AUGUSTA — City officials, concerned the state won’t pay enough money to cover the increasing cost of running the Augusta State Airport, balked at signing a new five-year contract to manage the state-owned airport.

Instead, they inked a one-year extension of the current contract, and City Manager William Bridgeo plans to meet with city councilors to discuss whether the city should continue to be in the airport business.

“I think we need to make a determination whether we’ve reached the point where it’s not practical for the city to continue this responsibility,” Bridgeo said. “I understand the state’s position, the Department of Transportation is hard up against it. That’s well known. But I don’t have the authority to subsidize airport operations with local tax dollars. Nor do I think there is any sentiment on the City Council, or in the residents of Augusta, to do that.”

Bridgeo said since 2008 the state has paid the city $550,000 a year to manage the airport, which has commercial flights provided by Cape Air and fixed base operations including charter flights and services for private pilots provided by Maine Instrument Flight.

So far the city, in part by cutting staff, has been able to run the airport for that amount. But the costs of running the airport have increased and local officials expect them to continue to escalate.

And the state’s proposal for the city to run the airport for the next five years did not include an increase to that $550,000 annual payment to the city, according to Bridgeo and John Guimond, manager of the airport.

“The state’s position is they don’t have the resources to provide for an increase in the future,” Bridgeo said. “And I can’t, in good conscience, commit the city to managing the airport for the next five years at the rate we set in the spring of 2008. It’s quite an intensive operation, keeping that airport running properly, and meeting Federal Aviation Administration standards. Costs have gone up substantially since 2008.”

Mark Latti, spokesman for the state Department of Transportation, confirmed the state could not increase funding for the airport in Augusta.

“In this economic climate, it’s difficult,” Latti said. “Basically we provided what the state could afford. We understand it’s difficult for them.”

Guimond said the city chose the one-year option instead of a new five-year contract so the city could take a look at the costs of running the airport. “Fixed costs have gone up. In the past, they’ve been able to make adjustments. But we’ve been flat-funded the last three years. We need to make sure, going forward, we can cover operational expenses.”

Latti said the one-year agreement will allow officials to revisit the issue.

“We’ve been very happy with the way the city has been running the airport, and hope to continue it,” Latti said. “But it is just a difficult economic time. Hopefully, when we look at this next year, things will have improved.”

Bridgeo stressed the state and city’s agreement, and working relationship, has been fine to date. The issue, he said, is simply the lack of money to go around.

“There’s no bad guy in this,” he said. “It’s just that we’re in the middle of some very tough economic times.”

Increased costs at the airport include fuel to heat buildings and to power trucks and equipment. Also, a planned new system of collapsible concrete blocks meant to prevent out of control aircraft from rolling off the end of the runway is going to take more time for snow removal, Bridgeo said.

However Latti said other changes the airport should make it more affordable to maintain, including a new, more efficient heating system for the terminal building, and plans to replace the main runway next year with a new, narrower runway which he said should lower snow removal costs.

In response to increasing costs, the airport has cut staff, eliminating a full-time maintenance position and reducing a clerical position to part-time, bringing the number of full-time airport staff to three.

Bridgeo said the airport continues to meet all FAA standards and “we will not compromise safety. That’s always the first priority.”

In the meantime the airport’s new commercial carrier, Cape Air, has been bringing in record numbers of passengers most months since it took over at the start of the year, Guimond said.

However he noted while more passengers means more traffic through the airport — and thus more revenues for airport-based businesses such as Hertz car rental and Sweet Chilli Thai restaurant — it doesn’t necessarily translate into more operating revenue for the airport itself.

Bridgeo noted there is also uncertainty, nationally, about the Essential Air Service program, which provides an annual $1.36 million federal subsidy for Cape Air to provide commercial air service in Augusta.

“Our congressional delegation has been wonderful about championing Essential Air Service, we’re grateful for that, it makes the difference as to whether we can afford to have commercial passenger service in Augusta or not,” Bridgeo said. “But, nationally, it has had a big bull’s eye painted on it.”

Bridgeo said while the airport does benefit the local economy, it is regional and serves people in a wide radius around Augusta.

Keith Edwards — 621-5647

kedwards@centralmaine.com