Finance Committee OKs $8.5 million cap for airport fuel revolving fund

The Nantucket Finance Committee voted unanimously May 13 to raise the airport fuel revolving fund cap from $6,000,000 to $8,500,000 to cover anticipated fuel purchases through the end of the fiscal year.

Airport staff presented the request during the committee’s May 13 meeting. Maria, an airport staff presenter, said the airport set the current fiscal-year cap at $6,000,000 at last year’s annual town meeting and asked the committee to approve increasing it to $8,500,000. “We would like to increase that cap to $8,500,000,” Maria said when describing purchases to date and anticipated deliveries.

The request reflected purchases through April 30 of about $5,800,000 and an estimate of additional deliveries for May and June. Maria told the committee the team had projected 58 more deliveries and added a buffer of roughly $678,000 to arrive at the $8.5 million cap request. She also said fuel-derived revenue is a material portion of airport income: the airport budgeted about $2,000,000 of fuel revenue in fiscal 2024, about $2.2 million in fiscal 2025, and $2.4 million in the next fiscal year, figures she said represented roughly 18% of the airport’s budgeted revenue for those years.

Town staff member Brian explained the legal and procedural mechanics. He said the annual town meeting sets the revolving fund cap and that the cap is the legal authority to expend from the fund during the year. Brian added that the fund can pay for fuel purchases and, where authorized by town meeting language, repairs and maintenance to the airport fuel farm. Any retained earnings above budgeted figures become available for transfer only after an audit is certified and through annual town meeting action.

Committee members asked for clarifications on cash flows and operations. Committee member Jeremy asked whether the fund works like a line of credit; Brian clarified it is not a traditional revolving credit facility but a municipal budgeting mechanism that limits annual expenditures and concentrates fuel activity in a single fund. Committee member Joe asked whether the fund balance ever goes to zero; Brian and Maria explained that retained earnings typically remain and that the airport would not expect to draw the fund to zero in normal operations.

Airport manager Warren (introduced as the new airport manager) and Maria addressed questions about who purchases fuel. Maria said about 30% of fuel revenue comes from commercial airlines and 70% from general aviation (private jets and the FBO). Warren noted the airport sells fuel in-house, which is less common than using third-party FBOs at many U.S. airports, and that aircraft are getting larger and therefore taking more fuel even when the number of arrivals is steady.

Motion and vote: Finance Committee member Joanna moved to approve the increase; Jeremy seconded. The committee recorded a unanimous roll-call vote in favor; the motion passed.

What the vote means: Raising the cap to $8.5 million authorizes the airport to expend up to that amount from the fuel revolving fund during the fiscal year for fuel purchases and authorized fuel-farm repairs. Any year-end retained earnings would require audit certification and separate annual town meeting action to transfer the funds for other uses, such as capital or PFAS remediation work, as staff described.

Committee members asked staff to provide additional detail after the meeting, including year-over-year gallons and dollar comparisons and the longer-term rationale for setting the cap at particular levels. Staff said they would provide those figures on request.