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Airport budget balanced without local tax support; FAA rules bar diverting airport revenue
Summary
Presque Isle’s airport presenter outlined a balanced 2026 budget that relies on landing fees (about $1.354 million, largely from JetBlue) and general aviation activity rather than local property tax, and reminded council federal ‘‘revenue diversion’’ rules prevent using airport funds for non‑airport needs.
Presque Isle’s airport manager presented a balanced fiscal 2026 airport budget on Oct. 14 that projects a modest $744 surplus and does not rely on local property tax. The airport’s largest net revenue source is landing fees, about $1.354 million, most of which the presenter said comes from JetBlue; general aviation revenue was cited at roughly $4.1 million with resale items (primarily jet fuel) offsetting a large portion of that income.
The presenter described capital needs including a new mini loader and service carts and said department staffing includes ARF, maintenance, general aviation operations and administrative support. He noted a substantial health‑insurance cost increase (about 21.7%) and cited fuel oil as the year’s major cost decrease.
Councilors asked about resale items and hangar rent. The presenter confirmed the $3.4 million resale line largely reflects the wholesale cost of jet fuel (Jet A) and limited quantities of deicing fluid and lubricants; he also said about 11,000 gallons of 100‑octane aviation gasoline (100LL) are part of sales. Hangar occupancy has been nearly 100% since construction, and four of the five original tenants remain; five‑year leases for newly built T‑hangars are expiring this year and the city plans to revisit rents to recover costs plus the airport advisory committee’s recommended 10% return.
On future airline contracting, the presenter said the current Essential Air Service (EAS) contract runs through Sept. 1, 2026, and that when bidding the next contract the city will incorporate operating and tenant‑responsible capital costs for the new terminal (including an estimated $12 million in FAA‑ineligible capital costs) so bidders can account for total airport fees.
The presenter cautioned councilors that federal law and airport grant assurances prohibit ‘‘revenue diversion’’ — moving airport receipts to unrelated municipal uses such as general‑purpose fire apparatus or library purchases. He cited the grant assurance provision cited at the meeting and said AIP/FAA enforcement actions in prior cases required repayment of diverted funds plus interest and could trigger civil penalties and withholding of grants.
The city’s airport official said the budget remains balanced without relying on local taxpayers and emphasized the constraints and disclosure requirements when capital costs are not FAA‑eligible. The council did not take a formal vote on airport budget items during the presentation; follow‑up or formal appropriation steps will occur later in the municipal budget process.
