To: Board of Supervisors
From: Greg Baer, Director of Airports
Report Title: Temporarily Eliminate Fuel Flowage Fees for Unleaded Aviation Gas
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE the temporary elimination of fuel flowage fees for Unleaded Aviation Gas at Buchanan Field and Byron Airport, as recommended by the Airport Committee and AUTHORIZE the Director of Airports to reinstate such fees at his/her discretion.
FISCAL IMPACT:
The action would result in an annual reduction of fuel flow fees collected by the Airports Division of approximately $7,200.
BACKGROUND:
The Airports Division has been working with Pacific States Aviation (PSA), one of its Fixed Base Operator (FBO) tenants at Buchanan Field, so they can offer unleaded aviation gasoline (avgas) in addition to the traditional leaded avgas. In accordance with Federal Law, airports similar to those in Contra Costa County, Buchanan Field and Byron Airport must continue to provide leaded avgas until December 31, 2030, or until a commercially viable and feasible unleaded avgas is approved by the Federal Aviation Administration (FAA). Offering an unleaded option is not currently a requirement, but a choice being made by PSA and supported by
the Airports Division.
Because this relatively new unleaded option can’t be used in all piston aircraft, supply and demand is causing the wholesale cost of the unleaded avgas to be higher than that of the traditional leaded avgas. If the price gap between lead and unleaded avgas is large, the sales of unleaded fuel are expected to remain low.
Similar to automobile gas stations, retailers of avgas (i.e., FBOs) pay state and federal taxes, as well as local fees that get passed on to consumers. Like most other airports, Contra Costa County charges a Fuel Flow Fee to all entities that dispense fuel at the airport. Through its lease agreement with the County, PSA currently pays the Airport $0.12 per gallon of avgas delivered to their site.
To help lower the retail cost of unleaded fuel as a way to encourage aircraft operators to purchase the unleaded option, the Director of Airports is recommending the elimination of fuel flow fees for unleaded avgas until a commercially feasible and viable fuel is approved by the FAA, and leaded avgas is no longer dispensed at County airports. This concept was unanimously approved by both the Aviation Advisory Committee and the Airport Committee.
Because there are a number of variables to consider when determining exactly when leaded avgas can’t be dispensed at airports, the Director of Airports is requesting the Board’s approval to have discretion over determining when fuel flow fess will be implemented for unleaded fuel.
Based on initial projections of unleaded fuel sales at Buchanan Field, the annual reduction in fuel flow fees collected by the Airports Division would be approximately $7,200. Because the unleaded option cannot be used in higher performance aircraft, a conservative high-end estimate would be 75% of all fuel sales would be unleaded, which would result in a fuel flow fee reduction of $13,500.
CONSEQUENCE OF NEGATIVE ACTION:
There would be less economic benefit to the purchase of unleaded avgas over leaded avgas which would lead to low demand and, therefore, limited environmental benefit.