forecasts als played a part and many people will benefit from were released this week at the convention, most of the creation of new business and new jobs, with a them taking into account the introduction of VLJs potential of 160 employees at the Eclipse mainte- • to the marketplace. Although the various forecasts nance base and 60 at the DayJet dayport. A large present slightly different numbers, they are all number of the jobs are high-paying, skilled labor extremely positive. - jobs. According to DayJet, the combined average - Crider has an airport success story to tell, economic impact to the community of both the which involves VLJs, Eclipse Aviation and DayJet base and the Eclipse facility during the first Gainesville Airport. DayJet, one of the first-to- three years of operation will be more than $26 mil- market on-demand air taxi services employing lion—an impressive number. the Eclipse 500 VLJ, has picked Gainesville as Crider's advice to other airports looking to build one of nine " dayports " located in Florida. their economic base: "Gainesville Airport is seen as Gainesville Airport, which serves three sched- an economic engine. Be flexible and look for new uled airlines and a lot of general aviation traffic, business paradigms and evolving trends. " Solid was selected for its strong business climate and advice from someone who knows. demand for direct regional access. The city is also home to the University of Florida, a community college and a major medical center. 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