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Jun 19, 2014 10:41 PMPublication: The East Hampton Press

East Hampton Town Board Doubles Airport Fuel Fee Despite Pleas

Jun 24, 2014 2:46 PM

Some say an East Hampton Town Board decision last week to bring in more revenue at East Hampton Airport by hiking fees on two fuel providers will do more harm than good.

On Thursday night, June 19, council members voted 4-1 to double the fee the airport charges a pair of private companies to pump and distribute fuel, despite pleas from both pilots and employees of those companies.

Critics say their fear is not only the impact on businesses forced to pay more, but the probability that they will pass the cost on to pilots, who could then decide not to fuel up at East Hampton Airport, but do so elsewhere—causing a drop in revenue for the town instead of an increase.

Since the fee has not been raised since at least the early 1990s, Town Board members said they believed it was well within their right to make the change, however.

Currently, the town collects 15 cents per gallon from two firms, Sound Aircraft and Meyers Aero Fuels, which sells jet fuel and aviation gas it buys from the town’s fuel farm, but it will start charging 30 cents per gallon on July 1.

Cindy Herbst of Sound Aircraft made her last appeal to the board Thursday night, saying the 15-cent increase would surely shutter her business. She called on 15 of her employees to stand up to represent jobs that could be lost at the small business.

Her office manager, Maureen Quigley, who has been with Sound Aircraft for more than 20 years, approached the podium, asking for a change of heart. “I implore you to listen to the experts who stand before you today,” Ms. Quigley said through tears. “Our recommendation is that the increase is too much, too soon.”

On June 17, the town’s Budget and Finance Advisory Committee made its recommendation to raise the fuel fee. Committee member Peter Wadsworth said that while the price the town charges Sound Aircraft Services and Meyers Aero Fuels has not gone up, the town’s wholesale provider of fuel has increased prices seven times since 1999.

Last year, the airport’s two providers sold an estimated $4.7 million worth of fuel, he said, and at 15 cents per gallon, the town collected $115,245 in fuel fees.

Ms. Herbst alleged that the committee’s findings were based on “false assumptions and flagrant omissions.”

She said the committee suggested that she open her books to provide a more realistic account of Sound Aircraft’s financials. She refused, saying her company is a private entity, and it would be ludicrous to establish a fee based on the company’s profitability.

“They have no idea of what the cost of doing business is here,” she said. “We’re a very seasonal company.”

Meyers Aero Fuels did not return requests for comment this week.

As it stands now, Sound Aircraft charges $6.75 per gallon for jet fuel, and offers volume discounts, and $7.38 per gallon for low-lead aviation gas. Myers Aero Fuels charges $6.55 for jet fuel and $7.19 for low-lead aviation gas.

By comparison, Francis S. Gabreski Airport’s company, Sheltair Aviation, charges $6.98 per gallon for jet fuel and $8.21 a gallon for low-lead aviation gas—both prices well above the rates at the two East Hampton providers.

Mr. Wadsworth noted that there is a significant difference in the mark-up of gas and fuel between Sound Aircraft and Meyers at East Hampton Airport. He said that by increasing the fee to what other comparable airports charge private fuel companies—25 cents and even 35 cents per gallon—the town could make an added profit of $115,245 each year.

The point is to find new revenue lines at the airport so that it can continue to operate without Federal Aviation Administration money and undertake much-needed capital projects, according to Mr. Wadsworth.

Councilwoman Kathee Burke-Gonzalez, who acts as the airport liaison, said the Town Board is justified in increasing the fee. “We’re firing on all cylinders as far as the airport is concerned in hopes to move forward,” she said. “We’re just doing what we think is taking the methodical approach.”

Ms. Herbst said she is still trying to figure out how much of an impact the fee increase would have and how much would have to be passed on to her customers. She said her company would be paying the town for a service they don’t provide.

Others came to her defense last Thursday, like pilot Hank Houtenbos, who serves on the town’s Airport Planning Committee.

“Make no mistake, this is not going to stop us from coming in and out of the airport,” he said. “The only difference is the only money you’ll get from us is our landing fee. We will not be buying from Sound Aircraft or Meyers.”

Mr. Houtenbos said he believes pilots will fly in with extra fuel to save money rather than tank up in East Hampton. He said the price is not even worth what the airport offers, since it is “crumbling” and “getting worse every year,” what with runway closures and lights that don’t work.

But that is just what the Town Board hopes to fix with more money. Ms. Burke-Gonzalez said the intention was not make it harder for helicopters and jets to travel in and out of the airport, or to make life harder for the private fuel distributors.

“We’ve been very transparent in our operations,” she said. “I don’t know if in prior years the airport manager or a designee would give a report on Memorial Day weekend operations. We’re not looking to close the airport. We want it to be safe.”

The budget committee is exploring other ways to increase revenues from the airport, like paid parking, setting lease renewals at fair market value, building and renting out new hangars, making use of 15 vacant lots along Industrial Road, and introducing a solar power farm. Raising the fuel fee is only its first move.

Town Supervisor Larry Cantwell seemed to be the only town official to be willing to give some leeway to the fuel companies.

“Based on the number of years—it’s been 22 years without an increase—I think increasing it from 15 to 30 cents is justified,” he said, echoing the sentiments of the other board members. “My issue is that this is not done all at once. I think that’s somewhat unfair, from my perspective.”

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One can feel a certain sympathy for the companies having to absorb an increase in fees for the first time in 22 years---and all at once. However, no increase in 22 years!!!! gave them a lot of time to save for what they must have realized was at best an oversight by airport admin and one which would someday catch up with them.
Clearly, another example of very poor administration by airport management over decades......
By Trish (91), Sag Harbor on Jun 20, 14 9:05 AM
low lead diesel fuel,.. surely you are talking about low lead av gas?... check the facts please!.
By hto (12), sag harbor on Jun 20, 14 2:04 PM
QSC and its minions are one step closer to closing our airport. They don't care about revenue or noise, its closure they want. This price increase will cause the helicopters and jets to fuel elsewhere (everywhere but Gabreski is now cheaper). So there goes 85%+ of the airport's fuel revenue, preventing it from being self sufficient. They will stop the FAA funding to keep the airport in the red and drive Sound and Meyers out of business. Plus since the jets and helis have to come in heavy with fuel ...more
By localEH (427), East Hampton on Jun 22, 14 11:47 PM
Will that increase cover the massive spending spree this Board has been on since taking office? Unlikely. Has anyone been paying attention to all the new hiring, the bonding, the nonstop budget modification. This will all catch up with us later in the year when the plethora of funding lines that fuel this spending begin to dry up (especially the health insurance line). Since there is no opposition, no public outcry, board meetings now being a unanimous love fest (Et tu Fredo), and with the local ...more
By Eamonn (17), East Hampton on Jun 24, 14 10:18 AM
This is just another example of how out of control things have become at the airport. Thank you Town Board and BFAC for pulling back the curtain. The Town has all the liability and these gas pumpers who have been raking it in for years make all the money? Cantwell says it's time to take a harder look at the entire fuel situation there. I say: good idea.
By Amelia Airport (48), East Hampton on Jun 25, 14 7:12 PM