"Iowa City Airport plan may change city role"

Friday, September 12, 2003

Airport plan may change city role
By Vanessa Miller
The Iowa City (IA) Press-Citizen


Iowa City could reduce its financial support of the local airport by nearly
$130,000 in the next budget year if the facility undergoes substantial
changes to its management and fiscal operations. 

That is according to the business plan that Airport Business Solutions, an
Atlanta-based consulting firm, submitted to the City Council on Sept. 4.

"If financial self-sustainability is the goal of the city for their airport
division, then significant changes must be made in the administration and
management of the facility," the plan states.

The firm describes city oversight as "barely adequate," crediting the need
for operational changes to unorganized and insufficient management. Airport
Manager Ron O'Neil declined comment Thursday.

The city owns and operates the airport, but the plan suggests contracting
with Jet Air, the airport's primary tenant, for management and maintenance.
Handing operations to a non-governmental entity already on site would
immediately reduce overhead, officials said.

According to the plan, "an immediate and significant reduction in the
airport's payroll (and benefits) would be realized, instantly moving the
airport much closer to financial self-sufficiency."

Concern for airport finances stems from the city's rising subsidies. In the
budget year that ended June 30, 1999, the city provided $28,000 for airport
operations. That increased to $166,700 last year and is projected to rise to
about $183,000 this year.

The airport's debt includes $1.3 million for the hangars and $1.7 million
for the Aviation Commerce Park.

Ron Duffe, manager of Jet Air Inc. of Iowa City, said he is open to the
business plan's suggestions.

"We would have an interest in management," Duffe said. "I definitely think
there will be some changes made."

According to the business plan, "it is the opinion of (Airport Business
Solutions) that the current management and administration of the airport is
barely adequate, and there are several deficient areas that need to be
addressed."

Other suggestions include aggressive marketing, which would increase the
fuel volumes by 2 percent for the next five years, and renegotiating a base
fuel fee of 12 cents per gallon instead of 10 cents per gallon. The plan
also suggests increasing hanger rates by $15 a month.

Without new development or additional revenues from the 56-acre Aviation
Commerce Park valued at $5.3 million, the airport might never be entirely
self-sufficient, officials said. However, the business plan projects
subsidies to fall to $54,412 in 2004 and $42,481 in 2008 with the proposed
changes.


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