Northwest Arkansas Democrat-Gazette
Airport budget issues raised
Manager looks at creating hangars for additional rental space
BENTONVILLE — Adding hangars would help the municipal airport shrink a $100,000 annual operating deficit, its manager said.
Chuck Chadwick, hired by the city in August, told the Airport Advisory Board the facility needs to work at becoming self-sustaining.
His financials, however, are different than the city’s, which show the airport had a profit of $9,720 in 2017 and $170,426 in 2016.
The numbers don’t match because Chadwick left out certain revenue, such as state and federal grants, and added expenses he categorized as “not appearing on budget documents.” They’re expenses the city provides, such as mowing, custodial, maintenance and management.
“The city doesn’t have a method of tracking what city services does at the airport,”
Chadwick told board members at the March 8 meeting. He said his numbers were estimates based on conversations he had with department heads. “If we don’t know what the numbers are, we don’t know where to start.”
Board members asked for clarification on some numbers but didn’t comment on the deficit.
The city has “consciously, intentionally” invested in the airport in ways that aren’t identified in the airport’s budget, Mayor Bob McCaslin said in an interview Tuesday.
“We’re there to help it grow in a responsible and appropriate manner,” he said, explaining the growth and increased activity at the airport is to a point where becoming self-sustainable is within reach.
The municipal airport is a general aviation airport on Southwest I Street. The number of aircraft based there has increased from 63 in 2014 to 77 in June 2017. The airport predicts 111 by 2035, according to the Airport Master Plan. The plan, adopted in July 2016, calls for developing 52,900 square feet of hangars over the next 20 years.
Chadwick is looking at creating two, 10-bay hangars that would provide more rental space and income. More planes would increase the amount of fuel sold and maintenance done, he said.
The city doesn’t have the money to build them, but Chadwick said he will pursue government grants and look at possible private partnerships to help cover the cost.
Hangars are typically built by private investors who lease the land underneath them. The building becomes the city’s once the lease has expired. Chadwick and the board in January discussed adjusting lease lengths.
Income reflected in Chadwick’s summary — including money from fuel flowage fees, taxes and rent — was $151,279 in 2016 and $142,376 in 2017.
Airport revenue reflected in the city’s 2018 airport budget — which includes 2016 actual numbers and 2017 budgeted numbers for comparison — show $406,550 for 2016 and $375,940 for 2017.
The city received $93,612 in 2016 from state and federal grants for the airport. It budgeted $210,220 in grants for 2017. Chadwick didn’t include grants or projects the grants paid for, telling board members the numbers balance out.
The Bentonville municipal airport has used FAA grants over the years to help pay for various projects including safety improvements to the runway, an update to its master plan and design and construction of the west side parallel taxiway.
Government grants can be used for capital projects and improvements but not for maintenance or operations, said Lynn Lunsford, FAA spokesperson. The airport or city is responsible for the maintenance of those improvements.
The airport showed a $170,000 profit in 2016, partly because of a land sale. Lonesome Tree LLC bought nine-tenths of an acre at the airport’s northwest corner for $129,005 as part of a land swap deal.
The company, which has the same address as Walton Enterprises, donated just under 7 acres west of the runway as well as 12.5 acres on the north end. The two pieces of land appraised for about $400,000 when the deal was made two years ago.
Strong partnerships with the city, state, federal government and private sector have made the airport what it is today, said Dave Powell, owner of Summit Aviation, the fixed base operator.
The land west of the runway was needed to build a parallel taxiway, which is under construction. That will open up the west side of the airport for more development because the east side is at capacity.
A new flight center is under construction on the northwest corner, just south of Bentonville Lake. The two-story building will house Summit Aviation and will include a restaurant, exhibit hangar, meeting rooms and retail space.
Powell said the numbers presented at the board meeting were narrow in view.
“The bigger benefit is the service we provide,” he said, explaining the construction of the flight center and hangars generates sales tax, of which two percent goes directly to the city and one percent to the county. The airport increases the city’s tax revenue indirectly when travelers fly in, stay in Bentonville hotels and eat in Bentonville restaurants, he said.
General aviation statewide generated $102.7 million in economic activity, supported 797 jobs with $32.8 million in earnings in 2014, according to the FAA’s most recent economic impact report released in 2017.
The Airport Advisory Board will next meet at 1:30 p.m. Thursday.
Melissa Gute can be reached at mgute@nwadg.com or on Twitter @NWAMelissa.