Hazleton Regional Airport has been self-sufficient for at least four years, with administrators saying grant-funded safety improvements and increases in revenue from hangar leases and fuel sales have propelled a facility that had been a financial drain into the black in recent years.
The city hasn’t had to use general fund revenue to sustain operations at the airport since it took on the role of running the facility in September 2011, said Dominic Yannuzzi, of Alfred Benesch and Co., the city’s contracted engineering firm.
That’s when Mayor Joseph Yannuzzi’s administration began making wholesale improvements, both physically and financially, the engineer said.
“The city took over as fixed-base operator in 2011,” he recalled. “The airport had many deficiencies and lacked services that compromised safety and efficiency. The budget, year to year from 2011, was adjusted for priority and necessary purchases and income increased. A plan was developed early on in addressing each deficiency — one by one on a priority-based method.”
Dominic Yannuzzi has been point man at the airport since then. His responsibilities include overseeing all airport-related expenditures, paid from a fund that is independent of the city budget. A list of expenses is then turned over to the Federal Aviation Administration and Pennsylvania Bureau of Aviation for review and audit.
The mayor also recalls challenges in turning the facility around and wants to clear up misconceptions that the airport is a drain on the city budget. “It was a drain,” he said “(Today), it’s self-sustaining.”
The mayor believes the entire region benefits from the airport, with advantages ranging from perception to economic development.
“The city sounds like a major metropolis,” the mayor said. “I see a lot of advantages and a lot of opportunities. There’s no qualms about any company (locating) here.”
Finances
According to recent audit reports, the airport fund began 2012 in the hole. It inherited a $28,298 fund balance deficit from 2011.
The city took over as fixed-base operator in September 2011 and began working to implement a number of safety improvements at the facility, Dominic Yannuzzi said.
The deficit grew as $139,889 in airport fund expenditures reported in 2012 outpaced $123,012 worth of revenue, audit reports show. The shortfall from 2012 increased the overall fund balance deficit to $45,175 by the end of 2012.
Losses that mounted in 2011 and 2012 were offset somewhat in 2013, when income from rental fees increased from $30,638 in 2012 to more than $63,000. Revenue from fuel sales also increased, from $60,852 in 2012 to more than $288,000 over the same time frame.
By the end of 2013, the fund balance deficit was cut by about half, to $24,284.
A number of factors contributed to the trend, the mayor said.
In 2012, the city undertook a $1 million-plus grant-funded lighting project at the airport, the first step to improving safety conditions, Mayor Yannuzzi said.
The city also renegotiated hangar leases with tenants at the airport — and made sure all were caught up on payments, he said.
“Most people were behind (on payment),” the mayor said. “We renegotiated every lease. And, everyone who had a lease, we got them up to date — they’re all pretty close to current on payments. That was a big factor.”
The city took the same approach to people who fell behind on tie-down fees, or payments for anchoring planes on airport land, Yannuzzi said.
“We got rid of some people and got paid up on the other ones,” he recalled.
While audit reports show a deficit for 2012, Dominic Yannuzzi said the report omitted one critical component — the amount of jet fuel and aviation gasoline the city had in reserve.
The city purchased fuel late into the year in both 2012 and 2013, the engineer said. The expense showed up in the budget and audit, but the amount of fuel kept in reserve did not, he said.
Furthermore, the value of the fuel reflected only what the airport purchased it for – and did not account for overhead and other costs the airport builds into its per-gallon sales price, he said.
“They didn’t take into account what was still in reserves and (sold) eventually,” the engineer said. “It wasn’t properly depicted in the 2012 audit.”
Accounting adjustments were made in 2013 to address the fuel reserve issue, he said.
In 2012 and 2013, the city had $98,099 worth of jet fuel and aviation gasoline in reserves, Dominic Yannuzzi said. The value of the fuel would’ve offset deficits reported for both years, he contends.
Since the fuel was typically purchased late in the year, revenue from sales didn’t show up until early the following year, he said.
Finances improved dramatically by 2014 — when the airport fund reported $655,838 in revenue compared with $514,764 in expenditures.
Revenue increases from fuel sales and hangar leases contributed to the turnaround, Dominic Yannuzzi said.
The airport fund finished 2014 with a $116,780 fund balance, an audit reveals.
The trend continues this year, with $362,909.19 in revenue reported through Thursday outpacing airport fund expenditures by $48,534.03, according to a report released by the city.
“General fund money has not supplemented this operation at all,” Dominic Yannuzzi said. “Expenses were slightly higher (in the past) because we bought the fuel and had it in reserve. The expense is hitting before the end of the year, before we bring in income. We recovered that money.”
Initiatives
In 2012, officials took steps to “re-brand” the airport, changing its name from Hazleton Municipal Airport to Hazleton Regional Airport, Dominic Yannuzzi said.
The focus shifted to improving services and making the facility safer for pilots, the engineer said.
The city secured a grant for purchasing a jet fuel truck and an aviation gasoline truck.
Lighting improvements were implemented, lines repainted and obstructions removed.
FAA officials took note of the improvements in a July 2013 letter to the city. In the letter, federal officials recognized efforts the city took to remove obstructions and create the most “symmetrical and stable” parameters at the facility in 25 years. Federal officials said the improvements led to more efficient and accurate flight inspections.
The city is working to expand a runway safety area, which will bring the runway to 5,000 feet and satisfy insurance requirements for most corporate jets, the mayor said.
The city relied on in-kind contributions and donations for completing the initial phase of renovations planned at the terminal building, Dominic Yannuzzi said. He estimates the value of those improvements at $150,000.
“We just had some roof material and labor donated to that,” he said. “That will help finalize the last stage (of improvements).”
Revenue from fuel sales and rentals will fund lease-purchase agreements for two hangars, Dominic Yannuzzi said. Additionally, Verizon will pay the city $21,600 per year for placing a cellular tower and related facilities at the airport. Payments will escalate 2.5 percent annually. Since the tower would be built on airport property, revenue would supplement the airport fund.
City highway workers maintain the facility, but money from the airport fund is used to reimburse salaries for the time they spend at the airport, the mayor said. The airport also reimburses the city for payroll expenses, the mayor noted.
Dave Chronowski serves as airport supervisor and the facility is staffed by part-timers on weekends.
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