>>SOUTHERN INDIANA —
The Clark County Board of Aviation Commissioners is continuing its effort to become an airport authority, but after receiving a cool reception at two county meetings, it is altering its approach.
During its meeting Wednesday, the board approved pursuing a request for proposal that will help to better define a business plan outlining the goals the airport would like to reach in the next few years.
Becoming an airport authority — which would give it the ability to levy taxes — is still at the center of its plans, but the air board said it needs to build a consensus in order to improve Clark County Regional Airport.
“It’s not a big battle against the [Clark County] commissioners or the council,” said board member Alan Conner. “This is what you owe them in order for them to make an informed decision. They’re not going to make you an authority regardless, unless you can lay out a really good plan and answer all their questions, which we’re not prepared to do at this time.”
To prepare to answer county officials’ questions, the board of aviation unanimously approved developing a plan quickly, hoping to turn around a proposal in 30 days.
“I think we need, as a board, to make sure where it is we want to go and what we want to do,” said board President Ronald Barnes. “I just see this kind of captures it on paper and gives a more focused effort.”
With a clearly defined plan to present to the council, the board believes it will have a better chance of becoming an airport authority.
FINDING FUNDING
One purpose of developing a request for proposal is that it would help the board — whose five members are appointed by the three commissioners — define the scope of services provided at the airport and that its pricing is at a market standard.
“It just does make kind of good business sense to at least know that from a pricing standpoint, that was in line,” Barnes said. “This isn’t going to be a cheap project.”
Also, by defining where it wants to go first the board would be able to take small steps at moving in the right direction.
At the heart of the plan is raising money.
“There is no way that you can implement a lot of those programs without capital,” Conner said. “So where are you going to get the capital? Either you get it through an airport authority, you get it through some other kind of taxing deal and maybe that business plan would look at alternative ways to raise revenue.”
The questions and concerns that have commonly come up during the air board’s previous presentations are allowing nonelected officials to impose a tax, the amount of money the air board already has in its budget and that the rents imposed for property are not adequate.
“It seems like one of those questions comes up and then that’s the end of it,” Barnes said. “It gets lost in the bigger picture.”
The bigger picture for the air board is the economic driver that the Clark County Regional Airport could be.
According to the aviation commissioners’ 2009 annual report, the economic impact the airport provides to the local community is more than $33 million.
“Most people ... they don’t really realize the economic driver that this airport is,” Barnes said. “It is a terrific part of the infrastructure on attracting businesses to this region.”
The economic impact is also something that can grow, according to the air board.
“The multiplier effect on the community is really big,” Barnes said.
Becoming more regionally significant is one of those keys.
A REGIONAL APPROACH
The airport’s location ties it directly to Louisville’s Regional Airport Authority.
Clark County Regional Airport could become a base for corporate travel, while major transportation and shipping would still occur at the Louisville International Airport and most recreational pilots would continue to fly out of Bowman Field, also in Louisville.
Additionally, Clark’s designation as a reliever airport has set it up to receive millions in federal money.
The Federal Aviation Administration is funding about $11 million of a project to extend the airport’s runway to 7,000 feet, with Indiana’s match at 1.25 percent and the local match of 3.75 percent.
One concern is that the air board is not an elected body and would, if granted an authority’s status, would be able to issue its own bonds.
“[County officials] have concern over the tax authority and what rate we might impose and they have concern over the fact that a taxing authority would be in place for somebody that’s not elected,” Barnes said.
The maximum tax an airport authority would be able to impose is 3.3 cents on $100 in assessed valuation, but board members have previously said that they would not seek the full amount.
“The only reason to really become an authority is not to get tax money, but its to have enough capital investment where you can make the airport self-sustaining,” Conner said. “That is the goal.”
RAISING RATES?
Before the county allows the air board the ability to impose a tax, some county officials have requested that members look to raise the rates to fixed-based operators at the airport.
At the forefront of the effort has been Commissioner Mike Moore, who has called the rates being charged “sweetheart leases.”
“There are some really below-average lease rates out there when you compare them to airports our size,” Moore said in a previous report.
Air board members were quick to dismiss raising rents at the airport for current lessees having a major impact on the airport’s revenues.
“Even if they were to change [the amount of the rents], the dollar change is going to be very small,” Barnes said.
The rent rates — which only apply to the land at the airport, as the operators have built and own their own facilities and hangars — were set by county ordinance 23-1993.
“It really makes no difference if they say those leases are horrendous or if they say those are fair-market,” Conner said. “There is nothing you can do about it.”
The ordinance will be in effect until 2035.
“The issue is you can’t change it,” Barnes said.
The only leeway the air board has in regards to rates is that it can raise rents incrementally every five years in accordance with consumer price index changes.
Even the increase consistent with the consumer price index has caused operators at the airport to question its legality, resulting in a lawsuit.
Revenues from grants, rents and fees that are expected during 2010 total more than $5.7 million.
The bulk of the money comes from a federal grant in the amount of $5.26 million, with rent money — based on 2009 figures — equaling just more than $103,000.
According to the aviation commissioners 2009 annual report, rents range from more than $6,600 to over $26,000 annually per property.
To cover its costs, the airport relies on grant funding and knowing the county’s financial situation. Becoming an airport authority and insuring the airport continues to get its matching grant money is tenuous at this point.
“We are worse financially than we were the first two months of ’09,” Barnes said of 2010’s figures so far.
Despite the slow start, the expectation is still that the airport will be able to make it through 2010 if it receives all of its matching grant money.
According to the board, a balance of $66,000 is available in a grant tracking fund and $50,000 is earmarked it the county’s general fund for matching grant money.
NOT-SO-QUICK FIXES
But without more funding, the air board is again limited to completing only routine maintenance.
Items such as a run-down snow plow, roads around the airport that need repaving and lights that need to be replaced are all issues facing the airport.
“We operate on a bare-bones minimum skeleton,” Barnes said. “So, what our budget should be and what it is are not the same thing.
“We’re deferring maintenance that ought not be deferred.”
If the airport falls below the Federal Aviation Administration’s standards, the county can be mandated to make improvements.
“All we’ve been doing at the airport for the last 30 years is deferred maintenance ... and one of these days you’re going to have to pay the piper,” Conner said.
