Councilconsidering financial plight of airport

Published on Thu, Dec 15, 2005 by eg Olson

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Council considering financial plight of airport

By Meg Olson

Blaine city council has approved a committee to study alternative uses for the airport property but the more pressing question appears to be how to keep the financially floundering facility afloat while the city decides what to do with it.

“We feel like we have a year,” said city manager Gary Tomsic at a December 12 council work session. “There’s got to be a decision made.”

In limbo between a $16.5 million expansion and extinction, the airport is not generating enough through fuel sales and leases to pay its debts, explained city finance director Meredith Riley. “Revenues anticipated by my forecasts are considerably below what is needed,” she said. “Roughly expenses can be covered by revenues. The problem is the interfund loans and debt service.”

Since 2002 the city general fund has loaned the airport half a million dollars to cover legal fees and property acquisition at the south end of the runway where the airport commission determined tall trees posed a safety risk. The latest bill came in November after Whatcom Superior Court ordered the city to pay costs related to the condemnation of property owned by Eugene Klein. Without another $50,000 loan from the city the airport would finish the year in the red, Riley said, and another $55,000 loan will likely be needed in 2006. That would mean the airport had to come up with a $55,000 annual payment.

“For us to pass the budget we need to have a reasonable expectation we’re not making loans that won’t be paid back,” Tomsic said. He asked airport commission chairman Doug Fenton to come up with some ideas on how the airport could pay the city back.

“We got here buying Bob Carruthers property. Strangely enough the solution lies in that same area,” Fenton said. If the city decides to close the airport it can sell the property and pay off the debt, he said. If the city decides to leave the airport as it is and not accept the $14 million federal grant to expand the facility, the land could also be sold now that the trees have been removed, since it won’t be needed for expansion.

If the expansion goes ahead, Fenton said, the federal grant could be used to pay the cost of acquiring the land as it would be part of the project. In addition, as the runway was moved south valuable land would become available for the airport to sell on H Street. ‘”The airport would be in really good shape,” he said.

The problem, Tomsic said, was in the short term. With the fate of the airport still unknown, the city can’t use federal expansion dollars. “The problem is right now none of these funds are available,” he said. “We need to find a source of revenue to make up the difference and we need to do it quickly.” Fenton said the airport commission would propose to council a plan to build 20 more hangars that he said would generate $25,000 to $40,000 annually.

Council members unanimously approved the new airport loan and they also approved a budget amendment that would set aside $20,000 for the airport study, though some were uncomfortable with where the money was coming from. “It comes across like cutting education to pay for the war in Iraq,” said council member Ken Ely at the recommendation that $5,000 be cut from funding requests for both the senior center and the boys and girls club.

Mayor John Liebert pointed out that those programs had seen substantial increases in previous years and funding would either stay the same or go up by a lesser amount.

“We’ve been very supportive of those programs,” he said. The city plans to apply to the Port of Bellingham for $10,000 in grant funding to make up the balance.