Beaufort County officials went looking for new money to improve the bottom line for the Hilton Head Island Airport, and they found it in a contract with the company that provides flight support for general aviation.
A new pact with Signature Flight Support doubles the percentage of revenue going to the county from fuel sold to private pilots, taking it from 3 percent of sales to 6 percent of sales. The percentage goes to 7 percent in 2014; 8 percent in 2016; and 9 percent when the runway is lengthened to 5,000 feet.
Signature Flight Support was so opposed to a suggested landing fee for general aviation planes (a minimum of $10 per plane) that it offered to reopen its agreement and send more money to the county. That says a lot about its view of the potential negative impact on general aviation traffic at the airport and the financial hit the business would take.
The county had estimated its proposed landing fee would bring in $100,000 a year. The bigger cut of fuel sales is expected to bring in $134,000 more this year. The county budgeted $131,000 for the fuel sale commission in fiscal year 2012. In fiscal year, 2011, it brought in $113,201, according to the county's annual financial report.
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The new agreement also calls for Signature to get 15 percent of the money from hangar rentals for its management services, instead of 25 percent. Hangar rentals brought in $131,494 for the county in fiscal year 2011.
The solution works for us. The source of the money in both instances is the private pilots using the airport, the same source a landing fee would have tapped.
(Commercial landing fees brought in $149,000 at the Hilton Head airport last fiscal year.)
But it does raise a question about previous negotiations with this operator. If this kind of concession could be gained in the past few months, what opportunities were missed when this agreement and the hangar rental agreement were negotiated and signed off on?
We urge the county to keep looking for ways to push up revenue and hold down costs. While county officials point to a positive cash flow from operations when depreciation is removed from the equation, they also point to needed maintenance that has been put off to help balance the budget.
The Town of Hilton Head Island turned down a $115,237 request for accommodations tax money to help pay for police and fire protection at the airport. The county reported that it was about $300,000 short of the $720,000 cost. Airport officials made a good case for the money, but town officials were not persuaded.
Last month, County Council voted for a facility charge of $4.50 per commercial airline ticket. If approved by the Federal Aviation Administration, it is expected to raise about $2.7 million over the next 10 years, based on current passenger levels. About $1.5 million would be used to repay the county for past airport projects, including about $1.2 million for land for the air traffic control tower and its construction.
All of this says county officials should bring sharper pencils and tougher negotiating to the table in the future.