Facing a cash flow shortage, the Martha’s Vineyard Airport Commission anticipates borrowing money in the near future to fund operations at the airport.
In a report at the commission’s regular meeting Thursday, finance subcommittee chairman Robert Rosenbaum said the airport has about $365,000 in cash on hand, and is spending about $200,000 a month to operate the county-owned facility.
“Bottom line is, cash is getting to be on the thin side,” said Mr. Rosenbaum. “We are anticipating that we will run out of cash within the next few months.”
The commission is considering short-term borrowing to fund operation until the summer season, when revenue increases. The airport could borrow money in anticipation of revenue for operations, or in anticipation of a bond, for capital projects.
“The staff, along with the county treasurer’s office, will be working over the next month and will come to the finance committee with a recommendation on what route to go,” Mr. Rosenbaum said.
He said the new rescue and firefighting building, maintenance on the terminal building, and maintenance on the airport’s wastewater facility are all projects that have drained cash in the past year.
“We are in this cash situation because of the years of neglect to the infrastructure,” Mr. Rosenbaum said. “We are now having to spend a significant amount of money to bring them up.”
Though the airport has not borrowed money in the past two years, commissioners said using short-term debt to fund operations is not unusual for airports.
“These are not anything that was not anticipated,” said commissioner R. Peter Wharton. “This is ordinary course of business for municipally run airports to utilize these tools as needed for any short term cash flow.”
In other business, airport commissioners learned from their consultant about delays in the planned expansion of the airport business park, including a regulatory problem with the lots in the current business park.
In a presentation, Brian Smith of the consulting firm McFarland Johnson, said none of the lots currently occupied by business park tenants were ever cleared for non-aeronautical use by the Federal Aviation Administration (FAA). The clearance is as required by law.
He said while some regulatory work was done when the airport created the business park, the FAA has no record of final approval. Mr. Smith said some remedial work will be necessary to bring the airport into compliance with the law.
“I have to admit that I’m a little dumbfounded,” Mr. Wharton said. “The fact that we are now having to bring all of that into compliance I find frustrating and surprising.”
Mr. Smith also outlined a number of other environmental and regulatory obstacles that have risen in the course of his work. He advised the commission that a number of assumptions about expansion have turned out to be false. He said one of those assumptions was that there would be a large amount of land available for possible multi-use development. He said given the regulatory hurdles, that is unlikely to happen.
He said, however, that the airport commission may be able to offer a few lots for development by the end of next year.
Commissioners approved approximately $135,000 in work orders for McFarland Johnson to continue work on land development and other projects.
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