Friday, December 26, 2014

Frederick Municipal Airport (KFDK) land debt comes due for city, operation budget balanced • Aldermen suggest ways to help ease financial burden

Airport operations could pay for themselves next fiscal year, according to a City of Frederick financial forecast and airport budget proposal, however, the city general fund will soon bear the burden of a large land debt at the site.

Katie Barkdoll, director of budget and purchasing, presented an early draft budget at a recent city workshop which contained a forecast for the airport.

The budget outlook will undoubtably undergo changes before becoming the mayor's official budget proposal, but it shows the city will need to transfer $850,000 to $950,000 from the general fund from fiscal 2016 through fiscal 2023 to meet the debt.

“We anticipate that the general fund will have to pick up that debt next year and every year after until 2023 when the balloon payment on the Bowman Farm is due, which is just over $5 million dollars,” Barkdoll said.

However, airport operations could show a positive balance of a few thousand dollars in the coming fiscal year, according to airport manager Rick Johnson.

That showed the airport was doing its “due diligence” on the budget, he said.

Frederick incurred the debt when it bought Bowman Farm to make way for a runway expansion at the airport.

Several hangars and buildings will be demolished as part of the expansion and new buildings constructed to replace them will generate revenue, but, despite the income, Barkdoll estimated that about $575,000 would need to come out of the general fund to cover the demolition expenses.

Alderman Phil Dacey said the city might want to think about working with a private company to save money on the new hangars, allowing the business to build the buildings and take revenue from rent.

“It might be an opportunity to explore a public-private partnership,” he said.

Alderman Michael O'Connor, airport commission liaison, said demand for the hangars is high, so revenues from them would be virtually guaranteed.

If the city partners with a company to build hangars and allows them to take profit, he said, there are still benefits to having more airplanes based at the airport.

“If you put more planes at the airport, more planes will buy fuel,” O'Connor said.

Airport staff have been looking at increasing hangar fees and increasing transient traffic at the airport to generate funds.

"I've directed the airport staff to leave no stone unturned when it comes to innovative ways to generate revenue," director of economic development Richard Griffin said in a phone interview.

Alderwoman Donna Kuzemchak said a small part of Bowman's Farm could probably be sold to help ease the debt burden.

Alderman Josh Bokee mentioned the possibility of talking to Frederick County about shouldering part of the debt, since the facility also benefits the county.

“It has regional benefits, and so we should have regional cost sharing,” he said. 

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A Cessna Citation Excel business jet takes off from Runway 23 in December at Frederick Municipal Airport.   Photo by Sam Yu

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