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September 13, 2013

FAA: All revenue must stay with Majors Field

If an increase in rent is part of the new L-3 Mission Integration lease contract currently being negotiated, that extra revenue won’t be making its way to the city’s general fund.

According to a 1990 report from the Federal Aviation Administration, Majors Field is one of thousands of airports from around the country that are affected by agreements with the Federal government. The document, which was released on April 30, 1990, indicates that Majors Field is affected by five such agreements.

According to city of Greenville Attorney Daniel Ray, having three such agreements require that all rental monies stay on airport property, per FAA regulations. These agreements also run with the land — i.e., barring an extreme circumstance, these agreements remain intact forever.

Majors Field (now Majors Airport) was given to the city of Greenville by the federal government under the Surplus Property Act of 1944. One of the specifications of that act is that the “recipient [must] use the revenue generated by the property for the operation, maintenance or development of the airport.”

The FAA must approve any lease between Greenville and L-3.

“We’ve been working with the FAA from the beginning so that we understand what their requirements are for this particular airport,” Ray said. “No two airports are the same in the laws they have to follow.”

Ray said that laws and regulations have changed since the most recent L-3 lease was approved in the 70s.

The Greenville City Council has not yet voted on a contract with L-3 and, since the two parties agreed to a non-disclosure agreement during the negotiation process earlier this year, it is unknown when a new contract will be presented to the council. But, regardless of whether there is an increase in L-3’s rent, that money will be earmarked for the airport fund only.

The airport fund is one of the city’s enterprise funds, which means that it is financed and operated in a manner similar to private business enterprises, where the cost of providing the service be primarily covered through user charges. According to City Manager Massoud Ebrahim, the Airport Fund currently has a negative fund balance of due to legal fees the city paid out of that account.

That budget deficit is projected to be $164,143, but on average the airport makes slightly more than it spends. The proposed 2013-14 city budget follows that trend, and Ebrahim indicated that surplus revenues would be used to offset the fund’s deficit.

Money collected from L-3 by the city for their airport release goes directly into the airport fund. If a new lease is passed and the amount of rent paid by L-3 changes, Ebrahim said it is possible for the council to amend the budget after it is approved.



 

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