AIRPORT SUSTAINABILITY

It has been often been told and repeated over and over, and also published in the local news publication, that the airport has never shown a profit, according to city records.   To objectively look at this, you have to take a serious look at the city records.

 In 2002 the city records show a gross income of $29,605.37, and expenses of $15,334.08.   Both the old and the new math will tell you this is $14,271.29 of profit.

In 2003 the airport shows a gross income of $19,015.82, and expenses of $4,509.88, and $14,505.94 of profit.  .  (In 2002 the city had $5203 of bad aviation fuel.  It went bad after sitting in the tank for too long, and the city could not sell it as 100LL aviation fuel.  After several months the fuel disappeared, no one knows where it went, the tank was emptied.  If this would be included in the city records, and the airport would be compensated for the fuel, the profit would be $19,475.24 for 2002, for a total profit of $33,981.18 for 2002 and 2003.)

These numbers will tell anyone that the repeated statements that the airport has never shown a profit, are just plain untrue. 

  

In 2004 the City records show airport expenses were $26,356.18 with income at $18,196.03, which will show an $8,160.15 loss for the airport.  Included in the expenses was $3,635.50 for engineering for the AIP funding.  This expense should have been paid for by the AIP Grant, but the city was unaware that the expenses qualified for grant funding.  The city also spent $8,799.50 in repairs to the airport that had gone overlooked in the past.  This also included $10,000 to St. Clair Aviation for airport management contract that included the grass mowing at the airport.   To correct for the engineering expense, that would put the airport profit at $29,456.53 for 02, 03, and 04.  We have heard over and over again that the city could not afford to pay someone $30,000 a year to sit at the airport to pump gas.   The fact of the matter is that only happened in two year 05, 06, which by the way also included grass mowing of the airport, something that the city had neglected to do. 

In 2005 things get interesting.   The city records show a gross income of $16,126.75, and expenses of $121,119.11, for a loss of $104,992.36.   This includes $30,000 for Buzz and the airport contract.  $3,118.70 in more engineering expense and $4,766.76 in MIRMA cost.  What is so different here is that these figures include a cost called MODOT $72,648.89.  (More on this later.)  Without the corrections for the engineering, but correcting the MIRMA cost, and the MODOT cost, the airport shows a profit of $5,343.66 for 02,03,04,05. 

In 2006 there are more corrections that need to be addressed.  The expenses are shown as $468,071.00 and income at $25,303.00 and show a loss of $442,768.00.   This includes a cost of $398,051.00 to MODOT.   Also included is an expense for Airevac for $23,298.00 and equipment repair for $10,044.00 which includes expenses for the helipad constructed for Airevac.   After correcting the above the airport would show a loss of $6,758.34 for 02,03,04,05,06. 

In 2007 city records show a gross income of $21,570.00 and expenses of $ $51,675.38 for a loss of $30,105.38.  These expenses also show a cost for MODOT for $23,642.48, and additional engineering expense of $2,110.55.  For the years 02 through 07 the airport would show a loss of $15,398.04. 

In 2008 the gross income was $33,005.00 and expenses were $62,128.00 for a loss of $29,123.  This includes another MODOT expense of $55,364.00.  With corrections for the MODOT grant, this should show a profit of $25,581, giving the airport a profit of $10,182.96 for the years of 02 to 08. 

In the year 09 through 12, the city started to contract out the grass mowing, and started to charge the airport for MIRMA coverage.  The MIRMA cost for those years was $28,077.15.    The city started to charge this much for insurance when they found out that they could not keep the airport revenue in the general revenue account of the city.   The $553,955.21 in MODOT expenses were not expenses, they were the AIP grant funds paid out by MODOT.  The city portion of the AIP contract was around $29,600 which should have been charged off to a capitol improvements account and depreciated over 20 years at $1390 per year.  Mirma cost should be $785 per year, and correcting for the rent the city paid the airport for the maintenance hangar and other items for Airevac expense, the operating profit for the airport, if accounted for under generally accepted accounting practices would show a profit for the years of 02 to 12, of $25,692.57. 

To take the city records at their face value without examination of the expense items to get a true picture of the airport financial situation is just plain wrong.  To publicly make claims about the profitability of the airport without care full examination of the figures, is irresponsible and unprofessional. 

The airport will no doubt show a loss for 2013, due to the management practices of the city.  The examination of these management practices show that one of two things is happening, the city is completely incapable of managing an airport, or the city is operating the airport with the intention of forcing it into an unprofitable situation to further its case for closure. 

The following is from a letter by MoDOT to the city on Sept 23, 2010. 

In reviewing information provided by the complainant, the City has presumably charged for insurance in some years and some years has not. Our office would recommend that the City of St. Clair have further discussions with other municipalities that have airports that do not sell fuel and determine how those municipalities establish their insurance costs for the airport. This will allow the City to develop an annual reasonable cost far airport insurance that is consistent in terms of actual cost compared to value received. This will also enhance the airport budget planning process.

The city did not follow this recommendation, but when eight other municipalities similar to St. Clair, were polled, they replied that they did not charge the airport for insurance due to the fact that they did not have any payroll at their airport.  The letter also went on to say;

Airport Sustainability

The MoDOT Aviation Section is participating with other aviation industry representatives in the preparation of a guidebook to assist political subdivisions in the development of a General Aviation Airport Business Plan .A business plan can assist airport owners in the short and long term sustainability of the airport and can allow the airport to respond accordingly in financially challenging times. Once the study is completed, our office will forward you a copy,

Based on information provided by the City for their 2009 revenue and expenses for the airport, it is possible for the airport to sustain itself if management and operational practices were executed in accordance with Federal Aviation Administration guidelines and circulars and in compliance with federal grant obligations. Our office is available to assist the City with any questions related to the airport and can provide FAA documents related to compliance with federal grant assurances.

Our office will await the submittal of the requested information in this letter: Please feel free to contact our office if you should have any’ questions.

In this letter MoDOT concluded that the airport could support itself.  The city made no attempt to resolve this issue, or reply to MoDOT with any information.