Palo Alto Airport- Fee Increases Still Unjustiifed

Saturday, November 18, 2006
City, county clash over airport fees
Palo Alto report disputes need for 7.6 percent increase in tie-down charge
By Kristina Peterson
The Palo Alto (CA) Daily News

A county commission’s recommendation to raise two key fees at the Palo Alto Airport likely won’t sit well with pilots unhappy with the county’s management of the facility. The Santa Clara County Housing Land Use Environment and Transportation Commission endorsed a business plan Thursday that would increase airport tie-down fees every year until 2017, when the county’s airport contract with Palo Alto expires. Their recommendation is only advisory – the plan must be approved by the Board of Supervisors before going into effect. If the plan is approved, Palo Alto Airport would see a 7.6 percent increase annually in tie-down fees. The airport’s 371 tie-down spots come in four different monthly prices, ranging from $111.50 to $162. Additionally, the fuel flowage fee would increase from 10 cents per gallon of fuel to 20 cents.

“The county actually has done a pretty good job,” Palo Alto Airport Association President Ralph Britton said Friday.

At one point, the county was pushing for a 36 percent increase in the tie-down fees to drive up revenues at the airport, which some county officials say is unprofitable. The county is recommending only a 3 percent fee increase at its Reid-Hillview and South County airports. Britton said the increase at Palo Alto compared to the other two airports is unfair.

“People have to pay their own way,” responded county Supervisor Don Gage. The other two airports are self-sustaining already, he argued.

“I don’t believe Santa Clara County should subsidize the Palo Alto Airport,” Gage said, stressing the county’s $211 million deficit this year.

An audit conducted by the city of Palo Alto sketched a different financial picture.

“We found that the airport had actually made money in 21 of the last 24 years,” City Auditor Sharon Erickson said. According to the city’s audit, capital improvement projects were responsible for the three years in which the airport was not profitable.

During the improvements, $2.8 million was spent, of which $2.3 million came from federal and state grants. The county paid $551,000, Erickson said.

“We put in $500,000 worth of fixes which we never recovered the money from,” Gage said. In contrast, he pointed to the addition of 100 hangars at South County Airport that enlarged its enterprise fund so that the airport can now afford to perform upgrades and repairs.

“No one wants to expand in Palo Alto because the lease only goes through 2017. Without a new lease, we won’t invest in new property,” Gage said.

The Palo Alto Airport Association, City Council and staff have formally stated their opposition to the business plan.

A letter to the board of supervisors from Palo Alto City Manager Frank Benest supported a moderate increase in tie-down fees, but stressed that the airport should remain competitive.

“It’s a regional resource. The city expects the county to continue operating the airport according to the terms of our lease,” Erickson said.

Editor’s Note: The unresolved issue at Palo Alto Airport are the charge for non-airport type services, which is still unresolved.

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