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BEDFORD COUNTY AIRPORT

ECONOMIC FEASIBILITY STUDY


AIRPORT BUSINESS PLAN

PREPARED FOR THE


BEDFORD COUNTY AIR INDUSTRIAL PARK
AUTHORITY
BY
L. ROBERT KIMBALL & ASSOCIATES, INC.

December 2006
Economic Feasibility Study
Airport Business Plan

TABLE OF CONTENTS
INTRODUCTION....................................................................................3
SECTION 1 - BACKGROUND AND OPERATIONS
1.1 Location, Airport History & Ownership/Administration................................4
1.2 Business/Economic Analysis & Employment...............................................6
1.3 Development History, Current Facilities & Desired Future Plans.................7
1.4 Aeronautical Role........................................................................ ................9
1.5 On Airport Businesses/Lease Agreements........................................ .........10
1.6 Based Aircraft, Fleet Mix and Operations Activity Profile...........................10
SECTION 2 – MISSION, VISION, BUSINESS GOALS AND STRATEGIES
2.1 Mission and Vision................................................................................... ..14
2.2 SWOT Analysis......................................................................... .................15
2.3 Business Goals and Objectives.................................................................. 16
SECTION 3 - FINANCIAL DISCUSSION AND ANALYSIS
3.1 Introduction................................................................. .............................18
3.2 Market Analysis /Service Area..................................................... ..............19
3.3 Airport Financial Condition...................................................... ..................22
3.4 Revenue Source Comparison & Existing Airport Revenue Sources............28
3.5 Expense Discussion .................................................. ...............................35
3.6 Baseline Forecast of Revenue and Expenses ........................................... .39
3.7 Grants – Federal and State................................................................... .....42
3.8 Alternative Financing Methods.................................................. ................48
SECTION 4 – AIRPORT OPPORTUNITIES & RECOMMENDATIONS
4.1 Airport Opportunities – Current and Proposed Devleopment Plan.............51
4.2 Foregin Trade Zones and Keystone Opportunity Zones.............................53
4.3 Recommendations............................................................ ........................56
4.4 Executive Summary................................................................. .................71
APPENDICES
Appendix 1: Marketing Plan Outline ............................................. ..................73
Appendix 2: Economic Impacts of Aviation – Bedford Airport .........................83
Appendix 3: Twelve Year Plan (December 2006) ............................................84
Appendix 4: Selections from Capital Improvement Program ..........................85
EXHIBITS
Exhibit 1 - Location Map ............................................................................... ....4
Exhibit 2 - Desired Grant Projects – 2007 through 2010 ...................................8
Exhibit 3 - “Intermediate” SASP Facility Recommendations............................10
Exhibit 4 - Forecast: Based Aircraft Projection......................................... ........12
Exhibit 5 - Based Aircraft Forecast – Fleet Mix .............................................. ..12
Exhibit 6 - FAA Airport Master Record (5010) Operations by Type ..................13
Exhibit 7 - Projected Itinerant, Local and Total Operations..............................13
Exhibit 8 - General Aviation Radius of Influence/Primary Service Area ...........21
Exhibit 9a - Loan/Debt Summary as of December 31, 2005 ...........................23
Exhibit 9b - Fixed Asset Summary as of December 31, 2004..........................24
Exhibit 10 - Summary of Historic Airport Profit/(Loss) – 2001 through 2005....25
Exhibit 11 - Summary of Historic Financial Components – 2001 - 2005...........26
Exhibit 12 - 2004 Airport Operating Revenue by Source.................................27
Exhibit 13 - 2004 Airport Operating Expense by Source.................................27
Exhibit 14 - Projected Revenue and Expenses................................................. 41
Exhibit 15 - Proposed Airport Development....................................................52
Exhibit 16 - Hangar Development Model..................................................... ....59
Exhibit 17 - Proposed Land Acquisition................................ ...........................65
Exhibit 18 - Bedford County Registered Aircraft Owners ................................81

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Airport Business Plan

INTRODUCTION
The Bedford County Air Industrial Park
Authority has accepted the services of L. Robert Kimball & Associates,
Inc. to conduct an Economic Feasibility Study/Airport Business Plan with
the goal to determine the best approach for the Airport to manage
aviation and non-aviation related development to maximize revenue
generation to support future development and maintenance of the
Bedford County Airport (HMZ). The Plan will help identify where the
Airport is today, where it has been in the past and where it wants to go.
The steps taken in this process will also make the Airport aware of the
competition, explore alternatives, be pro-active rather than reactive and
ensure that actions and recommendations are consistent with available
resources and constraints.

The primary goals of this report and associated analysis will


provide the following:

• SWOT Analysis
• Create a mission and current and long-term vision for the
Airport
• Determine supporting goals and objectives
• Evaluation of business operation and financial results
• Baseline projection of revenue and expenses
• Identification of strategies for meeting goals and objectives
• Suggest preferred course of action and implementation of such
• Test and make adjustments as necessary
Contained herein are the following sections that include the
sources/results of this Study/Plan:

• Section 1: Background and Operations


• Section 2: Mission, Vision, Business Goals and Strategies
• Section 3: Financial Discussion and Analysis
• Section 4: Airport Opportunities & Recommendations

SECTION 1
BACKGROUND AND OPERATIONS
This section will explore where the Airport has been and where it
is currently from an operations standpoint including a look at
management structure, Airport facilities, service area, employment,
operations, planned projects and Airport classification. Reviewing and
understanding Airport background and management structure will assist
in identifying opportunities, challenges and strengths of the Airport.

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1.1 Location, Airport History and Ownership/Administration

Location
Bedford County Airport (HMZ) is located on approximately 168
acres in Bedford Township, Pennsylvania. The County is located in the
Southern Allegheny Mountains, between Fulton and Somerset Counties.
Bedford County has a land area of approximately 1,015 square miles
and a 2004 Census population of approximately 50,230 people. Bedford
is 30 miles south of Altoona and approximately 30 miles northeast of
Cumberland, Maryland (reference Exhibit 1).

The Airport is situated 4 nautical miles north east of the Borough


of Bedford and is easily accessible via US Interstates 70, 76, and 99.
The geographic coordinates of the Airport are: Latitude 400 05’ 10.059”
N, Longitude 780 30’ 48.603“ W at an elevation of 1,163’ MSL (mean sea
level).

Exhibit 1 – Location Map

Airport History1

1
Source: Noel, Earl. Altoona Flight Service Station, Airport Profile, Bedford profile, Bedford Airport,
htt://www.faa.gov/ats/afss/aooafss/airport2.htm, Accessed June 04 2004

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The roots of the Bedford County Airport can be


traced back to the WWII days when a parcel of land
was leased from a local farm in Cessna, PA for the purpose of
establishing a grass/gravel landing strip, which was built in 1947 and
later abandoned. The official name was the Max Hunt Memorial Field
and several men from the area started a successful flight school, having
over one hundred flight students at its peak.

A more modern Airport was built in 1950 next to the Pennsylvania


Turnpike. The turnpike made the Airport easier to locate from the air.
The Airport had a 2,000’ paved runway and was considered to be a
challenge to fly in and out of due to the terrain. In subsequent years,
the need was expressed to build a larger, more modern airport for the
Bedford area. In July, 1989, a ground breaking ceremony was held for the
Bedford County Airport (HMZ). The project went through many challenges
and finally in May, 1994, the new airport opened for business. Significant
projects will be discussed in Section 1.3.

Ownership/Administration

The Bedford County Airport is owned and operated by the Bedford


County Air Industrial Park Authority. The governing body of the
Authority is a 15-member Board appointed by the Bedford County
Commissioners. This Board is authorized to exercise any and all powers
necessary for acquisition, construction, improvement, extension,
maintenance and operation of the Airport. This group meets monthly.
Ray Jennings, the Secretary/Treasurer of the Authority, is a dedicated
Airport Director who handles the day-to-day operations of the facility as
well as oversees airport development projects. The fixed-base operator
(FBO), Bun Air Corporation, provides maintenance, refueling services,
flight training, aircraft rentals and oxygen.

Bedford County Air Industrial Park Authority


Robert D. Sweet, Chairman
Mark W. Thomas, Vice Chairman
H. Ray Jennings, Secretary/Treasurer
B. Frank Dunkle, Asst. Secretary/Tresurer
Donald C. Gallagher
Paul I. Detwiler, Jr.
Sheldon D. Ickes
Joseph Lurie
Dr. Thomas F. Otis
Dr. Ron Markwood
Henry Meetze
Steve A. George
Robert D. Simmons
Roger S. Nave
Gary L. Nouse, Sr.

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Advisors to Authority
Gordon Stroup, Esq., Solicitor
Frank E. Grazier, Technical Advisor
Bette B. Slayton, Director, Office of Economic Development

1.2 Business/Economic Analysis & Employment

Business/Economic Analysis

In 2004, Bedford County was estimated to have a population of


50,230 and a population density of 49.5 persons per square mile2. The
average annual population of the county has been rising steadily the
past few decades, with the largest increase occurring in the 1970s. In
fact, between 1970 and 2000 Bedford County experienced a population
increase of 3,200, or an overall percent increase of 6.4%. According to
the Pennsylvania State Data Center (PSDC), the population of Bedford
County is expected to increase to over 54,000 people by 2020, or an
overall increase of 8.8%3. It should be noted that Pennsylvania is
expected to grow by 5.3% during the same period.

According to the U.S. Census Bureau, between the years of 1990


and 2000 the population of Bedford Township increased by over 470
people or 9.5%, the largest numerical increase in the County. The
majority of the municipalities located in the County are experiencing
increases in population. The largest concentration of population lives in
the central portion of Bedford County, along the Interstate 99 and
Interstate 76 (Pennsylvania Turnpike) corridors.

The business landscape of Bedford County is being transformed


into a dynamic, competitive marketplace. There are several industrial
parks (Bedford County Business Parks I and II and Bedford County
Business Center) that have multi-tenant buildings as well as sites
available for sale. In addition, the Bedford Springs Hotel is being
renovated with completion targeted for 2007. Bedford County is a
potential location for new and existing businesses to locate their
operations and is desirable due to close proximity to several U. S.
Interstates. The majority of municipalities that are experiencing
increases in population are located along Interstate 99 and Interest 76
(Pennsylvania Turnpike) corridors.

Any additions or improvements taking place at the Airport are


likely to spark new growth or increase the economy surrounding this
Airport. In the past, airports undertaking projects, especially runway
alignments and extensions, generally result in a larger demand on
aviation services at the airport. The most beneficial aspect of airport
improvement projects is being able to serve the business community.
2
Source: STATS, Indiana University, USA Counties IN Profile, Overview for Bedford County, PA,
http://www.stats.indiana.edu/uspr/a/us_profile_frame.html, Accessed 24 August 2005.
3
Source: Pennsylvania State Data Center, http://pasdc.hbg.psu.edu/index.html, Accessed 22 September 2005.

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Over the past few decades, there has been an


increasing amount of businesses using air travel as a
means of transportation. The better an airport can serve the business
community the more likely it is to attract new businesses to the area, as
well as increase the profits of existing ones.

Employment

In 2005 the Bedford County Airport, and its related facilities


and businesses employed approximately 13 people, the majority of which
were FBO personnel.

The Bedford County economic base is relatively diverse with


manufacturing, retail trade, educational services, health care and food
service sectors being the primary employers. Four of the top ten
employers are involved in transportation and warehouse or
manufacturing. Bedford County is located in close proximity to several
major U.S. Interstates and is located within a 500-mile radius of 40% of
the nation’s population.

1.3 Development History, Current Facilities & Desired Future


Plans

Development History

The development projects are summarized below for this airport.


• 1987 – Master Plan Update
• 1994/1995 – Construction of T-Hangar (10 units)
• 1997 – Crackseal Runway
• 1997 – Addition of 5 units to existing T-Hangar facility
• 1998 – Construction of Corporate Hangar 1 (150’ x 70’)
• 1999 – Airport Action Plan
• 2000 – Construction of Corporate Hangar 2 (150’ x 70’)
• 2002 – Overlay Runway
• 2004 – 900’ Runway Extension
• 2005 – Replace Taxiway Edge Lights
• 2005 – Airport Master Plan

Current Facilities

The overall facilities available at Bedford County include a single


5,005’ x 75’ (paved, bituminous) runway, a parallel taxiway, aircraft
parking apron (142,500 SF), two (2) corporate hangars, one (1) 15-unit
t-Hangar, FBO hangar, equipment storage maintenance hangar,
navigational and approach aids, terminal building, administrative

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Airport Business Plan

offices, and vehicular parking. Services include


major repair, power plant repair, aircraft
management, hangar rentals, tie-downs, flight instruction, 100LL and Jet
“A” fuel service, bulk oxygen, aircraft rental, aircraft sales and APU.

The terminal building is located adjacent to the apron and fuel


farm. It is a one-story story facility and is approximately 11,500 SF. The
building houses several offices as follows:
• Airport Director’s office
• Bun Air Corporation – Fixed Based Operator (FBO) Office
• Pilot Lounge
• Kitchen & Public Restrooms

The Civil Air Patrol (CAP) has offices in the Airport’s Maintenance
Hangar. Besides this group and the FBO, there are no other
businesses/organizations located at the Airport.

Desired Future Plans

Exhibit 2 below presents the desired future Airport projects to be


submitted by December 31, 2006. It will be important that projects
assigned for the future pass a business test, meaning that each project
and the implementation of such support business strategies and goals
and satisfy the airport’s mission/vision. It is also important to note that
there is significant local share and capital budget expectations related to
these future desired projects. Many of the projects focus on safety and
well as revenue enhancements. Several projects in the later years
involve easement and land acquisition with focus on obstruction and
primary surface control. All projects are consistent with the Airport’s
mission/vision to be discussed in Section 2.

Exhibit 2- Desired Grant Projects - 2007 through 2010

Total Federal State Local


Project Description Cost Share Share Share
$45 $42, $1,12 $1,1
Develop Airport GIS Program ,000 750 5 25
Construct Apron/Taxilanes –
Hangars, Buildings E/ F, Ph I,
Design 150,000 142,500 3,750 3,750
Construct Apron/Taxilanes –
Hangars, Buildings E/ F, Ph II, 270, 256, 6,75 6,75
Construct 000 500 0 0
Construct Vehicle Access and 175,
Parking – 14 spaces 000 166,250 4,375 4,375
Construct Unit Hangar – (80' x 702, 351,00
100') Building F (a) 000 - - 0*
Rehabilitate Apron, Parking, 165,000 156,750 4,125 4,125
Access Road and Taxiway via crack

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sealant, seal
coating and
remark
Construct East Apron/Taxilanes, Ph
I, Design
150,000 142,500 3,750 3,750
Construct East Apron/Taxilanes, Ph
II, Construction (site prep, grading
and electrical) 600,000 570,000 15,000 15,000
Install MALSF – R/W 14 960,000 912,000 24,000 24,000
$3,217,0 $
TOTAL 00 2,389,250 $ 62,875 $413,875

Note a – Balance of project costs ($351,000) to be requested via Capital Budget/Other


Share monies.

Projects desired from 2011-2018 include:


• Construction of various unit hangars and associated
taxilanes and parking
• Design and construction of apron (west) in various
phases
• Various new parking areas to support hangars, etc.
• Acquisition of land and easements with focus on
obstruction and primary surface control

Related documents include Appendix 3, the Airport’s Twelve Year


Plan as submitted December 2006 and Appendix 4, selections from the
2006 Airport Master Plan Capital Improvement Program concerning
capital project phasing and related financial forecasts.

1.4 Aeronautical Role


According to the Regulations Relating to Pennsylvania Aviation,
the Bedford County Airport is classified as a Business Service Airport. A
Business Service Airport is defined as, “An airport with a paved runway
3,500’ or greater, a runway lighting system, and a precision or non-
precision instrument landing approach. The Airport is included in the
National Plan of Integrated Airport Systems (NPIAS) as a General
Aviation (GA) facility.

Further, the 2002 Statewide Airport System Plan (SASP)


developed a stratification system consisting of five (5) different
functional levels that evaluated each airports role based on the
contribution it makes to the entire airport system, as well as its current
ability to meet statewide aviation needs. The five airport classifications
include Advanced, Intermediate, Basic, Limited and Special Use
facilities. Bedford County is classified as an Intermediate Facility. The

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recommended service and facility goals for an


Intermediate Facility are presented in Exhibit 3. As a
part of the completion of the SASP, a study on the economic impact of
aviation was undertaken. The purpose of the study was to analyze and
highlight the substantial economic value of the system of general
aviation (both business and general service) and scheduled service
airports in Pennsylvania. As indicated in the study, many people
beyond the immediate environs of each airport benefit from daily
aviation activity. Employees whose firms base corporate aircraft at the
airports; the commercial and industrial employers whose shipments
arrive or depart via the airports; the area retail establishments who
provide shopping opportunities for those arriving by air; and the hotels,
restaurants and tourist-related activities whose patrons arrive via
general aviation and scheduled service airports all represent people
beyond immediate airport environs who derive economic benefit from
the system of airports. The Bedford County Airport provided the
surrounding environs a total economic output of $5.3 million. A copy of
the analysis specific to the Bedford County Airport may be found in the
2005 Master Plan Draft that is currently in process.

Exhibit 3 – “Intermediate” SASP Facility Recommendations

Runway Length: Minimum of 4,000 feet (dry runway)


Runway Width: To meet ARC
Runway Strength:30,000 pounds
Taxiway: Full or parallel for Primary Runway
Navigational Aids: Published approach with decision altitude
of 400 feet or less and visibility minimum of 1
mile or less
Approach Aids: Rotating beacon, lighted wind
indicator/segmented circle, VGSIs, REILs
Lighting: MIRL
Weather: ASOS/AWOS
Services: Phone, restrooms, FBO, Maintenance, Jet fuel
(AvGas) and Ground Transportation
Facilities: Local and itinerant aircraft parking apron, local
and itinerant aircraft storage, general aviation
terminal and general aviation auto parking.

1.5 On Airport Businesses/Lease Agreements

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The Bedford County Airport supports the


operations of Bun Air Corporation and is home to the
Civil Air Patrol. Bun Air Corporation provides traditional Fixed Based
Operator services such as fueling and aircraft maintenance. In addition,
they are a full service aircraft management company, providing services
such as aircraft purchase, maintenance, scheduling, pilot services,
training, storage, insurance and equipment upgrades.

1.6 Based Aircraft, Fleet Mix and Operations Activity Profile

Based Aircraft

At the time of the airport inventory in September 2005,


there were 23 aircraft based at the Bedford County Airport. The
breakdown of aircraft by type is as follows: 14 single engines, 4 multi-
engines (3 piston and 1 turbo prop) and 5 turbo-jets. This number can
vary based on the season and according to activity at surrounding
airports, i.e. paving projects, runway closures, inadequate services, lack
of space, etc. Based aircraft per the TAF database has been fairly
consistent since 1999 ranging for the most part from a low of 21 to a
high of 25. It should be noted that there is not presently a waiting list
for hangar space.

Section 2 of the Bedford County Airport Master Plan provides


extensive details on the 20 year forecasts for based aircraft operations.
A general summary is provided below of the studies/methods reviewed
and/or utilized to prepare the forecasts with the outcomes of all studies
summarized below in Exhibit 4 with an average based aircraft forecast
provided.
1. Action Plan Projections - These represent an updated forecast
of based aircraft contained in the Action Plan Summary Report
completed for the Bedford County Airport in November 1999.
Although studied, these projections were removed form further
analysis as they were considered outdated.
2. FAA Terminal Area Forecast (TAF) - Projections were extracted
from the TAF as issued by FAA in January 2005.
3. Pennsylvania Statewide Airport System Plan (PSASP 2020)
projections – These represent data extracted from the State
System Plan that was completed in the year 2000. Forecasts
are provided on a planning district basis versus an individual
airport basis. Although studied, these projections were
removed form further analysis as they were considered
outdated.
Note: The existing forecasts (items 1-3) were adjusted as
required to reflect an actual 2005 level of 23 aircraft based at the
Bedford County Airport. Also, growth rates contained in the existing

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forecasts were extrapolated to provide


comprehensive projections for all key planning years
over the 2010 to 2025 planning period. In some cases, growth rates
were modified slightly and rounded to provide a linear projection.
4. Independent Forecasts
4a. FAA Aerospace Forecast: This method of forecasting focuses
on the industry versus historical trends of specific airports. The general
aviation active fleet is projected to increase at a rate of 1.1% annually
over the 12 year forecast period (2005-2016).
4b. National Market Share Analysis: This projection is based on the
Bedford County Airport’s anticipated ability to capture a continuing
percentage of the future national forecast. The publication “FAA
Aerospace Forecasts FY 2005 – 2016 indicates that, in 2005, there were
a total of 219,780 active general aviation and air taxi aircraft in the US,
and that this fleet is expected to increase at an average annual rate of
1.1% over the FAA forecast period to a total of 240,070 in the year
2016. With a 2005 based aircraft level of 23 aircraft at the Bedford
County Airport, this means that the Airport is currently capturing a
0.0105% market share of the national fleet. In consideration of the
projected socioeconomic characteristics of Bedford County population,
which shows a very nominal growth rate, the current market share
percentage of .0105 will not be increased over the long range planning
period.
4c. Linear Regression (Trend Analysis): This scenario uses a
historical pattern of based aircraft and projects the trend into the future.

Exhibit 4–Forecasts: Based Aircraft Projections


2005
Study/Method Actual 2010 2015 2020 2025
Adjusted FAA TAF 23 25 25 26 27
FAA Aerospace Forecast
23 24 26 27 29
%
National Market Share 23 24 25 27 28
Linear Regression
23 33 39 45 51
Analysis
Preferred Method
**Average: FAA
Aerospace Growth Rate
and Linear Regression 23 28 32 36 40

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** An average of the Linear Regression model and the FAA Aerospace


Forecasting projection was used as the preferred based aircraft
forecasting method for this Airport. The FAA Aerospace growth rate is
intended to represent a forecast of expected national growth and the
Linear Analysis is intended to represent a local scenario. The combined
projection is considered to represent a demand trend more reflective of
the socio economic characteristic and development trends for Bedford
County, the Airport’s primary service area.

Fleet Mix

The Bedford County Airport currently has 14 piston powered


single (61%), 3 multi-piston (13%), 1 turbo prop (4%), and 5 turbo jets
(22%). The projections, as presented below in Exhibit 5, reflect the
high percentage of business jet aircraft
currently based at the Airport, as well as the strong business jet
fleet growth predicted by the FAA. Also, it is noted that the number of
twin-engine piston aircraft shows no growth rate, which also reflect
information as provided by the FAA.

Exhibit 5 - Based Aircraft Forecast-Fleet Mix

2005
Aircraft Actual 2010 2015 2020 2025
Single Engine- Piston 14 15 16 17 18
Single Engine-Turbo
prop 0 1 2 2 3
Multi – Piston 3 3 3 3 3
Multi – Turbo prop 1 2 3 5 5
Jet 5 6 7 8 10
Rotorcraft 0 1 1 1 1
TOTAL 23 28 32 36 40

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Operations
According to Airport Master Records dated July 7, 2005, there
were 17,758 annual aircraft operations in 2004 consisting mainly of
general aviation local and general aviation itinerant with minor
contributions from air taxi and military operations. Air taxi and military
operations are considered to be itinerant operations which results in
itinerant operations at 35% and local operations at 65%. Details by
type of operation are included in Exhibit 6 below.

Exhibit 6 – FAA Airport Master Record (5010) Operations by


Type
Operational Mix
Type Estimate
Percentage
Air Taxi 1,800 10%
GA Local 11,58
8 65%
GA
Itinerant 4,120 23%
Military 250 2%
17,75 1
TOTAL
8 00%
Section 2 of the Master Plan also forecasts operations for local and
itinerant operations based on the Operations Per Based Aircraft
Methodology (OPBA). This method uses a relationship between the
Airport’s total operations to its based aircraft. By doing this, the OPBA
reflects the operations by all planes that operate at the airport, not just
based aircraft. A 600 OPBA ratio was used in this Study as suggested
by the BOA and is assumed to remain stable through future years with
business related activity continuing to expand, while recreational and
flight training activity may decline somewhat with a gradual change in
the local versus itinerant operations split to 45% local and 55%
itinerant.

Exhibit 7 – Projected Itinerant, Local & Total Operations

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Estimat Forecast
Operations
e 2005 2010 2015 2020 2025
Itinerant Operations 4,800 5,180 6,700 8,600 13,200
Local Operations 9,000 9,220 10,100 10,600 10,800
(2)(3)
Total Annual 13,800 14,400 16,800 19,200 24,000
Operations

Single 9,870 10,306 12,030 13,510 16,150


Multi-Engine 1,590 1,690 2,090 2,590 3,590
Jet 2,100 2,160 2,400 2,800 3,900
Rotor 240 244 280 300 360
13,800 14,400 16,800 19,200 24,000
(1) Itinerant operations are all airport operations other than local operations.
(2) Local operations are performed by aircraft which:
(a) operate in the local traffic pattern or within sight of the airport;
(b) are known to be departing for, or arriving from, flight in local areas
within a 20-mile radius of the airport; or,
(c) execute simulated instrument approaches or low passes at the
airport.
(3) Touch-and-Go operations are estimated to represent 40 percent of local
operations.

SECTION 2
MISSION, VISION, BUSINESS GOALS AND STRATEGIES
2.1 Mission and Vision
Prior to the start of this project, there was no mission statement
for the Bedford Airport. Like many other airports in the state and
across the county, the airport mission was simply to run the airport as a
general aviation transportation facility and operate it as such and to
continue existing measures. The following mission was created by a
task force charged with studying the future development of this Airport
as follows:

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“The identified mission of the Airport is to


provide a safe, clean, and efficient operating environment for the
aviation users of the Bedford County Airport, while at the same time
remaining sensitive to the needs of the local community and creating a
catalyst for economic development.”

Below are the visions and related services that were identified to
support the mission:

• Today: Basic/Core services for general aviation recreational to


include:
1. Fuel
2. Tie-downs
3. Hangars
4. Maintenance
5. Flight School
6. Aircraft Sales
7. Aircraft Rental
8. Published IFR Approaches
9. AWOS
10.Limited Corporate Hangars

• Intermediate: Full service general aviation Corporate Business


Center to include:
1. Above Items
2. Instrument Training
3. Flight School Expansion
4. Charter services
5. Rental Car
6. Additional Corporate Hangars
7. Business Centers
8. Published IFR Approaches
9. Avionics

• Future: Dynamic Aviation Business Center to include:


1. Runway Extension
2. Terminal Building Expansion (or explore use)
3. Additional Business Centers
4. Multimodal Center

The Bedford County Air Industrial Airpark Authority envisions a


community that values the airport and recognizes the value the Airport
brings to the community. With respect to expansion, this group hopes
to significantly enhance airport operations while maintaining close
working relations with business and residential users.

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2.2 SWOT Analysis


SWOT Analysis allows a business to focus and review Strengths,
Weaknesses, Opportunities and Threats with the goal of identifying
major factors affecting their business and competitiveness before
crafting business strategies. This analysis will provide information
necessary to support not only the mission and vision but will also assist
in the crafting of business goals, objectives and related strategies for
achieving those goals.

Summarized below are highlights from the discussion of each of


the four (4) components of this analysis.

Strengths
• The Airport offers traditional FBO services including major
repair, storage facilities (T-hangars and Unit hangars) and
fueling services.

• There is potential for business growth at the airport with


approximately 46 acres of land available in various lot sizes
located in the Bedford County Business Park which is located
adjacent to the Airport.

• The FBO contract provides for snow removal, runway


maintenance and general fuel farm maintenance which can be
major expense items for some airports.

Weaknesses
• This airport has only one (1) runway with dimensions of 5,005’
x 75’. Although this is sufficient for current and projected
operations, a 7,000’ runway is the minimum which will allow
for effective marketing of turbo jet aircraft of all sizes.

• Marketing and advertising efforts have been limited. There is


no assigned budget for marketing for the current year.

• Airport cash flow is minimal and the County does not subsidize
Airport Operations.

• There is no automated fuel service at the Airport. Service is


available from 7:00 a.m. to 6:00 p.m. Monday through
Saturday and from 9:00 a.m. to 12:00 p.m. on Sunday.

• The current FBO contract was renewed in May 2005 for a five
(5) year period with options to renew after term. This will limit
options for terms of revenue enhancement at the FBO level.

Opportunities

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There are several options available for land
acquisition that would greatly benefit the
airport in terms of revenue generation and in terms of
achieving the Airport’s mission/vision.

Threats
• FBO facilities may not be opportune for full-service FBO
provider.

• A long-term FBO lease was renewed in 2005 with terms


effective for 5 years.

• Website needs to be enhanced/personalized.

2.3 Business Goals and Objectives


There are a number of goals that must be addressed and related
strategies and recommendations identified. The goals and related
strategies highlighted below must support the vision and mission
statements for the Airport. The Airport’s mission, vision and goals
should be reviewed and updated annually with a team assigned to this
function. An Implementation Plan will be discussed in Section 4 (Item
D3).

The Airport is a business with considerable investment already


made in its facilities. In order to help protect this investment, as well as
any future capital improvements, part of the planning process involves
a financial analysis of the Airport business practices to include income
and expenses. This financial discussion and analysis will be presented
in the next section (Section 3) and then be followed by discussion of
Airport Opportunities and Recommendations (Section 4).

A) Self Sufficiency: The Airport must strive to be self-


sustaining. The Air Industrial Park Authority must continue to
look for ways to increase revenue and decrease expenses
without sacrificing services valued by current customers.

Objectives:
• Fuel Sales
• Hangar Rentals
• Land Leases for Corporate Hangar Development
• Perform Financial Analysis with Focus on O&M Expenses
• Standard Policy – Lease, Rules & Regulations, Minimum
Standards, etc.
• Development of both Owned and Non-Owned Parcels
• Full Service FBO (as it relates to above)

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B) Attract Businesses – Aviation,


Aviation Related and Other
Objectives:
• Create Friendly Business Environment with Convenience
• Establish Avenues for Potential Growth
• Integration of Industrial Parks

C) Private Investment
Objectives:
• Create Public-Private Partnerships

D) Economic Stimulator
Objectives:
• Teaming of Airport with Local Business, Redevelopment
Authority, Chamber of Commerce, Bedford County
Development Authority, etc.
• Continue to Serve Existing Client Base
• Implementation Plan

E) Enhance Airport Safety & Environmental


Sensitivity
Objectives:
• Maintain a Safe and Secure Operating Environment for Aviation
and Traveling Public
• Environmental Assessments

SECTION 3

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FINANCIAL DISCUSSION AND ANALYSIS

3.1 Introduction
Generating adequate airport revenue to cover operating and
maintenance costs, capital investment needs and depreciation, while at
the same time maintaining and expanding the airport’s tenant and user
base, is typically one of the most important and most challenging issues
facing airport operators. Airports, like many other components of public
transportation systems, are often subsidized by their public sponsors.
This has not been the case at Bedford as there has been minimal
financial support by the County.

To some extent, the non-quantifiable benefits that airports provide


to their local and regional communities are an important consideration
when examining airport self-sufficiency and investments. Economic
development, community relations and recreational opportunities that
airports typically provide are often considered invaluable to those
communities and their residents. Many public airport sponsors
understand the importance of these non-quantifiable benefits to their
communities and are willing to invest, at varying levels, in airport’s
operations. In the current fiscal environment, however, the willingness
and/or abilities of many public sponsors to invest in airport operations
can be limited. During periods of reduced municipal and state budgets,
airports are often competing with a number of other public services for
funding, and airports often receive a lower funding priority. This has
been the case at Bedford. The County has paid the Airport Director’s
salary but beginning mid-year 2005 this was no longer the case. It
should be noted that the County did assist with loan payoffs in March
2005. Assisting with loan pay-offs was a one-time occurrence and
County assistance should not be expected going forward.

The secondary goal is to examine the financial characteristics of


the Airport to determine potential alternatives and their respective
financial implications for maximizing the Airport’s revenue generating
potential. Examples of industry standard leases, as well as average
rates and charges, will be examined and compared to existing Airport
leases and activity-related charges. Rates must be based upon
amortization, depreciation and appropriate return on investment.
Recommendations may be identified for improving lease terms and
policies and/or revising rates with the goal of generating additional
revenues and improving the Airport’s net operating outcome via a
positive business environment.

The following analysis examines the market/service area and past,


current and projected financial operating condition.

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3.2 Market Analysis/Service Area


In order to establish a basis for determining the service area
potential and competition for this Airport, it is necessary to compare
and evaluate the airport's location, facilities and services with those
available at surrounding airports. Bedford County Airport serves
predominantly Bedford County and is in close proximity to several other
similar facilities. Historically, a 30-minute drive time has represented
the maximum distance that general aviation patrons would be willing to
travel to an airport; however, other factors need to be considered
including location of nearby airports, the existing facilities of nearby
airports and services of other competing airports.

Again, the Airport is classified as an “Intermediate” Airport per the


SASP. There are five (5) general aviation airports located within 30
statute miles (30 to 60-minute drive) of the Airport that could
potentially influence the service area of the Bedford County Airport.
Exhibit 8, which concludes this section, provides a map of the radius of
influence for general aviation airports.

When comparing Bedford’s services and accommodations, the


following items are highlighted:
• Bedford County Airport runway length is competitive at
5,005 feet. The Altoona-Blair County Airport is slightly
larger at 5,466’ with no competitive advantage. The John
Murtha Johnstown-Cambria County Airport offers two
runways - - one at 7,003’ and the other at 4,507’.
• Services are similar with some Airports offering charter, APU
and avionics as additional services.
• Only three (3) of the five (5) airports offer Jet “A” fuel in
addition to AVGAS. Per the airnav.com website, the
average price of 100LL is $4.18 and Jet “A” is $3.90 for fuel
prices reported within 50 miles of Bedford Airport.
Bedford’s pricing at August 2006 was $4.30 for 100LL and
$3.90 for Jet A.
• T-hangar prices were available for two (2) of the Airports
listed below in addition to two (2) other Airports located in
the same Region as Bedford. Average t-hangar monthly
rental price was $150 compared to Bedford’s price of $160.
In general this price is a subsidized price and is not
reflective of current construction costs and related
expenses.

The services, accommodations, aids to aircraft operations and


area of influence associated with each airport are described as follows4:

4
Per PennDOT Bureau of Aviation Website – Airport Directory, October 26, 2005

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Altoona-Blair County Airport,


Martinsburg, PA
• Classified as an Advanced Airport within the SASP
classification system and is located 15.4 nautical miles
northeast of the Airport.
• Maintains a 5,466’ x 100’ bituminous runway, 3,668’ x 75’
bituminous runway and two (2) parallel taxiways.
• Services: 100 LL and Jet “A” fuel, major repairs, hangar
rental, tie-downs, Auxiliary Power Unit (APU), aircraft
charter, flight instruction, aircraft rental, aircraft sales,
avionics sales and service.
• Navigational/approach aids: Airport Surface Observation
System (ASOS); Altoona Flight Service Station (FSS) located
on the airport; rotating beacon; Runway End Identifier Lights
(REILs) RW 2, 12 and 30; Precision Approach Path Indicator
(PAPI) RW 2, 12, 20 and 30; Medium Intensity Approach
Lighting System (MALSR) RW 20; High Intensity Runway
Lights (HIRL) RW 2-20; Medium Intensity Runway Lights
(MIRL) RW 12-30; VOR and ILS RW 20.
• Accommodations: Admin/terminal building, restrooms,
airport restaurant, taxi, limo, car rental and phone.
John Murtha Johnstown-Cambria County Airport,
Johnstown, PA
• Classified as an Advanced Airport and located
approximately 20.2 nautical miles northwest of the Airport.
• Maintains a 7,003’ x 150’ bituminous runway, 4,507’ x 100’,
and a series of taxiways.
• Services: 100LL and Jet “A” fuel, major repair, hangar rental,
tie-downs, APU, charter service, flight instruction, aircraft
rental and aircraft sales.
• Navigational/approach aids: ASOS; Common Traffic Advisory
Frequency (CTAF); Air Traffic Control Tower (ATCT); Very High
Frequency Omni-Directional Tactical Air Navigation
(VORTAC); Instrument Landing System (ILS) RW 33; HIRLs
RW 15-33; MIRLs RW 10 and RW 28; Visual Approach Slope
Indicator (VASI) RW 15; 23 and 28; REILs RW 23; MALSR RW
33; PAPI RW 5 and RW 33 and a rotating beacon.
• Accommodations: Administration building, terminal building,
restaurant, restrooms, phone, Servomation, car rental, taxi
service and nearby motels.
Blue Knob Valley Airport, Duncanville, PA
• Classified as a Limited Airport in the SASP and is located
approximately 18.8 nautical miles north of the Airport.
• Maintains a 3,415’ x 92’ gravel runway.
• Blue Knob Valley is attended irregularly.

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•Services: 100LL fuel, minor repairs,


hangar rental and tie-downs.
• Navigational/approach aids: a Unicom system and CTAF.
• Accommodations: Administration building, restrooms,
Servomation and taxi service.
Somerset County Airport, Friedens, PA
• Classified as a Basic Airport in the SASP and is located
approximately 23.0 nautical miles west of the Airport.
• Maintains a 4,697’ x 75’ bituminous runway, a 2,695’ x 192’
asphalt/turf runway and a full parallel taxiway.
• Services: 24-hour self-serve fuel service for 100LL and Jet
“A” fuel, major repairs, hangar rental, tie-downs, flight
instruction and aircraft rentals.
• Navigational/approach aids: WeatherMation; AWOS III;
Unicom; NDB; LOC RW 24; GPS RW 6; GPS RW 24; MIRL RW
6/24; rotating beacon; REIL RW 24 and PLASI RW 24.
• There is experimental aircraft activity at this airport.
• Accommodations: Administration building, restrooms,
phone, Servomation, car rental, taxi service and nearby
motels.
Ebensburg Airport, Ebensburg, PA
• Classified as a Basic Airport in the SASP and is located
approximately 26.0 nautical miles northwest of the Airport.
• Maintains a 3,204’ x 50’ bituminous runway, a 1,615’ x 122’
turf/dirt runway and a full parallel taxiway.
• Services: 24-hour self-service 100LL fuel, minor repairs,
hangar rental, tie-downs, flight instruction and aircraft
rentals.
• Navigational/approach aids: CTAF/Unicom, VOR, MIRLs RW
7/25 and rotating beacon.
• Accommodations: Administration building, restrooms,
nearby restaurants, servomation, nearby motels, phone and
car rentals.

Exhibit 8 below illustrates the location of these airports and their


proximity to Bedford County Airport. Also shown is a primary service
area based upon a 30- minute drive time and reference to nearby
facilities.
Exhibit 8 – Radius of Influence/Primary Service Area

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3.3 Airport Financial Condition

Background

Historic financial data was compiled for the Bedford County


Airport from audited financial statements. Financial data for calendar
years 2000 through 2004 was examined as well as 2005 unaudited
results to determine the current financial operating condition of the
Airport. This was done specifically to determine whether the Airport
generates sufficient operating revenues to cover its operating expenses
on an annual basis. This analysis, which will focus mainly on the last
two years as well as the 2005 unaudited results, will provide the
baseline from which Airport fees and leases will be examined and
potential means for generating additional revenues will be identified
and will ultimately provide the baseline for developing business
strategies.

The financial operating characteristics of the Airport are


summarized in the following sections. It is important to note that this
analysis focuses on operating revenues, operating expenses and net-
operating outcome. Infrastructure development costs, as well as non-
operating revenues such as investment income, will only be discussed
briefly below. The general reason for focusing on operating (versus non-
operating) results is that the Airport should be able to generate
sufficient operating revenues to cover the operating expenses that are
incurred in the daily operation of the Airport. Infrastructure
development and other airport-related investments, however, should
continue to be funded through FAA and other grant processes.

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Required local matching funds will need to come


from cash reserves, private partnership funds, bank
loans/lines of credit and /or County support.

Exhibit 10 follows the next section and provides detailed financial


data for the years 2001 though 2005.

Non-Operating/Debt
Non-operating expenses consist mainly of depreciation, interest
income and interest expense. In September 2005, Bedford County
committed $357,414 to the Bedford County Air Industrial Park Authority
for pay-offs on two (2) lines of credit (LOC) and a guaranteed revenue
series. In the past, Bedford County has not subsidized Airport
operations nor should this be expected going forward.

Exhibit 9a provides a Loan/Debt Summary as of December 31,


2005. Estimated interest payment for 2005 (excluding pay-offs of
principal and interest provided by the County) were $43,880. Of this
total, it is estimated that approximately $26,463 will be required to
support future interest payment related to debt on both corporate
hangars and the t-hangar building with a direct impact on net operating
results. A cash requirement of approximately $77,294 will be required
to support both principal and interest. The three (3) loans acquired to
support development of the new hangars are for a term of 15 years with
the first loan expiring 2013. In addition to the hangar debt, First
Commonwealth Bank approved a $200,000 line of credit in November
2005. It is the Authority’s intention to pay down the current line by
September 2006 with current borrowings at $12,500 with minimal
principal and interest paid in 2005. Finally, a new vehicle was
purchased for the Airport via a 48-month lease (annual cash
commitment at $6,165 or approximately $514/month).

Exhibit 9a: Loan/Debt Summary as of December 31, 2005

2005 Estimate
d
Bank Interest Years Loan Principal Interes
t
Project Loan Term Rate Left Balance Payment Paymen
t
M&T: Corp 1 15 variable
Hangar Years 3.39%
$250,00 begin @12/31/0 7.4 $153,395 $17,018 $5,689
0 8/1998 5
First 15 variable
Commonweal Years 4.25%
th: 304,000 begin @12/31/0 10.75 255,574 17,906 11,517
Corp 2 2002 5
Hangar
M&T: 15 variable

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Years 4.76%
begin @12/31/0 9.2 187,618 15,906 9,258
T-Hangars 265,000 4/2000 5
First
Commonweal ----
th: 200,000 12,500 5,500 316
LOC (a)
Bedford Dev. 10
Council: Years NY Prime start start
Bridge Fin. (b) 100,000 begin 100,000 9/2007 9/2007
10/200
2
First Closed WSJ
Commonweal 150,000 9/2005 Prime + To be
th: 1% Closed 5,500 - 6,902
LOC (c)
First
Commonweal Closed
th: 200,000 9/2005 6% Closed - 10,000 8,095
Guaranteed
Rev Series (c)
M&T: LOC (c) 81% of
Closed Prime to
45,000 9/2005 Float Closed - 14,000 1,328
Old Vehicle Closed
Loan - 9/2005 Closed - 400 775
Subtotal $714,587 $80,73 $43,88
1 0

Note a: Line of credit to be paid off in September 2006.


Note b: On 9/11/02, the Authority borrowed $100,000 via a Promissory Note
from this Council. The note requires no P&I payment until 9/7/07 at which time
payments are due at the New York Prime Rate.
Note c: Balance of debt paid by the County in 9/2005 as follows: M&T LOC
$31,152.55, Guaranteed Revenue Note $175,520.83 and First Commonwealth
LOC $150,740.25.

The most recent improvements at the Airport involved the


extension of Runway 14/32 which included lighting, signage and
rehabilitation to several taxiways. The only active grant involves the
current Airport Master Plan & Feasibility Study Update for the approach
lighting system and the addition of a truck with plow and spreader for
snow removal purposes.

Land, runways, buildings and equipment are recorded at cost of


purchase or construction. The straight line depreciation method is used
over the estimated lives as noted in Exhibit 9b below. Expenditures for
maintenance, repairs and minor replacements are expensed as
incurred. Replacements/betterments that increase the life of the asset

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are capitalized. Asset cost was $20,969,215 at


12/31/04 with book value at $17,583,241 with details
as follows:

Exhibit 9b – Fixed Asset Summary as of December 31, 2004

Depreciati Accumulat
L Cost on 2004 ed Book
ife Depreciatio
Asset n
Land $1,848,67 $0 $0 $1,848,67
8 8
Runway, Terminal, 40 16,203,51 348,818 2,896,006 13,307,5
& Taxiways 9 13
Hangars 40 1,559,472 38,987 276,507 1,282,96
5
Maintenance 40 370,128 9,253 78,652 291,47
Buildings 6
Fuel Facility 40 303,088 15,154 159,121 143,96
7
Sewerage 20 75,753 3,788 39,770 35,98
Treatment 3
Airport Buyout 90,628 0 0 90,62
8
AWOS III 20 112,129 5,342 44,234 67,89
5
Beacons 20 190,664 9,512 56,877 133,78
7
Equipment 20 222,346 11,341 111,118 111,22
8
Utilities 294,898 7,365 25,777 269,12
1
Total $21,271,3 $449,560 $3,688,062 $17,583,2
03 41

Exhibit 10 - Summary of Historic Airport Profit/(Loss) - 2001 through 2005

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2005 2004 2003 2002 2001


Unaudited Audited Audited Audited Audited
Operating Revenue
FBO: Fuel Flowage Fee $ 60,158 $ 47,944 $ 41,423 $ 32,147 $ 27,633
FBO: Hangar/Office Rental 25,200 25,200 25,200 25,200 25,200
Hangar rental 70,778 44,940 59,091 70,541 63,616
Other 664 5,720 10,481 - -
Total Operating Revenue 156,800 123,804 136,195 127,888 116,449

Operating Expense
Advertising 296 705 444 715 958
Airport Maintenance/Repair 17,879 18,810 16,003 7,972 6,050
Airport Director’s Salary 16,416 13,414 9,600 8,290 13,261
Legal & Auditing 576 3,991 1,728 3,113 4,216
Dues & Subscriptions 592 1,185 580 477 584
Utilities 10,285 10,797 10,423 9,658 7,853
Insurance 19,391 19,390 17,695 17,590 13,975
Supplies 2,384 2,830 1,930 1,932 1,934
Telephone 1,448 1,993 2,197 2,026 974
Travel & Training 8,760 6,954 5,379 3,057 743
Total Operating Expense 78,027 80,069 65,979 54,830 50,548

Net Income from Ops. $ 78,773 $ 43,735 $ 70,216 $ 73,058 $ 65,901

Non Operating Results


Interest Expense (43,880) (47,775) (51,258) (60,438) (44,455)
Depreciation Expense (449,530) (449,530) (372,846) (367,617) (358,536)
Interest Income 854 190 411 256 -
(402,991
Total Non Operating Exp (492,556) (497,115) (423,693) (427,799) )
($413,783 ($453,380 ($337,090
Net Loss ) ) ($353,477) ($354,741) )

NOTE: The Authority implemented a new financial reporting model (GASB No. 34) which provides for
significant changes in terminology: recognition of contribution in the Statement of Revenues, Expenses,
Changes in Net Assets and other changes. This statement excludes amortization on fixed assets acquired by
grants and results in a reduction in total operating results for 2001 and 2002 of $344,543 and $343,955,
respectively.

As shown in Exhibit 10, Airport operating revenues are generated


from variety of sources. Total operating revenues from these sources
decreased from $136,195 in 2003 to $123,804 in 2004, a decrease of
approximately 9% or $12,391. Although it appears that fuel sales
increased in 2004, this was not the case. The Airport sold less fuel;
however, effective June 2004, the fuel flowage fee collected by the
Authority was increased from $.15 to $.30 gallon. Vacancy in hangars
was the main reason for the decrease in revenue from 2003 to 2004.
Although audited financial results for 2005 were not available at the
time this report was completed, it is projected that the Airport revenue
will reach an all time high of $156,800. Average hangar capacity for
2005 was 87% with approximately 200,500 gallons of fuel sold. All
hangars were rented effective March 2006. As of April 1, 2006, there

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was no waiting list as there were several vacant


spots filled at the end of 2005 and into 2006.

During the same period, Airport operating expenses increased


21% ($14,090) from $65,979 in 2003 to $80,069 in 2004 due mainly to
increases in salary, insurance and maintenance repair expense. This
financial data indicates that the Airport experienced a net operating
gain ranging from a low of $43,735 in 2004 to a high of $73,058 in 2002
over the four(4) year audited period from January 1, 2001 to December
31, 2004. A substantial gain of $78,773 is projected for 2005.
When factoring in non-operating results, mainly depreciation and loan
interest expense, the Airport has been operating at a net loss.

Exhibit 11 below presents a summary of the various financial


components from 2001 through 2005.

Exhibit 11 - Summary of Financial Components – 2001 through 2005

225,000
Operating Revenue
150,000
Operating Expense

75,000 Net Operating


Income
Net Loss
0
2001 2002 2003 2004 2005-
-75,000 Unaudited

-150,000

-225,000

-300,000

-375,000

-450,000

-525,000

Financial data for 2004 was further examined to determine the


relative importance of different components of Airport operating
revenue and expense. Exhibits 12 and 13 presented below provide a
general understanding of which components of Airport operating
revenues and expenses are the most significant and would tend to have
the greatest impact on the facility’s net operating outcome.

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Exhibit 12 - 2004 Airport Operating Revenue by Source

Other
5%
Fuel
Hangar Flowage
Rentals Fee
36% 39%

FBO Rental
20%

As shown, Airport operating revenue of $123,804 for 2004, as


presented in Exhibit 12, is derived from a variety of sources. The
primary components of aviation-related revenue includes hangar
rentals, fuel flowage fee revenue and FBO hangar/office rental income.
Revenue will be discussed in detail in Section 3.4.
Exhibit 13 - 2004 Airport Operating Expense by Source

Travel
Training Advertising
Telephone 9% 1%
Airport
2%
Maintenance
Supplies 23%
4%

Insurance Salary
25% 17%

Dues Utilities
Legal
Subscriptions 13%
Auditing
1% 5%

Total operating expense was $80,069 at December 31, 2004.


Airport maintenance and insurance accounted for almost half of the
total expense. For many airports, personnel salaries, wages and taxes
are usually significant but this is not the case at this Airport. Salary
expense is at 17% and other primary components of Airport operating
expense include insurance at 25%, airport maintenance at 23%, utilities
at 13%, travel and training at 9% and legal and auditing at 5%. All
other expense categories each represented 4% or less of total operating

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expenses. A detailed expense analysis will be


presented in Section 3.5 (Expense Discussion).

When 2004 operating revenues and operating expenses are


compared, Airport operations provided net income of $43,735 during
2004. Unaudited results for 2005 provide a net gain from operations of
$78,773 due mainly to increased hangar rental income. Although not
presented above, depreciation expense is significant for this Airport with
a net loss of $453,380 reported at December 31, 2004 and a net loss of
$413,783 projected for 2005.

3.4 Revenue Source Comparison and Existing Airport Revenue


Sources
The characteristics of each of these revenue sources, as well as
their contribution to total operating revenue at the Airport will be
examined. In addition, current rates and leasing policies will also be
examined and compared to national averages and industry standard
practices.

Revenue Source Comparison


The objective of the revenue source comparison is to examine
revenue source and leasing strategies and compare them to
comparable revenue and lease characteristics at other airports. While
activity-related fees and leasing rates vary by airport, there are
common practices that generally promote maximized revenue
generation. Based on the findings, revenue sources from which the
airport should be generating additional revenues are determined,
industry standard best-practices related to those revenue sources are
identified and recommended changes to Airport leasing practices are
presented. These potential rate/lease and revenue source adjustments
would bring leasing strategies and Airport operating revenues more in-
line with national averages and industry standard best-practices and
could materially increase the Airport’s revenue generating potential.

The goal of this analysis is to identify best financial management


practices for Airport leases, as well as appropriate fee and rate
structures for activity-related fees. Specific emphasis will be placed on
those components of Airport net operating revenue that may present
opportunities for improving the net operating outcome.

The American Association of Airport Executives (AAAE) conducts a


national survey of airports to identify current rates and charges at those
airports that participate in the survey. Responding airports are
categorized by type and size so that national average rates and charges
can be identified for airports based on hub size (determined by number
of annual enplaned passengers) and geographic region. In the AAAE’s
most recent survey, almost 350 airports, including over 220 commercial

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service airports, responded to the survey and


provided data regarding activity-related fees and
leasing policies as well as a variety of other airport financial data. The
findings from this analysis were summarized as National Average Rates
and Charges.

National average data is presented by airport hub size in the


following categories:
• Large hub (LH) – over 6.6 million annual passenger enplanements.
• Medium hub (MH) – between 1.7 million and 6.6 million annual
passenger enplanements
• Small hub (SH) – between 330,000 and 1.7 million annual passenger
enplanements
• Non-hub (NH) – less than 330,000 annual passenger enplanements

Although this Airport has less than 330,000 annual passenger


enplanements, it is not categorized as a non-hub airport. It is important
to note that Bedford County, like many low enplanement airports, is not
operating as a non-hub but rather as a General Aviation airport. The
most applicable comparisons for the Airport would be the small hub and
non-hub categories. Relevant data for each hub size is presented in the
following analyses to provide a range of comparison.

A common tendency depicted by the data relates to average


airport revenues and airport operating costs at airports of differing hub
sizes. The data to be presented indicates that large hubs, medium hubs
and small hubs, on average, generate more total revenue per enplaned
passenger than total operating cost per enplaned passenger. Therefore,
on average, airports in these hub categories tend to operate with a
positive net operating outcome (revenues are greater than expenses).
At non-hub airports, the average total operating cost per enplaned
passenger is greater than the average total revenue per passenger,
indicating that, on average, non-hubs tend to require subsidies to fund
their operation.

Review of this national database shows that many of the nation’s


airports implement standard practices when developing rates and fees
and that these standard practices result in common revenue source
characteristics. While specific rates and fees tend to vary by airport
based on local market conditions, common practices used to develop
the rates tends to make them somewhat comparable region to region.

Data from the AAAE studies are presented where applicable in the
following review of sources of revenue.

Existing Airport Revenue Sources


Operating revenues generated from 2004 generally be
categorized into the following categories and will be discussed in detail
in this section:

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A) Terminal/FBO Revenues (20%)


B) Activity-Related Revenues (39%)
C) Hangar Rental and/or Land Lease Revenue (36%)
D) Other (5%)
A) Terminal/FBO Revenue
Terminal/FBO revenue accounted for 20% or $25,200 of total
revenue in 2004. This amount was collected and terms have remained
the same as far back as January 1, 2000. The Authority has agreed to
lease a total of 10,400 square feet of terminal and attached hangar
space, including the fuel farm to Bun Air Corporation (Bun Air) for a
period of five (5) years commencing May 20, 2004 and terminating May
20, 2009. The tenant has the right to renew the lease for three (3)
terms of five (5) years each. The lease amount is subject to an
adjustment and escalation provision which states the rental will not be
less than $12,000 during any year nor shall the rent increase more than
10% during any year.

Although this group does most of their work in the hangar


attached to the terminal building (6,400 sq. ft.), there is an office in the
terminal building for flight instruction, general counter space and
common access to kitchen, bathroom and lounge facilities. Bun Air
pays for heat and electric for the entire terminal facility and is
responsible for utilities related to runway lighting and the fuel farm. The
Authority pays for water and sewer for all facilities at the Airport.
Utilities will be discussed in more detail in Section 3.5 (Expense
Discussion).

Incongruities exist between this Airport and other non-hub


airports in terms of terminal rental rates. As shown above, national
average terminal rental rates for the various types of terminal building
rental space vary significantly based on hub size. It should be noted,
however, that Bedford’s rate is somewhat consistent with similar
Airports in Pennsylvania for which a lease analysis has been completed.

Large Mediu Small Non


AAAE National Average Rates Hub m Hub Hub Hub
Terminal Building Rates ($/sq. ft./yr.)
$35.2 $44.1 $31.1 $20.2
Common Rental Space 9 0 0 5
Bedford Rate FBO Terminal/Hangar
10,400 $2.42

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There is no unused space or space that could


easily be converted to rentable space to provide
additional revenue. At other Airports in the area, terminal areas can
accommodate a wide variety of tenants which frequently leads to
challenges when establishing rental rates for different terminal tenants.
A common best-practice regarding terminal rental rates involves
establishing a standard terminal rental rate that is applicable to all
terminal tenants and then adjusted based on the nature of the tenant’s
activities. A base terminal rate should be determined based on current
market value. In addition to this base rate, the Authority must include
an additional amount to recover costs associated with the tenant’s
space including, but not limited to, necessary improvements, utility
expense and maintenance/cleaning costs, where applicable. Specific
recommendations related to Terminal revenue will be discussed in
Section 4.

Industry standard best practices regarding FBO leases and


revenues typically include one or more of the following categories of
fees:

• Land/building lease – FBOs operating at an airport should be


assessed land lease and/or building lease fees, whichever are
applicable, for those facilities that they use. Like other airport
tenants, land lease rate and building lease rates applicable to
FBOs should be determined based on the fair market value of
the areas being leased and should include escalation clauses.
In addition, when FBOs fund facility development on leased
property, reversion clauses should in place that require
reversion of the new facilities to airport ownership following an
initial leasing period sufficiently long enough to allow the FBO
to amortize its investment.

• Percentage of gross sales – In addition to land/building leases,


some airports collect percentage fees from FBOs based on
their gross sales at the airport. In many cases, the FBO must
reach a certain volume of gross sales before such a lease
provision would apply. When implemented, airports typically
collect between 2 percent to 10 percent on gross sales over
the threshold established in the lease. In general, this type of
FBO fee represents a “privilege” fee for that FBO’s right to
operate at the airport and serve/generate revenues from
airport users. In some instances, the financial benefits of this
approach are mitigated by the costs associated with
monitoring FBO sales and collecting the appropriate amount of
percentage fees. This structure does not exist at this Airport.

• Fuel flowage fee – Fuel flowage fees typically apply to all FBOs
selling fuel to airport users. As previously discussed, FBO fuel

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flowage fees should be assessed on a per


gallon basis on all fuel delivered to the
airport. National average fuel flowage fees typically range
from between $.07 and $.10 per gallon. Bedford Airport
receives a fuel flowage fee from Bun Air and details will be
discussed below.

• Permit to operate on airport – Those businesses and individuals


providing services for a fee to airport users on airport property
should be assessed some fee by the airport for their operation.
In many cases, this fee is established as a nominal permitting
fee which requires businesses, tenants or other individuals
providing for-fee services at the airport to acquire an airport
permit. These permitting fees can vary based on the gross
sales of the entity being permitted as well as the service that
they provide. In addition to generating airport revenues, this
process allows the airport to better monitor business activity as
well as maintain a more accurate data base of on-airport
businesses and/or service providers.

B) Activity-Related Revenues
Activity-related revenues (39% or $47,944) are those generated
through the use of Airport facilities and/or services and for this Airport is
solely fuel flowage fees collected from the FBO.

These fees should generally be considered as revenues collected


by the Airport from individuals or businesses for the short-term use
(usually a period not to exceed one year) of Airport-owned and
managed facilities. Airport revenues generated through longer-term
facility or land leases will be discussed in a following section. The type
and scope of activity-related revenues collected by airports varies
significantly by airport size, activity levels, location and a number of
other factors. In addition, many airports do not collect activity-related
revenues from some sources, such as general aviation landing fees or
automobile parking fees, for cost-benefit and/or policy-related reasons.
As a result, fees and standard practices related to activity-related
revenues must be adjusted to reflect local conditions. Activity-related
revenues are collected at the Airport from the following sources:

Fuel Flowage Fees


Effective June 1, 2004, the Authority is able to collect $.30 per
gallon of gross sales of fuel to Airport tenants and others. This fee paid
to the Authority by the FBO represents 39% of revenue in 2004 and is

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about the same percentage of revenue in 2005.


Gallons sold for 2004 were around 195,000 gallons
with sales increasing to approximately 200,500 gallons in 2005.

Most Airports collect a per gallon fuel flowage fee which can range
from $.05 to $.10 ($.07 average from AAAE study). Another option,
although not as common, is for the Owner to collect a percentage of
gross fuel sales. The Authority has an extremely good arrangement
with the FBO. With current fuel prices, overall profit to an Airport
Owner or FBO is generally estimated at $.50/gallon on Avgas and
approximately $1.00 on Jet “A” fuel. Additional details/suggestions to be
discussed in Section 4 (Objectives A1 and A7).

Landing Fees
Landing fees are not currently collected at the Airport. Most
Airports determine landing fees based on an aircraft’s maximum
allowed takeoff weight (MATOW) of the aircraft landing at the Airport.
The AAAE National Average Rates are presented below for informational
purposes only and are presented as a cost per 1,000 pounds of aircraft
weight.

Large Mediu Small Non


AAAE National Average Rates Hub m Hub Hub Hub
Landing Fees (per 1,000 lbs glw)
$1.2
Signatory Air Carriers $2.01 $1.35 4 $.90
$1.6 $1.0
Non-signatory Air Carriers $2.25 $1.73 2 8

Parking Fees
The Airport does not generate revenue from automobile parking
fees. It should be noted that many airports collect aircraft parking fees
(overnight and/or monthly tie-down fees) and vehicle parking fees.
National average automobile parking rates are presented below for
those airports currently collecting them. As the data indicates, parking
rates generally decrease with declining hub sizes, so does the number
of airports in each hub size collecting parking fees. For example, survey
results indicate that less than 10 percent of the non-hub airports
responding to the survey collect parking revenues. For all but the
busiest non-hub airports, the costs associated with implementing and
collecting parking fees generally outweigh the revenues generated from
automobile parking. It is anticipated that this would be the case at this
Airport; therefore, the implementation of parking fees at the Airport is
not considered a feasible means of generating additional revenue. It is
important to note that by not collecting these fees, parking lot
construction and/or maintenance is Airport Improvement Program (AIP)
eligible.

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AAAE National Average Large Mediu Small Non


Rates Hub m Hub Hub Hub
Automobile Parking Rates:
Short-term $2.00 $2.00 $1.50 $1.00
Automobile Parking Rates: Long-
term $9.00 $8.00 $6.00 $4.50
Automobile Parking Rates: Max. $14.5
Daily $17.00 0 $8.00 $5.00
Automobile Parking Rates: $84.0 $48.0 $28.0
Weekly $84.00 0 0 0

C) Hangar Rentals and/or Land Leases


Hangar rental income contributed 36% ($44,940) to total revenue
in 2004. This figure has been projected to increase dramatically in 2005
to $70,778 or 45% of revenue. Two things account for the increase in
revenue from 2004. Vacancies have gradually declined and corporate
hangar prices were increased effective June 2005. Effective March
2006, Bedford Airport storage facilities and hangars are at capacity.
There is 41,881 sq. ft. of rentable hangar space at the Airport excluding
the FBO terminal/hangar space discussed above. The Airport could earn
up to $81,300 at full capacity at current lease rates as follows:
T-Hangar Facility $29,700
Corporate Hangars(2) $48,900
Maintenance Hangar $2,700

The t-hangar facility offers 15 rental units at $165 per month.


Given the current rate and total area of 16,881 sq. ft., tenants are
paying approximately $1.76 per square foot. The t-hangar facility has
electric but no heat. Two (2) corporate hangars (70’ x 150’ each)
currently provide seven (7) rental units with prices ranging from $300
up to $700 per month based on plane size. The average annual price
per square foot is approximately $2.33 per square foot based on a total
area if 21,000 sq. ft. for both facilities. The corporate hangar facilities
have heat, electric, water and sewer.

The maintenance hangar measures 4,000 sq. ft. with four (4)
garage bays, two (2) offices, meeting area and kitchen. Only one-half of
this building provides rental income to the Authority as two (2) of the
bays are used for snow removal equipment storage and another for
miscellaneous storage. The remaining bay is rented for $1,500 per
year. The Civil Air Patrol (CAP) utilizes this hangar and related office
space for weekly meetings and remits $1,200 annually to the Authority.
The annual rate per square foot for the area rented is $1.35. This
group also provides a 25% reimbursement on electric and heat for this
building. The Authority pays the water and sewer bill.

All of the hangar lease agreements are for a one-year lease period
with an option to renew. The lease does include a provision for a price
increase.

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There are no land leases at the Airport as all


hangars and buildings are owned by the Authority. The Authority has
increased prices in both the t-hangar and corporate hangar facilities
over the past few years. The facilities are in good condition. T-hangar
prices are competitive compared with several Airports located within
the vicinity of this Airport; however, some airports are subsidized and
prices may not reflect construction costs, related expenses and
depreciation. Also as a general comparison, storage units measuring
10’ x 10’ generally rent for up to $80 per month or $960 annually, which
equates to $9.60 per square foot. This is significantly higher than the
$1.76 square footage rate obtained on hangars.

As a general note, land leases typically involve airport property


that is leased over longer term periods to individuals or businesses. As
an example, developers and/or tenants may develop aviation-related
facilities on leased areas, such as hangars for their individual use or
lease to other parties or non-aviation facilities. Industry standard best
practices regarding land leases typically involve establishing a lease
rate for the leased parcels of land that reflects the fair market value of
the land and in some cases varies by location relative to airport
facilities. For examples, a parcel having access to the airfield may be
leased at a rate greater than a parcel without airfield access. Another
best practice related to land leases, one that represents significant long-
term financial benefits to airports, requires that following a lease period
of 20 to 30 years, any facilities developed on leased lands revert to
airport ownership. The lease term is typically structured to allow the
developer to amortize the costs of developing the facility, as well as
benefit from its use, before it is reverted back to the airport. Once the
facility reverts back to airport ownership, the original tenant can enter
into a new lease agreement for use of the land and facility; however,
the new lease is developed as a building lease on an airport-owned
facility. Reversion of tenant-developed facilities to airport ownership is
a very valuable means in promoting airport development while
protecting the airport’s long-term ability to generate revenues from
airport property and facilities.

D) Other
Other revenue for 2005 consisted mainly of Authority dues and
was a very small percentage of total operating revenue. Each of the 15
board members pays $100 annually. For 2004, other income
represented 5% of total income and consisted of Authority dues and a
salary related grant reimbursement.

3.5 Expense Discussion

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Expense details highlighted below have been


extracted from Exhibit 10 for 2005 and 2004. There
has been only a minimal change in operating expense from 2004
($80,069) to 2005 ($78,027). Each major expense will be examined
along with a summary section that will provide net operating
profit/(loss) by each facility that generates revenue for the Authority.
Non-operating results, mainly depreciation and a significant expense for
this Airport, have not presented below.
2005 2004
Unaudited Audited
Operating Expense
Advertising $296 -- $705 1%
Airport Maintenance 17,879 23% 18,810 23%
Airport Director’s Salary 16,416 21% 13,414 17%
Legal & Auditing 576 1% 3,991 5%
Dues & Subscriptions 592 1% 1,185 1%
Utilities 10,285 13% 10,797 14%
Insurance 19,391 25% 19,390 24%
Supplies 2,384 3% 2,830 4%
Telephone 1,448 2% 1,993 2%
Travel & Training 8,760 11% 6,954 8%
Total Operating Expense $ 78,027 $80,069

Airport Insurance
Airport insurance for 2005 and 2004 was $19,390 and accounted
for approximately 25% of the total expense in both years. The
Authority’s property policy covers the four (4) main hangar units at the
field. In addition, there is coverage for the snow removal/grass cutting
equipment, business vehicle and errors and omissions on Authority
members. There is also a $10 million per occurrence general liability
(G/L) policy that encompasses hangarkeepers liability. Deductibles
range from $250 to $5,000. The FBO carries a policy to cover property
and G/L coverage on the main hangar and terminal building.
Insurance costs are detailed below. General Liability, including
Hangarkeepers and Errors & Omissions, have been allocated to facility
based on square footage.
G/L, E/O & Total
Facility Property Hangarkeepers Insurance
Auto
Corporate Hangar 1 $510 $2,375 $2,885
Corporate Hangar 2 1,035 2,375 3,410
T-Hangar 731 3,818 4,549
Maintenance Hangar 753 905 1,658
Terminal/Hangar FBO 4,049 4,049
Equipment/Auto 2,840 ----- 2,840
Subtotal Insurance $5,869 $13,522 $19,391

Airport Maintenance
Maintenance expense was $17,879 for 2005 and represented 23%
of total operating expense in both 2005 and 2004. There are

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approximately 20 related maintenance accounts in


the general ledger some of which overlap. Some
suggestions for booking this expense going forward will be made in
Section 4. Below are 2005 estimated costs by category.

Maintenance Category 2005 Expense


Maintenance – Contracts/Inspections $6,863
Repair:
Common – AWOS, Taxiway & 3,490
Equipment
Corporate Hangar 1 775
Corporate Hangar 2 283
T-Hangar 360
Maintenance Hangar 385
Terminal Building/Hangar 98
Subtotal Repair 5,391

Runway Light/Bulbs 1,235


Airport Mowing 4,241
Fuel – Snow Removal 149
Subtotal – Maintenance $17,879

Salary Expense
Salary and related benefits are generally a significant percentage
of overall expense but is not the case at this Airport at the present time.
One Authority member serves as the Airport Director. In the past, a
portion of the Director’s salary was paid by the County; however, this is
no longer the case. Salary expense for 2005 is projected to be $20,416;
however, only $16,416 (21% of total expense) is reported due to $5,000
credit from grant funding related to a recent project. This reduction
should not be expected or planned going forward. Salary expense for
2004 was $13,414 or 17% of total expense. Note that this expense is
strictly salary related with no associated benefit or retirement expense.

Utility Analysis
Total utility expense is projected to be at $10,285 or 13% of total
expense for 2005. Details of this expense by facility are presented
below. It should be noted that the FBO pays for heat and electric for the
entire terminal building and attached hangar as well as utilities related
to the runway and fuel farm. Per the FBO, this expense runs
approximately $800-$850 monthly. In addition, the Civil Air Patrol (CAP)
utilizes the maintenance hangar, particularly the office, meeting area
and kitchen and reimburses the Authority for 25% of electric/heating
bills.

Heating expense is billed to the Authority for three (3) facilities


that include the corporate hangars and the maintenance hangar. The t-

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hangar facility is not heated. The heating expense


for 2005 was $6,348 and total expense to the
Authority was $5,816 taking into account a $532 reimbursement from
the CAP. Estimated cost per square foot for heat after CAP
reimbursement for these facilities is approximately $.23 based on
25,000 sq. ft. of utility coverage. Total cost has been allocated to each
facility as follows:

Heat
Facility Expense
Corporate Hangar 1 $2,446
Corporate Hangar 2 2,446
Maintenance Hangar 924
Subtotal Heat $5,816
Electric expense was $3,884 in 2005 with actual expense
presented below for the corporate hangars, maintenance buildings, t-
hangar facility, beacon and pole light. Because these facilities are
metered separately, actual electric costs are presented below along
with the cost per square foot.

Electric Cost per


Facility Expense Square Foot
Corporate Hangar 1 $843 $.08
Corporate Hangar 2 1,237 .11
T-Hangar Facility 468 .03
Maintenance Hangar * 1,086 .27
Beacon 164 n/a
Terminal Bldg. - Pole 86 n/a
Light
Subtotal Electric $3,884
* includes 25% reimbursement by CAP ($362)
Water and sewer expense for 2005 was $585 with services to all
buildings (42,900 sq. ft) except the T-Hangar building. There is one
meter at the Airport and the Authority incurs total cost. An estimated
cost per square foot of approximately $.01 with allocated expense is
provided below by facility.
Water & Sewer
Facility Expense
Corporate Hangar 1 $143
Corporate Hangar 2 143
Maintenance Hangar 54
Terminal 245
Building/Hangar
Subtotal Water & $585
Sewer

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Travel and Training, Other


Travel and training is at 9% due mainly to the
fact that Mr. Jennings is heavily involved in PA Aviation and attends the
PA Aviation Council and FAA Eastern Region conferences annually. In
addition, he serves as a Board member of the Governor’s Advisory
Committee and serves on various sub-committees. This group meets
six (6) times throughout the year. All other expense categories
represented 5% or less of total operating expenses.

Facility Revenue/Expense Comparison


As detailed above, there are specific expenses which can be
mapped or allocated directly to each Airport facility that generates
revenue. As detailed above, these are mainly insurance, utility and
maintenance repair expense. Through detailed analysis of ledger,
$28,573 (36%) of the total operating expense of $78,027 was allocated
back to a facility.

Operating Expense 2005 Unaudited


Advertising $296
Airport Maintenance 15,978
Airport Director’s Salary 16,416
Legal & Auditing 576
Dues & Subscriptions 592
Utility (Beacon only) 164
Insurance (Equip/Auto
only) 2,840
Supplies 2,384
Telephone 1,448
Travel & Training 8,760
Total Operating Expense $49,454

Below is a snapshot of net operating results by facility with


revenue presented at full capacity and current prices with reductions
represented by 2005 expenses. It should be noted that Repair expense
may vary significantly from year to year and impact bottom line. This
expense was minimal for 2005 and has been included. Average profit
margin is 73% with all facilities generating income with the exception of
the maintenance hangar due to the fact that two (2) of the four (4) bays
in this facility are used to store snow removal equipment. It is
important to note that the summary below does not take into account
any related loan expense associated with these facilities.
Facility: Revenue and Expense Comparison
Corp Corp 2 T-Hangar Maint. Termin Total
1 Hgr al
Revenue $21,00 $27,900 $29,700 $2,700 $25,200 $106,50
0 0
Expense
Insurance 2,885 3,410 4,549 1,658 4,049 16,551

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3,432 3,826 468 2,064 331 10,121

Utility
Repair 775 283 360 385 98 1,901

Subtotal 7,092 7,519 5,377 4,107 4,478 28,573

Net Result $13,90 $20,381 $24,323 ($1,407) $20,722 $77,927


8
% Margin 66% 73% 82% ---- 82% 73%

The only revenue line items not included in the table above are
fuel flowage fee income and other miscellaneous income of $60,822.
This revenue covers the unallocated expense presented above of
$49,454 and allows for a net profit of $11,368. In addition, the net
profit by facility contributes to bottom line operating results and
provides the Authority with an estimate of profit by facility.

3.6 Baseline Forecast of Revenue and Expenses


The projections of future airport operating revenue and expenses
have been developed and presented through the year 2010 using
baseline conditions. Revenue projections in this analysis are based on
the continued leasing of existing facilities and do not include estimates
of future revenues that may be collected by the Airport from potential
new facilities that may be developed and/or new businesses that could
potentially locate to the Airport. The projection does take into account
aviation growth, which is an important factor when forecasting revenues
and expenses. Both based activity and total operations will have an
impact on the projection. Exhibit 14 will be presented at the end of this
section and provides this Five-year projection.

As a review from Section 1, based aircraft are expected to


increase slightly through 2010 from the current level of 23 to 28 aircraft
(increase of one (1) each for single engine piston, single engine turbo
prop, multi turbo prop, jet and rotorcraft). The projection was the result
of an average of the Linear Regression Model and the FAA Aerospace
Growth Rate. The increase will not impact the projection presented
below as there is currently no additional rentable spaces at the field.
Operations will increase significantly to 24,000 by the end of the
forecasting period (2025).

Note that Appendix 3 provides a copy of the Airport’s Twelve Year


Plan as submitted in December 2006 and Appendix 4 provides
selections from the 2006 Airport Master Plan Capital Improvement
Section with financial projections provided based on desired future
Airport projects.

A summary of other assumptions for the Five-year projection is as


follows:

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•A projection for 2005 using full year actual


unaudited results was the starting point for
the Five-year projection. For 2005, revenue increased $32,996
due to corporate hangar price increases and to an increase in
occupancy rate. Fuel sales by the FBO increased slightly from
2004 with the average at 197,800 gallons sold over the course
of the past (2) years. The change in expense from the prior
year was minimal ($2,042).
• Projected fuel demand was available via Section 3 of this
Master Plan with a 200,356 gallon estimate for 2005 and a
257,292 gallon estimate by 2010. Actual gallons sold of
200,500 was used as the starting point with steady increases
ranging from 3% up to 6% applied to the get to the projected
gallonage figure for 2010 as close to the projection as possible.
Current fuel flowage fee of $.30/gallon was used for the
projection period to obtain the fuel flowage fee revenue.
• Hangars are generating an average of $2.07 per square
foot at full capacity and current rates. Revenue at 100%
capacity is $81,300. Because prices were recently increased
on both T-hangar and corporate units, an occupancy rate of
88% was assumed for Years years 1 through 3 and 91% for
remaining years.
• The FBO Lease Agreement expires in 2009. The
projection assumes a 5% increase in the current terminal
building annual rental fee of $25,200 to $26,460 in year 5.
• A 3% inflation factor was applied to salary, professional
fees, dues and subscriptions, utilities, supplies and telephone.
• Fixed budgets were set for travel/training at $9,000 per
year, which represents only a minor increase from 2005. In
order to enhance the role of the Airport in the community, an
advertising budget was assigned at $2,500 per year at the
beginning of the projection period and was increased to $3,000
by year 45.
• Maintenance expense has been projected at $18,000 for
years 1 through 3 with an increase to $20,000 for the
remaining years. The 2005 expense is projected to be close to
$18,000 and included a significant AWOS repair expense. The
Authority has noted that the weathermation contract should be
eliminated with annual savings of $1,800 in this category.
• Principal and interest payments will continue at $77,294
annually on loans associated with the T-hangar and corporate
hangar buildings.
• Effective September 2007, the Authority will begin
making payment at Prime (currently 8.25%) on a $100,000
loan granted in 2002 from the Bedford Development Council.
• Note that it was recommended that the Authority
consider a reserve be held to support future local share and

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maintenance costs; however, at this time


the focus for this Airport must be on
generating revenue.

Exhibit 14: Projected Revenue and Expenses


2005 Est Yr 1 '06 Yr 2 '07 Yr 3 '08 Yr 4 '09 Yr 5 '10
200,5 228,76 242,49 257,04
Fuel Sales (Gallons) 00 206,515 216,841 7 3 3

Operating Revenue
FBO: Fuel Flowage $60,15 $68,63 $72,74 $77,11
Fee 8 $61,955 $65,052 0 8 3
25,20 25,20 25,20 26,46
FBO: Rentals 0 25,200 25,200 0 0 0
Hangar Rental - 70,77 71,54 73,98 73,98
existing 8 71,544 71,544 4 3 3
66 60 60 60
Other - Dues 4 600 600 0 0 0
156,80 165,97 172,53 178,15
Subtotal Revenue 0 159,299 162,396 4 1 6

Operating Expenses
29 2,50 2,50 3,00
Advertising 6 2,500 2,500 0 0 0
17,87 18,00 20,00 20,00
Airport Maintenance 9 18,000 18,000 0 0 0
16,41 22,30 22,97 23,66
Salary Expense 6 21,028 21,659 9 8 8
57 62 64 66
Legal & Auditing 6 593 611 9 8 8
59 64 66 68
Dues & Subscriptions 2 610 628 7 6 6
10,28 11,23 11,57 11,92
Utilities 5 10,594 10,911 9 6 3
19,39 21,18 21,82 22,47
Insurance 1 19,973 20,572 9 5 9
2,38 2,60 2,68 2,76
Supplies 4 2,456 2,529 5 3 4
1,44 1,58 1,63 1,67
Telephone 8 1,491 1,536 2 0 9
8,76 9,00 9,00 9,00
Travel & Training 0 9,000 9,000 0 0 0
Subtotal Expenses 78,02 86,245 87,947 89,70 93,50 95,86

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7 1 7 7
$78,77 $76,27 $79,02
Net Income from Ops 3 $73,054 $74,449 4 4 $82,289

Cash Flow - Other:


(77,29 (77,294 (77,29 (77,29 (77,29
Loans: Hangars 4) (77,294) ) 4) 4) 4)
Loan: Bed. Dev. (4,908 (14,718 (14,718 (14,718
Coun. - - ) ) ) )
Local Share:Existing (900 (3,625
(a) ) (3,047) ) - - -
Pledged Donations 7,50
(c) - - 7,500 0 - -
Annual Cash (3,878 (8,238 (9,723
Flow 579 (7,287) ) ) (12,988) )
4,27 (2,430 (6,308 (27,534
BOP – Cash 8 4,857 ) ) (14,546) )
$4,85 ($6,308 ($14,54 ($27,53 ($37,25
EOP - Cash (b) 7 ($2,430) ) 6) 4) 7)

Note a: Existing Project /Local Share @2.5%: Master Plan ($3,947) & Snow Removal
Equipment ($3,625)
Note b: Actual cash per 2005 Audited Financials
Note c: Donations pledged that remain from ‘01 Capital Campaign.

In summary, continuing operations based solely on an “as is”


policy will not result in additional revenue to the Authority. Current
debt on existing facilities and local share are exhausting any positive
results from operation. Growth in revenue is simply limited due to the
fact that there is no space available for new customers and the fact that
expenses will continue to grow. It will be important that future FBO
contracts and other lease arrangements are designed to generate
optimal revenue for the Authority. In addition, over time it would be
anticipated that the financial benefits of the recommended standard
leasing policies would increase as a result of consistent, scheduled
increases in lease rates. Current lease price per square foot range from
$1.20 (Maintenance Building – CAP) to $2.51 (Corporate Hangar 2).
3.7 Grants – Federal and State
Bedford Airport has utilized aviation grants for various projects
over the years. Currently, there is one active grant at the Airport that
covers an update to the Master Plan with focus on an approach lighting
system. Grant paperwork has recently been received to provide details
on the purchase of snow removal equipment. There are significant
desired future projects for this Airport. Below is a general discussion of
federal and state grants. Detailed guidelines and specifics can be found
on FAA and BOA websites. There is no guarantee that an airport will
receive grant funding. Following this grant section is a discussion of
various alternative financing methods that the Airport may want to
consider should desired projects become a reality for this Airport.

Federal and State: Aviation Specific

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Only public-use airports and those licensed by


the Commonwealth can receive grants administered
by the Bureau of Aviation. The Bureau administers three (3) grant
programs amounting to approximately $20 million annually for the
purpose of airport development as follows5:

• Block Grant Program (BGP) – This federal program is supported


by various taxes collected nationally on airline tickets, freight
waybills, international departure fees and the sale of fuel.
Deposits are made into the FAA’s Aviation Trust Fund. Funds
are then distributed to the Airport Improvement Program (AIP)
with Pennsylvania getting approximately 18.5% (based on
area/population formula) or $8.5 million annually. Legislation
provides for up to ten (10) block grant states and currently
there are only eight (8) (Illinois, Michigan, Missouri, North
Carolina, Pennsylvania, Tennessee, Texas and Wisconsin). This
BGP gives the state aviation agency more responsibility in
managing its AIP allocation and the state decides which
airports will receive grants versus the FAA. For Pennsylvania,
the FAA administers General Aviation State Apportionment AIP
funds for five (5) airports where the Sponsor offers commercial
service (Northeast Philadelphia, Queen City Municipal, Capital
City, Rostraver and Allegheny County).

This program is available only to airports that are part of the


National Plan of Integrated Airport System (NPIAS), meaning those
airports that are public use and serve civil aviation or those that
are privately owned and serve as a reliever airport. Projects that
enhance the safety and security are given the highest priority.
Below are a few common projects that have and continue to be
supported via AIP funds:
• Airport Development Projects (i.e. runway and taxiway
improvements, terminal modifications, lighting updates,
weather observation stations, roads, buildings, safety
and security)
• Airport Master Planning
• Noise Compatibility Planning
• Noise Program Implementation projects

Revenue generating projects such as public parking facilities,


hangars, expansion of commercial space in terminals and parking
garages cannot be funded via AIP grants.

Current funding is generally 95% at the federal level with the


state matching funds at 2.5%. (70 airports are excepted and only
get approximately 70% - large and medium hubs on approved
5
Source: PennDOT BOA Website – November 9, 2005

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projects.) In addition, funding is reduced for


projects involving an airport terminal building.
Remaining project costs of 2.5% must be supported by the Airport
Sponsor/Owner.

AIP money is further divided into two (2) broad categories of


entitlement funds and discretionary funds as follows:
Entitlement Funds: There are four (4) categories of airports that
may receive entitlement funds. Only the primary (commercial
service airport) and non-primary entitlements (general aviation
airports) will be discussed in detail as they are applicable to most
Pennsylvania airports. The amounts presented below assume that
the total amount made available is $3.2 billion or more.
- Primary Entitlements: Various formulas are applicable based
on passengers boarded at commercial service airports. The
minimum entitlement is $1,000,000 per year for airports
with commercial air service with at least 10,000 passenger
boardings per year. Additional amounts are available based
on total passengers boarded. A new category announced in
2005 and called the Virtual Primary Airport Category
represents those airports that have scheduled service but
don’t meet the 10,000 annual enplanement requirement.
These airports will receive $500,000 in entitlement funding.
Also see the Passenger Facility Charge discussion that
follows as reductions may be made to entitlements for
medium and large hub airports.

- Cargo Airport Entitlements: Cargo service airports are


entitled to share money that equals 3% of total AIP funds.
An airport shares in this money in proportion to which the
total landed weight of cargo-only aircraft landing at an
airport is to the total landed weight of such aircraft at all
cargo service airports.

- General Aviation Non-primary Entitlements and State


Apportionments: General aviation non-primary entitlements
apply to airports that have only limited commercial service
or are used by private aircraft. The entitlement is based on
20% of the Five-year cost of requested development and the
maximum entitlement is currently $150,000 per year.
Remaining funds go to the states by formula taking into
account the population of each state. Bedford County
Airport falls into this category.

- Alaskan Airport Entitlements: Alaskan airports are entitled to


receive at least the same amount of money that they
received in 1980 (i.e. $10.5 million). If total AIP funding is

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at least $3.2 billion in a year, that


amount is doubled.

Discretionary Funds: Any leftover funds are allocated by the FAA


at its discretion. However, their funding is subject to three (3) set-
asides that include funds for noise projects, military airports and
another that focuses on reliever airports with significant runway
length and operations. After the set-asides, the money is to be
spent on airport projects that will enhance capacity, safety or
security or reduce noise.

• Aviation Development Program (ADP) – This state program is


funded through taxes collected on Avgas and Jet fuel with
deposits made into Pennsylvania’s Aviation Restricted Account.
Avgas taxes first fund the state’s aviation real estate tax
rebate program. Remaining funds go into the ADP. In order to
receive funds, the facility must be a licensed public airport. For
selected projects, funds are used to pay for project expenses
up to 75% at state obligated airports and 5% at federally
obligated airports. Currently, $7.5 million is available through
this program.

• Capital Budget/Transportation Assistance Program (Act 40) – In


2005, Governor Rendell released over $6,000,000 to various
airports to support such projects as airport acquisition and
hangar projects. This program covers projects that are not
typically covered via AIP and ADP grants (i.e. revenue
producing projects such as hangar development). After capital
budget funds are released, grants generally cover 50% of the
cost. Land acquisition costs are generally granted at 75% of
project costs via this program. Only the corporate hangar
expansion project estimated at $250,000 will qualify for capital
budget funding at 50% or $125,000. There is no guarantee
that this project will be selected.

Other Federal Program – Specific to Air Carrier


• Passenger Facility Charge (PFC): This is an alternative federal
funding source for financing airport development. Commercial
airports assess passengers a PFC charge (max is $4.50) and
carriers remit to airport. These fees supplement the AIP
program. For medium or large hub airports that charge a
$3.00 or less PFC, the AIP apportionment is reduced by 50% of
the forecast PFC revenue but not by more than 50% of the
apportionment calculated. If the PFC is more than $3.00, the
percentage increases to 75%. Foregone funding then goes into
a special small airport fund and is distributed by various
percents to non-hub airports, general aviation airports, small
hub airports and to the discretionary fund.

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• Essential Air Service Program (EAS): This


federal program is funded through the Airport and Airway Trust
Fund. Its purpose is to subsidize scheduled air service to small
communities that would not otherwise receive air service. This
program must be applied for annually.

• Department of Transportation, Treasury, the Judiciary, Housing


and Urban Development, and Related Agencies (THUD) Fiscal
Year 2006 Appropriations Bill: Congress approved $4.6 million
of federal funding for various projects in Pennsylvania which
were included in the Economic Development Initiative portion
of this bill. There were no funds allocated to the Airport.

Summary
As a summary and assuming an airport is part of NPIAS and has
no air carrier service, most airport development projects (if selected)
will be funded as follows:

Block Grant:
- 95% federal share: This source comes from the Airport
Improvement Program (AIP) which is funded through the
Airport and Airway Trust Fund. The revenues for the fund
come from various sources such as aviation fuel taxes and
passenger ticket taxes.
- 2.5% state share: The state share comes from the Aviation
Restricted Account. The source for the revenue for this
account comes from aviation fuel taxes.
- 2.5% local share: The source is airport operating revenues
or from airport donators. The Airport must attest that this
share is available prior to the start of a project via a
resolution signed by the owners of the Airport.

ADP and Capital Budget:


Non-Revenue Producing Projects:
Revenue Producing Projects:
- 75% Maximum State Share - 50%
State Share
- Balance is Local Share - Balance is Local
Share

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Federal and State Partnership: Appalachian Region


Grants6
Each year the Appalachian Regional Commission (ARC) provides
funding for projects throughout the Appalachian Region. Bedford
County is included in this region. Goals of this group are as follows:
1. Increase job opportunities and per capita income to reach
parity with the nation.
2. Strengthen the capacity of the people to compete in the global
economy.
3. Develop and improve infrastructure to make the region
economically competitive.
4. Build the Appalachia Development Highway System to reduce
Appalachia’s isolation.

For fiscal year 2005 through September 30, 2005, the ARC has
funded over $5.4 million of projects in Pennsylvania. Some of the
current ARC funding has been granted to Planning & Development
Commissions with some funding for Industrial Park Development. This
ARC’s Area Development Program (ADP) addresses the goals of the
Commission’s strategies, and the focus of this Commission includes
promoting a diversified region economy through strategies that help
communities create and retain businesses and jobs and helping
communities to develop an educated, skilled workforce. Specifically,
there are a few initiatives in this program that may be applicable to
operations at the Airport or surrounding area of an Airport. Some of the
specific grant initiatives are explored below.

The Intermodal Transportation Network specifically references


aviation with funds granted to help improve and coordinate the Region’s
comprehensive intermodal transportation network. Planning and
development activities to improve accessibility to the region are
supported by ARC.

The Asset-Based Development Initiative seeks to help


communities identify and leverage local assets to create jobs and build
prosperity while preserving the character of their communities. One of
the strategies includes converting overlooked and underused facilities
into industrial parks, business incubators or educational facilities.
Approved projects are scrutinized as federal dollars fund these projects.
The supported activities must have economic impact and must identify
unique assets of a region.

Another is the Business Development Revolving Loan Fund Grants,


which are pools of money used by grantees for the purpose of making
loans to create and retain jobs. The goal of the loans is not to make a
6
Per ARC’s website at www.arc.gov – December 6, 2005

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profit like conventional loans but rather to create


private-sector jobs; however, these loan grants are
not designed as substitutes for conventional lending sources. Loans
are generally limited to 50% of project costs. Some examples of eligible
loans include:
1. Machinery, equipment and other fixed asset acquisition
including transportation/delivery and installation costs;
2. New construction, alteration, modification, repair and
renovation of existing facilities, demolition and site
preparation;
3. Land acquisition that is an integral part of a project where the
dominant funding requirement is for building acquisition or
construction;
4. Working capital, which can include but is not limited to loans
for the interest obligation of interim construction loans, to
exceed a term of three (3) years, and for reasonable fees of
loan packaging, environmental data collection, consultants and
fees of licensed professionals; and
5. Refinancing existing debt only when the Grantee can document
that the project is viable and necessary to create or save jobs.

The Commission provides for a comprehensive overview of their


program and funding specifics at www.arc.gov. The contact for Bedford
County is the Southern Alleghenies Planning and Development
Commission, 541 58th Street, Altoona, PA 16602-1193, (814) 949-6520,
Email: sapdc@sapdc.org.

PA Department of Community and Economic Development –


Opportunity Grant Program7
There are a whole host of programs offered by the PA Department
of Community and Economic Development. The mission of this group
is to make Pennsylvania more attractive to existing companies and
more competitive with other states in attracting new jobs. The
Opportunity Grant Program (OGP) is available to private companies,
municipalities, municipal authorities, private developers and Industrial
Development Authorities and corporations. Funding can be used for
job training, construction or rehabilitation of infrastructure, acquisition
of land, buildings and rights-of-way, construction or rehabilitation of
buildings, purchase or upgrading of machinery and equipment, working
capital, site preparation, environmental assessments, remediation of
hazardous materials and architectural and engineering fees up to 10%
of the OGP award.

Per discussions with the Governor’s office in February 2006, there


appears to have been no past funding to Pennsylvania airports via the
7
Per PA Department of Community and Economic Development - Business Financing Programs Manual dated July
2005 and Opportunity Grant Program Guidelines dated March 20044

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OGP. That is not to say this will not be the case in


the future and airport owners should be aware of this
program. It may be possible for airports to partner with qualifying
companies and attract these companies to do business at the airport.
These grants have been primarily utilized for manufacturing and
industrial. Funding is also provided to economic development groups
for development of industrial parks. In addition, call center operations
have typically received funding.

There are several conditions that eligible companies must meet as


follows:
1. Must locate, expand or maintain operations at a PA site.
2. They must contribute at least $4 private investment for
every $1 of OGP assistance. It was also noted in current
discussions that because of the competitive nature of these
programs, the 4:1 ratio is only a minimum suggestions and
that some of the more recent grants have required 20:1 and
even 30:1 contribution ratios.
3. Within three (3) years, they must create or preserve 100
full-time jobs at the site, or increase their PA employment by
at least 20%, or provide a substantial number of new
employment opportunities within a high-growth industry.
4. Projects that will result in the creation or preservation of less
than 100 jobs must be located in counties or communities
suffering from severe economic distress.
5. Employees hired or retained by the private company must
receive a base pay of at least 150% of the minimum wage in
order to be counted toward the employment requirement.

3.8 Alternative Financing Methods


Due to timing or uncertainty that a project will receive federal or
state funding, there are several alternative financing methods that may
be available. These options are detailed below.

The Bedford County Air Industrial Park Authority ("Authority)


began a capital campaign in 2001 and was able to obtain a five-year
pledge of $167,000. In addition, the Bedford Development Council
provided the Authority with a $100,000 loan in 2002 to be used interest
free until 2007.

Municipal Bonds
Municipal bonds are securities issued by a local or state
government for a public or private purpose. These securities can
consist of long- and short-term issues. Short-term notes generally
mature in a year or less and can be used to gain funds quickly in
anticipation of future revenues such as state or federal grant payments

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or to cover irregular cash flows and also to raise


capital funds until long-term financing can be
arranged. Most notes have a minimum denomination of $5,000 with
interest typically paid at maturity. Bonds are issued over the long term
to finance significant capital projects and are also issued in
denomination of $5,000 or multiples of $5,000 with interest being paid
semi-annually.

Returns are generally tax free from federal tax, and local
governments will sometimes make their debt non-taxable for residents,
thus making these bonds completely tax-exempt. Some revenue
producing projects may be taxable (i.e., rental car facilities and airline
offices). Because of this tax advantage, the yield is general lower than
other types of bonds that are taxable. There are two basic types of
municipal securities as follows:

• General Obligation (GO) Bonds: The bonds are issued with the
belief that a municipality will be able to repay its debt
obligation through taxation or revenue from other projects.
There are no assets required to be used as collateral. Principal
and interest are secured by the full faith and credit of issuer.
These bonds finance projects that do not produce revenue and
are backed by the creditworthiness and taxing power of the
municipality operating the airport.
• Revenue Bonds/Revenue Financing: Many public projects are
financed by these bonds and include airport projects. They are
generally the most common funding source at larger
commercial service airports. However, airports with sufficient
operating surplus/net revenue may qualify for this type of bond
issue. Principal and interest are secured by revenues derived
by the users of the facility built with the proceeds of the bond
issue. Revenue bonds may help bridge the gap between
federal and state grant funding and the funding required by the
airport, which is generally 50% of project costs for some of the
larger capital projects. In order to successfully issue a bond on
behalf of a hangar project, a substantial waiting list and/or
long-term executed leases will most likely need to be available
to substantiate future revenue stream to support the bond
issue.

Private Financing/Development
This method of financing is used by an airport sponsor who
decides to use a third-party developer or a tenant to finance a
construction project. This is typical with hangar development.
Individuals and/or corporations lease land from the airport on which the
private developers fund the construction of hangar facilities. These
facilities are typically then leased by the developers to private aircraft

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owners. A long-term lease program is typically


developed that provides a lease term of up to 20 - 30
years during which the developer continues to pay a land lease to the
airport. At the conclusion of the lease term, the asset developed via
private financing hangar facilities and the land on which they are
located should revert back to the airport. This process allows the
developer to have sufficient time to amortize capital investments in the
hangar development while generating sufficient profits to make the
project financially beneficial. The private development alternative
promotes increased activity at the airport while minimizing the airport’s
amount of capital invested in a project. After the reversion of the
hangar buildings, the airport can then benefit from lease revenues
generated on these hangar facilities for which its maintenance costs are
minimal. In the privately-funded development scenario, revenues
collected by the airport from lease facilities would be limited to land
leases and be significantly lower than revenues collected if the airport
was owner of the facilities. This method is popular if capital is not
available by the airport to construct hangar facilities or where the
Airport wants to minimize its financial risks.

Another option is for the developer to deed


the improvements back to the Airport immediately after construction,
and the airport enters into a Management Agreement with the
developer. A portion of the improvement rent pays the management
fee and allows the developer to amortize the investment and receive an
appropriate return. As a public owner of the improvement, the airport
does not incur real estate taxes, thus increasing its net revenue.

Private financing may also mean that private individuals are


willing to provide full or partial funding for projects on terms much more
appealing than those from a local bank.

General Tax Fund


It may be possible to fund local share or any other
projects not available for FAA/BOA funding via the general tax fund at
the county or township level. The public entity needs to create
separate accounts to avoid the perception of “airport revenue
diversion.”

Business Line of Credit/Loan


The Airport has used this form of financing. A business line of
credit from a local bank may be available for some of the smaller
projects at your airport with lines of credit reaching $500,000 with the
maximum line varying depending on the bank. Generally, up to
$100,000 can be obtained as an unsecured line of credit. An airport
must be able to demonstrate sustainable earnings and cash flow in
order to qualify with additional common requirement details specified

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below. A line of credit is generally used for short-


term working capital, seasonal purchases, inventory
and others. For minimal loan amounts generally no collateral is
required, terms are open-ended, variable interest rate based on prime
plus a spread, and interest and fees may be tax deductible.
Requirements include an annual fee based on credit limit, minimal
opening fee, business must be established for a number years,
satisfactory business/personal credit history, profitable business with
sufficient cash flow and review required on prior years tax returns and
financial statements. To gain the best “deal”, the airport should
competitively bid this financing.

Aviation Development Loan Program


This program is detailed as part of Act 164, Title 74, Part III,
Subchapter D of Pennsylvania Laws relating to Aviation. It is a
relatively new loan program (Pennsylvania Infrastructure Bank) and was
initially seeded during state fiscal year 2003-04 with $500,000 with only
a minimal amount left as of February 2006. Additional funding was
added in 2006, with current funding at approximately $1.4 million.

This program is available to public airports with the maximum


loan amount being 10% of the overall Aviation Development Account or
$100,000 whichever is greater. The loan must be used for airport
development. The approved loan shall bear interest at a rate of one-
half the prime lending rate as published by the Federal Reserve at the
time of the loan application with the repayment period not to exceed 10
years.
SECTION 4
AIRPORT OPPORTUNITIES AND RECOMMENDATIONS
4.1 Airport Opportunities – Current and Proposed
Development Plan
General
Promoting new development at the Airport is a means of
improving the Airport’s financial operating condition and supports the
Airport’s mission/vision as outlined in Section 2. In addition to
recommended infrastructure development projects identified in the
master plan, attracting and promoting additional tenant development at
the Airport is extremely important. There are several areas on Airport
property that could be developed. Although it is not easy to identify in
specific detail the types of future development that may arise at the
Airport, there are general categories of development that should be
considered and planned for, yet not funded or constructed, before any
specific tenant and/or user is identified.

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There are a number of factors supporting


growth and development of this Airport.
Socioeconomic trends are on the rise for Bedford County. The County
has several KOZ sites some of which are located adjacent to the Airport
or within a few minutes drive time of the Airport which may help to
bring new customers/business to the Airport. This County has seen
recent development. The historic Bedford Springs Hotel is slated to
open in 2007 with $90 million provided via a public-private financial
package for restoration of this facility. Two companies have returned
or re-opened business in the County including Defiance Metal Products
and JLG Industries, a global producer of aerial work platforms and
telescopic hydraulic equipment. Seton Co., a manufacturer of
automotive leather, expanded their business and has relocated
operation from New Jersey to Bedford. In addition Recreational
Equipment, Inc. (REI), a national retail co-op which provides quality
outdoor gear and apparel, will open an eastern distribution center in
Bedford with full capacity completion by 2008.

Services/accommodations from general aviation airports within 50


miles of this Airport are not an overriding consideration for aircraft
relocation based on current status. With future growth, the Airport will
need to consider additional hangar facilities to remain competitive. This
will be discussed further in Section 4.3 (Recommendations).

Of course with any growth and development plan there are


challenges. The airport must continue to keep up with maintaining
current structures in order to make the airport marketable and continue
to keep the airport safe. Citizen/Neighborhood Support groups may
offer significant challenges for any airport and can delay or even limit
the ability of the airport to serve business interests. The Authority has
done a good job thus far in keeping the community abreast of proposed
changes for this Airport. Finally, marketing efforts and standardization
of documents at the Airport will require significant resources, time and
money.

Aviation Development
Aviation development represents a two-fold means for improving
an airport’s operating income. Revenues generated from new aviation
facilities through lease rates or user fees will increase an airport’s net
operating revenue. In addition, increased activity levels that may result
from aviation development, generate additional revenue through fuel
sales and other fees. Two primary potential aviation development
opportunities to be discussed in Section 4.3 are land development and
related hangar construction. Exhibit 15 presents the proposed Terminal
Area plan for the Airport and highlights various areas on Airport
property and related development. The development will be discussed
throughout Section 4.3 (Recommendations).

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Exhibit 15 – Proposed Airport Development

Indirect Aviation Development


Where aviation development opportunities may not exist, indirect
development may represent a means for generating revenues from
vacant airport property. When pursuing this type of development, it is
important to maintain sufficient Airport property with airfield access to
accommodate anticipated and unanticipated aviation-related
development at the airport. However, opportunities may arise for short-
term or long-term, indirect aviation uses that would generate some
revenues on Airport property that may currently be un-utilized or under
utilized. Indirect aviation use of Airport property may not increase the
usage rates of current aviators or attract new users to the Airport, but
there is potential to generate revenue by making better use of vacant
land.

Non-aviation development does not exist at the Airport today and


should continue to be discussed as it has the potential to increase
aviation activity by bringing the corporate aviation market to the
Airport. Fractional ownership is becoming common for businesses as
well as individuals and could mean a source of growth at the airport.
Other examples of indirect aviation development that may be
synergistic with current and future aviation activity could include retail
operators such as restaurant/food service, automobile fueling/repair
service, hotel development and foreign trade zones (discussed below in
Section 4.2).
Development – Financial Implications

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One of the most important steps in attracting


and accommodating new development at an airport
facility is having a thorough understanding of the financial implications
that potential development may have on the airport. Each opportunity
must be examined individually; in all cases, the following steps should
be taken to identify the potential financial implications of the
development:

• Identify the potential costs to the airport: Any


infrastructure development costs that may be the
responsibility of the airport need to be identified and, if
possible, a means for recouping these costs from the potential
tenant should be identified. In addition, the “opportunity” cost
of using airport property for indirect aviation development
should be quantified. This indirect aviation development will
provide minimal, if any, benefits to airport activity levels, and
therefore, may not represent the highest and best use of some
parcels of airport property.

• Identify the potential benefits to the airport: Potential


benefits of any development that may occur need to be
quantified. It is important to understand that the potential
benefits include not only anticipated future revenue streams
from the potential tenant but also increases in overall airport
activity and fuel sales, parking and tie down fees and hangar
fees that may be related to the operations of the potential
tenant.

• Use Industry Standard Best Practices in Lease


Development: When pursuing any potential development,
the lease document provides the primary means of ensuring a
mutually beneficial arrangement between potential airport
tenants and the airport itself. Implementing best practices
related to fair-market value appraisals, rate escalations and
building reversion clauses is essential to ensuring the potential
development will benefit the airport over the long run.

4.2 Foreign Trade Zones (FTZ) and Keystone Opportunity


Zones (KOZ)
Foreign Trade Zones (FTZ)
A foreign/free trade zone is defined as a port designated by the
government of a country for duty-free entry of any non-prohibited
goods. Merchandise may be stored, displayed, used for manufacturing,
etc. within the zone and re-exported without duties being paid. Duties
are imposed on the merchandise (or items manufactured from the
merchandise) only when the goods pass from the zone into and area of
the country subject to the Customs Authority. The advantage to an

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airport of having a FTZ means an additional revenue


stream to the owner through renting a facility to
support the business operating in the FTZ. The application and
activation process is not quick. It is estimated that the application
process takes eighteen to twenty-four months with the activation
process requiring another four (4) to six (6) months.

There are two (2) types of FTZs as follows:


General Purpose Zone (GPZ): A GPZ must be operated as a public
utility and be located within 60 statute miles or 90 minutes
driving time from the outer limits of a U.S. Customs port of entry.
They are established for multiple activities by multiple users. GPZ
projects may consist of one or multiple sites (i.e., single building,
industrial park, airport). While activities such as storage,
inspection and distribution are permitted at all FTZs, processing
and manufacturing require special permission from the FTZ Board.

Sub-Zone: These are designated in cases where a firm wants FTZ


status for its own plant or facility, or when the existing general-
purpose zone cannot accommodate the firm's proposed activity.
Sub-zones are common for an individual company's
manufacturing operations. They can be located anywhere within
a state, as long as a sponsoring grantee of a general-purpose
zone exists in the state and the U.S. Customs Service can fulfill its
proper oversight functions at the proposed location of the sub-
zone.

L. Robert Kimball & Associates, Inc. has partnered with Gambit


Interactive Corporation who specializes in Foreign-Trade Zone and
Special Purpose Subzone activity and the related international economic
development.

There is currently no FTZ that includes the Bedford County Airport


or an area near Airport property. The closest FTZ is Reading/York (#147
FTZ) with the York Zone located on 2,020 acres and covering Adams,
Cumberland, Franklin, Perry and York counties.

Keystone Opportunity Zones8


The Keystone Opportunity Zone (KOZ) program, in effect for a
twelve-year period, from January 1, 1999 to 2010, identifies and
develops a community’s abandoned, unused and underutilized
land/buildings into business districts and residential areas that provide
community revitalization. These KOZs are generally close to major
interstates, ports, rail lines and airports. The program is administered
by the Department of Community and Economic Development, and a
8
PA Department of Community and Economic Development: Keystone Opportunity Zone, Program Guides and
Application, Nov 2005

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partnership exists between state and local


government in collaboration with the Department of
Revenue (state taxes) and the Department of Labor and Industry
(Unemployment Compensation taxes). KOZs are designated by local
communities and are approved at the state level and are virtually tax
free and entitle businesses/residents to certain tax benefits when they
locate in a KOZ. Currently, there are 12 defined regions in 61 counties
across the state covering more than 49,000 acres (acreage ranges from
under 10 acres to over 500 acres per parcel). The elimination of state
and local taxes within these underdeveloped and underutilized areas is
resulting in significant economic growth and investment for designated
communities. It is important to note that KOZs must be approved at
the local level by all taxing authorities, including school districts.

Businesses located in a KOZ must actively conduct business from


the property. There is an on-line application process and businesses
that qualify must continue to apply annually. Current businesses in
Pennsylvania can relocate to a KOZ; however, there are additional
requirements in order to receive the tax incentives. Total taxes to a
business in a KOZ may be reduced to almost zero. Credits, waivers and
broad-based abatements impact State taxes including the Corporate
Net Income tax, Capital Stock and Foreign Franchise tax, Personal
Income tax, Sales and Use tax, Mutual Thrift Institution tax, Bank and
Trust Company Shares tax and Insurance Premiums tax. Local taxes
impacted include the Earned income/Net Profits tax, Business Gross
Receipts, Occupancy, Privilege and Mercantile tax, Sales and Use tax
and the Property tax.

In some cases through Pennsylvania, airport property or portions


thereof have been designed as a KOZ. Although this is not the case for
the Airport, there are several areas designated in Bedford County
(highlighted below), many of which are close to the Airport. These sites
will offer an opportunity to entrepreneurs and small business owners for
expansion and potential growth which will in turn present opportunities
for the creation of various types of jobs in the county and should mean
more traffic and business for the Airport.

Some of the specific sites highlighted and owned by the Bedford


County Development Authority’s are highlighted below as detailed on
this Authority’s web site. The KOZ sites include the following:

1) Bedford County Business Park I: Approximately 36 acres


remain in this 143-acre Business Park located in Bedford
Township. All vacant lots are designated KOZ through 2008 and
within close proximity of the Airport.

2) Bedford County Business Center: This facility was completed in


the Bedford County Business Park I on 6.29 acres and includes a

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24,000 square foot multi-tenant building.


Approximately 5,500 square feet of office
space is available for lease. This area is designated KOZ through
2008 and located near Airport property.

3) Bedford County Business Park II– Located at Interstate 99 and


County Ridge Road in Bedford, this site exists on 145 acres. This
Business Park provides turn-key sites geared to large distribution
centers and manufacturing.

4) Breezewood: Located in East Providence Township and one-half


mile from Interstates 70 and 76, this 90-acre parcel is owned by
the Bedford County Development Association and has KOZ status
through 2013. It is suitable for industrial and manufacturing.

5) Broad Top Industrial Park: Located in Saxton Borough,


approximately 28 miles from Interstate 70 and 76 and
approximately 15 miles from Interstate 99, this 25.66-acre parcel
is suitable for industrial and light manufacturing and has KOZ
status through 2013.

6) Everett Area Business Park: Located in West Providence


Township, approximately 8 miles from Interstate 70 and 76 and
approximately 10 miles from Interstate I-99, this 9-acre parcel
(two contiguous lots) is suitable for industrial and manufacturing.
It has KOZ status through 2008.

7) Hyndman Borough Industrial Park: Approximately five acres of


underutilized land is available in Hyndman Borough, located in
southern Bedford County near the Maryland state line, the area is
suited for industrial and manufacturing.

4.3 Recommendations
Below are the goals as discussed in Section 2. This section will
explore and discuss related business objectives and recommendations
and includes a discussion of County/Owner priorities.

Business Goals:
A. Self Sufficiency
B. Attract Businesses – Aviation, Aviation Related & Other
C. Private Investment
D. Economic Stimulator
E. Enhance Airport Safety & Environmental Sensitivity

Authority/Owner Priorities
The Authority has done a good job of keeping both the
Stakeholder and Community Advisory Group informed of current status

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at the field and their vision for the future. Several


meetings have been conducted for each group.
There is a strong desire for hangar development, additional parking
space, additional snow removal equipment and a published approach
system. A 500’ runway extension was analyzed with costs estimated at
$6.9 million to take the field from a B-2 to C-2 status. It has been
determined by the Authority that this is not a priority for the Airport at
this time. In the past year or so, the Authority has considered adding
an Avionics Shop and having the Airport serve as a police helicopter
operation base. In addition, the Airport Director has interest in a GIS
system.

Both the hangar development and published approach projects


will make the Airport much more desirable by current users and make
the airport more appealing to new users. These projects support the
Airport’s long range vision of becoming a dynamic Aviation Business
Center. It will be important to demonstrate demand for new hangars,
not just by a waiting list but by potential leasee monetary commitment.
It is suggested that a meeting take place to show the proposed
development area for new hangars to include detail by unit, including
type and proposed cost per unit. It is also suggested that the County
develop a long-term lease arrangement for any new hangars (i.e. 10
years) and that applications be available at such a presentation.

Funding may be a hurdle. The Authority will have the opportunity


to apply for capital budget funds each year. The Authority has identified
a corporate hangar expansion with capital funding at $125,000. It is
also important to note that there is no guarantee that total funds will be
released and depending on the project, only a percentage of funds can
be applied to total project costs (i.e. 50% for hangar development, 75%
land acquisition). Regardless of funding provided by federal and
state agencies, there will need to be a matching local share and private
funding for non-eligible work. Per Exhibit 2, the local share requirement
over the next four (4) years is $207,550 assuming all desired projects
are approved.

The Authority must also focus on additional revenue streams for


the Airport and with hangars filled will need to consider a 50% local
share match on any future development. Hangar development and
impact on financial results will be discussed in detail in this section
under the Self Sufficiency goal, specifically A2 (Hangar Development).

A) GOAL: Self Sufficiency


A1) Objective: Fuel Sales

• FBO Fuel Sales: Bun Air provides the fueling services at the
Airport and sold approximately 200,500 gallons of fuel in 2005
providing $60,158 to the Authority based on the $.30 per

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gallon fuel flowage fee. As a general note,


the average profit for fuel sold by the
Airport Owner is $.50 per gallon on Avgas and $1.00 per gallon
on Jet “A”. The current FBO Lease Agreement expires May 20,
2009. The Authority is earning an exceptional fuel flowage fee
in comparison to AAAE study results and other FBO
arrangements in Pennsylvania. It is suggested that the
Authority consider a fuel flowage fee for each type of fuel sold
at the field in order to increase fuel revenue and/or consider
including a percentage of gross sales clause into the next FBO
contract.

• Automated Fueling Services: Fueling service is currently


available at the Airport from 7:00 a.m. to 6:00 p.m. Monday
through Saturday and from 9:00 a.m. to 12:00 p.m. Sunday.
As general information, automated aircraft fueling services are
also a way to provide fueling services around the clock and
could provide for increased income. Equipment cost is
generally $15,000 per product with installation varying
between $5,000 and $10,000 depending on distance from
tanks to office. This may be a cost that could be shared by
both the Authority and FBO as both parties would benefit.

A2) Objective: Hangar Rentals

There are 23 units available at the Airport. All units


are at capacity with no waiting list. Facilities are in good condition.
The Authority has increased prices on both types of hangar units over
the study period. Annual hangar revenue at full occupancy will provide
the Authority with $81,300 which equates to an average price of $1.95
per square foot. Monthly t-hangar prices are $165 per unit while the
corporate rates vary based on size of unit and range from $300 to $700
per unit.

L. Robert Kimball conducted a survey of hangar prices by size a


few years ago. Over 23 airports provided pricing for hangar units
similar in size to those of Bedford County. The average monthly rate
per unit was $215. It should be noted, that rates at Bedford are
competitive compared to other Airports in its service area. It is clear
that Bedford needs to consider hangar development in order to improve
cash flow and operating results.
Exhibit 16 below provides a simplified financial exhibit that
reviews annual income and expense figures associated with the addition
of a typical 10-unit hangar facility (11,000 square feet) assuming an
average rental price of $250 per unit per month to be constructed on
one (1) acre of airport owned property. A comparison is presented
showing the Authority as Owner and also a private developer scenario.
Note that this Exhibit only takes into account the construction costs and

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does not factor in inflation or related development


such as design, taxiways, etc. These related costs
are generally covered at 97.5% (federal and state share) assuming
related projects are selected by FAA/BOA. Note that construction of t-
hangar taxiways and site development are generally estimated to be
the same cost as hangar construction costs.

Exhibit 16 – Hangar Development

Loan or Bond Financing


$300,000 for 20 Yrs @5% Private Development
Year 1 Yrs 2-20 Yrs 21-40 Yrs 1-30 Yrs 31-40
Develope
r as County as
Construction Loan/Rent Rent Owner Owner
Revenue
Hangar Rent * 30, 3
($250 mth/10 units) - 30,000 000 - 0,000

Land Lease (1 acre) 4,


Private Developer - - - 000
30, 4, 3
Subtotal Revenue - 30,000 000 000 0,000

Expense
1,70 1 1,7 1
Hangar Insurance 0 ,700 00 - ,700

O&M Hangar Costs


and/or Reserve (10%) 3,000 3,000 3,000

Interest/Principal -$1980
mth ** 11,88
(non-operating) 0 23,760 - - -

Depreciation-40yrs/SL 7,5 7
(non-operating) ** 7,500 7,500 00 - ,500

Subtotal Expense 21,080 35,960 12,200 4,000 12,200


Net Operating
Gain/(Loss) – Per Year (21,080) (5,960) 17,800 4,000 17,800
Cumulative Gain/(Loss) (21,080) (134,320) 221,680 120,000 298,000
Cumulative Cash Flow (13,580) 15,680 521,680 120,000 373,000
* Suggested rental rate per preliminary discussions with the County.

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** Assumes ½ year of principal/interest payment and depreciation in


construction year

Keeping in mind that there are many variable in the presentation


above (loan rates, monthly hangar rental rates, etc.), the loan/bond
financing scenario provides for a cumulative gain of approximately
$221,680 over a period of 40 years. The private development scenario
provides a slightly higher gain of flow of approximately $298,000 over
the same time period. Cash flow must also be available over the course
of the first 20 years to cover the minimal loss.

A3) Objective: Land Leases for Corporate Hangar Development

The proposed development area could support


additional corporate hangars. The Authority may want to consider
a business user survey (to be discussed in the Marketing Appendix) to
determine if there is a need for additional corporate hangar units. The
Authority may also want to consider a presentation to the business
community to discuss future development at the airport and if there is a
need by each business for aviation services, whether it be in terms of
charter service, corporate hangars or just general use by business
travelers.

Corporate hangar facilities to support jet activity


are generally 60’ x 60’ square feet and may have a small portion of the
unit dedicated to office space. As detailed above, a financial model
should be developed to determine which method of development
provides the maximum financial benefit to the Airport. Depending
on cash flow, hangars could be constructed by the company interested
in development or by the Airport Owner. Commitment by interested
parties needs to take place early in the process with long-term lease
arrangements in hand prior to breaking ground.

A4) Objective: Financial Analysis with focus on O&M Expenses


There are several suggestions that
have surfaced as part of the historical review of financial results as well
as actual results through December 2005.
1. Financial Results/Accounting Detail: All general ledger results
are prepared and booked to General Ledger by the Airport
Director. There is both a general operating ledger and project

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ledger. It is suggested that accounts be


standardized as there are a multitude of
accounts relating to Maintenance and Repair as well as
duplicate accounts to record other general expenses. In
addition, there are some accounts that exist in the project
ledger that should be booked in the general operations ledger
such as mowing, airport insurance and AWOS expenses.
Streamlining the ledger will provide for timely and accurate
analysis. It is suggested that a Repair account be opened
specific to each major facility at the field. There are also
several general accounts to record T-Hangar unit revenue.
One account would be sufficient.
2. Cash Flow: Although the cash flow was not requested, there is
an analysis being done by the Airport Director. With an active
grant and proposed future development, the cash flow
analysis should provide details month-by-month details and
should be estimated for a Five-year period.
3. G/L Journal Entries: It is suggested that standard journal
entries be used. As an example, hangar unit should always
include lessee, unit and month being paid.
4. Grant Details: Grant specifics must be recorded in detail and
it appears that a project ledger was created to identify grant
receipts and related project expenses. Local share, which is
the Owner contribution, impacts cash flow. Federal and state
payments will need to be detailed in audited financials. The
current grant requires a local share of 2.5%. Local share of
projects at a minimum should be known or even accounted
for when discussing projected results. For each project, the
major stakeholders should be identified and benefit to them
quantified to justify participation in the local share. Capital
improvements selected for the Airport must pass the
business test and complement the Airport vision/mission.
Viable projects as presented via the Twelve-Year Plan (TYP)
must be studied in depth so that cash flow is not jeopardized.
5. Utility Analysis: Utility expense accounted for about 13% of
total expense. The FBO is responsible for runway, fuel farm
and terminal building utility expense with the exception of
water and sewer. This is generally a substantial expense for
an Airport Owner. Although the Authority is not responsible
for the heat/electric expense in the FBO area. The Authority
should be aware of what it costs to support these facilities.
Utilities increase from year to year and are usually
overlooked. It is suggested that utilities be further broken
down to study the expense from a landside and airside
perspective. It is expected that detailed analysis will
supplement the review of leases and will insure lease rates

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are appropriately covering this expense.


Some questions to consider are:
• Are utility meters placed appropriately to map/track
expenses to the appropriate group (i.e., terminal facilities
and hangars)?
• Can metering changes be made to adjust for areas that
may have on and off peak usage?
• Can energy efficient improvements be made at the field
(i.e. lighting upgrades, insulation additions, etc.)?
• Should a portion of the water and sewer costs (although
minimal) be allocated back to FBO and CAP?

6. Accounting Policy/Reserve Funding: It is suggested that the


Authority consider a reserve fund to support future
repairs/maintenance of Airport property as well as future local
share for desired projects. It is suggested that a minimum of
5% of gross revenues be held in a reserve fund for each of
these categories at the point when operations can support.
7. Lease Summary: A comprehensive lease summary should be
developed and maintained to identify every square foot of
property that is available for leasing. This exhibit should
identify lessee, square footage rented, begin and end date of
lease, lease amount, important lease conditions (i.e. security
deposit, utilities included, concessions collected, etc.),
renewable period (if applicable), period of time vendor has
leased space and an area to document any future provisions
or notes on leased spaced. This worksheet has been
created and will be provided for future updates by the Owner.

Other Suggestions:
A. Full Capacity: The Authority should consider a Snow Removal
Equipment (SRE) storage building. There are currently two (2)
units in the maintenance hangar being used for storage of
SRE. In addition, the Authority recently received a grant
application related to the purchase of additional equipment.
Although the Authority would be responsible for local share
and minimal utility expense, the revenue generated from two
(2) additional rental units at current price would be
approximately $4,000. Besides these units, it appears that
the Bedford Airport is leasing every possible space at the
Airport.
B. Business Permitting Fee: Per current Airport Rules and
Regulations, a one-time fee of $75 has been established to
accompany each request for lease/license. It is suggested
that procedures be updated to include a statement such as,
“Individuals providing services for a fee at the Airport,
whether operating as a business or not, will be charged an

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Airport concession fee of at least $300 per


year.” If possible, the Authority may want
to consider basing this fee on gross sales, etc. to generate
additional income. The benefits to the Airport from
implementing such a policy will include an improved ability to
manage and monitor on-Airport business activities in addition
to a positive revenue impact.
C. Landing/Parking Fees: Landing fees are not being collected at
the Airport. Billing for landing fees is often time consuming
with aircraft owners not always identifiable. However, the
Authority should continue to focus on this potential revenue
stream to determine if there is a profitable way to collect this
fee. As a general note, some airport owners pay a
commission to their FBO to do this job for them. Landing fees
are generally collected based on aircraft weight as discussed
in Section 3.2 (Activity Related Revenues).

For all but the busiest non-hub airports, the costs associated
with implementing and collecting parking fees generally out-
weigh the revenues generated from automobile parking.
This is mentioned as a general note should parking become
substantial at this Airport in the future.

D. Partnership: It is suggested that members of the Authority


partner with a comparable airport to discuss and compare
business plans, financial policy and general operations.

A5) Objective: Standard Policy - Lease and Other


Background/General
Establishing standard policies regarding Airport leases, rates and
charges is an important means available to promote long-term
improvement to the Airport’s financial operating condition. The impacts
from this approach may not immediately generate additional revenues
like one would expect from increasing user fees, for instance. However,
the long-term impacts of establishing consistent leasing policies, on a
lease-by-lease basis if necessary, that improve the Airport’s revenue
generating potential and provide maximum benefit to the Airport could
significantly out-weight any one-time increase to fees. Current average
rate per square foot is $2.12 at the Bedford County Airport based on
leaseable space of 50,281 square feet.

Lease rates and charges vary by airport and tend to reflect market
conditions. Furthermore, the nature of an airport’s activity can also be a
major determinant of the types of revenue sources that exist at the
airport as well as the appropriate level of fees to be imposed on airport
users. While the actual charges may vary, common approaches are

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frequently used at airports to determine, collect, and


adjust fees at their facilities. An airport’s goal in
establishing rates, charges and leasing policies is to ensure that
revenues generated from an airport area, or cost center, generally
cover the costs of operating that area. Furthermore, each airport tenant
should contribute towards the operating costs of those areas or airport
facilities that it frequently uses. Specific rate escalation details should
be included in the lease and not be subject to negotiation during the
terms of the lease. Quantifying the potential costs and the potential
benefits of the development to the Airport is essential for ensuring that
any compromises that may occur during the lease negotiation process
will not negatively impact the Airport’s net operating outcome. In some
cases, anticipated increases in activity levels and associated revenues,
as a result of development by potential tenant, may justify rate
reductions to that tenant. However, the steps identified above should
be followed so that all potential impacts of the development are
quantified and understood before any long-term lease agreement is
executed.

• Terminal Lease Rates: The Airport should establish a


standard terminal lease rate that is adjusted every three (3) to
five (5) years based on terms included in the contract. The
periodic adjustment should increase the previous rental rate by
3-5% in order to keep pace with changes to the general price
level. This could be directly related to Bun Air (FBO) Lease.
The rental of the terminal building and attached hangar has
not changed over the course of the last four years. The
current rate is $25,200 per year for use of 10,400 square feet.
The lease does include language to allow for up to a 10%
increase in rental amount.

• Land Leases & Reversion Clauses: There are currently no


land leases at the Airport today. If these exist in the future, a
standard land lease rate should be applied to all land leases.
This rate should be based upon location, site development,
utilities and visibility. The rate should be increased annually if
the market justifies such an increase. The standard rate and
scheduled escalations should be included in all future land
leases as well as provisions outlining the reversion to the
Airport of all facilities constructed and/or improved by the
tenant during the lease term. It is vitally important that the
Airport consistently implement reversion clauses in all future
land leases, as well as in lease extensions with existing tenants
when possible, to allow the Airport to benefit from future
revenue streams resulting from privately-developed facilities
on Airport property.

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•Lease Buy-Outs: If the need arises, the


Authority should assess the cost/feasibility
of lease buy-outs for those long-term leases that are no longer
profitable. The longest lease term is with Bun Air for a period
of four (4) years with an automatic renewal option.

• Essential Facilities: Going forward, the Authority should


address ownership versus lease of any new essential facilities.
Currently, all essential facilities at the Airport are owned by the
Authority.

• Hangar Leases and General Use Requirements: The


Authority issues hangar lease agreement which includes key
requirements as follows:
1. Hangar lease rentals should be short-term in nature and
allow for a 3-5% increase annually. The Bedford County
Airport Lease Agreement is for a period of one (1) year
and is not renewed automatically.
2. The amount of rent can be changed via written notice.
3. It is clear that the hangar shall be used for the storage of
aircraft only and items specifically related to the
maintenance of the aircraft.

A multi-year schedule of hangar rental rates and escalations


should be developed and maintained by the Airport to assist in
tracking this activity and insuring that rates are increased as
scheduled. The per-unit monthly cost should be evaluated
periodically and should reflect current market replacement costs.

• Minimum Standards: Minimum Standards are available for


this Airport, however they were last updated May 1, 1993.
Although still effective, the Authority should consider an annual
review of this document and update accordingly. Upon
receipt of federal funding, it is the Airport’s responsibility to
make the airport available for public use on reasonable
conditions and without unjust discrimination. Through these
standards, the airport sponsor agrees to make available the
opportunity to engage in commercial aeronautical activities to
any person, firm or corporation that meets reasonable
minimum standards as established by the Airport Sponsor.
The purpose of this document is to ensure a safe, efficient and
adequate level of operation and services to the public.
Compliance with the standards should be made part of a
service provider’s agreement with the sponsor. Once created,
this document should be updated as needed and reviewed
annually at a minimum.
• Business Permit Fees: See Section A4, Financial Analysis,
Item B for details.

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A6) Objective: Development – Owned and Non-


Owned Parcels

• New Development via Airport Property: There are several


areas at the Airport which could be made available as potential
development sites. Exhibit 17 highlights several recommended
areas for future hangars and related development such as
taxilanes and parking. Instrument Approach Development is
under way which will make the Airport much more desirable to
aircraft users, specifically a LPV approach has been
recommended which will greatly enhance safety.
• Proposed Land and Easement Acquisition: There are
several easement and land acquisition parcels identified on the
TYP (Appendix 3). The purpose of acquisition is mainly for
obstruction and primary land control. In addition, two
parcels have been identified for future aviation development
consisting mainly of the Heartland and Stahl properties at at
approximately 32 acres.

Exhibit 17 – Proposed Airport Layout Plan

A7) Objective: Full Service FBO

• Experienced FBO: It will be important to review FBO


capabilities and to explore what might be required to support

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increased Business/Corporate activity. The


existence of an air charter service would be
considered a key ingredient to the Airport and should produce
revenue generation for other on-site aviation services. There
may also be an added benefit for bringing in this service
exclusive from the FBO. The charter service could provide the
FBO with fuel sales thus resulting in additional income to the
Authority. In addition, the charter service would be set up to
provide financial incentives to the Owner (via lease income and
possibly a percentage of gross sales). “Full service” must be
well-defined in the Airport’s Minimum Standards.

• Limited FBOs: Limited FBOs are not recommended for this


Airport as they create unnecessary competition unless they are
truly specialty limited FBOs (i.e. airplane painting, avionics,
etc.).

• FBO Standard Rates/Charges: Although standard rates and


charges are necessary, it is important to have access to FBO
results and/or projections to insure the Owner has instituted
the best revenue generating policy. As a general note, FBO’s
that focus on maintenance activities and charter operations
generally produce significant profit margins. Collecting a fee
for service based on gross sales may produce additional
revenue than a general concession fee.

• FBO Financial Results: FBO report of results from operations


and fuel sales/gallons sold should be required monthly with the
requirement detailed in the FBO Agreement. Also for those
FBO’s that pump fuel for Owner, all fuel coming on to the
Airport should be reported to the Owner as all vendors
accepting fuel must be registered with the Owner. Note that
corporate and stand alone fueling facilities only erode the
desire for a full service FBO.

• Minimum Standards: See Objective A5 (Standard Policy –


Lease and Other) for details.

A8) Objective: Communication

Effective and frequent communication between the FBOs, Airport


Directory/Authority and tenants will only enhance operations. The
mission, vision and goals for this Airport need to be shared with those
that will contribute to the success of taking this Airport above and
beyond where it is today. Those directly involved in daily Airport
operations should meet weekly even if for a few minutes.
Communication must also extend to tenant group with meetings
scheduled periodically throughout the year to provide general updates
from both sides.

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B) GOAL: Attract Businesses – Aviation, Aviation Related and


Other
B1) Objective: Create friendly business environment with
convenience

• Advertising: Advertising value is directly proportionate to


traffic levels. Advertising today consists only of yellow-page
listings. The terminal building may become a place for local
company advertising as traffic to this airport increases. Some
airports generate $1,000 annually from any one local company
for advertising opportunities at airports. As the Airport begins
is development and moves towards an aviation business
center, advertising will become increasingly important. The
Airport should also evaluate other non-terminal advertising
locations such as billboards with highway visibility.

• Survey: Create survey cards for air transportation users as a


way of obtaining recommendations for improvements of Airport
facilities/services. The Marketing Appendix will provide details.

• Benefits: The Authority as Owner must strive to show not only


the economic but also the intangible benefits of this Airport.
There must be a balance between concerns of local citizens
and the transportation service that this Airport provides to
local businesses. Noise complaints should be responded to
immediately. Compatible public use of Airport facilities should
be encouraged.

B2) Objective: Establish avenues for potential growth

• Marketing: An aggressive marketing strategy and supporting


budget is a necessity and priority for this Airport. Most
successful airports incorporate a strong marketing program to
bring the existence of the airport and related services/facilities
available to the public on a continuing basis. The marketing
appeal should be made to the private business sector with the
Airport marketed as a business service center catering to
corporate needs. While the private business sector is
important, focus should also be on recreational customers,
tenants and the community. It may also be beneficial to
explore a joint marketing campaign with the FBO. See
Appendix 1 (Marketing Plan Outline) for detail.

• Marketing Committee: The Authority should create a


committee to work on such a strategy and end product (i.e.,
materials, mailers, distribution list, etc.). Hiring a marketing
firm should also be explored. With the vision of transforming

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the Airport into an Aviation Business Center,


the marketing plan needs to focus on
attracting corporate aviation users. A good marketing plan
may also boost advertising revenue. This committee may also
want to partner with the groups developing the local business
centers and partner in their marketing efforts.

• “Rent Anything” Approach: The Authority should be


prepared to rent any available space and be flexible to meet
most any opportunity. Available space could be rented for
business training, conferences, fairs, flea markets, etc. for a
daily fee. Future plans should incorporate some sort of training
facility to provide additional income to the Airport.

• Website: This Airport must have a website to include


extensive and current information about the airport, products
services and facilities provided, management at the airport and
local community issues. This site should be professionally
designed and constructed so that the Authority can easily
update and maintain general information.

• Foreign Trade Zone (FTZs): FTZs were reviewed in detail in


Section 4.2. With portions of an airport designated as a FTZ,
the result will be increased revenue via land and/or building
lease. The County should pursue any opportunities for a FTZ
on Airport property.

• Keystone Opportunity Zones (KOZs): KOZs were reviewed


in detail in Section 4.2. They serve as a partnership between
each community and region among state and local taxing
bodies, school districts, economic development agencies and
community-based organizations. There are several KOZ sites
located near the Airport which may mean increased business.
Exploration of the KOZ that encompasses the Bedford County
Business Park is recommended to see if any adjacent Airport
property can be included.

• Highest and Best Use: It will be important to determine the


highest and best use of current and new facilities at the Airport
and those that will provide the highest potential for revenue
generation for the Owner.

B3) Objective: Integration of Industrial Parks


Economic indicators suggest that any number of industries should
prosper in the area with manufacturing making steady progress. There
are numerous industrial parks in the area. The Airport should make all
attempts to attend these planning meetings to introduce the Airport to
prospective tenants and to introduce future plans. Partnering with
developers in their marketing efforts is also suggested. In October

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2005, the Commonwealth Financing Authority (CFA)


provided the Bedford County Development Authority
(BCDA) with a $175,000 grant with funds to be used to develop the
County’s marketable assets, create jobs and boost tourism. It appears
that this group has invested heavily and having the Air Industrial
Authority work with this group could be extremely valuable.

C) GOAL: Private Investment

C1) Objective: Create public-private partnerships

• Grant Funding: The County must continue to partner with


PennDOT to continue grant funding of desired Airport projects.
Meetings should be scheduled with this group to present future
desires and the County’s involvement in the current and future
operations of this Airport.

• Private Development: Explore ways to appeal to the private


sector for help with local share and other capital projects. Any
future marketing plans should focus on this group with
literature or meetings to discuss plans for future expansion at
the Airport.

D) GOAL: Economic Stimulator


D1) Objective: Teaming of Airport with Local Business, Chamber
of Commerce, Bedford County Development Authority (BCDA),
etc.
It is suggested that the Authority draft a Memorandum of
Understanding (MOU) of goals for Airport in relation to the goals of
Bedford County. It is suggested that the Airport Owner in consultation
with stakeholders and community members come together to review
the current vision and goals and activity. As discussed above, the BCDA
may be a great starting place. Branching out beyond the Airport
border and working with these groups should result in new tools and
processes for the betterment of the Airport and overall economy.
Integrating planning efforts with a larger system may also increase the
success rate.

D2) Objective: Continue to Service Existing Client Base


Hold monthly meetings for general aviation users and any future
concessionaires for focus on issues and needs.

D3) Objective: Community Partnership


Public appearances to target audiences and hosting and/or
attending charitable events can build good will and create positive
profiles in the community. Reaching out to the community is a

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necessity. The Airport currently hosts an annual


Young Eagle Day, school tours and also provides
meeting space for the Eagle Scouts. The Airport must partner as much
as possible on projects so that the local community can enjoy the
benefits of an airport, not just the noise.

D4) Objective: Implementation Plan


Create an Implementation Plan to incorporate all goals of the
Airport and how the Airport will reach immediate- and long-term vision.
Include a timeline for each individual goal and schedule monthly
meetings to review progress and update goals as necessary. Posting
the Mission/Vision at the Airport is also recommended.

E) GOAL: Enhance Airport Safety


E1) Objective: Maintain a safe/secure operating environment for
aviation and traveling public.

• Airport Rules and Regulations and Emergency/Security


Plan: The Authority has developed Airport Standards and
Operating Rules and Regulations. In addition, the
Emergency/Security Plan must be developed, published and
released to all airport tenants. In addition, these documents
should be reviewed and updated annually as necessary. The
Security Plan to focus on preventing unauthorized access to
aircraft, tenant involvement and the involvement with law
enforcement.

• Website: Update the Bedford County Airport’s website to


include information on safety and security measures.

• Safety Checks: Implement monthly “safety check/walk” to be


conducted by Airport Director.

• NEPA Compliance: It is suggested that a lease provision be


added to all future agreements that will require an annual
environmental audit be done by an independent firm with the
requirement of a report to be submitted to the Airport Owner.

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4.4 Executive Summary


The Airport has been able to generate net income from operations
for the past few years. The Airport hangar units are at capacity wit h
no additional opportunity for additional hangar revenue beyond future
price increases. It will be imperative that the Authority consider all
options to advance this Airport beyond current capabilities. On-airport
acreage has been identified for future hangar and aviation
development, which is a necessity for this Airport. Based aircraft
operations are currently at 23 and are projected to increase slightly to
28 by 2010 and to 40 by 2020. Total operations are projected to
increase to 24,000 by 2025 from a projected figure of $13,400 at 2005.

The Authority has a good relationship and fairly good lease terms
with the current FBO, Bun Air Corporation. The fuel flowage fee is
significant at $.30 per gallon sold and the FBO handles most expenses
and issues related to the terminal building and adjacent hangar. The
Authority also leases the fuel farm and snow removal equipment to the
FBO. It is suggested that the Authority consider an increase in the
annual rental rate of $25,200 as it has been more than four (4) years
since a price change. The Authority may also want to explore
implementing a gross percentage of revenue fee on FBO fuel sales
beyond a certain number of gallons sold.

Highlighted recommendations from the documentation are as


follows:

• The Airport has been supported by the business community


with donations of approximately $167,000 pledged through

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2006. Another campaign is suggested


as the Authority will need to fund local
share of $413,875 over the course of the next four (4)
years. In addition, capital funding on hangar development
is not a guarantee and could be an additional financial
requirement. It is suggested that the Airport Director and
other Authority members invite the business community to
the Airport to share the Airport and future plans with the
community.

• It will be important to fully understand future demand based


on the business additions to the community. It will be
imperative that the Authority continue to work with the
community and local development groups to reinforce a
positive image of the Airport and benefits to the community.
A Marketing budget has been suggested for this Airport with
emphasis on partnering with the local community. In
addition, a Marketing Plan Outline has been provided as
Appendix 1.

• Although the Airport Standards and Operating Rules and


Regulations are comprehensive, they are dated May 1993.
It is suggested that the Airport Director release this
document with a current date and continue to update
annually or as changes in operations/policy occur.

• A Lease Summary has been provided for the Airport and


should be maintained going forward. Cost of utilities as
they relate to each facility should be documented. The
summary provides an annual cost per square foot based on
leaseable space and current revenue generated per facility.
• The Authority should consider adding a snow removal
equipment storage building to the Airport’s future plans.
Such a unit would free up two (2) units in the maintenance
hangar with potential revenue at $4,000 annually.
• The 500’ runway extension was analyzed with costs
estimated at $6.9 million to take the field from a B-2 to C-2
status. It has been determined that this project will not be a
priority for the Airport at this time.
• Non-aviation development does not exist at the Airport
today and should continue to be discussed as it has the
potential to increase Airport operations. Examples of
indirect aviation development that may be synergistic with
current and future aviation activity could include retail

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operators such as restaurant/food


service, automobile fueling/repair
service, hotel development and a foreign trade zone.
Fractional ownership is becoming common for businesses as
well as individuals and could mean a source of growth at the
airport.
• The Authority has recently contracted with Citation Shares
for pick-ups and drop-offs with revenue stemming from the
fuel flowage fee associated with fuel sales related to this
business.
• The Authority should consider a future reserve based on
gross revenues to support future local share and Airport
repair/maintenance costs. Cash flow is not able to support
this reserve currently.

Late in 2005, the County received its first Industries Planning


Grant. The Commonwealth Financing Authority (CFA) approved a grant
to the Bedford County Development Association for $175,000. The
purpose is to develop the County’s marketable assets, create jobs and
increase tourism. The funds will specifically be used to create a
comprehensive marketing program to promote tourism.

Bedford County has seen recent development with many


businesses taking advantage of the Keystone Opportunity Zones (KOZ)
sites in the area that will provide numerous business opportunities with
tax incentives. The historic Bedford Springs Hotel is slated to open in
2007 with $90 million provided via a public-private financial package for
restoration of this facility. Two companies have returned or re-opened
business in the County including Defiance Metal Products and JLG
Industries, a global producer of aerial work platforms and telescopic
hydraulic equipment. Seton Co., a manufacturer of automotive leather,
expanded their business and has relocated operation from New Jersey
to Bedford. In addition Recreational Equipment, Inc. (REI), a national
retail co-op which provides quality outdoor gear and apparel, will open
an eastern distribution center in Bedford with full capacity completion
by 2008. With this significant business expansion, the Airport should
see an impact.

APPENDIX 1
MARKETING PLAN OUTLINE
INTRODUCTION
Product, Price, Promotion and Place are the basis for a
marketing plan. Target markets and their needs will be identified with
appropriate pricing strategies developed to reach these markets. The
Airport’s image development will also be an important part of the

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marketing plan. Airport marketing is generally a


long-term process, and the Owner must be able to
monitor the success of their marketing activities through performance
measures that support these long-term goals.

The marketing plan will play a significant role in helping this


Airport to meet the followings goals:

1) Attract Businesses – Aviation, Aviation Related and Other


2) Self-Sufficiency

The Airport’s current promotional program is limited to an annual


Young Eagle Day, school tours, and host to Scouting meetings. General
details about this airport offered via the Bedford County website. The
Airport is listed on the AirNav.com website but this is a general website
used for all airports. Having potential customers rely on information
from AirNav.com, but means a loss of “value-added” information such
as future development, standard policy, public relations information and
other airport amenities.

Like other airports similar in size/service to Bedford County, this


Airport simply lacks the staffing required to prepare and carry out a
comprehensive marketing plan. There is simply not enough time for the
Airport Director to focus on marketing efforts. Because it is difficult to
measure the success of a marketing program, airport owners are not
able to justify the significant expense often associated with a marketing
plan. This has been the case at Bedford County with no marketing
funds assigned via the operational budget; however, a good marketing
plan should pay for itself. Performance standards must be defined with
testing and evaluation done annually.

PRODUCT
Details on product, services and facilities were outlined in detail in
Section 1 and will only be reviewed briefly in this section for purposes of
having all information available in this Appendix to assist with a
comprehensive marketing plan.

The Bedford County Airport encompasses approximately 168


acres of land. The overall facilities available at Bedford County include
a single 5,005’ x 75’ (paved, bituminous) runway, a parallel taxiway,
aircraft parking apron (142,500 SF), two (2) corporate hangars, one (1)
15-unit t-hangar, FBO hangar, equipment storage maintenance hangar,
navigational and approach aids, terminal building, administrative offices
and vehicular parking. Services include major repair, power plant
repair, aircraft management, hangar rentals, tie-downs, flight
instruction, 100LL and Jet “A” fuel service, bulk oxygen, aircraft rental,
aircraft sales and APU.

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The terminal building is located adjacent to the


apron and fuel farm. It is a 1 story facility and is approximately 11,500
SF. The building houses several offices including Airport Director’s
office, Bun Air Corporation - FBO Office, pilot lounge, kitchen and public
restrooms. The Civil Air Patrol (CAP) is housed and has offices in the
Airport’s Maintenance Hangar. Besides the CAP, there are no other
businesses/organization located at the Airport.

Local attractions include but are not limited to: Old Bedford Village,
Bedford Springs Golf Club, Blue Knob Ski Resort, Shawnee and Raystown
Lakes, Fort Bedford Museum and Espy House (national registry).
PRICE
Price will simply mean offering the most competitive price for the
services being offered at the Airport. Assumed preferences for the various
types of customers will be reviewed below, and it will be important to
conduct a survey to make sure the list of preferences are complete and
ranked in order of importance.

Market Analysis/Service area was discussed in detail in Section 3.2


of this Study. In order to establish a basis for determining the service
area potential and competition for the Airport, it is necessary to
compare and evaluate the Airport's location, facilities and services with
those available at surrounding airports. Based on the available facilities
and the location of surrounding general aviation airports, the Bedford
County Airport has a radius of influence to general aviation airports of
30 miles.

Five (5) general aviation airports could potentially influence the


service area of this Airport and include Altoona-Blair County, John
Murtha Johnstown-Cambria County, Blue Knob Valley, Somerset County
and Ebensburg. They are all within a 30-60 minute drive from the
Airport. When comparing Bedford’s services and accommodations, the
following items are highlighted:

• Bedford County Airport runway length is competitive at


5,005 feet. The Altoona-Blair County Airport is slightly
larger at 5,466’ with no competitive advantage. The John
Murtha Johnstown-Cambria County Airport offers two
runways one at 7,003’ and the other at 4,507’
• Services are similar with some airports offering charter, APU
and avionics as additional services.
• Only three (3) of the five (5) airports offer Jet “A” fuel in
addition to AVGAS. Per the airnav.com website, the
average price of 100LL is $4.18 and Jet “A” is $3.90 for fuel
prices reported within 50 miles of Bedford Airport with

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pricing at Bedford Airport at $4.30 and


$3.90 respectively at August 2006.
• T-hangar prices were available for two (2) of the airports
listed below in addition to two (2) other airports located in
the same region as Bedford. Average t-hangar monthly
rental price was $150 compared to Bedford’s price of $160.
In general this price is a subsidized price and is not
reflective of current construction costs and related
expenses.

Based Customer Preferences


There are no available hangar units at the Airport for new
customers. There are two (2) corporate hangars and one (1) t-hangar
facility consisting of 15 rental units. All are in good condition.
Currently there are no waiting lists as several vacant hangar units were
recently filled. All facilities at the Airport are owned by the Authority.

Below are some assumed preferences for based aircraft operators.


Surveys should be conducted to gather additional details on what
customers are looking for at an airport and items should be ranked in
order of importance.
1. Proximity to Business/Home
2. Runway Length/Strength, including the availability of
multiple runways and approaches
3. Presentable Terminal Facilities
4. FBO Services
5. Availability of Adequate/Quality Storage Facilities for
Aircraft
6. Availability of Adequate/Quality Facilities for Office Space,
Parking, etc., Safety and Security Related Features such as
Control Tower, Aircraft Rescue and Fire Fighting, Part 139
Aircraft Operating Certificate, Military Presence, Precision
Instrument Approaches and Timely Snow Removal.
7. Minimal Noise Abatement Procedures/Restrictions

Transient Customer Preferences


Transient customer preferences are listed below. Surveys should
also be conducted for these transient customers so that this list is
complete and ranked in order of importance.
1. Proximity to Customer Destination
2. Cost and Associated Service
3. Runway Length/Strength, including the availability of
multiple runways and approaches
4. Presentable/Comfortable Terminal Facilities
5. Safety and Security Related Features such as Control Tower,
Aircraft Rescue and Fire Fighting, Part 139 Aircraft Operating

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Certificate, Military Presence, Precision


Instrument Approaches and Timely Snow
Removal.
6. Minimal Noise Abatement Procedures/Restrictions
7. FBO Services
PROMOTION
It appears the Airport’s current promotional program is limited to
yellow page advertising and limited on-site meetings for tenants. In
addition, there are limited special events held at the field and a
comprehensive website does not exist for this Airport.

Although it has been suggested that the marketing plan is a


necessary element for this Airport, there are some relatively inexpensive
ways to promote the Airport. The key is reaching as many people as
possible and being able to promote the importance of general aviation in
the community. Some ideas are as follows:
1. Presentations could be made at local community meetings
such as Chamber of Commerce, BCDA meetings or even
have the Airport host such meetings.
2. Special events could be held at the airport (i.e. Relay for Life,
holiday promotions, etc.)
3. The Airport should conduct special organization tours and
continue to offer school tours.
4. The Airport should offer open houses and continue to sponsor
or co-sponsor the annual Young Eagle day.
5. Joint marketing efforts should be explored with the FBO and
with local efforts (i.e. local economic development firms,
BCDA, etc.).
6. Participation in local trade shows/conferences to promote the
Airport to local business/corporations.
7. Promote Airport as venue for large outdoor activities and
community interest events.

PLACE
All products and services are provided at the Bedford County
Airport and a brief summary of based operations will be presented.
Based Aircraft
Both based and annual operations are expected to increase but
not significantly. There are 23 aircraft currently based at Bedford
County Airport with breakdown by aircraft as follows: 14 single engine,
four (4) multiengine, and five (5) jets. This number can vary based
on the season and according to activity at surrounding airports, i.e.
paving projects, runway closures, inadequate services, lack of space,
etc. Referencing Exhibit 4 (Based Aircraft Forecast Study) of this
report, the preferred average forecast for 2025 is 40 based aircraft with

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increases mainly in the single and jet fleet. It should


be noted that desired projects have been identified
in the Airport’s Twelve-Year Plan to include hangar expansion and
related development (i.e., taxilanes and aprons), GIS development and
future land and easement acquisitions mainly for obstruction and
primary surface control as a highlight.

Aircraft Operations
According to Airport Master Records, 13,400 annual aircraft
operations were estimated for 2005 consisting mainly of local general
aviation at 65% and itinerant operations at 35%. The preferred
operations forecast provides for an increase of roughly 79% to 24,000
by 2025 using the preferred forecasting method.

TARGET MARKETS
Bedford County Airport customers consist of based aviation and the
community. With land development and the “corporate business center”
concept as a vision for this Airport, the marketing plan should target not
only business/corporate customers but also recreational users of the
Airport, tenants and the community. Marketing materials should
emphasize the value an airport brings to the community. With specific
expansion ideas, this could mean increased operations at the Airport and
more opportunities for the community in terms of jobs and working
relationships with local businesses. The needs for each of these target
markets that exist at Bedford County Airport are explored below.

Business/Corporate Customers
The following attributes should be highlighted when appealing to
the business/corporate environment:
1. Runway Length/Strength, including the availability of
multiple runways and approaches
2. Proximity to Customer Destination
3. Availability of Adequate/Quality Storage Facilities for Aircraft
4. Availability of Adequate/Quality Facilities for Office Space,
parking, etc.
5. Service Availability – FBO fuel services, competitive fuel
pricing (24-hour and/or self serve), maintenance and
instruments
6. Ground Transportation – rental cars, courtesy cars and
limousine service
7. Presentable/Comfortable Terminal Facilities (space,
refreshments, etc.)
8. Safety and Security Related Features such as precision
instrument approaches, timely snow removal and published
safety procedures.

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9. Minimal Noise Abatement


Procedures/Restrictions

As discussed in the business analysis, charter service and


business/corporate aircraft are becoming a popular means of
transportation. It allows the business/corporate sector as well as the
private sector the ability to meet on-demand transportation
requirements. This mode of transportation provides flexibility and time
savings as there is generally no wait.

Recreational Customers

These customers that use aircraft for recreational purposes are


typically based at general aviation airports like Bedford County. With the
exception of a precision approach and airport restaurant, the assumed
required services of this type of customer appear to be adequate given
current demand.
1. Runway Length/Strength, including the availability of
multiple runways and approaches
2. Availability of Adequate/Quality Storage Facilities for Aircraft
or Tie-down Availability
3. Service Availability – FBO fuel services, competitive fuel
pricing (24-hour and/or self serve), maintenance and
instruments
4. Ground Transportation – rental cars and courtesy cars
5. Presentable/Comfortable Terminal Facilities
6. Safety and Security Related Features such as precision
instrument approaches, timely snow removal and published
safety procedures.
7. Minimal Noise Abatement Procedures/Restrictions
8. Restaurant

Tenants
Airport tenants look for the following attributes when locating on
Airport property. Representatives from the Authority should meet bi-
annually (at a minimum) with all Airport tenants to discuss the Airport
and to get tenant feedback.
1. Responsive and resourceful airport management
2. Facilities that are maintained and kept current
3. Availability of Standard Policy and consistent application of
such
4. Availability of an Airport Mission and Business Plan

Community
The following are assumed attributes for the community.

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1. Provider of safe and affordable air


transportation to the community
2. Provide business growth/opportunity to build local economy
3. Provide balance between aviation sector and community by
hosting community events at Airport (fund raisers, hosting
meetings, etc.)
4. Minimize environmental impacts
5. Provide convenient business access to the community

SUGGESTED MARKETING STRATEGIES


Several of the marketing strategies listed below could be
implemented quickly and should involve minimal time and financial
resources.

Website
It is suggested that Bedford County hire a firm to design a website
that would not only offer general information about the Airport such as
runway length, services offered and accommodations but also
information on new projects at the Airport, proposed land development,
future projects, special events to be held at the Airport as well as
community events. This website should be designed to allow Authority
members or the Airport Director to update general information such as
current prices, standard rates and charges, etc.

In-House User Surveys/General Information Flyers


Surveys should be created for based customers, tenants and
general users of the Airport. This Survey/Informative Flyer would
provide answers on what the Airport is doing well and what could be
done to improve services. The flyer could include upcoming events at
the Airport as well as any other information applicable to each group
being surveyed. For general users of the Airport, it would be interested
in knowing where they live (county/town/state) and common travel
destinations.

Local Aircraft Owners


It might be suggested that this Airport consider a survey of
registered aircraft owners located in Bedford Country and possibly
aircraft owners in surrounding counties. A survey could be developed
for this group to see how many owners use the Airport and if not, why.
Although the current facility has little opportunity for customers who
may want to base their aircraft at the Airport, it would be beneficial to

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know how many owners may consider this Airport as


a home base given future development desired by
the Owner.

Per the FAA’s database of registered aircraft owners


(http://registry.faa.gov/aircraftinquiry/, select “State and County”) for
Bedford Country as of April, 2006, there are currently 30 registered
aircraft owners (20 individual, two (2) partnerships, four (4) corporations
and four (4) co-owners). All registered aircraft are less than 12,500
pounds. An extract from this database is presented as Exhibit 18
(concludes document) with details provided for owner address, tail
number and aircraft make, model and year.

Business/Corporate Surveys
Surveying local businesses/corporations is also a necessity.
At a minimum, the services/facilities should be highlighted. In order to
increase marketability, perhaps the Airport could be introduced as a
facility offering a business meeting setting with catering services.

Business needs of this group must also be captured and should


include questions such as:
1. Do employees travel frequently for business purposes?
2. Does the company own a business jet?
3. What airport is used by employees for business travel
purposes?
4. Do you use a charter service or an airline for business
travel? How often?
5. Is there a common destination for your company? And if so,
how many people generally travel to this destination?
6. If you do not currently use the Airport, why not?

General Community
If Charter Service should become a reality at this Airport, it is also
recommended that a survey be sent to residents of the local community
to determine why or why not the Airport is being used by the
community. The survey should also request if there are any other
destinations that would be beneficial to the community. Again, general
Airport information should be highlighted via the appeal to general
additional business. School tours should continue and use of Airport
property by the community should be offered.

Image Development
Image development is an important element and/or
outcome of the overall marketing plan. Image development could
include the following:

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• Sponsor of business events and/or


local club meetings
• Signage updates
• Airport open house
• Website enhancements
• Conference participation

EFFECTIVENESS OF PROGRAM

The Airport must have some method of tracking the effectiveness


of any implemented marketing program. All inquires about the Airport
should be tracked and recorded with the purpose of determining what
type of marketing program/materials were effective and if they should
continue to be used. Increases in based aircraft, aircraft operations
and fuel sales are also a good indication that marketing efforts are
paying off.

Exhibit 18 – Bedford County Registered Aircraft Owners

Tail # Serial # Name/Address Make/Year/Model


WILLIAM L. MORELAND
160 MORELANDS RD PIPER
1723P 22-2513 BEDFORD PA 15522-5653 PA-22-150
W EUGENE FOOR CESSNA
124 RIVER BOTTOM LANE 1972
19962 17260891 SAXTON PA 16678-9705 172M
BAKER HOLDINGS LLC PIPER
28R- 5741 BUSINESS 220 1970
2081T 7135025 BEDFORD PA 15522-7643 PA-28R-200
SELL HAROLD R AERONCA
4584 WOODBURY PIKE 1946
2388E 7AC-5967 WOODBURY PA 16695-9708 7AC
WILLIAM L. MORELAND CESSNA
160 MORELANDS RD 1964
2522J 15061022 BEDFORD PA 15522-5653 150E
THOMAS H. BLACK, JR. CESSNA
307 12TH STREET 1975
2759J A1500589 SAXTON PA 16678 A150M
FRANK
BERNARD F. FRANK BERNARD F
3299 RAGGED MOUNTAIN RD 2003 BABY ACE
30051 92443 CLEARVILLE PA 15535-8920 MODEL D
SCHNETZLER
BERNARD F. FRANK ESTILL E
3299 RAGGED MOUNTAIN RD 1983
3134Y 2760 CLEARVILLE PA 15535-8920 B8M

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Economic Feasibility Study
Airport Business Plan

JAMES E. WILLIAMS RYAL


RR A4 BOX 121 1975
VOLKSPLANE-
31JR 2119 EVERETT PA 15537 VP-2
BLAIR LOFFER CESSNA
1971
3944Q 17260044 FISHERTOWN PA 15539 172L
WILLIAM FOY PIPER
130 BALTIMORE ST 1967
46WF 32-971 SCHELLSBURG PA 15559 PA-32-260
JERRY M. GRIIFITH PIPER
1099 CENTERVILLE RD 1961
4855Z 22-8430 BEDFORD PA 15522-5735 PA-22-108
HARRY E. DOLLY, SR. CESSNA
4774 BEDFORD VALLEY RD 1955
5087A 28087 BEDFORD PA 15522-5900 172
BUN AIR CORP CESSNA
PO BOX 638 1975
5262H 17265388 BEDFORD PA 15522 172M
ROGER L. LIPPINCOTT PIPER
138 FLASH DR 1968
NEW ENTERPRISE PA 16664-
5325L 28-4628 8022 PA-28-180
Tail # Serial # Name/Address Make/Year/Model
KENNEY AVIATION LLC BEECH
PO BOX 475 1968
534Q TC-1176 OSTERBURG PA 16667-0475 95-B55 (T42A)
PAUL W. SOKOLOSKI BEECH
247 DELLWATER LN 1967
650PV TE-427 BEDFORD PA 15522-3631 95-C55
KEVIN V. FREDERICK PIPER
1252 ROSE LN 1968
6589J 28-5048 BEDFORD PA 15522-4353 PA-28-180
SAMUEL A. MONTGOMERY PITTS SPECIAL
1377 LOWER SNAKE SPRING
RD 1967
70W 001-KDW EVERETT PA 15537-6657 S1C
WILLIAM L. MORELAND BELLANCA
160 MORELANDS RD 1969
7372V 30226 BEDFORD PA 15522-5653 17-30
SHELDON D. ICKES CESSNA
124 W BARCLAY ST 1959
7489M 55789 BEDFORD PA 15522 175
MICHAEL W. FITCH AERONCA
304 VALENTINE ACRES RD 1946
83323 7AC-1990 CLEARVILLE PA 15535-8642 7AC
SALE REPORTED AERONCA
RT 3 BOX 96 1946
86123 11AC-550 BEDFORD PA 15522 11BC
RICHARD E. PHILBRICK PIPER
332 BEDFORD VALLEY RD 1946
88323 15941 BEDFORD PA 15522-5311 J3C-65

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Economic Feasibility Study
Airport Business Plan

BEDFORD MEDAIR CORP PIPER


160 LAKE DR 1987
9116Z 2811015 BEDFORD PA 15522-6572 PA-28-236
DENNIS Y. TAYLOR PIPER
ROUTE 1 BOX 107 1966
9305J 28-3397 BEDFORD PA 15522 PA-28-180
WELDON B. SHANK ERCOUPE
160 HOLLARS EXT 1946
93648 971 EVERETT PA 15537-4364 415-D
ROBERT D. SIMMONS CESSNA
2028 W GRACEVILLE RD 1960
9411X 21057711 EVERETT PA 15537-5648 210A
EDWIN D. SELL CESSNA
4686 WOODBURY PIKE 1971
9805G 17259705 WOODBURY PA 16695-9709 172L
FRY EDWARD
EDWARD L. FRY LEO
175 DOWRICK DR 1999
99VR 1198006 MARTINSBURG PA 16662-9612 S-16 SHEKARI

APPENDIX 2
ECONOMIC IMPACTS OF AVIATION

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Economic Feasibility Study
Airport Business Plan

APPENDIX 3
TWELVE YEAR PLAN (TYP)

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Economic Feasibility Study
Airport Business Plan

APPENDIX 4
SELECTIONS FROM CAPITAL IMPROVEMENT PROGRAM

SC LAN\BusinessPlan_Bedford.doc page 93 December 2006