Ogden-Hinckley Airport has been losing millions since 2006, audit reports

The Ogden-Hinckley Airport, a municipal airport that served about 400 aircraft in 2021, has been losing millions of dollars since 2006, a legislative audit published on Wednesday shows. 

Since 2006, the airport has reported an operating loss every year, said Andrew Poulter, lead auditor. The amounts range from $160,000 to $1.7 million across that time frame, according to the audit.  

The money used to fund that loss comes from Ogden’s general fund, he said, and since 2013, the city administration has expressed a desire to decrease the subsidy funded by taxpayers. But it hasn’t reached that goal yet. The Ogden-Hinckley Airport is rare if compared to other similar airports in Utah, such as those in St. George or Cedar City, which have reported profits or lower losses, Pouter said.

“We believe that a lack of planning contributed to the inability to improve that loss. In 1994, the airport released a strategic plan but they didn’t update or release a new plan until 2020,” Poulter said. “There are no specific goals to minimize the loss or improve general operations at the airport.” 

Among some of the issues presented in the audit, which Poulter highlighted in a presentation to the Legislative Audit Subcommittee, were ineffective communication with airport stakeholders, insufficient oversight over financial operations and poor enforcement of hangar use requirements. 

However, Poulter added, as a whole, the Office of the Legislative Auditor General believes the airport is headed in the right direction, taking corrective action in the past five years to improve. 

The airport also faces pending litigation on lease agreements, under a complaint posed by hangar owners who were concerned about the city’s management of the leases. That’s not included in the audit, however, as it’s a rule to not comment or audit areas that are part of a legal challenge.

Over half of the 244 hangars in the airport didn’t have a building and code inspection on record, according to the audit. The review also found that 22 of them didn’t have functional aircrafts, and 43 more didn’t have any aircraft information.

“We also found some that were in a state of disrepair. Some are very, very old. Some are 50-plus years old,” Jesse Martinson, audit manager, said at the Wednesday meeting. “We found that this is another area where they can do a better job … to help generate not only revenue, but to create a much safer place to be able to manage their airplanes.” 

The city of Ogden was working with Weber County to get a tax increment financing agreement to raise $210 million for the airport. However, the county, “due to poor and slow communication from a prior city employee with the county,” Poulter said, decided to pause those negotiations until after the results of the audit were released and the hangar complaint was resolved.

Though the city has a plan in place, Poulter added, the plan itself needs improvement, as “they don’t have a mission statement, they don’t have core values. Their plan is missing performance measures, and is also missing an annual work plan.”

That’s important, he said, because there are lots of investments that could be injected into the airport. The airport’s master plan estimates it could raise about $450 million from private sources, local or federal government and other grants, “and we want to make sure that it’s put to good use.” 

Ogden Mayor Ben Nadolski, who took office in January after serving on the Ogden City Council since 2016, told the subcommittee that he would embrace the recommendations made in the audit.

“Whenever there’s a new administration that takes place, there can be uncertainty, there’s no doubt about it, this is a discussion I’ve had with our staff. But there also come opportunities,” Nadolski said. “And we are now at a point in time where we have these findings in hand, we have a new mayor and a new administration.” 

The City Council approved the appointment of Jared Johnson as director of economic and community development last week, in part because of his expertise managing airports, Nadolski said.

“Both the legislature and stakeholders had asked for some third-party involvement, in addition to the audit staff, and we have gone ahead and hired and contracted with a third-party consultant who has national expertise, who is helping us with a group of stakeholders that are giving us input on how to govern and manage our airport moving forward, specifically on the contentious issues of hangar leases.” Nadolski said. “So we feel that we’re making really good progress.”

During the meeting, House Speaker Mike Schultz, R-Hooper, expressed concern about $10 million in funding the state granted Ogden in 2020 for infrastructure improvements for the airport and asked about the status of the airport’s goals. Though some of those projects have been completed, the intention of adding more than 3,000 new jobs and getting more than $250 million in earnings haven’t been fully realized. 

“We know where the stall is coming from and it’s happening because there’s contention on issues that we need to resolve around the hangar leases,” Nadolski replied. “That feels like something that’s holding everybody back and all of us back. That’s why it’s really front and center in our initial efforts with our third-party contractor.”

The mayor believes that having a new administration taking over contracts, lease language and areas to improve will be a big help.

“If we get that resolved, it’s going to open up a lot of opportunity because we continue to hear about capital that’s just sitting on the sidelines right now, waiting for that process to be completed so that they can step in and make investments,” he said.