Kittitas County AirportStrategic Business Plan - FINAL - 072621 (002)

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APPENDIX II: PRELIMINARY AIRPORT ASSESSMENT APPENDIX Airport Strategic Business Plan, 07/26/2021 57 The airport sponsor’s obligation to make an airport available for public use does not preclude the airport sponsor from recovering the cost of providing the facility. The airport sponsor is expected to recover its costs through the establishment of fair and reasonable rents, fees, or other user charges that will make the airport as self-sustaining as possible under the circumstances existing at the particular airport. The FAA’s Policy Regarding Airport Rates and Charges (61 Fed. Reg. 31994; June 21, 1996 as amended) provides comprehensive guidance on the legal requirement that airport rents, fees, and charges be fair, reasonable, and not unjustly discriminatory. Federal law does not prescribe a single approach to rate-setting; airport sponsors may utilize a preferred methodology as long as that methodology is applied consistently to similarly situated aeronautical users and conforms to other requirements outlined in the Policy. Ordinarily, the FAA will not investigate the reasonableness of a general aviation airport’s rents, fees, or charges absent evidence of a progressive accumulation of surplus aeronautical revenues. The Use of Airport Revenue: Assurance 25 (Airport Revenues) provides that: “All revenues generated by the airport and any local taxes on aviation fuel established after December 30, 1987, will be expended by it for the capital or operating costs of the airport; the local airport system; or other local facilities which are owned or operated by the owner or operator of the airport and which are directly and substantially related to the actual air transportation of passengers or property; or for noise mitigation purposes on or off the airport…” Assurance 25(a) Airport revenue (aeronautical and nonaeronautical rents, fees, and charges) must be used for the operational and capital costs of the airport, the local airport system, or other airport sponsor facilities that are directly and substantially related to the air transportation of passengers or property. Certain airports are exempted from this requirement because the law grandfathers’ certain arrangements that existed prior to September 3, 1982. The FAA’s Policy and Procedures Concerning the Use of Airport Revenue (64 Fed. Reg. 7696; February 16, 1999) provides several examples of unlawful revenue diversion, as follows:  Paying in excess of the value of goods or services the airport sponsor receives;  Improper cost allocations;  Charging less than fair market value rent to nonaeronautical users, including the airport sponsor itself;  Directly subsidizing air carriers;  Using airport revenue for general economic development activities;  Paying for marketing and promotions not related to the airport;  Loaning money to other entities at less than prevailing rates; and  Using airport revenue to participate in some types of community events.