CAA: GA News, "Budget has officials debating Oregon airport's development"

["Stephen Irwin" <stepheni@xxxxxxxxx>]

Friday, March 14, 2003

Budget has officials debating airport's development 
By Anne Aurand 
The Bend (OR) Bulletin 


Because of a tight budget, city of Bend officials are facing a conundrum
about the municipal airport. 

Municipal airports can drain a city's pocketbook, but they can also boost
economic development. 

Pilots and business owners say the Bend airport has tremendous potential for
stimulating the local economy and is under-utilized and under-appreciated.
They say the city has been inconsistent about airport policies and unclear
about what direction it should take. 

Some feel that good management could even make the airport earn revenue for
the city. 

"If it's managed correctly, this could be the one city department that makes
money," said Gary Waldron, chief pilot for the Flight Shop, which provides
aircraft maintenance, fuel sales, charter flights and is home of a flight
school at the airport. 

But before the city sinks more property tax revenue into growing the
airport, Councilor John Hummel said he needs to be convinced that the
subsidy will create jobs and boost the economy rather than just be "a
recreational amenity" for "rich pilots." 

Approaching the airport, a few miles east of the city's limits, it's hard to
know when you've arrived. There's no welcome; there's no security force
standing guard. There's just a cluster of hangars strung between the
north-south runway and Powell Butte Road. 

It's generally quiet except for the wind wooshing over the sagebrush and
juniper. Occasionally the silence is shattered by an aircraft revving up for
takeoff. 

Waldron, the pilot, and Barry Howarth, a hangar owner, sit in the Flight
Shop on the airport's developed west side and vent their frustrations. 

They say the city needs to improve the runway, install an automatic weather
reporting system, develop unfinished office space and build hangars on
unused land. 

They defend the idea of investing city funds in the airport because it would
benefit the community. 

"The airport brings money into the economy," Waldron said. 

Charlie Spence, spokesman from the Maryland-based Aircraft Owners and Pilots
Association, said airports benefit a community like a main street or a
highway. 

Mostly, he said, airports promote economic development. A president or CEO
of a big company won't locate a business where he can't communicate with the
outside world, he said. 

Bend's Flight Shop is also home to a growing aviation program through Mount
Hood Community College. 

Jerry Bean, coordinator for the aviation program, said the number of
students doubles each quarter, and soon, a four-year aeronautical university
will locate there. Bean said students can earn an applied science degree in
aviation, which is the first step to any career in aviation. 

Andy Lindsey, Bend's Public Works Department management assistant who has
been overseeing the airport since the last airport manager left the position
in 2001, said "not quite half" of the city's 415 acres surrounding the
municipal airport is developed. 

Improvements are coming - albeit at a cost. 

Last year, the city added a new section to its Capital Improvements Plan for
$3.73 million in projects associated with the airport over the next five
years. 

The plan includes realigning Nelson Road for safety reasons, expanding the
west terminal apron and building a new runway. The plan is not to draw
large, commercial airlines, according to those involved with the facility. 

Also included in an airport improvement plan is a project to relocate the
runway a bit to the east, which would open up more land on the west to
develop. 

Lindsey, the public works official, said the problem with developing the
east side of the runway is that there is not the sewer, gas and road
infrastructure necessary for development. Plus, he said, it doesn't make
sense to do it before the runway is moved. 

Debra-Diane Jenness said the city could be raking in revenues from a lot of
pilots if it would build more hangars. 

She has been waiting for more than a year to rent an aircraft hangar at
Bend's airport. 

Jenness, a home-schooling parent and "back-seat pilot," and her retired
pilot husband, have homes in Bend and Crescent Lake, east of Willamette
Pass. She would rather rent a hangar closer to home, but out of necessity,
she has taken her $175 a month fee to Prineville's airport. 

The city of Bend rents out 64 airport hangars for about $200 a month, said
Lindsey, from public works. And, about 25 people are waiting for a storage
space, which turn over about once a year, he said. 

City Manager David Hales said the city wants to explore whether increased
revenues from hangar rentals, which could help fund airport operating costs,
would justify the investment in building up the airport. 

Bend's general fund, which is comprised of property taxes and pays for
police and fire services, has augmented airport revenues to build up the
facility. 

"The general fund has loaned significant dollars to the airport fund," Hales
said. "The airport has not been paying its own way." 

The good news is, after five years of free rent, airplane manufacturer
Lancair will start paying a ground lease of $70,000 a year to the city. 

In the late 1990s, the city's former chief financial officer, assistant city
manager and airport manager, Andy Parks, took interest in the airport and
built up infrastructure, allowing the airport's northwest end to sprout
businesses. 

To fund that, Finance Director Jim Krueger said, the city borrowed about
$1.5 million in the form of certificates of participation, or bonds, and
$900,000 from the general fund. 

Parks and then-Mayor Bob Woodward said the city council and the business
community at that time saw the airport as an asset for economic growth. 

They thought the loan could be paid off with transient room tax revenues of
about $80,000 a year for five years, and then Lancair's ground lease could
kick in. 

The city's airport fund still owes about $1.4 million on the certificates of
participation and $330,000 to the general fund, Krueger said. 

Of this year's $1.1 million airport fund, about one-third of the revenues
comes from charges for service, such as ground leases and hangar rent
income. About a third comes from grants from the Federal Aviation
Administration; and another third comes from the general fund. 

Businessmen Bill Bronson, owner of Sun Air, which provides aircraft
maintenance and charter flights, and Bill Dolf, owner of Leading Edge
Avionics, which sells, installs and repairs navigational equipment for
airplanes, feel like the city has changed direction about hangar ownership. 

They said the city used to prefer private parties to build and lease out
hangars - renting the ground from the city. But now it seems the city wants
to earn the income from hangars. 

This is just one issue an airport manager will deal with, when hired. The
council adopted a budget that includes an airport manager's salary of
$54,000 to $75,000 annually. No date has been set for having management in
place. 

City Manager David Hales said not having an airport manager has "hampered
our ability to set a clear vision for the airport." 

The city has has not decided if it wants to hire an in-house manager or
contract out with an airport management firm. 

Councilor John Hummel said having a private firm manage the airport takes
most of the risk away from the city. The firm would invest its own money in
developing the airport. But it also could take away potential profit for the
city. 

If a city employee was in charge, the city would pay for any improvements -
although the Federal Aviation Administration covers considerable capital
costs - and any profits earned would go into the city's pocketbook. 

Hummel said he'll need hard proof that the airport can provide jobs and
stimulate the economy before he supports using property tax revenues to
develop the airport further. 

"If it's necessary to bring in living wage jobs, I support it," he said. 

"If it's not, it's a government subsidy for rich pilots, a recreational
amenity."

Attached Photo:

The Flight Shop employee Jeremiah Kessler gasses up a Cessna 172 at the Bend
Airport last Saturday.

20030314000758.jpg