Airport Master Plan 2012 - City of Waterville

8.7 Summary of Airport Financial Assessment
The five year financial history of the Airport reveals that FBO expenses averaged $284,670 while FBO
revenues averaged $285,260. This results in an annual average FBO profit of $590 between 2006 and
2010. For the same five years, maintenance expenses averaged approximately $88,000 per year while
maintenance revenues averaged approximately $8,000 per year. This indicates that maintenance activities
have been operating at an average loss of nearly $80,000 annually. Unfortunately FBO revenue has
steadily decreased each year since 2007. Another disturbing trend in the overall profit and loss shows an
increasing (doubling) deficit over the last three years since 2008. The Strategic Recommendations section
of this chapter looks to provide options for the Airport to secure long term positive revenues while
reducing current airport expenses.
8.8 Strategic Recommendations
There are various items that can improve an Airport’s ability to generate increased revenue such as new
development, new tenants, additional airport services and amenities, and/or a modification to existing
rates and charges. However, just as revenues can change over any given time, expenses can change as
well. Unexpected expenses associated with airfield maintenance, as well as airport owned buildings and
equipment, as well as the departure or failure of an existing on-airport business can significantly affect
annual budgets.
It is important to note that an Airport Master Plan, including the study of its financials, is based upon
recent history, and current conditions. Therefore, the FAA suggests completing an update to the Master
Plan every 5 to 10 years, or if the characteristics of the facility changes. Regularly updating the Airport’s
Master Plan will enable the City to develop a successful roadmap into the future while tracking the
Airport’s performance of the past.
The following strategic recommendations for WVL are based upon the historical financial data provided
by the City and are both quantitative and qualitative in nature. They include:
1) Maintenance and Rehabilitation of Airport Infrastructure. Without improvements to the runway
infrastructure, activity levels will not increase. Further, the Airport runs the risk of losing based
aircraft as well as the potential additional liability of high speed aircraft operating on poorly rated
airfield pavements. Maintenance and reconstruction of the runway infrastructure is a key component
to being able to attract an FBO as well as attract additional based aircraft tenants/hangar development
opportunities.
When based aircraft tenants choose to keep their aircraft at an airport, they do this based on the
infrastructure (i.e. runways, services, navaids, etc.) available at the facility and in turn pay the Airport
a fee to do so through leases and fuel sales. The expectation is that the Airport utilizes those fees to
maintain and improve the facility accordingly.
The following is one scenario of just one component of Airport revenues paying back a capital
improvement. While not all encompassing of the capital program or airport revenues, the
Reconstruction of Runway 14-32 is a good example of return on investment. At a total reconstruction
cost of $811,000 the City’s share at 5% is $40,550. Assuming $5,000 of the existing rental/land lease
income annually, the City’s share is returned in just 8 years.
Infrastructure improvements are the most prudent investment the City can undertake to make the
Airport more attractive. And considering that every $0.05 the City spends in capital improvements
attracts $0.95 from the federal (FAA) and state (Maine DOT) makes this a wise investment.
The City of Waterville Maine
Implementation and Financial Plan – Page 8-16
Airport Solutions Group, LLC & The Louis Berger Group, Inc. December 2011