Friday, January 27, 2017

Columbia County Airport (1B1) CEO rejects lease talks

GHENT — Richmor Aviation, which oversees operations at the Columbia County Airport, has ruled out renegotiating its lease even as the county continues to explore a new hangar at the facility.

Mahlon W. Richards, chief executive officer for Richmor Aviation, Inc., made the comment a day after final numbers for the airport’s financial performance from the county perspective were handed out at a meeting of the airport subcommittee Wednesday.

“I don’t think so,” Richards said Thursday when asked if he was open to rejigging the terms of his lease. “We have been here 50 years. When other people look at it and say it’s a bad deal, they should look at airports in other places.”

The airport profit-and-loss analysis for the years 2013 to 2016 were presented at the meeting by County Controller Ron Caponera and as with the preliminary numbers released late last year show the airport, situated in Ghent almost at the junction of Routes 9H and 66, is break-even at best from the county perspective.

Revenues for 2016 were $82,897 with expenses of $97,271, giving a loss of $14,374 for the year.

There were small profits of $8,965 in 2015, $1,287 in 2014 and $1.386 in 2013, leaving a loss of $2,736 for the entire four-year period.

To be sure, adding sales tax to the equation helps marginally bolster analysis in the  airport’s favor. Sales tax paid to New York state on fuel sold at the airport averaged out over a five-year period to $22,132 a year, according to Richards.

The county gets half of that, or an average of $11,066, which, given the overall numbers are small, significantly boosts the receipts from the airport on a percentage basis.

But for at least one county resident, even adding in the sales tax numbers are not enough.

“The idea of, in effect, handing this infrastructure to Richmor for them to profit while the taxpayers continue to subsidize a loss is not in my opinion the best use of tax dollars,” said David Berman, a Ghent resident, in an email exchange after the meeting.

“While much of the (capital expenditure) comes from other government sources we need to recognize that those dollars are still tax monies and are a subsidy to the operation of Richmor Aviation.

According to New York State Department of Transportation data, the county airport has consumed almost $10.2 million since 1981 in various maintenance, equipment purchase and other costs. The total consists of $8.64 million in Federal Aviation Authority funds, $1.07 million in state funds and $436,639 in county money for a total of $10,151,570.

The FAA grant history report is broken down differently, though many of the projects have similar titles as the state report. The federal report indicates grants have totaled $11.6 million since 1982 comprising $10.23 million in entitlement money and $1.33 million in discretionary grants.

The FAA said entitlement funds are based on the number of passengers that travel through an airport and discretionary funds are based on requests from the airport sponsors for specific projects. Generally, the FAA pays 80 to 90 percent of a project, according to the agency.

“If we don’t get the federal money, someone else will get it,” said Art Cashin, an airport subcommittee member, at the meeting.

The lease

The October 2007 lease the county signed with Richmor for use of the airport facilities was substantially broken down as $25,000 in rent, 50 percent of T-hangar fees with a base rate of $310 per month, 50 percent of tie-down fees with a 2007 base rate of $50 a month, fuel flowage fee of $0.08 per gallon, and 50 percent of landing fees with the base rate in 2007 being $50 per landing of turbine powered transient aircraft.

Variable fees were to rise 3 or 4 percent per year for each year the lease was in effect. Richmor’s Richards said the fuel flowage fee will go up to $0.12 per gallon in October this year as per the existing lease agreement upon renewal. The existing lease term expires at midnight on Sept 30, 2017.

Richmor provided figures showing total rent for 2016 of $67,011, comprising rent, T-hangar, tie-down and landing fees. The fuel flowage fee for 169,000 gallons at $0.08 per gallon was $13,520.

Combined, those two numbers total $80,531, in line with the county’s indicated revenue received of $82,897.

Richards indicated at the meeting that he may at least be amenable to reviewing landing fees, a factor which the county appears to have control over. “Landlord reserves the right to institute new, or revised landing fees,” according to the lease.

In the interim, Richmor, with 27 employees at the local airport whose combined salaries on average have totaled $2.4 million over the last five years, would like a new hangar.

“Another hangar would generate some more business,” Richards said.

Exploring the idea, however, is not any indication of a commitment from the county.

“What we are doing is exploring a new hangar and it will be public,” Airport Subcommittee Chairman Mike Benvenuto said.

Richmor is required to notify the county six months before the end of the current lease term on whether it will exercise its right to renew the lease.


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