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Oct 15, 2014 10:27 AMPublication: The East Hampton Press

Fueling Company Sues East Hampton Town Over Increased Airport Fees

Oct 21, 2014 12:03 PM

An on-site fueling company at East Hampton Airport is suing East Hampton Town after the Town Board earlier this year raised fuel prices and landing fees.

Sound Aircraft Services Inc. filed a lawsuit in the State Supreme Court in Riverhead earlier this month, alleging that East Hampton Town violated the terms of its Federal Aviation Administration grants when it voted to increase fuel and landing fees in June. The lawsuit asks the court to reverse the fee hikes by nullifying the resolutions that established them.

The airport is currently grant-obligated, meaning it accepts money from the FAA to support its operations and must abide by the terms of the grant, which ensure “non-discriminatory” methods are used when creating rules and regulations for aircraft.

Neither Mr. Cantwell nor Town Attorney Elizabeth Vail would comment last week on the case. Alison L. Squiccimarro, the attorney for Sound Aircraft, did not return a call seeking comment.

In June, the board voted to raise the fueling fee from 15 cents to 30 cents per gallon. The hike, according to the lawsuit, was a violation of the “fee and rental structure” provision of the grant, given that the board must “employ a reasonable, consistent and transparent method of establishing airport fees.” The terms of the grant also compel the board to have “meaningful discussions between the airport sponsors and airport users before changing or implementing rates at airports,” which, according to the lawsuit, didn’t happen.

Before the 4-1 vote to raise the fueling fee, the Town Board held a public hearing on the issue in June, at which Sound Aircraft owner Cindy Herbst pleaded with the board to not raise the price. “This will surely close our small business in the next few years,” she told the board.

The town last raised the fee in the early 1990s, while the company itself raised its own prices seven times since 1999, according to Peter Wadsworth, a member of the town’s Budget and Finance Advisory Committee. He added that the town’s decision was well-justified at the time of the vote. The increase, he said, would provide the town with an additional $115,245 in annual revenue.

The suit goes on to say that the increase in fees is unwarranted because there is no proof that the excess revenue is needed. The town adopted its 2014 budget with an itemized line for “operation of the airport,” including revenue from both landing fees and fuel fees, the suit alleges, assuming the fees would be the same as they were in 2013.

Shortly after the budget was adopted, the town formed a subcommittee to “determine whether the airport could generate sufficient cash flow to fund necessary and reasonable capital and maintenance expenditures without resorting to FAA funding.” The subcommittee then determined that the airport could operate without the help of grants from the FAA. That calculation, according to the lawsuit, was done using the 15-cent figure, before the town voted to raise the fee.

The same lack of evidence goes for the landing fees, it alleges. Also in June, the board voted to increase landing fees at the airport by 10 percent, which took effect immediately after the vote. But when preparing the debt capacity analysis for the Town Board—proving that the airport could operate without FAA funding—the subcommittee used the figures prior to the 10-percent increase in landing fees, and therefore violated the FAA Revenue Use Policy, the suit says.

“Sound Aircraft has worked tirelessly with the town through both town employees and the legislative process to address the town’s airport concerns,” Ms. Herbst said in an email. “Unfortunately, decisions made by the town failed to consider the irreparable harm that the town’s actions will cause this small, local, family-owned business. While reluctant to challenge the town’s actions, Sound was left with no choice but to seek legitimate and appropriate review to insure its long-term viability.

“Sound Aircraft seeks nothing more than to maintain a healthy and viable business at the airport consistent with the lease that it entered into with the town. We hope that the town will address these issues in an appropriate and businesslike manner without discrimination or retaliation.”

An on-site fueling company at East Hampton Airport is suing East Hampton Town after the Town Board earlier this year raised fuel prices and landing fees.

Sound Aircraft Services Inc. filed a lawsuit in the State Supreme Court in Riverhead earlier this month, alleging that East Hampton Town violated the terms of its Federal Aviation Administration grants when it voted to increase fuel and landing fees in June. The lawsuit asks the court to reverse the fee hikes by nullifying the resolutions that established them.

The airport is currently grant-obligated, meaning it accepts money from the FAA to support its operations and must abide by the terms of the grant, which ensure “non-discriminatory” methods are used when creating rules and regulations for aircraft.

Neither Mr. Cantwell nor Town Attorney Elizabeth Vail would comment last week on the case. Alison L. Squiccimarro, the attorney for Sound Aircraft, did not return a call seeking comment.

In June, the board voted to raise the fueling fee from 15 cents to 30 cents per gallon. The hike, according to the lawsuit, was a violation of the “fee and rental structure” provision of the grant, given that the board must “employ a reasonable, consistent and transparent method of establishing airport fees.” The terms of the grant also compel the board to have “meaningful discussions between the airport sponsors and airport users before changing or implementing rates at airports,” which, according to the lawsuit, didn’t happen.

Before the 4-1 vote to raise the fueling fee, the Town Board held a public hearing on the issue in June, at which Sound Aircraft owner Cindy Herbst pleaded with the board to not raise the price. “This will surely close our small business in the next few years,” she told the board.

The town last raised the fee in the early 1990s, while the company itself raised its own prices seven times since 1999, according to Peter Wadsworth, a member of the town’s Budget and Finance Advisory Committee. He added that the town’s decision was well-justified at the time of the vote. The increase, he said, would provide the town with an additional $115,245 in annual revenue.

The suit goes on to say that the increase in fees is unwarranted because there is no proof that the excess revenue is needed. The town adopted its 2014 budget with an itemized line for “operation of the airport,” including revenue from both landing fees and fuel fees, the suit alleges, assuming the fees would be the same as they were in 2013.

Shortly after the budget was adopted, the town formed a subcommittee to “determine whether the airport could generate sufficient cash flow to fund necessary and reasonable capital and maintenance expenditures without resorting to FAA funding.” The subcommittee then determined that the airport could operate without the help of grants from the FAA. That calculation, according to the lawsuit, was done using the 15-cent figure, before the town voted to raise the fee.

The same lack of evidence goes for the landing fees, it alleges. Also in June, the board voted to increase landing fees at the airport by 10 percent, which took effect immediately after the vote. But when preparing the debt capacity analysis for the Town Board—proving that the airport could operate without FAA funding—the subcommittee used the figures prior to the 10-percent increase in landing fees, and therefore violated the FAA Revenue Use Policy, the suit says.

“Sound Aircraft has worked tirelessly with the town through both town employees and the legislative process to address the town’s airport concerns,” Ms. Herbst said in an email. “Unfortunately, decisions made by the town failed to consider the irreparable harm that the town’s actions will cause this small, local, family-owned business. While reluctant to challenge the town’s actions, Sound was left with no choice but to seek legitimate and appropriate review to insure its long-term viability.

“Sound Aircraft seeks nothing more than to maintain a healthy and viable business at the airport consistent with the lease that it entered into with the town. We hope that the town will address these issues in an appropriate and businesslike manner without discrimination or retaliation.”

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