TUPELO – Tupelo Regional Airport Executive Director Josh Abramson said Tuesday struggling finances and fewer passengers require “fundamental changes” between the airport and the city of Tupelo.
After meeting in closed session for about an hour related to a lease at the airport, Tupelo City Council members did not take any action. However, Abramson said financial realities of the airport make leaning on city support necessary.
In July, the Daily Journal reported the airport needs at least $700,000 in permanent repairs for an older runway to support larger aircraft landing in Tupelo and then being dissembled by Universal Asset Management, an airplane disassembling and recycling company with a 20-year lease at the airport.
“We’ve lost $850,000 in funding in a year with no trend of it coming back,” Abramson said. “The airport has to be a part of the city’s capital plan.”
With an operating budget of $4.9 million this year, the airport has a $40,000 operating surplus. However, the balance sheet starts to look red when factoring the airport’s $2.6 million debt to the city.
Currently, Tupelo’s airport has a separate budget from the city’s annual budget. However, the city does provide an allocation for the airport listed under community services, the same category where it provides for nonprofits. In Fiscal Year 2013, the city allocated $158,500.
The city of Tupelo has little oversight related to funding at the airport. Beyond the mayor appointing airport authority members, the city has no other role with the airport’s governing body.
Abramson declined to disclose how much funding the airport needs but will turn in his formal request to the city for Fiscal Year 2014 funding next week. Mayor Jason Shelton and city finance leaders are in the process now of preparing the budget to present to the City Council.
While Abramson wants the airport to be a part of the city’s five-year capital budget, Shelton, working on the city budget for his first time as mayor, has said other city departments many need to postpone big-ticket purchases due to budget constraints.
Shelton said after the closed session Tuesday that he wasn’t ready to discuss how finances at the airport could impact the coming year’s budget.
“I can’t give a comment until I know all of the details,” he said.
With the airport losing commercial services connected to Memphis, fewer passengers have flown out of Tupelo. Currently, Silver Airways only offers connections to Greenville and Atlanta.
The airport anticipated a $1 million Federal Aviation Administration grant this year to help cover runway costs but only received $150,000 because of funding tied to passengers.
After meeting with the city, Abramson and airport authority members met in closed session for about a half hour with Keri Wright, UAM’s chief operating officer. After the meeting, airport and UAM officials said they wanted to work together to find a long-term solution to the funding problem.
“We need to work together,” Wright said.
UAM employs about 80 people, including workers at a warehouse in Verona. The company has landed more than 60 retired aircraft in Tupelo. Another 747 is scheduled to land Thursday at the airport, and Wright said airport officials are looking at ways to accommodate it.
Abramson also said the airport will likely look into asking other entities for funding, such as the Lee County Board of Supervisors.
“The airport is regional and impacts more than just the city of Tupelo,” he said.
Business editor Dennis Seid contributed to this story.