UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C. Friends of the East Hampton Airport, Inc. et al. , Complainants, v. Town of East Hampton, NY Respondent. FAA Docket No. 16-15-02

RESPONDENT TOWN OF EAST HA MPTON, NEW YORK’S BRIEF IN SUPPORT OF ITS MOTION TO DISM ISS AND ANSWER TO THE COMPLAINT Designation of persons to receive service fo r the Town of East Hampton, New York: Elizabeth Vail Town Attorney Town of East Hampton 159 Pantigo Road East Hampton, NY 11937 EVail@EHamptonNY.Gov W. Eric Pilsk Catherine van Heuven Kaplan Kirsch & Rockwell LLP 1001 Connecticut Ave., NW, Suite 800 Washington, DC 20036 epilsk@kaplankirsch.com cvanheuven@kaplankirsch.com Telephone: (202) 955-5600 Facsimile: (202) 955-56162 I. INTRODUCTION The current Town Board of the Town of East Hampton (the “Town”) is making a concerted effort to address a number of long-st anding capital needs at the East Hampton Airport (“HTO” or the “Airport”). Th is has included a detailed eval uation of Airport capital and maintenance needs, an examination of long-neglected management issues, and a complete review of Airport financing. Having done so, the Town is now implementing a comprehensive plan to address airport improvement needs to en sure that the Airport is well-maintained, wellmanaged, and remains safe. In the past year alone, the Town has issued almost $1.5 million in bonds to fund the costs of installing a new Airport Weather Operatin g System (“AWOS”), new lighting on Taxiway “A”, new paving on Runway 4-22, and engineering work for myriad other capital improvement projects including construction of a perimeter fence and a comp rehensive pavement evaluation study. The Town also has installed a permanent s easonal air traffic control tower, and completed a comprehensive Terminal Instrument Proce dures (“TERPS”) analysis to address known obstructions. The Town has adopted an Airpor t Capital Improvement Plan (“ACIP”) and an Airport Maintenance Plan that, together, identify over $10 million in projects that need to be completed in the next several years. Less visibl y, new Airport managementhas begun to put into place management systems to address outstanding leasing issues, pavement inspection and maintenance issues, and a variety of other day-to-day operational concerns. The Town also has had to face the fact that pa ying for all of the needed work is expensive and that current Airport revenues will be insufficient to pay for al l of that work. Accordingly, following a comprehensive – and public – process, the Town increased its fuel flowage fee for the first time in almost 20 years and raised landing fees by 10% last ye ar. In addition, the3 Airport is actively seeking revenues from non-aer onautical sources, includi ng leases, to further enhance Airport revenues. In the midst of all of these changes, Compla inants filed this Complaint, which focuses on past shortcomings while altogeth er ignoring the Town’s current efforts to address those very problems. But as Complainants acknowledge, a sponsor is in compliance with its Sponsor Assurances when it understands it s obligations, has a plan to a ddress compliance issues, and is executing that plan. In this case, the record sh ows plainly that the Town is actively carrying out plans to redress past issues and to implement a comprehensive maintenance plan. Had Complainants actually desired to resolve the matter, they would have engaged in a meaningful discussion, during which they would have learne d that the Town is either currently in compliance with its sponsor obligations or willi ng to agree to a Corrective Action Plan with the FAA to resolve lingering compliance issues. However, the fact that much of the Complaint focuses on projects that were completed before the Complaint was filed, are nearin g completion, or are well underway, exposes Complainants’ true motive simply to attack the Town for pursuing unrelated matters which Complainants oppose. Indeed, Complainants failedto raise a number of issues in their limited effort to “resolve” their complaints prior to filing and effectively walked away from the preComplaint discussions they initiated when the To wn asked them to prioritize the projects they wanted built and to provide other in formation regarding their claims. First, Complainants are simply annoyed that th ey will have to pay more to use the Airport as the Town adjusts fees to pay for the ve ry capital projects Complainants demand. Complainants would like the Town to accept fede ral grants and therefore, reduce the costs to them for using the Airport. Complainants are also unhappy that the Town is pursuing Airport4 noise rules that will restrict operations by some of the aircraft they operate. Unable to argue that they should not pay their fair sh are of Airport costs and seeking leverage to forestall the noise rules, Complainants filed this Complaint based on an incomplete factual investigation that failed to discover the Town’s ongoing compliance efforts. The facts demonstrate that all of the projects identified in the First Cause of Action have either been completed or are moving toward comp letion under a definite schedule. The Town is clearly aware of its maintenance obligations, has plans in place to meet those obligations, and is actively implementing those plans. Thus, the First Cause of Action fails to state a claim that the Town is in violation of a ny of its sponsor obligations. Second, and similarly, Complainants’ claims in their Second Cause of Action are baseless. Complainants allege that the first phase of the rehabilitatio n of Runway 4-22 – in which the runway pavement is being used as a temporary taxiway – is somehow an attempt to permanently convert Runway 4-22 into a taxiway. That is simply not true. The pavement was constructed to full runway specifications and w ill be incorporated into a fully rehabilitated Runway 4-22 when the runway pr oject is completed as called for in the Airport Capital Improvement Plan and on the FAA-approved Ai rport Layout Plan (“ALP”). The Town’s rehabilitation of Runway 4-22 is consistent with the ALP, and there is no compliance issue with its interim use as a taxiway. Finally, the Third Cause of Ac tion focuses on Airport finances, and in particular, on the Airport’s landing fees. As the To wn has previously demonstrate d, the recent increases to the Airport landing and fuel flowage fees are fully justified in part by the cost of financing the Airport capital and maintenance projects that must be completed in the coming years, including5 projects Complainants themselves demand. Compla inants may not like having to bear their fair share of those costs, but ther e is nothing improper or unreason able about making them do so. Nonetheless, the Town acknowledges that aspect s of the Airport’s revenue structure need to be addressed. The Town acknowledges that through administrative actio n over the years, the weight-based landing fee schedule has come to incl ude a number of discre pancies in fee levels between aircraft of similar weights. The Town is committed to revising its landing fee schedule this summer to remedy those discrepancies. Second, the Town acknowle dges that many of the older leases for non-aeronautical property do not char ge full, fair market rents. Those leases do not include subordination clauses, however, and the Town is not r eadily able to increase rents. Nonetheless, the Town acknowledges that rents ar e below fair market rates and agrees to enter into a Corrective Action Plan with the FAA to assure compliance going forward. Because the Town is either actively pursui ng plans to address the issues raised by Complainants or is willing to enter into a Corre ctive Action Plan to address certain issues, the Complaint fails to state any valid claims of a current compliance violation. Accordingly, the Complaint should be dismissed. II. STATEMENT OF FACTS A. Overview of Airport East Hampton Airport is a public-use general av iation airport located in the Town of East Hampton in Suffolk County, New York. The Town owns the Airport and maintains and operates it for the benefit of the Town, re sidents, and visitors. The Airport serves a wide-variety of helicopters and fixed-wing aircraft . There are approximately 160 ba sed aircraft at HTO. While there is no commercial airline serv ice at the Airport, there are flight services that provide nonscheduled, on-demand flight servi ces. Declaration of East Hampt on Airport Director J. Charlton (“Charlton Dec.”) at ¶ 5.6 The Airport has a main terminal and an ex ecutive terminal. The Airport has three runways: a main runway (Runway 10-28) a nd two cross-wind runways (Runway 16-34 and Runway 4-22). Runway 4-22 is temporarily closedand is currently bein g used only for taxiing purposes. Id . at ¶ 11; id . at Exhibit (“Ex.”) 1 (Airport Layout Plan); id . at Ex. 5 (2010 Master Plan Generic Environmental Impact Statement (hereinafter “2010 Master Plan” at pp. 1-3). There are currently two fixed-base operators (“ FBOs”) that provide ai rcraft fueling at the Airport: (1) Sound Aircraft Serv ices (“Sound”) and Myers Aero Services Inc. (“Myers”). Id . at ¶ 13. In addition to the two FBOs, there are several aeronautical tenants that operate hangars at the Airport. Id . at ¶ 14. There also are approximately 15 non-aeronautical tenants at the Airport. Id . B. Comprehensive Airport Management Plan The Town has been engaged in a comprehens ive master planning process over the last decade. The Town conducted a master plan update study between 2004 and 2007 to identify essential airport improvement activ ities. Charlton Dec. at Ex. 5 (2010 Master Plan at vii). In 2010, the Town completed and adopted a Generi c Environmental Impact Review for the recommended improvement projects, including runway rehabilitation, obstruction removal, replacement of the Automated Weather Observi ng System (“AWOS”), taxiway lighting, terminal ramp rehabilitation, and replacement of the perimeter fence. Id . at Ex. 5 (2010 Master Plan at pp. 3-4). In 2011, the FAA issued its conditional approval for the ALP Update that addressed the airport improvement projects identified through the master planning process. Id . at ¶ 8(b) and Ex. 4 (FAA conditional ALP Approval). Immediat ely thereafter, the Town commissioned its consultants to develop a comprehe nsive Airport management plan. Id . at ¶ 8(b) and Ex. 5 (December 1, 2011, consultant presentation). In December 2013, the Town approved the 2014-2018 Airport Capital Improvement Plan, which identified $5.26 million in capital projects which had se cured FAA conditionalapproval York St a identifie d projects t Airport M T plan. E v for a ne w purchas e fuel far m taxiway l (Bond R the cond i ago, on planning and Ex. 9

A consens u (Runwa y currentl y Runway status of and which a te Environ m don a separ a that had not M aintenanc e T he Town i s v en before th w seasonal a d improved m . Id . at ¶ 8

l ighting, ru n esolutions). i tion of exis t April 21, 2 0 , design, an d 9 (Bond Res A i 1. A major out c u s plan for y 10-28) in y -closed Ru n

16-34 into a the Runwa y also had co m m ental Qual i a te Airport M yet underg o e Plan). s taking act i h e ACIP wa s a ir traffic c o

data collec t 8 (c). Last y n way rehabi l

The Town t ing infrastru 0 15, the T o dengineeri n olutions). i rport Run w c ome of the future run w approximat e n way 4-22 apermanen t y s is detaile d mpleted the i ty Review A M aintenanc e o ne environ m i ve steps to s approved i n o ntrol towe r t ion technol o y ear , the T o l itation, and also hired a u cture and p o wn issued a n g work for

w a y s

2004-2010 w ay use at H e ly its curr e after resol u ttaxiway. I dbelow.

7 environme n A ct (“SEQ R e Plan an ad d m ental revie w

implement n 2013, the T r , complete d o gy, and se t o wn issued b

installation a n engineeri p rioritize airp abond for airport capi t

master pla n H TO that c e nt configur a u tion of rel e I

d . at Ex. 5 ( n tal review p R A”). At th d itional $5. 1 w under SE Q

its compre h T own appro v dan update t tled enviro n b onds for a l of an FAA- c i ng firm in p ort improv e $500,000 t o t al improve m

n ning proce s c alls for: (1 ation; (2) r e e vant safet y (2010 Mast e process pur s h e same tim 1 9 million i n Q RA. Id . at

h ensive airp v ed constru c to its Airp o n mental cla i l most one m c ertified A W September 2 ement proje o pay for n e m ent projec t

s s was the d ) keeping t e paving an d y issues; an e r Plan at p . s uant to the e, the Tow n n capital co s

Ex. 8 (ACI P

p ort manag e c tion and fu n o rt Security i ms related t m illion dollar W OS. Id . at

2 014, to ev a cts, and jus t e cessary su r t s. Id . at ¶ ¶

d evelopmen t the main ru n dreactivati n

d (3) conv e

. 1). The c u New n also s ts for P and

e ment n ding Plan, t o the r s for Ex. 9 a luate tdays r veys, ¶

9-10

tof a n way n g the e rting u rrent8 Runway 10-28 is 4,255 feet long and 100 feet wide and is th e primary-use runway. The majority of the traffic is handled by this R unway, as it is dimensionally the largest runway, provides more navigational aids and equipment to pilo ts, and is structurally in the best condition. Charlton Dec. Ex. 4 (2007 Master Plan Update at I-1). Runway 10-28 is currently in good condition, and the Town has an activ e preventive maintenance plan. Id . at ¶ 11(a). Runway 16-34 is a cross-wind runway that is 2,060 feet long and 75 feet wide. It is designated as a cross-wind runway. The 2010 Master Plan calls for the eventual conversion of this Runway to a permanent taxiway. Id . at Ex. 5 (2010 Master Plan at pp. 1-3). The 2007 Master Plan Report reve aled that this Runway was in fair condition with high severity block cracking. Id . at Ex. 4 (2007 Master Plan Update at I-1). The Town patched the existing cracks in Runway 16-34 last year. Id . at ¶ 11(b) and Ex. 10 (Runway 16-34 invoices). Runway 16-34 is currently safe; there are no crac ks or vegetation, and there is no standing water on the Runway. Id . at 11(b). Runway 4-22 is a secondary cross-wind runway that is 2,501 feet long and 100 feet wide. In 2006, the FAA rated this Runway as failed. Sin ce then, this Runway has been closed and has been used for taxiing operations. Id . at Ex. 4 (2007 Master Plan U pdate at I-2). The approved Master Plan calls for Runway 4-22 to be reactivated as a runway when Runway 16-34 is converted into a permanent taxiway. Id . at Ex. 5 (2010 Master Plan at pp. 2-3). The FAA is well aware of these plans. The 2011 FAA-approved AL P clearly indicates that Runway 4-22 is currently closed, but thatit will be reactivated in the future. Id . at Ex. 1 (ALP). Before any rehabilitation of Ru nway 4-22, however, appropriate safety and environmental implications must first be addresse d. For example, Daniels Hole Road penetrates the Runway Safety Area at the Runway 22 en d. In addition, activation of Runway 4-22 willincrease has the m Master P evaluati o determi n I n purpose s project w Runway the Run w T master p Mainten a for repai r complet e $353,60 0 Town p u Baseline Resoluti o invoices ) airport u s noise impa c m ost signific P lan at pp. 6 o n of all Ai r n ing next ste p n the interi m to ensure t w as complet e

is returned w ay. Id . at ¶ T a 2. T he Town i d p lan proces s a nce Plan). rof the Tax i e d state env i 0 on July 3, u blished a b i

King Corp o n 2014-12 8 ) . The new s ers. Id . at ¶ c t in areas to

a nt resident i 6 & 119). T rp ort pavem e p s and timi n m , the Town h

that the ex i e d in 2014 a to full servi ¶

11(c) and E a xiwa y “A ” d entified th e s , and the The Town a i way “A” li g i ronmental r 2014. Id . a i d for the w oration on N 8 9). The w o

lighting sy s ¶

11(f). the southw e i al concentr a T he Town h a e nts. Id . at n g for future

h as repaved i sting uses o nd was con d ce, the To w E x. 11 (Run w ” Li g htin g e need to r e work is n o approved de g hting on A p r eviews an d a t Ex. 14 (R ork on Sept N ovember 6 o rk was co m s tem is state

9 e st of the Ai a tion of ho m a s directed i ¶ 10. The r rehabilitati o the portion o n the clos e d ucted to fu l w n will only w ay 4-22 re p

e habilitate th o w complet e

sign work a n p ril 17, 2014 dapproved t

esolution 2 0 ember 18, 2 6 , 2014. Id mpleted lat e -of-the-art a i rport in Wa i m es around th

i ts engineer r esults of th e o n of Runw a

of the Run w e d Runway l l runway s p need to rep p aving invoi c h e lighting e . Id . at ¶ n d the deve l 4 . Id . at Ex.

the issuanc e 0 14-836 an d 2 014, and u l d . at Ex. 14 e last year . a nd has not g i nscott, whi c h e Airport. I

to conduct e se studies w a y 4-22. w ay currentl y

remain saf e p ecifications

ave the re m c es). on Taxiwa y ¶

11(f) an d l opment of b 14 (Resolut i e of bonds i dResolution l timately ac c

(Resolutio n Id . at Ex. 1 g enerated a n c h is the are a I

d . at Ex. 5 ( a compreh e w ill be criti c

y used for t a e . The rep a . Thus, wh e m aining porti

y “A” durin dEx. 8 (A i b id specific a i on 2014-48 5 i n the amo u

2014-837). c epted the b n 2014-115 0 1 4 (Taxiwa y n y complai n athat ( 2010 e nsive c al in

a xiing a ving e n the on of

g the i rport a tions 5). It u nt of

The b id by 0 and y “A” n ts byD AWOS a The To w Id . at ¶ environ m the insta 1468). T construc t at ¶ 11(g

T Hampto n (“Aviati o repairs a n Ex. 13 ( A its lease h T (Nov. 21 item du r Mainten a conduct include t paveme n A u 3. D uring the p l

a t the Airp o w n included d 11(g) an d m ental revie w

llation of a T he Town i s tthe new A W ). R a 4. T here are tw o n Air Hang a o n Resourc e n d improve m A viation Re s h old. Work i T he main te r

, 2013, Pres r ing the To w a nce Plan. C a compreh e the ramp pa v n t projects. u tomated W l anning proc o rt to replac e d esign and r

Ex. 8 (A C w s and app r

new AWO S s about to is W OS. Cons

a mp Maint e o terminals ar, and the e s”). Unde r m ents to th e s ources Lea s i s ongoing a r minal ramp entation to T w n’s plann i C harlton De c e nsive airpo r v ement. T h

In the inte r W eather Ob

ess, the To w e the curre n eplacement C IP). On r oved the is s S . Id . at E x sue bid spe c truction is a n

e nance at the Airp o surroundin g rthe terms e leasehold, i s e). Aviatio a nd anticipat p is nearing T own at p. 2 i ng process c . at Ex. 8 ( A rt pavement h e results of

r im, Airpor t 10 servin g S y s w n also iden t n t equipmen t

of the AW O December s uance of b o x . 15 (Reso c ifications a n n ticipate dt o

o rt. The ex e g ramp spac

of its lease i ncluding th n Resource s ed to be co m the end of 2 ). The ter m

and rehab i A irport Mai n

evaluation the evaluat i tstaff ensu r s tem (“AW O t ified the ne e tthat has b O S in the A C 18, 2014, o nds in the o lution 2014

n d to publi s o be comple t

e cutive term c e is leased

, Aviation R h e ramp. C h s is currentl y mplete by m i

its design l i m inal ramp w

i litation is c n tenance Pl a

this summ e i on will ass i r es ongoin g O S”) Repla c e d to install een decerti f C IP and has

the Town amount of $ 4 -1467 and R s h a Reques t t e by early s u

m inal, also k n to Aviatio n R esources i s h arlton Dec. y repairing th id -May. Id . i fe. E.g., C w as identifie d

c ontemplate d a n). The To w e r. The ev a i st the Airp o g safety by c ement an FAA-ce r f ied by the F proceeded a completed $ 260,000 to R esolution 2 tfor Propos a u mmer 201 5

n own as th e n Resources , s responsib l at ¶ 11(d); h e paved ar e at ¶ 11(d). C omplaint E das a top pr din the A i w n is plann i a luation wil l o rt in priori t conducting r tified F AA. apace.

state fund 2 014- a ls to 5 . Id .

e East , Inc. l e for id . at e as in

x. 22 iority i rport i ng to l also t izing dailyinspecti o at ¶¶ 10 &

T priority i Mainten a Septemb construc t in the ve r with ma n working efforts w the Airp o I n surroun d request, t that the under th immedia t state an d Ex. 16 ( J use of a v request i s o ns of the p a & 11(d). A i 5. T he perimet e

i tem that w a a nce Plan. er 2014 an d t ion of the f e r y near futu r n agement o f with tenant s w ill significa n

o rt. O 6. n May 201 d ing the Airp

the Town c o entire cano p h e FAA’s r

t ely that th e dlocal regul a J uly 24, 201 4 v isual glide s still pendi n a vement thr o i rport Peri m e r fence aro u a s identifie d Id . at Ex. 8 dhas direct e e nce. Id . at r e. Id . at ¶ 1 f the local s to ensure t n tly reduce

b struction R 3, the FA A p ort. Id . at ¶ o nducted a c p y of trees egulations a e process fo r a tions. Id . a t 4 Memoran d slope indic a n g before th e o ughout the

m eter Fenc e u nd the Ai r dearly in th e 8 (Airport M edits engi n ¶

¶ 10, 11(j) . 1(j). The T o d eer popul a that all gate s the potenti a

R emoval A identified ¶

11(h) and E c omprehens surroundin g a t 14 C.F. R rmitigating t¶ 11(h); id . d um to Tow n a tor mitigati e FAA. Id . a 11 Airport and

e and Gates rport is also e planning p M aintenance n eer to prio r

. The Tow n o wn mainta i a tion. Id . a t s are closed a l for deer s t

several o b E x. 16 (May ive review o g the Airpo r R . Part 77.

the obstruc t at Ex. 16 ( J n Board). I n on plan to e a t ¶ 11(h). removing a

in need of p rocess and

Plan). Th e ritize desig n n anticipates

i ns an activ e t¶ 11(j). T

when not i n trikes and o t

b structions ( y 30, 2013, F

o f potential r t would lik e

The To w t ions could J uly 5, 2013 , n the interi m e nsure safe o a ny foreign o

repair. Th was includ e e Town hir e n work and

receiving a e hunting pr o T he Airpor t nuse. Id . a ther potenti a

( trees, vehi c F AA Letter).

obstruction s ely constitu w n also in fo

be lengthy d

, Town Lett e m , the Town o peration at o bject debri s

is, too, is a e d in the A i e d an engin e

planning f o scope of se r o gram that a tDirector i s a t ¶ 11(k). T a l safety ris k

c les, and a At the age n s and deter m u te “obstruc t f

ormed the d ue to appl i er ); see also has propos e the Airport. s . Id .

high i rport e er in o r the r vices a ssists s also T hese k s at

hill) ncy’s m ined t ions”

FAA i cable

id. at e d the TheT Town ap analysis 11(h) an d scope o f mapping for obstru work. Id I n availabl e noted ab o identify a T areas in t Town w i The To w Program . impleme n C T value. V b een abl e T he Town is p proved ex p

to identify t d id . at Ex. f required m and a TER P u ction remo v d . n the interi m e . The Tow n o ve, the To w apermanent P a 7. T he Town h a

the Airport. i ll be prepar i w n acknowl e

. The Town n ting a plan C . Non- A T he Town h a V irtually no n

e to increas e moving for w p enses for a

the full arr a

16 (Resolu t m itigation. I

P S analysis. v al, after w h

m , the FAA

n is commi t w n has pro p

solution fo r a vement M a a s records o f

Id . at ¶ 11 ( i ng a comp r e dges that i t

is aware o f to fulfill th o A eronautic a a s, in the p a n e of those l e rents whil w ard to add r erial photo g a y of obstru c t ion 2014-1 2 I n March 2 0

Id . at ¶ 11( h ich it will s e

has announ t ted to resto r p osed a miti g rexisting ob a intenance f its Airport p ( e); id . at E x r ehensive ai r t does not h f its obligati o o se obligati o a l Tenants a st, entered i l eases has a e the leases

12 r ess the actu g raphy and c tions that p 2 95). This 0 15, the To w h). The To w e cure state a

c ed that ce r ring these n g ation plan f structions.

p avement a n x . 12 (daily i rport pavem e h ave a for m o ns regardi n o ns. Id . at ¶ 1

i nto non-ae r asubordinat i

remain in e u al obstructi

photogram p enetrate th e

informatio n wn’s engin e w n is curre n a nd federal e

rtain nightti m n ighttime ap p

f

or the sho r t

n d conducts d i nspection l o e nt evaluati o m al Paveme n n g pavemen t 1 1(e).

r onautical l e i on clause a e ffect. The ons. In No v metric map e 20:1 visu a n will be us e e er complet e n tly working e nvironment a

m e approac h p roaches. I t term and i s

d aily inspec o gs). As in d o n this sum m n t Maintena n tmaintenan c

e ases at less a nd the To w

Town agre e v ember 201 4 p ping an dr e a l slope. Id e d to identi f e d review o to finalize a a l reviews f o h es are no l o I

d . at ¶ 11(i ) s taking act i

tions of all p d icated abov e m er. Id . at ¶ n ce Manag e c e and is ac t

than fair m w n has not l e

e s to enter i 4 , the e lated d . at ¶ f y the o f the aplan o r the

o nger ) . As i on to

p aved e , the ¶

¶ 10. e ment t ively

m arket

e gally i nto a13 Corrective Action Plan with the FAA to ensure thatthe Town has an aggressive plan to ensure that non-aeronautical leases are compliant going forward. D. Airport Finances The Town has a Budget and Financial Advi sory Committee (“BFAC”), the purpose of which is to examine ways the Town can redu ce costs and can improve budgeting for capital projects. Malman Dec. at ¶ 2. In early 2014, the Town dire cted the BFAC to undertake a financial analysis of the Airpor t, including airport income and e xpenses, as well as new revenue streams, which can serve as a baseline of ag reed-upon data for furthe r discussions and policy decisions by the Board. The Town identified certain BFAC members and additional community members to assist the BFAC in this process. Collectively, this group is known as the BFAC Airport Finance Subcommittee (“Subcommittee”). Id . at ¶¶ 3-5 and Ex. 1 (February 4, 2014, Town Work Session Minutes). The mission of the Subcommittee is to anal yze Airport expenses, as well as capital and maintenance needs. Id . at ¶ 6. To that end, the Subcommittee undertook extensive fact-finding in early 2014 – including outreach to Town offi cials, Airport personnel, and both FBOs – to understand future capitaland revenue needs. Id . at ¶¶ 7, 25-28 & 37- 38, and Ex. 9 (May 5, 2014, letter from Subcommittee transmitting analysis to Town Board). The results of the analysis were set forth in the Subcommittee’s April 2014 Preliminary Debt Capacity Analysis. Id . at Ex. 8 (“Preliminary Debt Capacity Analysis”). In the Preliminary Debt Capacity Analysis, the Subcommittee outlined its examination of various operating scenarios (including the status quo and various levels of reduced revenue due to varying levels of aircraft operations) to examine how much debt the Town coul d support from Airport revenues. Based on the analysis, the Subcommittee concluded that under existing reve nue streams, the Town could support debt levels between $5.1 and $8.5 million, depending on th e operating scenario, but that the Airport14 Fund balance at the end of 2018 w ould be less than $1.5 million. 1 See generally, id . at ¶¶ 12-19; id . at Ex. 8 (April 26, 2014, Prelimin ary Debt Capacity Analysis); id at Ex. 10 (Subcommittee Presentation re: April 26, 2014, Preliminary Debt Capacity Analysis); and id at Ex. 11 (Transcript of May 20, 2014, Town Work Session) (Subcommittee’s public presentation of April 26, 2014, Preliminary Debt Capacity Analysis). The Subcommittee summarized its conclusions as follows: The SubCommittee has questions as to the adequacy of the fund balances (reserves) to pay for non-bondable expe nditures such as litigation and consultant’s fees in the event the To wn Board adopts an aggressive noise abatement policy.

... Accordingly, the SubCommittee has be gun to explore revenue enhancement opportunities, such as paid parking, in creased fuel flowage fees and increase lease revenues. Revenue enhancemen ts, which would help (i) increase available debt service coverage to support increased capital improvement programs and/or (ii) build reserves to guard against continge ncies and/or (iii) reduce borrowing, will be the primary focus of the Subcommittee’s continuing work. id

at Ex. 8 (April 26, 2014, Preliminary De bt Capacity Analysis at pp. 1 & 3). Based on the conclusion that the existing s ources of Airport revenue were not sufficient to meet expected needs, the Subcommittee tu rned its attention to examining specific fee increases that could increase revenues almost immediately with no initial expenses. E.g ., Malman Dec. at ¶ 19. The Subcommittee researchedfuel flowage fees at comparable facilities and concluded that an increase to the fuel flow age fee for the first time in 20 years would be reasonable. E.g., Malman Dec. at ¶¶ 20-30; id . at Ex. 18 (Subcommittee’s June 17, 2014,

1 Although the Town recently enacted operational rest rictions at the Airport, it is important to recognize that even the “status quo” scenario studied by the Subcommittee ( i.e ., the scenario examining financial impacts with no use restrictions) predicted minimal reserves remaining in the Airport Fund in 2018. Malman Dec. at Ex . 8 (April 26, 2014, Preliminary Debt Capacity Analysis at p. 3). Thus, the n eed for additional revenue existed regardless of whether or not the Town enacted use restrictions.15 Presentation). Therefore, at its June 2, 2014, m eeting, the Subcommittee agreed immediately to recommend raising the fuel flowage fee from 15 cents to 30 cents. At the same meeting, the Subcommittee also agreed to recommend that the Town increase landing fees by 10 percent before the busy season had passed. 2 Id . at Ex. 15 (June 2, 2014, Subcommittee Minutes at 1-3). This recommendation was the result of extensive review of historic la nding fees at HTO, a comprehensive review of landing fees at comparableairports, and review of a detailed analysis provided by the Town’s consultant, DY Associat es, all of which indicat ed that raising the landing fees by 10 percent was reasonable. Id . at ¶¶ 37-39; id . at Ex. 23 (table comparing landing fees at comparable airports); id . at Ex. 24 (Town consultant’s comparison of future landing fee options). At the June 3, 2014 Town Board Work Session, then-Airport Director Brundige announced two proposed resolutions: Reso lution 2014-672 (raising the landing fees by 10 percent) and Resolution 2014-673 (raising the fuel flowage fee to $0.30 per gallon). Malman Dec. at ¶ 33; id at Ex. 16 (June 3, 2014, Town Work Session Minutes). At the Town Board Meeting two days later on June 5, the Town Board considered both resolutions and heard testimony on both proposed fees. At the hearing, Cindy Herbst of Sound Aircraft testified that the fuel flowage fee increase would have a direct negative impact on business. Id . at ¶ 34; id . at Ex. 17 (Transcript of June 5, 2014 , Town Meeting). In response, the Town passed Resolution

2 Landing fees are a significant source of reve nue at the Airport. The amount of the landing fee varies for differe nt classes of aircraft ( e.g ., single-engine, twin-engine, etc.). The Town has historically raised landing fees at the Airport at regular interval s. In recent history, landing fees were increased in 2006, then ag ain in 2008, 2013 and most recently in 2014. For example, the landing fee for a single-engine pr op aircraft was raised to $5 in 2006, $7 in 2008, $10 in 2013, and $11 in 2014. Currently, the highe st landing fee is assessed for multi-engine turbine aircraft weighing over 50,000 pounds. That fee was raised to $100 in 2006, $400 in 2008, $600 in 2013 and $660 in 2014. See generally , Malman Dec. at ¶¶ 37-41; id . at Ex. 22 (2006, 2008 and 2013 Landing Fee data ); Complaint at ¶ 27 (2014 landing fee data). This highest fee is only assessed on about 2 pe rcent of the operations at the Airport.16 2014-672, increasing the landing f ees, but tabled Resolution 2014-673, increasing the fuel flowage fee, in order to a ccommodate further discussion. Id . The Town Board then held an extensive public discussion of operations at the fuel farm and the proposed fuel flowage fee incr ease at its June 17, 2014, Work Session. Id . at ¶ 35; id . at Ex. 19 (Transcript of June 17, 2014 Town Work Session). At that meeting, the Subcommittee presented a detailed discussion on the fuel fl owage fee issue to explain the bases for its recommendation to increase fuel flowage fees. The goal of the presentation was to explain why that particular increase was fair to both the To wn and the FBOs, who remained able to make a reasonable profit on fuel sales. In brief, the S ubcommittee focused on severa l factors: (1) that the fee had not been increased in 20 years; (2) that other airports were char ging comparable fees; (3) that the fuel flowage fee is the only comp ensation that the Town receives for owning, operating, and maintaining the fuel farm, incurri ng carrying costs for fuel storage and accounts receivable, and assuming liability for fuel farm op erations; and (4) that the fuel farm was badly in need of costly repairs. Id; id . at Ex. 18 (June 17, 2014, Subcommittee Presentation). Two days later, at the June 19 Town Boar d meeting, the Town Board heard additional testimony and ultimately passed the Resolution 2014- 673 to increase the fuel flowage fee to 30 cents. Id . at ¶ 36; id . at Ex. 21 (Transcript of June 19, 2014, To wn Meeting). However, in direct response to the concerns of the FB Os, the effective date of the in crease was deferred to July 1. As Councilman Van Scoyoc concluded: ... we’ve heard from both the FBOs and members of the public. And I just want to make it clear that the initiative is really about increasing revenues and trying to get our airport in order. There’s a number of maintenance issu es that, I think ev erybody recognizes, have gone without attention for a number of years. We’re in a position where we believe that we can move forward w ith repairs at the ai rport without being locked into the FAA’s funding, and be an airport that’s obligated to the FAA17 rules. We believe that, I think for the la st 22 years of this fuel flowage fee, has not kept pace with the increases in fuel, or with the requirements of the Town in order to provide that service. And that – and just a for-instance, and I know this number has been talked about, it’s 100% increase, but it’s a 2.5% increase per gallon on the fuel.

... [T]he Town has a responsibility to pr ovide the fuel farm with up-to-date equipment. We’re in a position where that really needs to be addressed, it’s over 20 years old. ... Again, this is really all about revenue and trying to make the airport safe, and continue to improve on the maintenance. Id . at Ex. 21 (Transcript of June 19, 2014, Town Meeting, at pp. 32-33). E. Pre-Complaint Resolution In late July, 2014, Counsel for Friends of th e East Hampton Airport (“FOEH”) requested a meeting with the Town to discuss various safety allegations, including specifically: (1) tree obstructions; (2) runway deterioration; (3) ramp deterioration; (4) the perimeter fence; (5) the AWOS; (6) signage; and (7) lighting. The request also detailed FOEH’s concerns regarding compliance with federal grant assurances an d the Town’s announced intent to pursue use restrictions. Charlton Dec. at Ex. 19 (July 31, 20 14, FOEH letter). Representatives of FOEH met with the Town on September 4, 2014. At that meeting, FOEH again outlined its legal theories regarding future use restrictions at the Airport. In addition, FOEH discussed at length its concerns about many of the safety issues alleged in its letter. The subject of landing fees, fuelflowage fees, and/or lease payments was not raised either in the July 2014 letter or at the September 2014 meeting. Id . at ¶¶ 19-20. Following the meeting, Town officials asked FOEH for additiona l information on the speci fic safety allegations that were identified in its July letter and that were discussed at the meeting. Id . at Ex. 19 (September 8, 2104, letter). FOEH provided no further response to the Town on these issues until it filed the pending Comp laint on January 29, 2015. Id . at ¶ 21.18 III. SUMMARY OF APPLICABLE LEGAL STANDARDS A. Part 16 Jurisdiction and Current Compliance The FAA’s authority to adjudicate disputes under Part 16 is de fined, and limited, by 14 C.F.R. § 16.1(a), which authorizes the FAA to adjudicate disputes arising under certain laws and provisions. Disputes arising under laws not set forth in Section 16.1 may not be addressed in a Part 16 proceeding. Final Agency Decision and Order, In re Compliance with Federal Obligations by the City of Santa Monica, Cal. , FAA Doc. No. 16-02-08, at 29 (July 8, 2009). The FAA’s compliance program is focuse d on achieving voluntary compliance. Therefore, “in addressing allegations of noncompliance, the FAA will make a determination as to whether an airport sponsor is currently in compliance with the appli cable Federal ob ligations.” Scott Meyer v. City of Cincinnati , FAA Docket No. 16-12-14 at 10- 11 (Director’s Determination Sept. 12, 2014). In making an assessment of compliance: FAA must make a judgment call in all cases as to whether a sponsor is reasonably meeting its federal commitments. A sponsor meets its commitments when: (1) The federal obligatio ns are fully understood; (2) A program (e.g., preventive ma intenance, leasing policies, operating regulations, etc.) is in place that the FAA deems adequate to carry out th e sponsor’s commitments; (3) The sponsor satisfactorily demonstrates that such a program is being carried out; and, (4) Past compliance issues have been addressed. Airport Compliance Manual (FAA Order 5190.6B, hereinafter “Comp liance Manual”) at ¶ 2.8(b). See also Keathley v. City of McKinney, TX, FAA Docket No. 16-03-14, at 20-21 (Director’s Determination Oct. 13, 2004) (finding no violation when respondent was aware of its wildlife mitigation obligations, had a plan to a ddress that obligation, and was diligently carrying19 out that plan); Ricks v. Greenwood- Leflore Airport , FAA Docket No. 16-09-04, at 17 (same, in the context of removing aircraft equipment on airport property). B. Burden of Proof 14 C.F.R. § 16.29(b) places the burden of proof squarely on the complainant: [T]he burden of proof rests wi th the Complainants (who are bringing the action), not the Respon dent. It is the Complainants’ responsibility to provide a concis e but complete statement of the facts relied upon to substa ntiate each allegation. Director’s Determination, M. Daniel Carey and Cliff Davenport v. Afton-Lincoln Cnty. Mun. Airport Joint Powers Bd. , FAA Docket No. 16-06-06, at 28 (Jan. 19, 2007) (citing 14 C.F.R. § 16.23(b)(3)). A complainant must also provide “all documents then available in the exercise of reasonable diligence, offered in support of the complaint . . .” 14 C.F.R. § 16.23(b)(2). See also Director’s Determination, Aero Ways, Inc . v. Del. River & Bay Auth., FAA Docket No. 16-09- 12, at 15 (Aug. 30, 2010) (“The burd en of proof falls upon the Co mplainant to establish and substantiate each allegation made.” ). Inferences and arguments from the apparent absence of contrary evidence are not suffi cient to meet this burden. Scott Meyer v. C ity of Cincinnati , FAA Docket No. 16-12-14 at 25 (Director’s Determination Sept. 12, 2014) (“First-person accounts of conversations and an abundance of argumenta tive opinion and critici sm do not equate to substantial and credible evidence. In a formal Part 16 complaint, the complainant has the burden of proof to establish the comp laint’s allegations by a prepondera nce of substantial and reliable evidence.”). C. Airport Sponsor Assurance 11, Pavement Preventive Maintenance Sponsor Assurance 11 provides: Pavement Preventive Maintenance . With respect to a project approved after January 1, 1995, for the replacement or reconstruction of pavement at the air port, it assures or certifies that it has implemented an effective airport pavement maintenance-20 management program and it assures that it will use such program for the useful life of any pavement constructed, reconstructed or repaired with Federal financial assi stance at the airport. It will provide such reports on pave ment condition and pavement management programs as the Secretary determines may be useful. An effective airport maintenance program “at a minimum, must include (a) a pavement inventory, (b) annual and periodic inspections in accordance with AC 150/5380-6B, Guidelines and Procedures for Maintenance of Airport Pavements , 3 (c) a record keeping and information retrieval system, and (d) identi fication of maintenance program funding.” Compliance Manual at ¶ 7.6. Regular inspection is critic al to meeting this obligation and should follow set procedures to assure inspection of all pavement elements, follow a regular schedule, and be documented and preserved. Id. D. Airport Sponsor Assurance 19, Operation and Maintenance Airport Sponsor Assurance 19 provides as follows: a. The airport and all facilities which are necessary to serve the aeronautical users of the airport, other than facilities owned or controlled by the United States, shall be operated at all times in a safe and serviceable conditi on and in accordance with the minimum standards as may be requi red or prescribed by applicable Federal, state and local agencies for maintenance and operation. It will not cause or permit any activity or action thereon which would interfere with its use for airport purposes. It will suitably operate and maintain the airport and all facilities thereon or connected therewith, with due regard to cl imatic and flood conditions. Any proposal to temporarily close the airport for non-aeronautical purposes must first be approved by the Secretary. In furtherance of this assurance, the sponsor will have in effect arrangements for-

(1) Operating the airport's aeron autical facilities whenever required; (2) Promptly marking and lighting hazards resulting from airport conditions, including temporary conditions; and

3 We note that this Advisory Circular has since been updated. See FAA Advisory Circular 150/5380-6C (Oct. 10, 2014).21 (3) Promptly notifying airmen of any condition affecting aeronautical use of the airport. Nothing contained herein shall be construed to require that the ai rport be operated for aeronautical use during temporary periods when snow, flood or other climatic conditions interfere with such operation and maintenance. Further, nothing herein shall be construed as requiring the maintenance, repair, restoration, or replacement of any structure or facility which is substantially damaged or destroyed due to an act of God or other condition orcircumstance beyond the control of the sponsor. b. It will suitably operate and maintain noise compatibility program items that it owns or controls upon which Federal funds have been expended. The FAA has summarized this obligation as follows: Grant Assurance 19, Operation and Maintenance , is the most encompassing federal grant assurance related to airport maintenance. It requires the sponsor to operate and maintain the airport’s aeronautical f acilities – including pavement – in a safe and serviceable condition in accordance with the standards set by applicable federal, state, and local agencies. Compliance Manual at ¶ 7.3. Assu rance 19 generally requires: the sponsor to carry out a conti nuing program of preventive and remedial maintenance. The maintenance program is intended to ensure that the airport facilities are at all times in good and serviceable condition to use in the way they were designed. Id. at ¶ 7.4. This program requires re gular inspections and repairs. Id. The FAA recognizes that it cannot set a uniform standard for maintenance, but has described the criteria for compliance with Assurance 19 as follows: Although an acceptable level of main tenance is difficult to express in measurable units, the FAA will consider a sponsor compliant with its federal maintenance oblig ation when the sponsor does the following:

a. Fully understands that airport faci lities must be kept in a safe and serviceable condition. b. Makes available the equipmen t, personnel, funds, and other resources, including contract arrangements, to implement an effective maintenance program.22 c. Adopts and implements a detailed program of cyclical preventive maintenance adequate to carry out this commitment. Id. at ¶ 7.5. E. Airport Sponsor Assurance 20, Hazard Removal and Mitigation Sponsor Assurance 20 requires that an airport sponsor: will take appropriate action to assurethat such terminal airspace as is required to protect instrument and visual operations to the airport (including established minimum flightaltitudes) will be adequately cleared and protected by removi ng, lowering, relocating, marking, or lighting or otherwise mitigating existing airport hazards and by preventing the establishment or creation of future airport hazards. The FAA has explained that this assurance generally: requires airport sponsors to protect terminal airspace. Accordingly, the sponsor must prot ect instrument and visual flight operations, including establishe d minimum flight altitudes. Adequate protection includes the clearing, removing, lowering, relocating, marking, lighting, or mitigating of existing airport hazards. It also includes prot ecting against establishment or creation of future airport hazar ds, including wildlife hazards. Compliance Manual at ¶ 7.13. Although Assurance 20 imposes an affirmative obligation on airport sponsors to prevent and remove hazards when the sponsor controls the land uses, the FAA recognizes that an airport s ponsor may not control hazard or obstruction. In particular, the FAA recognizes that “uncontrolle d growth of trees and vegetation can be a hazard. These hazards must be dealt with in conjunction with any applicable local or state requirements.” Id. at 7.13(a). See also Goodspeed Airport LLC v. East Haddam Inland Wetlands & Watercourses Comm’n , 634 F.3d 206 (2d Cir. 2011) (Part 77 and othe r federal law did not preempt compliance with local wetlands laws). Spons ors are further instructed to co ordinate with the Air Traffic Organization for guidance on how to address airspace issues when an obstruction exists. Id. F. Airport Sponsor Assurance 24, Fee and Rental Structure Sponsor Assurance 24 provides that an airport sponsor:23 will maintain a fee and rental st ructure for the facilities andservices at the airport which will make the airport as selfsustaining as possible under the circumstances existing at the particular airport, taking into acc ount such factors as the volume of traffic and economy of collection. As the FAA has recognized in its Compliance Manual: The requirement [in Assurance 24] recognizes that individual airports will differ in their ability to be fully self-sustaining, givendifferences in conditions at each airport. The purpose of the selfsustaining rule is to maintain the utility of the federal investment in the airport. Compliance Manual ¶ 17.5. Under this principle, air port sponsors have wide latitude to set rates and charges. Airport rates a nd charges are also s ubject to the general requirement to be reasonable and non-discriminatory. Charges for aeronautical uses of th e airport must be reasonable. For aeronautical users, the FAA considers charges that reflect the cost of the services or facilities satisfies the self-sustainingrequirement. Accordingly, the FAA does not consider the selfsustaining obligation to require the sponsor to charge fair market value rates to aer onautical users. Id. at ¶ 17.10. Under that rule, “fees for the us e of the airfield generally may not exceed the airport’s capital and operating costs of providing the airfield.” Id. It is permissible, however, for an airport sponsor to set rates charges at a le vel designed to create reserves, hedge against contingencies, and facilitate financing: Reasonable reserves and other funds to facilitate financing and to cover contingencies are not considered revenue surpluses. The sponsor must use any surplus funds accumulated in accordance with the Revenue Use Policy . Id. at ¶ 17.9. Given the discretion airport operato rs enjoy, the FAA will not ordinarily question rates and charges at a general aviation airport unless the airport sponsor is progressively accumulating substantial surplus revenue:24 The FAA will not ordinarily investigate the reasonableness of a general aviation airport’s fees absent evidence of a progressive accumulation of surplus aeronautical revenues. Id. See also id . at ¶ 17.10 (same). The FAA has provided further explanation on ho w it will apply these requirements in its Policy Regarding Airport Rates and Charges (“ Rates and Charges Policy). 78 Fed. Reg. 55330, 55332 (Sept. 10, 2013). The Rates and Charges Policy se ts forth five principles that establish the substantive standards for assess ing the reasonableness of airport rates and charges for domestic users: 1. In general, the Department relies upon airport proprietors, aeronautical users, and the market and institutional arrangements within which they operate, to ensure compliance with applicable legal requirements. Direct Federal intervention will be available, however, where needed. 2. Rates, fees, rentals, landing f ees, and other service charges (‘‘fees’’) imposed on aeronautical users for aeronautical use of airport facilities (‘‘aeronautical fees’’) must be fair and reasonable. 3. Aeronautical fees may not unjustly discriminate against aeronautical users or user groups. 4. Airport proprietors must maintain a fee and rental structure that in the circumstances of the airport makes the airport as financially self-sustaining as possible. 5. In accordance with relevant Federal statutory provisions governing the use of airport reve nue, airport proprietors may expend revenue generated by the airport only fo r statutorily allowable purposes. Id . at 55332. Recognizing that disputes between airport s ponsors and aeronautical users regarding fees are likely, the FAA has provided recommendations for consultati on and negotiation that it hopes will avoid disputes and the need for FAA intervention. See id. (Paragraph 1.1). Those recommendations are not mandatory, however, and the FAA expressly recognizes that: “Federal25 law does not require a si ngle approach to airp ort rate setting.” Id. at 55333 (Paragraph 2.1). “Airport proprietors may set fees fo r aeronautical use of airport facilit ies by ordinance, statute, or resolution, regulation, or agreement.” Id. When a dispute involving airport fees reaches the FAA, however, the FAA’s role is focused on the substance of the fee: “In considering such a dispute [over the reasonableness of airport fees], the FAA’s role is to determine whether the airport proprietor is in compliance with its grant obligations and statutory oblig ations relating to airport fees.” Id. at 55332. However, the “FAA proceeding is not intended to provide a mechanism for adjudication the respective rights of the parties to a fee dispute.” Id. The FAA adjudication process is focused, therefore, on the reasonableness of the fee, not on th e procedures by which a fee was adopted. The FAA has explained that the Rates and Ch arges Policy applies in a more limited manner to general aviation airports compared to air carrier airports. See Policy Regarding Airport Rates and Charges , 61 Fed. Reg. 31994, 31997 (June 21, 1996). This reflects, in part, the fact that the requirements of 49 U.S.C. § 47129 – which largely prompted promulgation of the Rates and Charges Policy – do not apply to general aviation airports. Id. This difference in approach also reflects the fact that “airport propri etors, especially proprietors of general aviation airports, may use different methods for setting f ees than those commonly used for setting fees paid by airlines. The Department reiterates its commitme nt to apply the policy flexibly in evaluating general aviation fees . ” Id. (emphasis added). For example, the Department “understands that many airport proprietors apply a single charge, e.g., a fuel flowage fee, to general aviation users for the use of all aeronautical facilities. The Department does not intend to disturb this practice [by requiring sophi sticated cost allo cation systems].” Id.26 Accordingly, the FAA approaches the reasonabl eness of general aviation airport fees at a very high level. First, “the FAA will not ordinarily undertake an investigation of the reasonableness of a general aviation airport’s fe es absent evidence of a progressive accumulation of aeronautical revenues.” Compliance Manual at ¶ 17.9. Second, general aviation airports are not required to set fees accordingly to any particular formula, but simply pursuant to a “reasonably transparent and not unjustly discriminatory . . . cost allocation methodology.” 61 Fed. Reg. at 31997. G. Airport Sponsor Assurance 25, Airport Revenue The prohibition against revenue diversion is set forth in Sponsor Assurance 25: All revenues generated by the airport and any local taxes on aviation fuel established after December 30, 1987, will be expended by it for the capital or op erating costs of the airport; the local airport system; or other local facilities which are owned or operated by the owner or operator of the airport and which are directly and substantially related to the actual air transportation of passengers or property; or for noise mitigation purposes on or off the airport. See also 49 U.S.C. § 47107(l); 49 U.S.C. § 47133; FAA, Policy and Procedures Concerning the Use of Airport Revenue , 64 Fed. Reg. 7696 (Feb. 16, 1999) (“Re venue Use Policy”) at 7697. In general, airport revenue may be used for th e operating and capital co sts of the airport: Sponsors may use their airport reve nue for the capital or operating costs of the airport, the local airpor t system, or other local facilities owned or operated by the airport owner or operator and directly and substantially related to the ai r transportation of passengers or property. []Operating costs for an airport ma y be both direct and indirect and may include all of the expenses and costs that are recognized under the generally accepted accounting pr inciples and pr actices that apply to the airport enterprise f unds of state and local government entities.27 Compliance Manual at ¶ 15.9(a). It is permissible for an airport sponsor to “use airport revenue to pay lobbying and attorney fees to the extent th ese fees are for services in support of airport capital or operating costs thatare otherwise allowable.” Id. at ¶ 15.9(d). See also Revenue Use Policy at § V(A)(5) (same). As discussed above, the sponsor assurances do not prohibit an airport sponsor from accumulating a reasonable re serve or providing for contingencies, provided that such reserves are ultimately used for a llowable airport purposes. Compliance Manual at ¶ 17.9. H. Airport Sponsor Assurance 29, Airport Layout Plan Sponsor Assurance 29 provides as follows: a. It will keep up to date at all times an airport layout plan of the airport showing (1) boundaries of the airport and all proposed additions thereto, together with the boundaries of all offsite areas owned or controlled by the sponsor for airport purposes and proposed additions thereto; (2) the location and nature of all existing and proposed airport fac ilities and structures (such as runways, taxiways, aprons, termin al buildings, hangars and roads), including all proposed extensions and reductions of existing airport facilities; and (3) the locati on of all existing and proposed nonaviation areas and of all exis ting improvements thereon. Such airport layout plans and each ame ndment, revision, or modification thereof, shall be subject to the approval of the Secretary which approval shall be evidenced by the signature of a duly authorized representative of the Secretary on the face of the airport layout plan. The sponsor will not make or permit any changes or alterations in the airport or any of its facilities which are not in conformity with the airport layout plan as approved by the Secretary and which might, in the opinion of the Secretary, adversely affect the safety, utility or efficiency of the airport. b. If a change or alteration in the airport or the facilities is made which the Secretary determines adversely affects the safety, utility, or efficiency of any federally ow ned, leased, or funded property on or off the airport and which is not in conformity with the airport layout plan as approved by the Se cretary, the owner or operator will, if requested, by the Secretary (1) eliminate such adverse effect in a manner approved by the Secretary; or (2) bear all costs of relocating such property (or replacement thereof) to a site acceptable to the Secretary and all costs of restoring such property28 (or replacement thereof) to the level of safety, utility, efficiency, and cost of operation existing befo re the unapproved change in the airport or its facilities. In short, Assurance 29 requires an airport sponsor to maintain an ALP showing all existing and planned facilities, and to amend th e ALP to reflect any changes in existing or planned development. Compliance Manual at ¶ 7.18. IV. ARGUMENT A. Complainants Failed To Make Good Fa ith Efforts to Resolve This Dispute Before Filing Their Complaint 14 C.F.R. § 16.21 requires a complainant to enga ge in good faith efforts in a bona fide attempt to resolve disputes before filing a complaint. See also Compliance Manual at ¶ 5.16 (same). In this case, it is clear that Complainants did not meet that standard. Complainants’ only effort to resolve this dispute was to participat e in one meeting with the Town to discuss their concerns about: (1) the Town’s compliance with federal grant assurances related to safety, operations, and maintenance; (2) the Town’s intent to pursue use restricti ons at the Airport; and (3) the 2005 Settlement Agreement between the FAA and the Committee to Stop Airport Expansion. Id . Charlton Dec. at ¶¶ 18-21; see also id. at Ex. 19 (July 31, 2014, FOEH letter). Representatives of FOEH and the Town met on September 4, 2014. The meeting focused on FOEH’s requests that the Airport carry out a numb er of construction proj ects to address alleged safety issues. There was also discussion of pa st litigation and the eff ect of the 2005 Settlement Agreement between the FAA and the Committee to Stop Airport Expansion, and Complainants’ view that the Town should seek federal grant funds to help fund airfield improvements. Id. at ¶¶ 19-20. Complainants did not rais e any claims regarding landing a nd fuel flowage fees, revenue diversion, or non-aeron autical leases. Id . On those issues, Complainants made no effort whatsoever to resolve their concerns pr ior to filing the pending Complaint. Id .29 As a follow-up to the meeting, the Town Supe rvisor sent a letter to FOEH requesting additional data on the sp ecific safety issues alleged; the Supe rvisor also asked FOEH to provide details on its recommendation for approaching the FAA to discuss the effect of the 2005 Settlement Agreement. Id . at Ex. 19 (September 8, 2014, letter). Complainants did not respond to that letter or provide any a dditional information or data. Id . at ¶ 21. The next communication from FOEH was the Complaint, which was served on the Town on January 29, 2015. 4 FOEH’s July 31, 2014, letter and single meetin g with the Town do not constitute “good faith efforts” to resolve Complainants’ concerns. E.g ., 14 C.F.R. § 16.21 (“Prior to filing a complaint under this part, a person ... shall initiate and engage in good faith efforts to resolve the disputed matter informally ....”). Had Complainan ts actually desired to resolve the matter, they would have responded to the Town’s request, pr ovided the follow-up information to the Town and engaged in a meaningful discussion. Had they done so, the Town would have provided information that likely would have resolved all or most of their claims. As an illustration of the importance of such informal efforts to resolve disputes, had Complainants complied with the Part 16 requirements, they would have learned that the Town was addr essing their concerns and that many of the alleged concerns had already re solved by January 2015 when the Complaint was filed. Moreover, Complainants failed completely to raise with the Town any of the claims asserted in their Third Cause of Action and made no effort whatso ever to resolve those issues. Because Complainants failed to make a good faith e ffort to resolve their claims before filing the Complaint, the Complaint should be dismissed.

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e er am . i rport a fety, i rport Id . at t ions. dhas r , and e mentC 42. As t h appropri a Airport s any fore i The Airp maintain debris, th Complai n Complai n no weig h at 25 (D i T Resourc e with Av i tenant i s executiv e R Mainten a evaluati o necessar y The To w T h 2. A i C omplainant s

h e ramps h a a te measur e s taff condu c i gn object d e p ort Manag ed in the Ai r h ere have b n ants’ spec u n t at ¶ 42, i s h t in a Part 1 i rector’s De t T he ramp at e s. Charlto n i ation Reso u currently r e terminal i s R ehabilitatio n

a nce Plan, a n o n study thi s y projects b a w n is aware o h e Town Is i rport Ram s assert that a ve experien e s to ensure c t daily visu a e bris and to e rhas for m rport office s b een no acc i u lation that s just that: b 6 proceedi n t ermination S

the executi v n Dec. Ex. 1 u rces to ens u r epaving ar e anticipated n of the ma i n d the Tow n s yearto b e a sed on rel a o f its obliga t Takin g Ap p ps Safe . certain ramp ced normal w

that the A a l inspectio n identify an y m alized that s . Id . Due t o i dents or o t poorly mai n aseless spe c n g. Scott M e S ept. 12, 20 1 v e terminal 3 (Aviation u re proper m e as in its l e

to be comp l i n terminal r n has direct e e tter deter m a tive import a t ion to assur e 31 p ropriate S t p areas hav e w ear and te a A irport is ke

n s and wal k y areas that r

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asehold, an d l ete by May r amp is pla n e d its engine m ine the sch e

a nce and av a e that the ra m teps To M a

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include d a n spections a t s due to th e ment coul d h out any su p o f Cincinna t

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lead to d a p porting evi d t i , FAA Doc

b ility of the e Airport Di r p and relat e b ilitation of Id . at ¶ 11(d)

h e current A e a compre h h at work in

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relation to a t ¶¶ 10 & 1 n ed and rep a n t at ¶ ented d ition.

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consultant e ssary actio n b ackground,

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, 2013, lette r are within t a quifer. Id . a inants’ evi d t echnical, th n t at Ex. 7. work, and compliance a s A Plan T e lves ackno w ly impleme n regarding p n as simply

the FAA n M ay 2013, a l surface f o t¶ 11(h); i dlear ned th es surround i u ly 24, 2014 b y the Tow n y informed ecause of ap r ). In parti c he Town’s W at. ¶ 11(h); d ence make s

at need to b The Town i 32 is in the p with its obl i o Address T w ledge, the n ting a pla n p lan for o b

cutting do w

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working th r mplementin g d er Assuran c n Obstructi o w are that th e

the issue. C Complai n e es. But th i

e veral pote n c y demand e d etermine th 0 , 2013, lett e rous additi o ikely consti t n Board). A

p rocess for l regulation s t ed in a Spe c y District, w 2 014, Mem o b er of steps Town can a rough those g that plan . c e 19. o ns . e re are tree s C omplaint, E n ants attemp i s is far fro m

n tial obstru c e d that the T h e full sco p t er). The T o nal obstru c tute obstruc t A majority o addressin g s . Id . at. ¶ 1 c ial Ground w w hich protec t o randum to T

, including l a ddress this steps, to r e . Id .

s that E x. 7 p t to mthe

c tions T own p e of T own c tions t ions. o f the

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ons issue a n

’ s Determin a

that the T o y v. City o n ation Oct. o n obligatio n i cks v. Gre e o f removin g obstruction s create a gr a hazards mu m ents”). T h 4. C omplainant s

n is therefo r s the nature

to address ru s as soon as rial photogr a g ., Charlton D n to restore g uide slope P ath Indicat o t ed above, n d has dem o a tions cited i o wn is curr e o f McKinn e

13, 2004) n s, had a pl a e n w ood-Lef l g aircraft e q s in a mann a nt assuranc u st be dea l

h e Runwa ys s assert th a t r e in violati o of the Tow n u nway pave possible. F aphy and p h D ec. Ex. 11 (

two of the indicator m or . This re q the Town h o nstrated th a i n the Comp e ntly not in ey, T X , F A (discussin g a n to addres s l ore Airpor t q uipment o n er consiste n e violation. l t with in

s Are Safe A

all three ru o n of Assur a n ’s obligatio ment issues . 33 or example, h otogram m ( h). In the i n

nighttime i m itigation p q uest is curr e

h as a plan a t it is dilig p laint, Comp

complianc e A A Docket g whether s that obligat t , FAA Do c n airport pr o n t with loca l

E.g ., Comp conjunctio n A nd Servic e u nways req u a nces 19 an d ns and also

. the Town’ s m etric mappi

n terim, the T i nstrument a p lan that w o e ntly pendin g

in place t o ently carryi n p lainants ha v e with its o b No. 16-0 3 respondent t ion, and w a c ket No. 16 o perty). T h l requireme n p liance Ma n n with an y

e able . u ire some le v d20. Comp

completely s engineer r e i ng project, T own is wo r approaches. o uld raise t g before the o address th n g out that v e failed to m b ligation to 3 -14, at 2 0 was awar e a s diligently 6 -09-04, at 1 h e fact that n ts may be f n ual at ¶ 7.1 3 y applicab l e

v el of rehab p laint at ¶¶ 5

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state

dthat s both T own34 Complainants themselves admit that the Ai rport’s main runway, Runway 10-28, is in good shape. Complaint at ¶ 20. They do not a llege, nor can they, that Runway 10-28 is in anyway unsafe or unable to accommodate operati ons. Charlton Dec. at ¶ 11(a) (Runway 10-28 is in good condition). The Town acknowledges the need to perform preventative maintenance on Runway 10-28 and has planned for such mainte nance in its Airport Maintenance Plan. Id . The Town plans to complete a comprehensive pavement evaluation in 2015. Id . at ¶ 10. The results of this study will inform decisions on when preventive maintenance is scheduled for this Runway. The Town is aware of its obligations, has a plan to meet those obligations, and is diligently carrying out that plan. As depicted on the FAA-approved ALP, Runway 16-34 is currently used as a cross-wind runway, but it will be eventually converted to a taxiway. Charlton Dec. Ex. 1. (ALP). The 2014-2018 ACIP includes appropriate funding for this project. Id . at Ex. 8. Complainants’ evidence regarding the status of this Runway is simply out-of-date. The Town did, in fact, acknowledge the need to rehabilitate this Runway in late 2013, see Complaint at ¶ 50, but that work is now complete . In early 2014, the Town patched the cracks in Runway 16-34, and the Runway is currently safe. Charlton Dec. at ¶ 11(b); id . at Ex. 10 (Runway 16-34 rehabilitation documents). Runway 4-22 is temporarily closed, as reflected on the approved ALP. Id . at ¶ 11(c); id . at Ex. 1 (ALP) (Runway Data Table); id . at Ex. 6 (Conditional ALP approval). The ALP and 2010 Master Plan call for the eventual rehabilitation of this Runway. Id.; see also id . at Ex. 5 (2010 Master Plan at pp. 2-3). In the interim, th e Runway will continue to be used for taxiing operations. Id . at ¶ 11(c). Just last year, the Town re paved the portions of the Runway that areb eing us e no evide n F 22 to a t a conduct e 22 as an pay for Complai n Complai n T airfield, a design a n the very half mill i Ex. 9 ( B demonstr demonstr is comm i

I n Complai n Yet, as C Decemb e e d for taxii n n ce of safet y urther, Co m a xiway is b a e d to full ru n

operating ru the future r n ants had r e n t, they wo u T h 5. T he Town a c

a nd it has b n d construc t near future. i on dollars t o B ond Resol u r ate that t h r ate that the i tted to oper a A 6. n yet anot h n ants allege C omplainant s er . Compla i n g purposes. y concerns w mplainant’s a

a seless and w n way specif i u nway. Id . r ehabilitatio n e viewed th e u ld have dis c h e Town Is c knowledge s een taking s t ion of the p Id. at ¶¶ 1 0 o conduct n e u tions). Th u h e Town is

Town conti n a ting the Ai r New, FAA h er exampl

that the T o s themselve s i nt at ¶ 59; s Id .; id . at E w ith the curr e a ssertion tha t w ithout me r i cations and at ¶ 11(c). n . Id . at E e relevant d o c overed that

Activel y Pl a s that it sho u s teps to do s p erimeter fe n 0 , 11(j). Th e e cessary wo r u s, once ag a

in violati o n ues to take rport in a sa f

- Certified A e of Comp o wn has fail e s acknowle d ee also Char 35 E x. 11 (Run w e nt taxiing o tthe Town h r it. The pav

in no way p Moreover, t E x. 8 (Airp o o cuments, r a there are no a nnin g To C u ld constru c s o. The To w n ce and ant i e Town also rk on critic a a in, Compl a o n of any its obligati o f

e, efficient, A WOS Will p lainants’ a e d to updat e d ge, the To w

r lton Dec. a t w ay 4-22 re p o perations. h as “perma n ing work fo p revents th e the Town h a o rt Mainten a a ther than r o grant assur a C onstruct A c t an effecti w n has dire c i cipates rec e has just iss u a l projects li k a inants’ ass e

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t¶ 11(g); id p aving doc u

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l d support a n lighting sy s n g evidence , s upported a s o cket No. 1 ts allegatio n T he Town i n e in Nove m n tation). T h

without in c a nce on a d s ystem are u n ants simpl y r ned that the s truct the ne w n the early f

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mlast year. t Exhibit 1 4 applicable s t n ito r s the l i rtions regar d file a Com p o issue a Re l l be installe d t s’ argumen t h at Compla i ig htin g S y s t n unreliabl e n g system, o allege an y n ts do not a i thout a shr e

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n was “A” dhas t em’s x iway37 C. The Town Is Maintaining Runway 4- 22 Consistent With The FAA-Approved ALP For their Second Cause of Action, Complainan ts spin a convoluted tale based on the premise that the Town has failed to maintainRunway 4-22 in operational condition and has instead “permanently” converted Runway 4-22 into a taxiway. Complaint at ¶¶ 62-70. Like any good tale, elements of the story are true. Runway 4-22 has been out of service for several years because of disrepair. Charlton Dec. at ¶ 11(c); id. at Ex. 4 (2007 Master Plan at p. I-2); id . at Ex. 5 (2010 Master Plan at pp. 2-3). The Town is cu rrently using Runway 4-22 as a taxiway. Both of those facts are well-known, and the Townhas apprised the FAA as appropriate. Id. at ¶ 11(c). Beyond that, however, Complainan ts’ allegations lack any ev identiary support. The ALP clearly indicates that the Runway is currently closed and that the Town has proposed to rehabilitate the Runway in the future. Id. at. Ex. 1 (Compare Existing ALP with Proposed ALP). In the interim, the Town has repaved the porti ons of Runway 4-22 currently used for taxiing operations to ensure ongoing safety at the Airport. Id . at ¶ 11(c); id . at Ex. 8 (Airport Maintenance Plan calls for “emergency repair fo r temporary use of a taxiway before converting to a runway”); id . at Ex. 11 (Runway 4-22 repaving docum ents). This will enable the ongoing, temporary use of the Runway as a taxiway wh ile the Town completes its planning work and obtains necessary funding to implement future runway projects. As fu rther evidence of the Town’s intention – and in refutation of the Complainants’ suppositions – the taxiway pavement was built to full runway specifications so that it can be incorporated into a fully-rehabilitated runway. Id. at ¶ 11(c). There is no evidence that current use of R unway 4-22 is unsafe or that the Town has suspended maintenance on this facility. To the contrary, the Town is actively maintaining the facility for its current use. There is no evidencethat the Town intends to permanently close this38 Runway. To the contrary, all of the Town’s pl anning documents provide clearly for the future rehabilitation of the Runway. Id . at ¶ 11(c); id . at Ex. 1 (ALP); id . at Ex. 5 (2010 Master Plan at pp. 1-3); id . at Ex. 8 (Airport Maintenance Plan). And there is no evidence that the Town has failed to maintain the Runway consistent wi th the current ALP. The FAA-approved 2011 ALP states plainly that the Runway is currently closed for runway operations – a fact that the Complainants are forced to admit. Complaint at ¶ 66 n. 4. Moreover, Complainants’ assertion that the FAA’s approval was “conditioned upon the return of Runway 4-22 to full use” misses the point. E.g., Complaint at ¶ 66. The FAA approved the ALP with Runway 4-22 closed, but with the plans to reactivate the runway in the futu re, as clearly depicted on page 3 of the ALP. Charlton Dec. at Ex. 1 (ALP). The Town has not taken any action inconsistent with that or that would adversely affect safety. The Town is in full compliance withits obliga tions under Assurance 29 and Complainants’ assertions to the contrary are baseless and without merit. D. The Town’s New Airport Fees Are Reas onable And Appropriate Insofar As They Were Raised Specifically To Pr ovide For The Airfield Improvements Complainants Have Demanded Having devoted two Causes of Action to be rating the Town for not completing repairs and improvement projects fast enough, Complainants switch gears in thei r Third Cause of Action and attack the Town for increasing landing fees to help pay for the costs of necessary capital projects at the Airport. 5 The obvious contradiction in Complainants’ position is made clear by the fact that Complainants do not even suggest that the Town has been accumulating a surplus, does not need to spend many millions of dollars to improve the Airport or that any of the projects are not necessary. To the contrary, Complainants argue in Paragraph 87 of their Complaint that

5 We note that the matter of the Town’s 2014 fee increases are the subject of a separate, and currently-pending Part 16 Complaint, Sound Aircraft Services, In c. v. Town of East Hampton, NY (FAA Docket No. 16-14-07).39 the Town “does not intend to and cannot allocate sufficient funds to perform all of the necessary repairs and maintenance” without which the Airport will not be able to operate safely. Yet Complainants also challenge the Town’s effort to raise those funds by increasing landing and fuel flowage fees to pay for the very repairs and maintenance items Complainants demand. At bottom, Complainants’ position rests on the simple a nd selfish premise that the fees are too high and that someone else should shoulder the burden of paying for the facilities they demand. There is simply no rule or principle under th e grant assurances that supports that position. In an effort to distract attention, Complainants offe r another convoluted theory, i.e., that the Town has deliberately allowed the Airport to fall into disrepair in order to discourage aircraft from using the Airport and is now using the increased landing fees to further discourage use. E.g., Complaint at ¶¶ 15, 72, 73 & 74. On its face, this is absurd because the very purpose of the increased landing fees is to pay for the necessary repairs, thus making the Airport more attractive to users. E.g., Malman Dec. at ¶¶ 7, 17, & 19. Moreover, Complainants’ theory lacks any factual support whatsoever. First, Complainants’ cite no evidence whatso ever to support the notion that the Town deliberately allowed the Airport to fall into disrep air in order to discourage use. That is pure speculation that deserves no weight or consideration in a Part 16 proceeding. Scott Meyer v. City of Cincinnati , FAA Docket No. 16-12-14 at 25 (Complai nants must establish by a preponderance of substantial and credible evidence that the Spons or has violated its gran t obligations). In any event, it is not true. The Town is embarking on an responsible, ambitious, multi-year effort to address maintenance and repair needs to make th e Airport both safe and at tractive to users. Charlton Dec. at ¶¶ 7-12; Malman Dec. at ¶¶ 9- 11. While the Town acknow ledges that it is has not always been able to perfor m maintenance and repairs promp tly, the current Town Board and40 Airport management are committed to operating th e Airport in a professional and safe manner, including addressing maintenan ce and capital needs that may have gone unmet in the past. Charlton Dec. at ¶¶ 7, 12. Second, Complainants cannot meet their burden of showing that the Town increased the landing fee in order to discourag e use. The only evidence Comp lainants offer to support this allegation is an excerpt from the minutes of the June 2, 2014 meeting by the BFAC Subcommittee. 6 Complaint at ¶ 73. But that discussion was limited to a discussion of touchand-go operations, which the Subcommittee recogni zed are not a current problem. Complaint Ex. 17 at 3. There was no discussion suggesting th at the purpose of incr easing the landing fee in 2014 was to discourage touch-and- go operations. As detailed above, moreover, the stated and only purpose of increasing the fees was to raise sufficient revenue to pay for needed airport maintenance and capital projects to improve the airfield. Supra at pp. 13-17; see also, Malman Dec. at ¶¶ 7, 17, & 19; see also id. at Ex. 18 (Subcommittee’s May 17, 2014, presentation at slide 2 (“Why BFAC Recommends that HT O Increase Its [Fuel Flowage Fee] To $0.30/Gallon”)). Complainants offer no evidenceto suggest, much less prove, otherwise. Third, Complainants argue that the fee incr eases are only necessary because the Town has decided to no longer accept federal grant f unds, which Complainants speculate could have been used to fund projects in stead of increasing landing fees. Comp laint at ¶ 72. But Complainants also acknowledge that the Town has no obligation to accept federal grant funds, and further, make it clear that they do not allege that the Town’s refusal to accept grant funds is in itself a violation of the S ponsor Assurances. Complaint at ¶ 37. Complainants’ argument is

6 Respondent also notes that the Subcommittee, while created to advise the Town, is distinct from the Town and has no authority to speak on behalf of the Town.41 simply posturing because, by their own admission, it is of no legal significan ce. It, too, deserves no weight. The simple fact is that Complainants want it both ways. They want a modern airport with new pavement, as well as other safety and operati onal features. And they want someone else to pay for it: an understandable desi re, perhaps, but hardly the ba sis for a legal action that the Town has somehow violated its gr ant assurances. As explained below, the current fees were set in a transparent and fair manner to allocate the cost of needed improvements to the airfield, all of which are improvements that Complainants have urged the Town to complete. Complainants’ case is motivated by the simple desire to pa y less for more, and it should be dismissed. 1. The New Fees Are Appropriate And Comply With Sponsor Assurance 24 . The fundamental obligation under Sponsor Assura nce 24 is to “maintain a fee and rental structure that makes the airport as financially self-sustaining as possible under the particular circumstances at that airport.” Complia nce Manual at ¶¶ 17.9 & 17.10. The focus under Sponsor Assurance 24 is on self-sus tainability and protecting the fede ral investment in an airport, not in charging “market rates” for using the ai rport. Compliance Manual at ¶ 5. Moreover, “Grant Assurance 24 does not obligate an airport sponsor to design it s schedule of rates and charges around the profit margins of its FBOs.” Northern Air, Inc. v. County of Kent, FAA Docket No. 16-11-10 at 53 (Director’s Determin ation March 28, 2013). Accordingly, “the FAA will not ordinarily undertake an in vestigation of the reasonableness of a general aviation airport’s fees absent evidence of a progressive accumu lation of aeronautical revenues.” Compliance Manual at ¶ 17.9. The 10 percent landing fee increase and the ne w 30 cent fuel flowage fee at the Airport are plainly justified under this standard. First of all, the Subcommittee based its analysis on the ACIP and related Airport Maintenance Plan, whic h together identified over $10 million in capital42 projects that need to be done at the Airport. See generally, supra at pp. 13-17; see also Malman Dec. at ¶¶ 7-19. These projects include the runway and paveme nt projects that Complainants have demanded, as well as other important proj ects. Charlton Dec. at Ex. 8 (ACIP and Airport Maintenance Plan). The Subcommittee dete rmined that prior Airport revenues were insufficient to meet expected capital and other expenses. Malman Dec. at ¶ 17. In other words, under the prior revenue structur e, the Airport would not have been self-sustaini ng given future capital and other needs. The Subcommittee thus determined that additiona l revenue sources, including the increased landing and fuel flow age fees, were necessary for the Airport to become selfsustaining. Id. at ¶ 19. Second, the Subcommittee reviewed comparab le airports and concluded that the proposed increases were generally consistent. Id . at ¶ 25 (fuel flowage fees) & ¶ 38 (landing fees). Finally, increasing fuel flowage fees and landing fees is a permissible and traditional way for a general aviation airport to meet its obligations under Assurance 24. Rates and Charges Policy, 61 Fed. Reg. at 31997. The Subcommittee’s anal ysis shows that the fuel flowage fee and landing fee increases would address most, but not all, of the Airport’s revenue needs. Malman Dec. at ¶ 44. Those basic, and uncontested, fact s establish that the new fees are reasonable and fully compliant with Assurance 24. In addition, Complainants fail to meet their burden of proof that th e Town has violated Assurance 24. A challenge to fees at a general aviation airp ort under Sponsor Assurance 24 is not ripe “absent evidence of a progressive accumulation of aer onautical revenues.” Compliance Manual at ¶ 17.9. “Reasonable reserves and other funds to facilitate financing and to cover contingencies are not consid ered revenue surpluses.” Id. Complainants do not offer any proof that there has been a progressive accumulation of airport revenue s. Nor could they. The new43 fees have not been in pl ace for a full year and there simply can be no evidence of a progressively accumulating surplus in such a short period of time. Moreover, as detailed above, the new fees are necessary to pay for very capital projects that Complainants want. The fundamental flaw with Complainants’ argume nt is that it ignore s the fact that the landing and fuel fee increases were increased for the sole purpose of pr oviding sufficient revenue to pay for over $10 million in airfield capital projects, including the very runway and pavement projects Complainants assert are essential. The Subcommittee’s analysis shows that the fuel flowage fee and landing fee increas es would provide most, but not all, of the revenue needed to pay for those necessary capital projects. MalmanDec. at Ex. 8 (Preliminary Debt Capacity Analysis); id . at Ex. 10 (May 20, 2014, Subcommittee Presentation). Accordingly, the Town is continuing to explore other sources of revenue in order to meet the Airpor t’s financial needs. Malman Dec. at ¶ 44. Those basic, and uncont ested, facts establish that the new fees are reasonable and fully compliant with Assurance 24. Complainants do not argue that the Town does not need to perform the projects identified on the ACIP and Airport Maintenance Plan, nor do Complainants dispute the dollar amounts of those improvements. Complainants do not present any financial analysis of the Airport revenues and capital needs demonstrating: (1) that the ne w fees are not necessary, (2) that the new fees have led to an unreasonable surplus, or (3) that th e new fees will lead to anunreasonable surplus. In short, Complainants fail to offer any affirm ative proof that the new fuel flowage fees and landing fees are in any way inc onsistent with Assurance 24. Instead, Complainants make two arguments that largely miss the point. First, Complainants argue that the fees are unreasonable because they are simply too high. Complaint at ¶ 75. To support that, Complainants compare th e Airport’s landing fees to other airports and44 to a fee schedule from Bombardier Aerospace Corp. v. City of Santa Monica , FAA Docket No. 16-03-11, at 44 (Director’s Determination Jan. 4, 2005), where the FAA found the fees to be improper for other reasons. Complaint at ¶ 29. But the simple f act that the Town’s landing fees are high does not make them improper. The touchs tone of any fee structur e is whether it meets the goal of self-sustainability. Compliance Manu al at ¶¶ 17.5, 17.10. A fee must be evaluated not by its absolute cost, but by the financial needs it is intended to meet. Id. As demonstrated above, the fees at the Airport are tailored to meet some, but not all, of the Airport’s capital needs and are therefore approp riate under Assurance 24. Bombardier is not to the contrary. In that case, the Director noted that Santa Monica’s fees were high, but did not find the fees to be no n-compliant for that reason. Rather, the Director was presented with other reasons why the fe e itself was unreasonable, including apparent discrimination among users and an underlying methodology that did not properly allocate airport costs among users. Id. Second, Complainants allege that the basis for the new fees wa s that “certain aeronautical users could afford it.” Complaint at ¶ 76; see also id . at ¶¶ 26, 30. Not only is that not the case, but Complainants offer no evidence to support that assertion. 7 The news fees were set at a level appropriate to meet anticipated expenses for capital needs and they are reasonable.

7 The sole “evidence” that Complainants offer to support their theory that the Town raised fees because “aeronautical users can afford it” is in the minutes of the BFAC Subcommittee from June 2, 2014. Complaint at ¶ 77. But the Minutes simply state: “It was determined that, since there is significant work to complete final fuel management recommendations , while continuing this work the Town should immediately raise the fuel flowage fee to 30 cents a gallon since, already in 2002 a consulting report to the town had recommended increasing the fuel flowage charge. Since 2002 the retail fuel price has gone from about $2.50 a gallon to over $7.00 while the Town’s flowage fee had remained fixed.” Malman Dec. at Ex. 15 (June 2, 2014 BFAC Subcommittee Minutes) (emphasis added). Moreover, the cited 2002 report reco mmends raising the fuel prices in the context of its finding45 2. The Fee Increases Were Adopted in a Transparent Manner . The method by which the Town adopted the ne w fees was, without question, reasonable, transparent, and non-discriminatory. Adoption of landing fees by ordinance is expressly permitted. 78 Fed. Reg. at 55333 (“Airport proprietors may set fees for aeronautical use of airport facilities by ordinance, statute or resolu tion, regulation, or agreement.”) And periodic increases in the fuel flowage fees are expressly contemplated in the FBOs’ respective leases. See Charlton Dec. at Ex. 18 (Excerpts from FBOs Leases). Moreover, both fee increases were adopted through a robust public process that simply compared future financial needs to existing re venues and concluded that additional revenues were necessary to meet those obligations. Supra 13-17; see also Malman Dec. at Ex. 10 (May 20, 2014 Subcommittee Presentation); id. at Ex. 11 (Transcript of May 20, 2014, public hearing); id. at Ex. 16 (June 3, 2014 Town Work Session Minutes); id. at Ex. 17 (Transcript of June 5, 2014 Town Board Meeting); id. at Ex. 19 (Transcript of J une 17, 2014 Town Work Session). The Subcommittee meetings were public, Malm an Dec. at ¶¶ 4-5 (Subcommittee has been meeting since February 2014 and meetings ar e open to the public), and the Subcommittee actively engaged with aeronautical users. E.g., Malman Dec. at ¶¶ 26-2 8. And the fee increases were adopted by resolution by the Town Board afte r the public notice required by law. Malman Dec. at ¶ 33. Thus, Complainants’ arguments abou t the lack of transparency are baseless. There is no evidence that the Town failed to meet its obligations under Assurance 24. 3. The Town Did Not Discriminate When It Raised The Fees . The method by which the Town adopted the ne w fees was reasonable, transparent, and non-discriminatory. The fuel flowage fee applies equally to all aeronautic al users. And, with that “East Hampton has the lowest prices inthe service area for 100LL and Jet A ...” See id. at Ex. 12 (2002 Airport Economic Anal ysis at 22). This is hardly the admission that Complainants allege.46 regard to the landing fee, the Town simply adop ted an across-the-board 10 percent increase to the long-standing and never-before challenged fee stru cture. The increase applies equally to all aeronautical users. Complainants argue that the landing fees cover a wide monetary range and bear “no rational relationship to the infrastructure requirements of services that are used by the various types of aeronautical users.” Complaint at ¶ 78. To be clea r, the Town’s landing fees are intended to be weight-based. See Malman Dec. at Ex. 12 (2002 Airport Economic Study at p. 22) (“East Hampton’s fee is graduated by weight...”). The Town acknowledges, however, that over the years the Town’s actions to adjust landing fees may have resulted in certain discrepancies among users. The Town intends to revisit, update, and co rrect the landing fee schedule in the summer of 2015. 4. The Town Is Addressing Revenues from Non-Aeronautical Leases . Finally, Complainants argue that the Town ha s violated Assurance 25 by failing to collect fair market rent from non-aeron autical users. Complaint at ¶¶ 80-86. Complainants cite to a 2012 schedule of leases that provides information about then-current leases and rents. Complaint at Ex. 28. Complainants also comment on four specific leases, which are currently below fair market value. Complaint at ¶¶ 31-32 & 84-85. As part of its analysis, the Town’s advisory committee has acknowledged that the Town w ill need to increase revenues from nonaeronautical users and sources. Malman Dec. at ¶ 44; id . at Ex. 8 (Preliminary Debt Capacity Analysis at p. 3. The Town agrees to enter into a Corrective Action Plan with the FAA to discuss and resolve any current is sues with non-aeronautical leases and to implement a plan for assuring ongoing compliance going forward. The Town is committed to finding additiona l sources of non-aeronautical revenues as leases expire or as permitted under existing leases . To the extent any future revenue increases

### will allow the Town to consider lowering aeronautical fees such as the landing and fuel flowage

fees, the Town 

### will do so. 

## V. CONCLUSION For the foregoing reasons, the Town respectfully requests that the 

### FAA dismiss the Complaint and find that the Town is in compliance with its sponsor obligations. Respectfully submitted this lst day of May, 2015.

Elizabeth Vail Town Attorney Town of East Hampton 159 Pantigo Road East Hampton, 

### NY 11937 EVail@EHamptonNY.Gov Eric Pilsk Catherine van Heuven Kaplan Kirsch & Rockwell LLP 1001 Connecticut Ave., NV/, Suite 800 Washington, 

### DC 20036 epilsk@kaplankirsch. com cvanheuven@kaplankirsch. com Telephone: (202) 955-5600 Facsimile: (202) 955-5616

47

### CERTIFICATE OF' SERVICE

I hereby certify that I have this lst day of May,2015, served the foregoing Respondent Town of East Hampton, New 

### York's Brief in Support of Its Motion to Dismiss and Answer to the Complaint on the following parties by e-mail at the following addresses: Office of the Chief Counsel Attn: FAA Part 16 Airport Proceedings Docket, AGC-610 Federal Aviation Administration 800 Independence Avenue, S'W V/ashington, 

### DC 20591 1 copy via E-mail 9-AWA-AGC -Part- 1 6 @faa. gov Leonard D. Kirsch, Esq. McBreen 

### & Kopko 500 North Broadway Jericho, 

### NY 11753 lkirsch@mklawnyc.com Dated this 

### I't day of May,2015 Catherine M. van Heuven

48