By HEATHER PYLES, CJ Staff Writer
City and county officials and concerned citizens gathered Friday at the Lake Cumberland Regional Airport in hopes of reaching a resolution to the airport’s much-discussed financial woes.
This month’s airport board meeting was dedicated to conversations about the airport’s role in the community — and ways to ensure it will continue to operate in the future.
“If you want to develop this area like we all hope to see it develop ... you want to keep this airport funded, and be happy and proud of it,” local businessman Wally Iverson said during the two-hour meeting. “It’s a must to keep it going if you want to keep the area going.”
The seven-member board and several others were quick to point out that the airport is vital to the local economy, but others stated that the “common person” doesn’t see a need for the airport.
“I have a real hard time selling this airport to people who never use it who don’t know a thing about it,” Pulaski County Fourth District Magistrate Glenn Maxey said.
Board member Scott Gulock said he had heard that sentiment before, but he emphasized that numerous businesses in the area — including Kingsford Charcoal, Duraflame, Chlorox, Southern Belle and Air Methods — may not be in the area if not for Lake Cumberland Regional Airport.
“Most people probably wouldn’t understand how many companies they work for in this area that have corporate airplanes,” Gulock said, adding that an airport’s existence can hold sway as to whether a company chooses to locate to a certain city or not.
Former airport board member David Morris pointed out that “it could be argued General Electric never would have come here” if not for the airport, and he also noted that Tecumseh, a company that employed hundreds of Pulaski countians before leaving the area, was also a heavy airport user.
Board members also pointed out that local houseboat sales, while down in a harsh economic environment, are often made to those who fly into the area by using the local airport. And as a result, Pulaski County has seen thousands of jobs created with the help of the airport.
The 60-odd years old airport operated as a general aviation site only until last year, when Locair brought its limited commuter services to the area. That deal ended just last month, when the company decided to pull out of Somerset once its contract was up.
And what’s left in the wake of Locair’s exit is a terminal that requires some $80,000 to keep operational — and around $25,000 to just “mothball,” as board members have said. With that additional cost, the board has been scrambling to gather enough funds to operate on a month-by-month basis.
Board members are also unsure how the terminal will be utilized in the future.
But, the board emp-hasized during the meeting that the airport is still in relatively good financial standing, con-sidering the lack of funding and what mem-bers have said is support from the county and city.
According to infor-mation presented by the board, the airport is only carrying a debt of around $40,000.
“That’s our total debt, and that’s not bad management, people,” board chairman Don Bandy said.
Still, the board put off repairs and necessary upgrades in an effort to get through the winter months — notoriously known as the hardest months for the airport due to lower numbers of people flying into the area.
But expansion is nearly impossible, as the board noted the airport has no emergency funds or any funds tucked away for growth. Bandy said the board is in no position to go after large loans.
“We’re not sure we have that support in this community,” Bandy said.
One of the main areas of discussion during Friday’s meeting was the board’s request that the airport be placed with other entities that receive revenue from the county occupational tax system.
Local county officials have been vocal about the economy’s toll on what is considered the largest revenue source for the county — and the five incorporated cities located in the area. Revenue from the occupational tax has dropped 3 percent, which left the county scrambling to construct a bare-bones budget that would cover operating costs this fiscal year, which ends June 30.
In contrast, the City of Somerset has enjoyed relative financial stability, and city council members have expressed some concern that the county has opted to not give the airport as much funding as it once did, while the city has continued to help fund the airport.
Bandy questioned whet-her the county was giving too much to other entities through the occupational tax.
“Possibly there’s entities within the county that are getting maybe more than they need ... there may be some ways where you need to make a change.” Bandy said.
Bandy said the county has given around $9,000 to the airport this year, which he said roughly pays for half of the airport’s electric bill. Pulaski County Treasurer Arlene Young said the county has also picked up bills here and there for the board. The city has given around $40,000.
“I think it’s your obligation as the city to continue your support financially if the county cannot,” Bandy told those city council members in attendance.
Young explained that the occupational tax goes to fund numerous entities. Three entities that serve both the county and the cities are given funds “off the top,” or out of gross profits. 13 percent of that goes to Pulaski County 911, 13 percent goes to Somerset-Pulaski County EMS, and around 5 percent goes to the Pulaski County Detention Center.
From there, Young said the county takes the net profit from the occupational tax revenue and divides it among county entities and the incorporated cities.
20 percent of that revenue goes into the county’s general fund, 20 percent goes to the Somerset-Pulaski County Development Foundation, 30 percent goes into the county road fund, and the remaining 30 percent is divided among the five incorporated cities — Somerset, Science Hill, Eubank, Burnside and Ferguson — by per capita.
“I feel like this airport should’ve been on the occupational tax system since day one, and we were left out,” Bandy said.
Board member Clarence Floyd said no one at the airport asked that they be placed in the system.
“Nobody asked for it, Don,” Floyd said. “It was our fault.”
Young said she believes the most fair way to give the airport funding, should county and city officials agree to it, would be to give the airport some percentage of the gross profit of the occupational tax.
“The fair way to spread out the expense of this airport would be to take a percentage off the top,” Young said. “Everybody in this county would benefit and it wouldn’t hurt anybody that much. But the city has to agree.”
Somerset City Council Member Jim Rutherford expressed some concern about the trickle-down effect the restructuring may have on the cities.
Young said Somerset has the lion’s share of the cities’ tax revenue at around 90 percent because of the city’s per capita rate. That amounts to more than $1 million dollars each fiscal year.
Rutherford responded he’s hopeful that the city can find some way to accommodate the airport.
Bandy emphasized that the board may require around 4 percent of the gross profit for occu-pational taxes, but several officials said that may not be possible. Rutherford asked whether the airport could survive on less, stating that it may be hard to sell the change to other entities because the share they receive can barely cover operating costs, especially in down years.
“Here’s what we’re trying to stop, is ‘We’ve got to take care of all these other entities, and you airport go do it on your own,’” Bandy answered.
Bandy said if the airport receives too little, they would have to continue coming to the county and city for funding that either may not have. Young clarified that the economy, and the occupational tax revenue, may recover in the next few years, which would lead to an increase in the airport’s share.
“I’m hoping this will be the year that things level out,” Young said. “We’re looking at (between 2 to 4) years to get it back.
“And then we can start seeing a little growth at a time,” she added. “If the economy had stayed where it was, we’d have collected $9 million last year instead of $8 million.”
Arlene noted that the county in the current fiscal year would’ve seen $9.2 million or $9.3 million from the occupational tax fund, as opposed to the $7.5 million the county received.
Fifth District Magistrate Mike Strunk said he and other officials may get some backlash from county entities and their constituents alike for the occupational tax restructuring.
“You take them people (911, EMS and the road department) struggling so bad and we give you money right off the bat ... we’re going to take a lot of heat for that,” Strunk said.
Floyd fired back at Strunk, saying hard decisions come with being an elected official.
“Hey guys, that’s what it’s all about,” Floyd said. “That’s why you run for reelection and that’s why you have elections, so don’t give us that crap.
“Don’t try to pass the buck now, it’s how you save the money,” he continued. “It’s what you do with it.”
Strunk emphasized that he wants the airport to succeed, but he noted the county and city both need to see exactly what the airport may need in order to do so.
Young noted the occupational tax ordinance would need to be restructured and amended to bring the airport into the fold, and she said discussions between the county and city both would have to occur before any decisions can be made.
“At this point, we would welcome anything that we could possibly get,” Gulock said.
Rutherford expressed some optimism for a resolution to the airport’s woes.
“Everybody sharing in this venture is certainly better than one party feeling a major burden on it,” Rutherford said.
The board voted to write a formal letter of request to both the county and city asking that the airport be added to the entities already on the occupational tax list.
Other discussions made during the meeting included a motion that the board carry out a limited audit, called an “agreed-upon procedures” audit, to give the city and county both a general idea of the airport’s financial situation. County and city officials agreed that the resolution process would best start out with such a report.
“It’s that time of year and I think we need to have one,” Bandy said.
According to state law, the airport is not required to undergo a state audit because any funds received from the county and city are reviewed under those entities’ audits.
“You’ve got to have a starting point,” Young said. “You’ve got to know from this point forward what to expect.”
Floyd said he’d rather see the airport undergo a full-scope audit, but he and other board members said such an undertaking would all but drain the airport’s funds.
“I just like to see them done. Keeps everybody straight,” Floyd said. “I would like to see a full audit of everything we have, but if we can’t afford it, that’s a different story.”
