Wednesday, August 8, 2012

Hailey tweaks air-service LOT

Council calls for fiscal oversight

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Passengers check in for a Horizon Air flight at Friedman Memorial Airport. Photo by Mountain Express

The Hailey City Council expressed unanimous support Monday for Fly Sun Valley Alliance's proposed five-year, 1 percent increase to valley local-option taxes to support air service to the Wood River Valley.

Council members were divided on whether the additional tax should apply only to lodging and rental cars or whether it should also apply to bars and restaurants.

The council will discuss this issue again Aug. 20, and also is expected to decide then whether to put the issue on the November ballot.

The proposed tax increase would gather an additional 1 percent of LOT revenue from Hailey, Sun Valley and Ketchum for retaining, improving and developing commercial air service at Hailey's Friedman Memorial Airport.

Carol Waller, executive director of Fly Sun Valley Alliance, said at a Hailey City Council meeting Monday that if ballot measures pass in participating cities in November, the new funding will be used to pay for minimum-revenue guarantees and marketing efforts.

Minimum-revenue guarantees are subsidies paid to commercial airlines to guarantee existing air service routes and develop possible routes.

Waller said an undetermined percentage of the funding would be used to market the area.

"I would like to see almost all of the funding go to minimum-revenue guarantees," said Hailey Mayor Fritz Haemmerle, who described the many marketing groups in Ketchum and Sun Valley as a "pig's breakfast" of groups spending money in a disorganized fashion.

"I am concerned that the political force behind this [LOT increase] is the real estate community that wants to sell more second homes to absentee owners," said Haemmerle.

"That would be undesirable for us," he said.

Hailey Community Development Director Micah Austin said the expected LOT increase from Hailey, estimated at $160,000 to $190,000 per year, would be a "good deal" for the city's economic development.

The council voted to remove Blaine County from a joint-powers agreement that would oversee spending of the new tax funding, since Blaine County has no LOT and would not provide funding.

The council also voted to include a fiscal oversight mechanism in the document, and extend joint powers board memberships from one year to two years.

Carol Brown expressed concern that Hailey residents and business owners might not support the ballot initiative in November if the tax increased the cost of local dining.

The Aug. 20 meeting will be at 5:30 p.m. at City Hall.

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