<p>Facing a cash flow shortage, the Martha’s Vineyard Airport Commission anticipates borrowing money in the near future to fund operations at the airport.</p>
Facing a cash flow shortage, the Martha’s Vineyard Airport Commission anticipates borrowing money in the near future to fund operations at the airport.
In a report at the commission’s regular meeting Thursday, finance subcommittee chairman Robert Rosenbaum said the airport has about $365,000 in cash on hand, and is spending about $200,000 a month to operate the county-owned facility.
“Bottom line is, cash is getting to be on the thin side,” said Mr. Rosenbaum. “We are anticipating that we will run out of cash within the next few months.”
The commission is considering short-term borrowing to fund operation until the summer season, when revenue increases. The airport could borrow money in anticipation of revenue for operations, or in anticipation of a bond, for capital projects.
“The staff, along with the county treasurer’s office, will be working over the next month and will come to the finance committee with a recommendation on what route to go,” Mr. Rosenbaum said.
He said the new rescue and firefighting building, maintenance on the terminal building, and maintenance on the airport’s wastewater facility are all projects that have drained cash in the past year.
“We are in this cash situation because of the years of neglect to the infrastructure,” Mr. Rosenbaum said. “We are now having to spend a significant amount of money to bring them up.”
Though the airport has not borrowed money in the past two years, commissioners said using short-term debt to fund operations is not unusual for airports.
“These are not anything that was not anticipated,” said commissioner R. Peter Wharton. “This is ordinary course of business for municipally run airports to utilize these tools as needed for any short term cash flow.”
In other business, airport commissioners learned from their consultant about delays in the planned expansion of the airport business park, including a regulatory problem with the lots in the current business park.
In a presentation, Brian Smith of the consulting firm McFarland Johnson, said none of the lots currently occupied by business park tenants were ever cleared for non-aeronautical use by the Federal Aviation Administration (FAA). The clearance is as required by law.
He said while some regulatory work was done when the airport created the business park, the FAA has no record of final approval. Mr. Smith said some remedial work will be necessary to bring the airport into compliance with the law.
“I have to admit that I’m a little dumbfounded,” Mr. Wharton said. “The fact that we are now having to bring all of that into compliance I find frustrating and surprising.”
Mr. Smith also outlined a number of other environmental and regulatory obstacles that have risen in the course of his work. He advised the commission that a number of assumptions about expansion have turned out to be false. He said one of those assumptions was that there would be a large amount of land available for possible multi-use development. He said given the regulatory hurdles, that is unlikely to happen.
He said, however, that the airport commission may be able to offer a few lots for development by the end of next year.
Commissioners approved approximately $135,000 in work orders for McFarland Johnson to continue work on land development and other projects.
Comments
Out of cash ! The airport
Chad Flynn EdgartownOut of cash ! The airport sold more fuel this summer than in the past. Water rates are up. Sewer bills are due. Lots of income there but no cash. Maybe the bookkeeping is the problem. Past management never seemed to have a problem with cash. This airport is one of the busiest in the state in the summer. Where is alll that income ? Maybe an audit from an outside source is in need up there. Looks like the manager might not have a grip on finances. Come on airport commission due your job and get to the bottom of this.
I know it may seem heresy,
Mr. B ChilmarkI know it may seem heresy, but I don't suppose charging folks who use the facility for its intended purpose might be asked to bear the brunt of these apparently expected/anticipated shortfalls, going forward?
I mean, are they really going to go to the other airport on the island?
What do you mean those who
Jim OBWhat do you mean those who use the facility? Planes pay landing and ramp fees for using the airport
I understand that. My point
Mr. B ChilmarkI understand that. My point is that, apparently, it is not enough.
Perhaps you should check the
deshandra brown EdgPerhaps you should check the fee schedule posted on the airports website. The aircraft (airside) users pay landing fees, parking fees, and ramp fees along with a federal excise tax on fuel purchases (and in comparison to other airports this FBO is about as basic as it gets). Airline Passengers pay fees on their tickets. So the 'folks that use the facility' DO pay. Its not the responsibility of aircraft owners to subsidize a business park with below market rents so the tenants can gouge customers with their business services as is common on this island. Thankfully the FAA (Federal Aviation Administration) has rules that make certain that a federally funded airport, part of a national airspace system, is not allowed to be used be local politicians to be held ransom for greedy local residents and politicians.
Because the MAC & FAA
John Clarke EdgartownBecause the MAC & FAA provided grant money for the infrastructure for the park almost 20 years ago would it not be logical to infer that the park was approved by the FAA? I am just asking this question as part of a logical outcome of the sequence of events that created the park infrastructure. I am sure there are multiple nuances as to how approval is granted but one would think grant money provided indicates approval of the park.
Just think of all the wasted
Bob EdgartownJust think of all the wasted money on legal fees this group has created over the years. Wish we had that back now.
Mr. Wharton states he is a
Michael OBMr. Wharton states he is a little dumbfounded that the FAA has no record of final approval in the "land of wink and nod"?
Really ??
Is this islander ineptiude?
Summer Resident OBIs this islander ineptiude? Arrogance? Islanders want to run the island for summer people like me, but then this happens. You get voting power, yet summer people bring the money. How many towns or commissions or entities should have state review because of the inability of year round folks to understand the importance of proper management.
Wow. Shocking that people
Gail Gardner EdgartownWow. Shocking that people that live here year round would want to run our own place. Would you like to relinquish control of your "hometown" to others? You're free to not come here. Or to become a year round resident and help run things. I'm no fan of how things go at the airport but wealthy summer residents don't own our island or us.
All island issues of any
Mark EdgartownAll island issues of any import are complex, for you to make such a broad statement is very short sighted. There are many "year round folks" that give their time and effort to keep this place afloat . The arrogance is in your court. When someone kicks out your soapbox from underneath you, all off us Islanders will be glad to break your fall... as usual...
I read the whole story with
Headline Judge MvyI read the whole story with interest but was startled by the second story, the real story. All the non aviation businesses are out of federal code compliance? These County officials need to take their jobs far more seriously. Or we need to give these jobs to people who will. No FAA approval for all these businesses that have been paying rent according to long term leases, assuming the up front investments would pay off for them? Only to find out they were not allowed to be there? Can this paper please investigate this further and hold some people responsible?
Perhaps a fundraiser would be
Bert Oak BluffsPerhaps a fundraiser would be a good start . A Bake Sale , 50/50 Raffle or ........A Car Wash .
With all the private jets
islandgirl WTWith all the private jets which come in all summer long (even all year long) plus the refuelings that take place, the income from the business park, and all the other businesses in the airport, the commercial flights, the private aircraft, and all the rest and the airport is losing money? Deferred maintenance is always far more expensive because you can only kick the can so far down the road, but the lack of income cannot all be blamed on such projects. I seem to remember that there were funds for the new building (did it need to be such a castle?) and that the towns perhaps chipped in. Perhaps it is time for a forensic audit. And a review of salaries. Raising the rates in the business park (where there are a lot of businesses which need space available only in that spot -- a very good central location. And now we hear that the businesses were never approved by the FAA. I also note that the consultant had bills approved for payment for $130,000 -- I hope (but doubt) that was their whole contract amount. That is very expensive advice and it seems as if it will result in even more expensive action to bring the airport up to snuff. Who was the airport manager who fluffed some of this and what was he/she paid? Is she/he now on a pension? Lots of expensive questions and precious few answers...............as our dear president would say: so sad!
Why was required
Abby Normal The RockWhy was required infrastructure work not performed? Should there be a change in the airport commission? Since they knew the costs of these projects, one would hope they prepared properly. That does not seem to be the case. How many of the board are people steeped in the airport management business?
Do people understand the
John Aldeborgh EdgartownDo people understand the difference between profitability and cash flow. The airport can easily be profitable but cash flow negative. If the commission had approved infrastructure investments, these consume cash but have but have little impact on profits. For example: the Airport spends $1M on a new building but deprecates the building over 20 years. This would require $1M in cash but only impacts the profits by $50K a year in expense. Short term borrowing is a normal practice for many businesses. Don’t panic or confuse the Balance Sheet with the P&L.
That may be true for a
Really West ChopThat may be true for a regular business but in the municipal world you don’t spend what you don’t have if you can’t tax. The Airport clearly has something wrong going on!!! In a previous comment to another article it was stated that the Airport had between 4.5 and 6.5 million dollars in reserve just 3 years ago and now they have spent beyond their revenue, deficit spending, by all of that. Does anyone really believe that they will have the revenue to pay the note when it comes due. The Airport should be flush with cash from the summer and yet they have none. Please will someone open the Airport books to public eyes to cast a light on this clear mismanagement!!!
Another "Dukes County County
Peter's Watching MVIAnother "Dukes County County Review Commission" is in order as a matter of fact it is long overdue isn't it!
My husband and I returned
Anne Bennett Oak BluffsMy husband and I returned from vacation to Logan on Christmas Day. After hours of traveling, we decided to give Cape Air a call to save us a bus and a boat ride. The price we were quoted for a single, one way ticket to the Vineyard
was $379. Our round trip ticket to Paris cost each of us about $668.00. For each of us to fly one way from Logan to the Vineyard would cost more than one of our round trip tickets to Europe. Someone must be making money.
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