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Web posted Sunday, March 18, 2007

Cost to operate at state-owned airports set to increase

By Rob Stapleton
Alaska Journal of Commerce

Aircraft owners and businesses operating at state-owned airports should brace for price hikes.

A number of rates and fees are set to jump in the amended version of the state's regulations, guidelines and pricing for airports statewide. The amended rules, known as Title 17 regulations, are due out later this month.


According to Ron Stroman with the Southcentral statewide leasing department at the Department of Transportation, leases, concessions fees and other charges will be increasing when the latest version is passed.


“We did a market study on 28 airports and determined our prices based on this study,” said John Torgerson, deputy commissioner of statewide aviation for the DOT. “The rates suggested were much higher than what we settled on.”


DOT used Affiliated Appraisers of Alaska, which recommended that the fair market value of leases, tie-downs and rents should be 140 percent greater than current rates.


DOT's aviation leasing department decided on an increase in the neighborhood of 50 percent, according to one official.


“We looked at the fair market value and decided on something in the 50 percent higher range after reviewing the market study,” said Stroman, a leasing officer with DOT.


Title 17 was supposed to be amended and passed last year but was held up in the legal department beyond the deadline for public comment. This forced DOT to re-write the amendments, and now it is ready again for public review.


“We will have a series of public meetings in Fairbanks and Anchorage that will be information-only,” Stroman said. “If people want to comment on the Title 17 regs, they will have to do that by putting it in writing either then or send it to us.”


Title 17 informational meetings will be held at the state DOT maintenance building at Lake Hood in Anchorage on March 22 from 6:30 p.m. to 8:30 p.m. A Fairbanks meeting will be held March 27 at the DOT Region Office on Peger Road from 6 p.m. to 8:30 p.m.


The state will also be stepping up enforcement in how it collects concessions fees from firms that offer services other than aircraft-related business. In addition to their leases, hotels, bars, restaurants and retail shops located on state airports are charged fees that are either a flat rate or a percentage based on the dollar amount of sales.


Among other notable changes in the Title 17 amendments, Stroman said the state would no longer require liability insurance across the board for entities operating at airports. DOT will only require insurance in special cases, but has the right to review all individuals on a case-by-case basis.


Public comment on the Title 17 amendments opened on March 8 and will close 90 days later.


After the comment period, DOT will review the public input and may approve changes by the fall.


Rob Stapleton can be reached at rob.stapleton@alaskajournal.com.

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