West Lebanon — The cost of doing business at Lebanon Municipal Airport could become more expensive this summer, as officials look to increase fees in an attempt to shore up the finances at the city-owned facility.
The City Council on Wednesday said it would support a hike in landing fees and rent at the airport, which has a $1 million operating budget, in the hopes that it will become self sufficient.
The talks were the first step toward a multi-pronged plan to wean the airport off taxpayer dollars, with discussions expected to continue into July, City Manager Shaun Mulholland said on Thursday. Aside from fee increases, he said, city leaders also are considering proposals to build a solar array and further develop the airport property.
“The plan, fully implemented, will allow us to get to a time where (the airport is) not running a deficit,” Mulholland said in a phone interview.
The airport is one of several city departments that operates a yearly deficit, requiring taxpayer support to sustain itself, Airport Manager Rick Dyment told the City Council on Wednesday, according to an audio recording of the meeting.
This year, he said, the city’s general fund provided about $340,000 to the airport, with nearly $180,000 expected to be paid back through lease payments and fees. But even with that revenue, Dyment predicted the facility ultimately will run a $250,000 deficit in 2018.
Lebanon politicians have long contended with costs at the airport, which is home to several aviation companies and served commercially by Cape Air.
The airline, which flies direct to Boston and the suburbs of New York, has struggled for years to meet the minimum 10,000 passengers needed to continue receiving federal subsidies.
Plans to develop portions of the West Lebanon property for business also have faltered, and attempts to find a commercial tenant for restaurant space in the terminal have proven unsuccessful.
Budget numbers that Dyment provided to the City Council show the airport running annual deficits ranging from $16,000 to $200,000 over the past eight years.
In 2017, Lebanon contributed almost $237,000 to the airport, which ran a $151,000 deficit.
And in 2016, roughly $110,000 in taxpayer money went to airport operations, which ran a $32,200 deficit that year.
To remedy the situation, he proposed increasing the landing fee for large jets coming to the airport, which could draw an additional $5,100 annually.
When a plane lands at Lebanon and doesn’t have a hangar, it proceeds to Granite Air Center, the airport’s fix-based operator, which provides fueling and maintenance services.
The company also collects a fee of anywhere between $10 for small planes and $125 for jets, Dyment explained. Granite Air Center keeps 25 percent of those fees and passes the remaining money onto the city, he said.
Although the current price to land in the city already is set at a market rate, Dyment predicted that increasing the fee by $75 on large jets wouldn’t lose the airport customers.
“They wouldn’t go elsewhere if we nudged it up a bit,” he said.
Officials also floated the idea of increasing rents at the airport.
Granite Air Center pays about 12 cents per square foot for its space in Lebanon, according to information Dyment shared with the City Council. By increasing that price to 28 cents, he said, the city could double its revenue from the company to about $110,000.
Overall, Lebanon could make an additional $191,000 by increasing its lease rate, Dyment estimated, adding negotiations are ongoing with several companies doing business on the airport property.
Installing solar panels in the southeast corner of the airport also could be a good way to generate revenue, said Dyment, who estimated an array could bring in $30,000 yearly.
“I think there are some really good opportunities to put solar at the airport,” he told councilors.
But before any panels could be placed on the roughly 10-acre site that’s being explored, the state would have to weigh in. Much of the land is considered wetlands, and would have to go through a permitting process that could be challenging, Dyment said.
“We’d have to stabilize the ground with turf, or brush or something,” Dyment said. “One option that somebody told me once is the best use of that area is high-value blueberries.”
Once the land near the solar array is cleared, he said, it could be fenced off and blueberries could be sold to generate more revenue for Lebanon.
Dyment also presented plans for proposed future development at the airport, which would add a new business park to the property.
The council was skeptical of that project, though, saying excavation likely would be too costly and time consuming. They also dismissed plans to install a parking meter system at the airport, which markets its free parking to travelers.
Councilors were supportive of increasing fees, saying it could be a quick way to increase revenue. Some expressed interest in charging a higher landing fee for all planes, while others said proposals should focus on jets, which are likelier to have wealthy owners.
Some of the corporate jet traffic involves major employers in the Lebanon area and visitors to Dartmouth College and its graduate schools.
“It sounds like the consensus is let’s look at a small increase for some and maybe a bigger increase for the bigger birds,” City Council member Jim Winny said.
The council also expressed openness to a solar array and asked that the project be researched further.
“I do have my doubts about dumping a solar farm or any sort in a wetland,” Assistant Mayor Tim McNamara said. “I do think there’s going to be some push back from the state but I could be completely wrong.”
Mulholland, the city manager, said the city administration will continue to research projects and negotiate with renters into July, when the City Council will next discuss airport finances.
Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.