Board Looking For Additional Revenue From The Airport, FBOs Say They Would Struggle To Stay Open

The Town Board in East Hampton, NY has proposed a 100% increase in a "fuel flowage fee" charged to FBOs when they purchase fuel from the town.

Under the proposal, which is currently on hold while it undergoes further discussion, the fee would go from 15 cents to 30 cents per gallon. Such an increase would put FBO Sound Aircraft Services out of business "in the next few years" according to a spokesperson for the business.

The online site 27east.com reports that the town owns a fuel farm from which the two FBOs at East Hampton Airport (KHTO) ... Sound Aircraft Services and Myers Jet Fuel ... purchase fuel for resale. The town says it has not raised the fees since the early 1990s, but the price of fuel has continued to rise. The two FBOs sold $4.7 million in fuel in 2013, according to the site, mostly to jets and turbine helicopters. The town collected $115,245 in fuel flowage fees last year, along with nearly $1 million in landing fees and over $625,000 in rental income at the airport.

The town maintains that they need the money for maintenance on the fuel farm, for which it budgets $3.5 million annually. Raising the fees, the board said, would also help the town make improvements at the airport without having to rely on FAA AIP grants.

A message distributed by a pilot's group to other pilots, tenants, hangar owners, and others interested in the airport says that, along with the proposal to raise the fuel flowage fees, the Town Board "raised HTO landing fees by 10%" on June 5th. "Last year the landing fees were raised significantly more and there are plans to continue a 10% increase each year," the notice said.

"You should also be aware that the Town is actually considering floating municipal bonds upwards of $5.1 - $8.5 million dollars debt serving funded exclusively by across the board increases in all airport operations, fuel flowage increases for the next several years, landing fees, property lease rate increases, etc., to generate cash flow to debt service these bonds INSTEAD of taking readily available FAA funding at NO cost to airport operators, users and taxpayers or the Town alike," the notice continued. "Collectively, these alternative funding methods including debt servicing of municipal bonds, could have an adverse affect on all those who use the airport and the airport's ability to operate in a solvent manner."

The meeting was scheduled for Thursday.

FMI: www.town.east-hampton.ny.us