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Local Airport Funding

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MINUTES OF THE

LOCAL AIRPORT FUNDING TASK FORCE

Wednesday, June 24, 1998 . 1:00 p.m. . Room 403 State Capitol



Members Present:
    
    Sen. Lyle Hillyard, Co-Chair
    Rep. Bill Hickman, Co-Chair
    Sen. Ed Mayne
    Sen. Alarik Myrin
    Rep. Judy Ann Buffmire
    Rep. Don E. Bush
    Rep. James R. Gowans
    Rep. Glenn Way
    Mr. Robert Froelich
    Mr. Jerry Peterson
    Mr. Danny K. Quillen
    Mr. Jeremy Taylor    
    Mr. Leonard Wojcik

Members Excused:

    Mr. Russell C. Widmar    
    Ms. Sheri Griffiths

Staff Present:

    Ms. Connie Steffen,
     Research Analyst
    Mr. Keith Woodwell,
     Associate General Counsel
    Ms. Angela D. Kelley,
     Legislative Secretary

Note:    A list of others present and handouts distributed are on file in the Office of Legislative Research and General Counsel.

1.     Committee Business - Chair Hillyard called the meeting to order at 1:15 p.m.

     The task force members introduced themselves.
                                
2.    Airport Financing - Mr. Woodwell, Associate General Counsel, gave a presentation titled "Local Airport Funding Task Force (S.B. 197)" and distributed a copy to the committee. He discussed the classification of airports throughout the country and the sources of funding. He said that there are five sources of funding: 1) federal airport improvement grants; 2) passenger facility charges; 3) tax-exempt bonds; 4) state and local government contributions; and 5) airport revenue. He also displayed graphs comparing sources of airport funding for large and small airports.

    Ms. Steffen, Research Analyst, gave a presentation titled "State Airport Funding Programs" and distributed a copy to the committee. She explained Utah's airport funding program, including sources of revenue and how it is spent. She also discussed how other states aid airports. She noted that a $.04 per gallon tax on aviation fuel is dedicated for aviation purposes. Seventy-five percent of the aviation fuel tax revenues are disbursed to the airports where the tax was generated. The remaining 25 percent is used to fund the programs of the Department of Transportation's Aeronautical Operations and to pay for the cost of collecting the tax.

3.    Funding Needs - Mr. Robert P. Barrett, Department of Transportation, Aeronautical Operations, gave a presentation titled "Funding Requirements" and distributed a copy to the

committee. He said that the appropriation for airport construction for FY 1999 is $900,900 and the average annual appropriation needed is $5.43 million to $6.00 million, resulting in a shortfall of $4.53 million to $5.10 million.

    Mr. Barrett was invited to the next meeting to finish his presentation.

4.    Aviation Fuel Prices - Mr. Thomas C. Brill, Department of Natural Resources, distributed a handout titled "A Brief Analysis of Utah Jet Fuel Prices" and discussed its content. He said that jet fuel prices in Utah are 12 - 19 cents per gallon higher than in other western states. The higher price of jet fuel in Utah is due to several factors: 1) the Salt Lake City petroleum refineries are operating close to capacity; 2) Utah imports of jet fuel exceed exports; 3) some of these imports are delivered to Utah by truck; and 4) the Salt Lake City petroleum refineries face a relatively higher crude oil cost.

    Ms. Shelley Cordon Teuscher, Parsons Behle & Latimer, representing Amoco, explained that the market has grown and refineries have had to expand to meet the growth. She said that the refineries have focused on gasoline and diesel, because they are top sellers. She also said that jet airline fuel does not have as much of a spot market as gasoline and diesel. Consequently, the price of jet airline fuel does not fluctuate as much as gasoline and diesel. She speculated that within the next couple of years, the prices will drop for airline fuel.

    Mr. Quillen suggested that the director of fuel purchasing at Delta Air Lines be invited to the next meeting of the task force to discuss airline fuel problems in Salt Lake City.

5.    Other Business - The next meeting of the task force was scheduled for July 7, 1998 at 9:00 a.m.

6.    Adjourn -

    MOTION: Mr. Quillen moved to adjourn the meeting at 4:15 p.m. The motion passed unanimously.F:\USERS\NAE\AIRPORT\JUNE98\JUN24MIN

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