Finding 503652 (2024-001)

1. Internal Control & Compliance – Hangar Licensing (Leasing) System Criteria: The Federal Aviation Administration (FAA) has compliance requirements any airports receiving FAA monies that address hangar licensing (leasing). The FAA has an expectation that the hangar licensing rates should be within reason of market rates for the area. Condition: The City has not adjusted its hangar licensing rates to market over the years. Cause: The City had contracts with hangar license holders that were perpetual in nature which were not adjusted to reasonable market rates. The contracts were intended to provide a service for the community and keep the hangars available for the hangar license holders. Effect or Potential Effect: Without adjusting licensing rates to the reasonable market rate, the City could lose the FAA grant funding that is important to keep the airport up to standards which are set by the FAA. Recommendation: We recommend that City should consider updating the license holder contracts to reasonable market rates in order to come into compliance with the FAA. Responsible Official’s Response: The City concurs with the recommendation and has already started the process to address the hangar licensing contracts.