Although Sound Aircraft, a full-service fueling company at East Hampton Airport, filed a lawsuit against East Hampton Town earlier this month, the cost of legal fees related to the litigation will have no effect on the airport’s ability to be financially self-sufficient in the future, town officials said this week.
In April, the town’s Budget and Finance Airport Committee released a debt capacity report stating that the airport could generate enough revenue to operate without grants from the Federal Aviation Administration, if the Town Board opts to allow certain grant assurances to expire at the end of this year. However, the report failed to include the cost of legal fees in its projection of self-sufficiency, which, in the past, has cost the town on average $40,000 a year in litigation and $100,000 a year in legal counsel.
In addition to the cost incurred by the town for litigation, the Sound Aircraft lawsuit calls for the reversal of the town’s newly imposed 10-percent increase in landing fees and the 100-percent hike in fueling fees, from 15 cents to 30 cents. These new fees were instituted in June as a way to generate revenue for the airport.
In light of the recent lawsuit, said Town Supervisor Larry Cantwell, the airport’s ability to be self-sufficient is not threatened.
“The airport debt capacity analysis was a projection that was done in April,” he said. “It didn’t include legal fees, but it also didn’t include some of the revenue sources that we’re currently collecting. It’s a projection that should be updated on a regular basis. And when it is, it should include additional revenue that we’re accruing and any additional expenses.”
Additionally, said Mr. Cantwell, the debt capacity analysis was “preliminary” and did not include all of the other potential outlets for revenue available at the airport. Other potential sources of funding, he said, include paid parking, a possible solar farm, and lease renewals at fair market value. The town rents property at the airport to local businesses.
In addition, in its 2015 budget, the town increased its legal counseling and professional services and outside legal counsel to $270,000 from $100,000 budgeted for this year.
“Part of it is certainly anticipation of additional attorney fees for next year, should there be litigation as a result of any actions the town takes with respect to any restrictions imposed at the airport,” Mr. Cantwell said.
Come 2015, four key grant assurances will expire, forcing the town to choose whether to renew grants from the FAA. If the airport were to operate independently, it could impose restrictions on traffic and mitigate noise from helicopters, which has been a hot-button issue for residents both in East Hampton Town, Southampton Town, and parts of the North Fork.
Town Councilwoman and Airport Liaison Kathee Burke-Gonzalez would not comment on the lawsuit or how it would impact the town’s decision.