BizPilot
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Menards is pleased with change in airports
Published: Wednesday, July 5, 2006 10:24 AM CDT
The Menards Corporation is no longer using the Chippewa Valley Regional Airport (CVRA).
Corporation officials have decided to fly their planes into the Menomonie Municipal Airport (MMA) instead. The company began using MMA exclusively on June 9.
Menards is making plans to make the Menomonie Municipal Airport its permanent local base for corporate flights and is looking for a long-term agreement with Menomonie.
In a statement from Menards, officials said CVRA was difficult to negotiate with and issues involving the high cost of parking at CVRA forced Menards to take its business elsewhere.
According to a statement by Menards spokesperson Jeff Abbott, on a typical day, Menards parks approximately 100 cars at the airport. The cars belong to passengers, pilots and mechanics. There are approximately 40 flights per week during the summer and 80 flights during the winter to various destinations around the Midwest.
Menards said that the MMA tends to be more business-oriented and has been good to work with. "The origination of flights from Menomonie has gone very smoothly. [MMA] has bent over backwards to help us," the statement said.
Meanwhile...............
[FONT=Verdana, Arial, Helvetica, sans-serif]7/2/2006 10:35:19 AM[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]Airport’s financial state misreported [/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]Former manager receives part of blame for facility’s mounting debts [/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]Julian Emerson
[/FONT][FONT=Arial, Helvetica, sans-serif]Leader-Telegram Staff[/FONT]
Published: Wednesday, July 5, 2006 10:24 AM CDT
The Menards Corporation is no longer using the Chippewa Valley Regional Airport (CVRA).
Corporation officials have decided to fly their planes into the Menomonie Municipal Airport (MMA) instead. The company began using MMA exclusively on June 9.
Menards is making plans to make the Menomonie Municipal Airport its permanent local base for corporate flights and is looking for a long-term agreement with Menomonie.
In a statement from Menards, officials said CVRA was difficult to negotiate with and issues involving the high cost of parking at CVRA forced Menards to take its business elsewhere.
According to a statement by Menards spokesperson Jeff Abbott, on a typical day, Menards parks approximately 100 cars at the airport. The cars belong to passengers, pilots and mechanics. There are approximately 40 flights per week during the summer and 80 flights during the winter to various destinations around the Midwest.
Menards said that the MMA tends to be more business-oriented and has been good to work with. "The origination of flights from Menomonie has gone very smoothly. [MMA] has bent over backwards to help us," the statement said.
Meanwhile...............
[FONT=Verdana, Arial, Helvetica, sans-serif]7/2/2006 10:35:19 AM[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]Airport’s financial state misreported [/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]Former manager receives part of blame for facility’s mounting debts [/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]Julian Emerson
[/FONT][FONT=Arial, Helvetica, sans-serif]Leader-Telegram Staff[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]When Chippewa Valley Regional Airport commissioners learned in May they would unexpectedly receive $246,000 in federal money, it seemed like an answer to their prayers.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]It didn’t work out that way.
According to Eau Claire County Finance Director Scott Rasmussen, the airport faces an estimated $182,000 shortfall this year and may be unable to make full monthly debt payments next year unless the commission slashes spending or finds new revenue.
The airport will pay $131,000 in debt payments this year.
Earlier this year, beset by financial troubles that led to the Feb. 28 firing of former Airport Manager Jerome Thiele, commissioners were desperate to generate additional revenue — in part to staff a vacant air traffic control tower.
Commissioners believed the $246,000, combined with a Federal Aviation Administration decision in April to pay 70 percent of tower staffing costs, could be used to pay for tower workers and other airport initiatives.
The money would help erase the black eye left by the $3.9 million tower project, which hasn’t opened since it was built last year because of problems obtaining the money necessary to staff it.
But staffing the tower would add to budget woes, creating an additional $157,000 annual cost that would have to be paid from the airport budget, officials said.
Commission members planned to staff the tower, which likely would increase airport revenue by attracting more takeoffs and landings. But Rasmussen advised that might not be a good idea, despite public pressure to do so.
“Before they go ahead and do that (open the tower), they had better be able to take care of what they have,” Rasmussen said.
The airport’s financial situation took another hit last month when Menards officials announced the company has moved its flights to the Menomonie Municipal Airport after the commission approved a parking fee. The Eau Claire-based home improvement company and Mesaba Airlines account for the majority of airport activity.
Menards spent an estimated $41,000 on fuel flow taxes at the airport, adding to Rasmussen’s original projected $141,000 shortfall.
The airport also stands to lose projected parking revenue of as much as $100,000 because of the company’s decision to fly from Menomonie.
“They are facing some serious issues,” Rasmussen said in describing the airport’s financial picture. “When you look at these figures, it spells big economic problems.”
Compounding difficulties is the fact the airport budget doesn’t include contingency money to cover the shortfall. In April, Rasmussen issued a report detailing the airport’s shaky financial position. The commission hadn’t included depreciation expenses in its budgets, leaving a growing maintenance shortfall and little cushion if more money was needed.
“There is no fall back or room for error here,” Rasmussen said.
Not adding up
From tabulating hangar rental fees to estimating the number of flights at the airport, Thiele projected a too rosy financial picture. A review of airport budgets since 2002 showed the former airport manager routinely overstated revenues and underreported expenses.
For the past two years the budget over-reported income from airport hangars. In 2004, the difference between revenue budgeted and collected was $23,033, a shortfall that ballooned to $79,209 last year.
Nonetheless, Thiele projected the airport would take in $158,842 in hanger income this year, more than double the $73,230 collected in 2005. That projection isn’t possible, given that the maximum income airport officials could collect in hangar fees is $106,000.
Many of his other budget projections similarly were off. Fees collected from airport landings last year were projected at $73,100, but the airport received just $36,825.
The 2006 budget includes an anticipated $70,835, a figure that appears too high. Terminal collection fees show a similar pattern.
Thiele also failed to file passenger facility charges forms with the federal government that allows the airport to receive $104,975 in revenue.
Airport consultants Mead & Hunt are working to recover some of the PFC costs, but it’s not likely the airport will be fully reimbursed, Rasmussen said.
“Where did Jerry come up with these numbers?” Rasmussen asked. “That’s a question I’m hearing a lot these days.”
Commissioners John Torgerson and Ron Purvis criticized Thiele’s budget practices, saying the former manager misled the commission about the airport’s financial picture.
“We had no idea we were in this kind of budget situation,” Purvis said.
Digging out
Airport Commission members have acted to address budget problems. They increased airport parking fees to raise additional cash and have cut spending in other areas, including marketing.
Commissioners said they’ve put off a decision on whether to staff the tower as they contemplate how to make up a deficit Torgerson said could grow to as much as $200,000 by the end of the year.
While those actions will help, they likely won’t solve the airport’s long-term financial concerns because the airport budget doesn’t include many nonessential services to cut, Rasmussen said. Recently hired Airport Manager Charity Speich, who begins her job this week, faces significant challenges, he said.
“They’ve got to somehow find a way to increase revenues,” Rasmussen said, noting that efforts to attract an airline in addition to Mesaba has proven difficult and doesn’t look to get easier given difficult times faced by airlines.
Purvis acknowledged the seriousness of the airport’s financial situation but said he doubts local and federal officials would let the airport shut down if it can’t pay its bills.
“I don’t think people are willing to let that happen,” he said.
Despite short-term hardships, Torgerson said he remains optimistic about the airport’s future. The airport should benefit from growth in the Chippewa Valley, increased demand for hangar space and an upsurge in air travel, he said.
“We think long term the outlook is positive,” he said. “But we certainly have found some difficult things we have to deal with.”
Leader-Telegram reporter Eric Lindquist contributed to this report.
Emerson can be reached at 830-5911, (800) 236-7077 or [email protected].
By the Numbers
The Chippewa Valley Regional Airport is repaying loans totaling $1.64 million:
n A 20-year loan by the Eau Claire County Board totaling $867,000 for terminal improvements. The loan was approved in 2002.
n A 35-year loan by the Eau Claire County Board totaling $679,000 to build hangars. The loan was approved in 2004.
n A five-year loan by the Chippewa County Board totaling $54,000 to purchase land near the airport. The loan was approved in 2004.
n A five-year loan by the Eau Claire County Board totaling $40,600 to buy land near the airport. The loan was approved in 2002.
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I remember when it used to be W11 and Northwind Aviation was the FBO there. I still remember flying the little red C150 that used to be there.
