TO: Mayor and City Council
THROUGH: Keith Stahley, City Manager
FROM: Brian D. Martin, PE, Public Works Director
SUBJECT:
title
First Reading of Ordinance Bill No. 1-25 to amend SRC Chapter 9 to modify the collection of aircraft landing fees and overnight parking fees.
Ward(s): 2
Councilor(s): Nishioka
Neighborhood(s): SEMCA, SESNA
Result Area(s): Strong and Diverse Economy
end
SUMMARY:
summary
The proposal would amend language related to the aircraft landing and overnight parking fee collection program at the Salem-Willamette Valley Airport.
end
ISSUE:
Shall City Council advance Ordinance Bill No. 1-25 to second reading?
RECOMMENDATION:
recommendation
Advance Ordinance Bill No. 1-25 to second reading.
body
FACTS AND FINDINGS:
Increased expenses for airport operations and maintenance, coupled with the addition of commercial air service in 2023, have added to the airport’s annual budget shortfall, and new revenue has not yet materialized to forecasted levels. Including ongoing general fund support, the airport’s five-year forecast shows an unsustainable financial trend beyond the next two years. Additional aircraft landing and overnight parking fee collections will help close the budget gap. The fees are anticipated to capture between $50,000-$100,000 annually.
Locally based aircraft, emergency services, government, military, and aircraft that weigh less than 7,000 lbs. (Maximum Gross Takeoff Weight) would be exempted from landing fees. The minimum weight requirement of 7,000 lbs. would capture the larger general aviation aircraft, and nearly all business jets and turboprop aircraft that operate to/from Salem but would likely not discourage flight schools in the valley from conducting training at the airport. Staff is confident that this structure will generate revenue while maintaining annual aircraft operations and not adversely impact local businesses operating at the airport.
In its Special Meeting of December 18, 2024, the Airport Advisory Commission considered staff’s recommendation to impose fees on aircraft that weigh 5,000 lbs and above. After considerable discussion, the Commission voted unanimously (with one abstention) to recommend City Council adoption of the proposed code changes at the 7,000 lbs. weight minimum.
Staff supports the recommendation of the Commission and believes this is a good starting point for these fees. Once the technology is in place to capture this information, staff will monitor and analyze aircraft landing data, revenue, and feedback from airport users to determine if future adjustments to the program are warranted.
BACKGROUND:
In continued efforts to become financially self-sufficient, airports across the United States are updating their aircraft landing fee and overnight parking fee programs to capture the uses of the airport by transient aircraft operators that may not otherwise pay to use the airfield. Historically, such fees were charged only to for-profit entities engaged in commercial aviation activities; privately-owned general aviation aircraft and business jets were generally exempted from such fees to attract more aircraft to the airport, which would presumably lead to greater fuel sales and fuel flowage revenue.
U.S. airports today, particularly general aviation airports and smaller commercial-service airports like Salem, find themselves short on revenue with increased operational costs, leaving large funding gaps. Collecting fees for aircraft operators that use the airfield is one such way to close the revenue gap. Modern technology has made it possible to track which aircraft land and park at the airport and automates the billing and collection of landing fees and overnight parking fees.
John Paskell
Airport Manager
Attachments:
1. Ordinance Bill No. 1-25
2. Exhibit A to Ordinance Bill 1-25