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"Arizona airport tenant complains to FAA"



Monday, October 21, 2013

Chandler airport tenant complains to FAA 
By Michelle Mitchell
The Arizona Republic


A longtime tenant of Chandler Municipal Airport has filed a formal complaint
with the Federal Aviation Administration over the city's management of the
airport.

The complaint was filed by attorneys for Chandler Air Service in July.
Chandler city officials filed a formal response Sept. 30. Each party has the
option to write one more response before the FAA considers the complaint.

If the FAA finds that the city is not in compliance with a requirement of
its federal funding, Chandler might not receive federal grants for airport
operations until those concerns are resolved, said Lori Quan, Chandler's
airport administrator and economic-development specialist.

An FAA spokeswoman said she could not speak about this complaint or possible
outcomes.

Chandler Air Service, which has been a tenant at the city-owned airport
since 1980, filed the complaint in part because of a city policy that
requires any lengthening of the runway to be funded by a publicly approved
bond.

"It's a noise-based ordinance that stacks the deck against increasing the
size of the runway," said Timothy McCulloch, an attorney representing
Chandler Air Service.

The city should place that decision back in the hands of city officials,
because the bond requirement improperly places limits on the runway only for
noise reasons and because voter approval limits the city's control of the
airport management, the complaint states.

The complaint also alleges impropriety in the way Chandler handles fuel
sales. The city should keep tax revenue from aviation-fuel sales in a fund
dedicated to the airport rather than sending it to the city's general fund,
according to the complaint.

The city and Chandler Air Service both sell fuel at the airport. The
complaint further alleges that the city does not fairly compete because its
fuel-sales operation is subsidized by taxpayer money.

Chandler, in its response, denies each allegation in the Chandler Air
Service complaint.

The city asked that the complaint be dismissed because Chandler Air Service
did not substantiate its allegations, that the allegations do not fall under
the jurisdiction of this FAA complaint procedure and that Chandler Air
Service "is not directly and substantially affected by the city's alleged
non-compliance," according to the city's response.

"(Chandler Air Service) is not responsible for the management of the airport
and cannot, under the guise of grant-assurance compliance, substitute its
judgment for the city's on the advisability or appropriateness of capital
projects and the management of the airport," the city's response states.

The Chandler City Council in September approved spending as much as $100,000
to defend the complaint. The law firm Kaplan Kirsch and Rockwell was hired
at a rate of as much as $475 an hour.

"I have a real bone to pick here with the feds on this one," Mayor Jay
Tibshraeny said during a council study session on Sept. 9. "We run a nice
operation at the airpark area and then they force us to defend ourselves
against frivolous accusations and have to spend significant taxpayer dollars
to prove what we already know is that we run it very well; we run it
aboveboard.

"We're going to go to the mat on this one."

There is not a process for either party to recoup legal costs as part of
this complaint process, Quan said. There also would not be monetary damages
awarded, she said.

Chandler Air Service attempted to work out these issues informally with the
city but was rebuffed, according to McCulloch.

Letters written by McCulloch to the city in 2010 and 2013 request mediation.
Attorneys for the city responded that mediation would not be effective or
appropriate given the complaints.

The city's 2010 response stated that if the FAA believed that there was a
potential compliance issue, "the city would rather deal directly with the
FAA to resolve that issue rather than, yet again, rehashing that issue with
CAS either individually or through a mediation procedure."

Runway dispute 

Chandler Air Service's complaint about the Chandler Municipal Airport
runways centers on the length of one of them. Runway length has been the
subject of a longstanding debate in the city.

"We think that the city improperly put in a noise-based ordinance to limit
the length of the runway," McCulloch said.

The parallel runways are 4,870 feet and 4,401 feet long.

A 1982 airport master plan included a proposal to extend the longer runway
to 6,900 feet.

CSA claims that the city received federal-grant funding to purchase land for
this extension, but Chandler's response denied this claim and states that
the grants were "used for their intended purpose."

Concerns that longer runways would bring noisier jets led Chandler voters in
1989 to approve a ballot measure banning jet aircraft from the airport. The
city did not enforce that ban, but replaced it with a 1990 ordinance that
limited the length of the runway.

The city later added a requirement that any runway extension be funded
through a voter-approved bond, according to the city's response. Development
on the airport effectively limited the potential length of the runway to
about 5,700 feet.

The city's 2010 airport master plan recommended that one of the runways be
extended to 5,700 feet and found that would "not result in significant noise
impacts to the surrounding community."

Ballot measures seeking funding for runway expansion have failed twice.

In 2007, voters approved more than $450 million in bond funds through other
measures, and the $65,000 for runway extension was the only bond measure on
that ballot that failed, noted Chandler Air Service owner John Walkup.

Walkup said he is not telling the city how to run the airport, but asking it
to return that decision-making ability to the City Council rather than
leaving it in the hands of voters.

"We've tried very hard to do a good job for the airport, and it gets to the
point where we can't do any more without a better airport to operate out
of," Walkup said.

"All the other airports have prospered and grown and increased tenants by
leaps and bounds," Walkup said about other Phoenix-area airports, such as
Scottsdale Airport, Glendale Municipal Airport and Phoenix-Mesa

RELATED INFO

Airport complaints, responses

 Runway extension

 Chandler Air Service complaint: Runway extension should be determined by
city officials, not connected to a voter-approved bond. This requirement
improperly places limits on the runway only for noise reasons and limits the
city's discretion and control over the airport development. The city
received federal funding for the extension of the runway.

 City response: The FAA does not have the authority to order the city to
change this ordinance and that ordinance is not a noise-based restriction.
All federal grants were used for their intended purpose and the city did not
violate the obligations that came with federal funding.

 Fuel-sales tax revenue

 Chandler Air Service complaint: Taxes from airport fuel sales should be
paid into the Airport Enterprise Fund not the city's general fund. This
revenue should be used for airport improvements. The tax falls under a
requirement that it be dedicated to the airport.

 City response: The taxes were implemented before a requirement was
instituted that aviation fuel taxes be spent on operating costs of the
airport. Aviation fuel-tax revenues are returned to the airport as part of
the city's annual general-fund payments to the airport fund.

 Fuel-sales competition

 Chandler Air Service complaint: Chandler should not use federal, state and
local money to subsidize the city's fuel operation, allowing it to operate
at a loss and creating an unfair competition with Chandler Air Service's
fuel sales. The city requires Chandler Air Service to meet higher standards
than the city-run fuel service. The city "constantly" prices its fuel lower
than what Chandler Air Service charges.

 City response: The city does not use federal grant money or city funds to
subsidize its fueling operation, and the city's fueling facility does not
fall short of the standards it requires of Chandler Air Service. The city
follows a formula to determine its fuel price and does not track Chandler
Air Service's pricing in order to price the city's fuel lower. It does not
operate fuel sales at a loss. 

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