JOHNSTOWN — Rental income from a new restaurant at John Murtha Johnstown-Cambria County Airport comes as welcome news, but will only put a small dent in a projected deficit of more than $100,000 a year.

“It is not one thing that is going to get us there,” airport authority member William Polacek said.

Raising money for airport operations is a multifaceted, challenging responsibility, involving state, federal and county tax dollars, along with income from operations.

“It is not like a water authority where you just raise rates,” airport authority member Raymond Porsch said.

Although the late Rep. John Murtha was able to steer tens of millions to build infrastructure and bring military units to the facility, few of the earmarks went into the authority’s operating budget. None of the National Guard or Reserve units pay rent or provide other revenue to the county-owned airport.

Several factors over the past decade led to the current economic decay, Porsch said.

In the past, the airport counted on a hefty allocation from the county budget.

In 2001, the county paid $280,000.

In what may have been an overly optimistic attempt to show the Cambria commissioners that the airport could operate in the black, former manager Joe McKelvey submitted a 2002 budget that reduced the county share to $185,000.

County funding has never returned to the previous levels.

This year, it’s about $150,000.

Authority members feel they were not kept abreast of the financial situation in the past.

“We thought we were doing OK,” Porsch said. “In reality, we were running a deficit – robbing Peter to pay Paul.”

An audit later showed Mc-Kelvey was improperly using federal grants to cover some local costs, apparently planning to make up the difference later.

After McKelvey’s removal in 2007, the airport was ordered to repay more than $100,000.

The bill came due during a $17.8 million runway upgrade financed by the Department of Defense. Millings removed from the old runway were sold to cover the misused funds, Porsch recalled.

“We started with a clean slate,” he said.

‘Balance the budget’

About the same time, a lease was completed with the Defense Department for several acres above Galleria Drive Extension. A Murtha-backed plan was to build climate-controlled warehouses for storing tanks and other attack vehicles for rapid deployment.

Only one warehouse was built because of soil problems, but the airport authority received $750,000 up front for the 99-year lease.

That money was invested in interest-bearing certificates, with plans to draw off the balance and interest over many years.

“We didn’t feel it was fair to spend it all up front,” Porsch said. “But we were forced to balance the budget with that money.”

The “surplus fund” has dwindled to $300,000, with at least another $100,000 expected to be withdrawn this year.

“We can get through 2011 and maybe 2012, if we really tighten our belts,” Porsch said.

After the dire financial situation came to light three years ago, the authority has taken numerous steps to correct old problems, prevent new issues, find new revenue and squeeze more money out of existing sources.

Accountant Dennis Kotzan has been attending authority meetings to keep members up to date.

‘Chipping away at this’

New agreements with commuter flight service provider Colgan Air and fixed base operator MTT Aviation have brought more income, and leases for all other hangars are facing increased scrutiny and negotiations.

One possibility would be to renegotiate the military units’ joint-use agreements to include some rental income or other reimbursement.

Rental income on most of the hangars is based on the original 20-year lease negotiated when the property was vacant, Porsch explained.

Low rental payments were given to encourage leaseholders to build on the land.

But after 20 years, ownership of the buildings was turned over to the airport. Rent was supposed to be increased to reflect the improvements, but most renewals were approved at the original rent.

Four-unit hangers capable of housing eight aircraft were renting for $100 a month.

That’s about the cost of a 10-by-20-foot storage unit in Stowaway at 1360 Eisenhower Blvd. Names of those benefitting from the low rent is a veritable who’s who of Johnstown business. Leases for Zamias Services, W.C. McQuaide Inc. and Judge David Klementik have all been restructured in the past few months.

By requiring all leases to be renegotiated, rental income will increase as much as eightfold in the next couple years.

“As you can see we are chipping away at this by increasing revenue,” authority Chairman Rich Weaver said. “That is our goal now, to increase revenue.”

A national decline in the airline industry, coupled with local challenges with runways shut down by weather and construction, has reduced passenger counts to less than 10,000 a year since 2007.

That means the airport misses out on $1 million federal Airport Improvement Program funds allocated to all those with at least 10,000 enplanements. By missing the magic number, Johnstown only receives $150,000 a year.

Airport leaders are pushing for federal changes that would create a graduated scale based on passenger counts. Porsch suggests a simple formula of $100,000 for every 1,000 riders.

‘What they need to know’

But even receiving the $1 million would not solve the issues, Porsch said, pointing out that the funds can be used only for improvement projects such as paving or painting runways.

It cannot be used for day-to-day operations.

Moreover, the federal money requires a 2.5 percent local match, Kotzan said, wondering where the authority would come up with $25,000.

The situation is not hopeless, leaders stress.

Marketing efforts have intensified to entice aeronautics companies to open facilities on the airfield.

“It would only take one or two of those big leases to get us back,” Porsch said, adding that the authority is working closely with Johnstown Area Regional Industries to identify companies.

There are ongoing communications with an international helicopter service company.

In addition, area defense companies have begun working together to identify new opportunities and bring more industry here, said Polacek, who is JWF Industries’ chief executive officer.

“If we can steer some of (the companies) up here, I want to get started on that,” Polacek said. “What they need to know is: What land is available and what it can and cannot be used for.”

The authority continues to explore every option for revenue and is open to suggestions, Weaver said.