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UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

CHANDLER AIR SERVICE 

 Complainant, 

v. 

CITY OF CHANDLER, ARIZONA 

 Respondent. 

FAA Docket No. 16-13-05 

DECLARATION OF LORI QUAN IN SUPPORT OF THE 

ANSWER OF THE CITY OF CHANDLER, ARIZONA TO COMPLAINANT’S 

14 C.F.R. PART 16 COMPLAINT 

1. My name is Lori Quan. I am an employee of the City of Chandler, Arizona, and 

serve as the Airport Administrator of Chandler Municipal Airport. I have been acting in the role 

of the Airport Administrator since October 2011. I make this declaration based on my first hand 

knowledge, my review of Airport and City documents, and on information and data collected and 

maintained by the Airport and the City in the ordinary course of business. 

2. The Chandler Municipal Airport (“Airport” or “CHD”) is located in the City of 

Chandler (“City”), approximately three miles southeast of the city center. The Airport began 

operations in 1948, and, since that time, it has been owned and operated by the City. The Airport 

does not have commercial passenger operations, but is a relatively busy general aviation airport. 

In 2012, the Airport served over 197,000 general aviation, rotary, and military operations. The 

Airport is home to approximately 437 based aircraft. Over the years, the City has accepted a 

number of AIP grants for the acquisition of property, airport planning, and the construction of a 

variety of capital improvements. The most recent grant is AIP-3-04-0008-023, for San Tan 

Apron Repairs and the rewiring of the Taxiway A lighting circuit. 

3. The Airport consists of two parallel runways: Runway 4L/22R and Runway 

4R/22L. Runway 4L/22R was built in 1960, at a length of 2,610 feet. It was extended in several 

phases in the 1970s and early 1980s to reach its current 4,401 foot length. Runway 4R/22L was 

built in 1994, at a length of 4,870 feet. The City’s plans for the Airport anticipate extending 

Runway 4R/22L to a future length of 5,700 feet. The current Airport Layout Plan is attached as 

Exhibit 1, and the current Airport Master Plan is attached as Exhibit 2. The current ALP and 

Master Plan were submitted to the FAA in 2007. 

4. Chandler Air Service (“CAS”) is the sole fixed base operator (“FBO”) at the 

Airport. In the course of my duties as Airport Administrator, I have become familiar with the 

operations of CAS, and I am personally acquainted with CAS’s owner, John Walkup. I have 
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first-hand knowledge of CAS’s use of Airport property. I am familiar with the City’s lease with 

CAS and related documents and agreements, including the Fuel License and Airport Minimum 

Standards. CAS leases approximately five acres from the City. A copy of the Lease is attached 

as Exhibit 3. Aerial photographs of CAS’s leasehold showing the location of CAS at the Airport 

and the location of CAS’s facilities are attached as Exhibit 4. 

5. Over the years, Mr. Walkup has attempted to lobby City officials regarding 

Airport policy, and he has expressed a particular interest in extending the length of Runway 

4R/22L. 

6. Beginning in 2010, CAS began making more pointed complaints and alleging a 

variety of compliance issues, including issues relating to fuel-sales, revenue diversion relating to 

fuel taxes, and economic discrimination. Primarily, CAS expressed frustration with the failure of 

the bond measures to extend the runway and urged the City to repeal Ordinance 3888 and 

construct the runway extension without voter approval. CAS indicated to City staff, various 

members of the Airport Commission, and me that it would not pursue its other alleged claims of 

compliance issues if the City would repeal or modify Ordinance 3888 to allow the runway 

extension without a vote. The City Council has declined to take that action. 

History of Airport Development 

7. Airport planning and development have evolved over the years and are 

memorialized in the official records of the City. True and correct copies of the principal 

documents setting forth that history are attached hereto, and described as follows: 

• 1982 Airport Master Plan Update (attached as Exhibit 5) 

• Ordinance 2122 (attached as Exhibit 6) 

• Minutes of the Regular Meeting of the Chandler City Council, Nov. 5, 1998 (attached 

as Exhibit 7) 

• 1998 Airport Master Plan Update (attached as Exhibit 8) 

• Ordinance 2912 (attached as Exhibit 9) 

• Minutes of the Regular Meeting of the Chandler City Council, Nov. 19, 1998 

(attached as Exhibit 10) 

• Resolution 3253 (attached as Exhibit 11) 

• Resolution 3268 (attached as Exhibit 12) 

• Resolution 3329 (attached as Exhibit 13) 

• Memorandum from Planning Commission and Staff to Mayor and City Council re: 

Crossroads Towne Center (attached as Exhibit 14) 

• Minutes of the Regular Meeting of the Chandler City Council, July 24, 2003 

(attached as Exhibit 15) 

• Minutes of the Regular Meeting of the Chandler City Council, Aug. 14, 2003 

(attached as Exhibit 16) 

• Resolution No. 4034 (attached as Exhibit 17) 
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• Minutes of the Regular Meeting of the Chandler City Council, Jan. 25, 2007 (attached 

as Exhibit 18) 

• Minutes of the Special Meeting of the Chandler City Council, May 24, 2007 (attached 

as Exhibit 19) 

• Ordinance No. 3888 (attached as Exhibit 20) 

8. Ordinance 3888 is currently codified at Chandler Municipal Code §§ 8-10, and it 

provides as follows: 

8-10. - Extension of runway; physical limitations. 

To guarantee to the citizens of the City of Chandler the continued quiet 

enjoyment in and to the homes, schools, churches and work places, the 

Chandler Municipal Airport shall not be permitted to accommodate, in any 

fashion, aircraft which require for takeoff a runway longer than five 

thousand seven hundred (5,700) feet. Extension of the runway shall 

require voter approved bonds, which specify that the bond monies are for 

the purpose of extending the runway. In addition, the Chandler Municipal 

Airport shall not be designed to accommodate aircraft that weigh in excess 

of seventy-five thousand (75,000) pounds maximum gross weight, and/or 

have a wingspan of seventy-nine (79) feet or more. 

9. Ordinance 3888 sets City policy regarding the size and capability of future 

Airport facilities and the process for authorizing a runway extension. It is not intended, and has 

not been applied, to restrict aircraft operations. The City does not restrict any aircraft from 

operating at the Airport based on aircraft weight, wingspan, or other factor. Any aircraft whose 

performance specifications and capabilities allow it to operate at the Airport is permitted to do 

so. If the runway is ultimately extended as provided in Ordinance 3888, the City intends to 

allow any aircraft that can operate on a runway of that length, based on its certification and 

performance capabilities, to do so. 

Airport Revenue and Fuel Tax Collection 

10. All proceeds from the sale of fuel (other than the use tax) are treated as airport 

revenue and used for Airport purposes. 

11. The City endeavors to make the Airport as self-sustaining as possible. Although 

the City keeps all airport revenues, including the proceeds from the sale of fuel (other than the 

use tax), in an airport enterprise fund, those funds are insufficient to cover the costs of operating 

the Airport. Accordingly, the City annually transfers funds from the General Fund to the Airport 

Enterprise Fund to assure the Airport does not incur a loss. The amount of the payment is based 

on the projected shortfall between Airport revenues and Airport expenses. In FY 2011/12, the 

City provided a $151,602 subsidy. The City has not closed out FY 2012/13, but estimates that it 

provided $208,103 in support to the Airport last fiscal year. Over the past several years, the City 

has provided annual subsidy payments to the Airport as follows: 

FY2006-07 $176,103 

FY2007-08 $316,903 

FY2008-09 $187,019 
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FY2009-10 $219,193 

FY2010-11 $305,126 

12. The amount of the subsidy far exceeds the amount of the privilege and use tax the 

City collects on fuel sales as the Airport. 

13. The City Council and City staff have expressed their commitment in myriad ways 

to the continued financial support of the Airport. 

Recent Airport Facilities Improvements 

14. In 2010, the City replaced the pavement surrounding the Airport’s self-service 

fuel facility. The project was part of a larger project to improve storm water drainage by, among 

other things, replacing an open water storm water ditch with an underground culvert and catch 

basin system, as well as a stilling basin and dry well west of Airport Boulevard. The purpose of 

the project was to make land west of the control tower developable. As part of that project, the 

pavement around the City’s self-service fueling island was contoured to direct any accidental 

fuel releases into a lined retention basin to keep it isolated from storm water discharge. 

15. The City has also built and improved a number of additional facilities at the 

Airport, many of which directly benefit CAS. For example, the City built a paved perimeter 

service road that allows CAS’s fueling trucks to get to the heliport located on the Airport without 

crossing the runways and taxiways. The City has improved Airport Boulevard in a way that 

provides improved groundside access to CAS’s facilities. The City is in the process of 

constructing a new parking lot for tenants on the north side of the Airport that CAS will have 

almost sole use of until more tenants arrive. The City has also brought water and sewer hookups 

to CAS’s property line, although CAS has chosen to remain on a septic system. 

16. In late 2012, CAS complained of extensive cracking on the “San Tan Apron,” 

which is immediately adjacent to CAS’s fuel pumps, and expressed its concern that the cracks 

limited access to its pumps. I explained that the cause of the cracking was the nature of the soils 

beneath the pavement (the San Tan Ramp sits on an environmental cap) and that the City, 

through the FAA’s Airport Improvement Program, had been actively planning a more than 

$300,000 rehabilitation of the entire San Tan Ramp to address that problem. That project is 

largely funded with AIP and state grants. 

17. In order to promptly address CAS’s concerns, in late 2012, I directed Airport staff 

to work with CAS to implement a temporary solution by filling the cracks immediately adjacent 

to the pumps with hot mix. The City has put the entire San Tan Ramp project out for bid and 

expects to award the bid in October 2013, with work to be completed early by 2014 (barring any 

unforeseen circumstances). 

18. Based on my first-hand observations, and the recollections of Airport staff, CAS 

has not undertaken any significant capital improvements other than an asphalt seal coat and 

minor cosmetic changes, such as painting its facilities, including its self-service fueling facility, 

since approximately 2005 when it installed the facility. 

Fuel Sales at the Airport 

History of Fuel Sales at the Airport 
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19. For many years, the City was the only seller of fuel at the Airport, providing a 

self-service Avgas fueling facility for the convenience of Airport users. For a brief period of 

time, the City provided full-service, attended Avgas sales, sometimes referred to as “off-thetruck” service because a fuel truck delivers the fuel directly to the aircraft. 

20. Starting in 1994, CAS began selling Avgas, providing full-service, off-the-truck 

service. Since that time, CAS has been the only full-service fuel provider at the Airport. In 

1995, CAS began selling Jet A fuel, in addition to Avgas, also providing full-service fueling. In 

2005, CAS requested and received permission to begin providing a commercial self-service 

fueling option, and, in late 2005, CAS began providing a self-service fueling option. 

21. CAS sold approximately 206,793 gallons of Jet A fuel in FY2012/13. CAS also 

sold 354,905.40 gallons of Avgas in FY2012/13. In contrast, the City sold 53,594.10 gallons of 

Avgas at its self-service fueling facility in FY2012/13. A chart summarizing fuel sales by the 

City and CAS over the past six years is attached as Exhibit 21. 

Pricing of Avgas at the Airport 

22. The City has adopted a formal process to set its Avgas price, which is 

incorporated into the Airport’s Fee Schedule. A true and correct copy of that process is attached 

hereto as Exhibit 22. Pursuant to that process, the City sets a minimum base price by calculating 

what its total costs are, including the price of fuel, a $0.10 fuel flowage fee, taxes, applicable 

overhead, capital costs, and other allocable costs. By policy, the City cannot sell fuel for less 

than that base price. 

23. Next, the City assesses competition by surveying Avgas prices offered by sellers 

at other airports in the region as well as CAS. That survey establishes a maximum price based 

on market conditions. Based on the Airport administrator’s judgment of market conditions, the 

City sets a price above the minimum base price but at a fair, competitive price. Over the past 

year, the City’s price has sometimes been higher and has sometimes been lower than the price 

charged by CAS. A chart summarizing the weekly prices of aviation fuel at the Airport is 

attached hereto as Exhibit 23. 

24. The City selects its Avgas vendor through a request for quotes on the spot market 

each time it places an order. In recent months, Epic Fuels has won many of those bids. CAS 

also sells Epic Fuels. 

25. I am not aware of how CAS sets it Avgas prices. I have reviewed CAS’s Lease, 

Fuel License, and the Airport’s Minimum Standards and cannot find any requirement that CAS 

carry “branded fuel.” I have consulted with Airport staff and my predecessor, and none of them 

are aware of such a requirement. Although CAS’s lease does require it to carry a certain level of 

insurance, as do all Airport tenants, that insurance requirement does not include a branded fuel 

requirement. 

26. Although the City reports all revenue and expenditures associated with the 

Airport, it does not individually report the profits on fuel sales. The fuel pricing policy is 

designed to insure the City has consistently made money from its fuel sales. The City also 

makes available Airport Quarterly Reports, which provide a “Snap Shot” of whether projected 

fuel sales volumes are above or below projections, but those reports do not show profits or losses 

on fuel sales. True and correct copies of several recent editions of those reports are attached as 

Exhibit 24.