Time for Change at the Airport

The Leesburg Town Council was recently trying to get a grip on the Leesburg Airport financials as they went through the budget process. Leesburg Today reported on the struggle, Airports Financials Grab Councils Attention. It was about time. For the last five years the airport has lost a total of $2,259,734. That is an average of over $450,000 a year. Last year the loss was $525,286. The trend is not good. Taking a page from Enron’s play book, some on the Council, egged on by the airport manager and the leaders of the airport commission, are blaming the accounting system. This group, rather than trying to fix the problem, apparently would like to rewrite the book on GAAP, or Generally Accepted Accounting Principals. Another suggestion was to move the airport from being an Enterprise Fund to some other form of accounting in the Town’s financial report. I call this a cover up. By definition an Enterprise Fund should at least breakeven. The Town has two Enterprise Funds – The Airport Fund, and the Water & Sewer Fund. (I wrote earlier about the Water & Sewer Fund which has also been mismanaged – see Water Balloon.)

Instead of trying to juggle the books, the Town should do what any money losing business does – cut costs and increase revenues. Like the utilities department, which had not increased rates since 1992 the airport has not increased rates for three years. When I looked into the tie-down rates, I discovered the Town charges $100 a month and that they were 100% occupied with a waiting list. This means that sometime after 1993 the tie-down rate was decreased, because in 1993 it was $100. I managed the airport from 1981 until 1993 under a contract with the Town. The Town paid me nothing for management or anything else. I leased land and buildings from the Town. The lease terms were determined by the Town in a public RFP process. I never negotiated the rate or term. Today the cost to the Town to manage the airport is over $400,000 for both personal and contractual services.

In the last 15 years the airport has managed to chase off all but one business jet, and build a $4 million Taj Mahal terminal that caters to small recreational pilots and airplanes. Business jets visit on occasion, but seldom stay. As I write this, the Town Council, on the recommendation of the Airport Commission and the staff, is about to reject the two bids for the hangar pad that had gone vacant for over three years. One of these bids was from a very successful high tech company, EIT, founded by State Senator Joe May, and the other bid was from a large Washington DC real estate company, Advantis. Two years ago the Town accepted a bid for the adjacent hangar pad, but to date not one spade of dirt has been turned on this site and it remains vacant.

In May the last of the FAA flight service employees, once numbering over 150, will leave. With them goes the majority of the economic impact of the airport. It’s time for change.