Friday, August 31, 2012

County set to OK air-service agreement

Final decision rests on Hailey’s views

Express Staff Writer

Blaine County commissioners said Tuesday that they plan to enter into an agreement with Ketchum, Sun Valley and Hailey to use public fund to secure air service—so long as the city of Hailey agreed to it during the council’s meeting Thursday night.

The commissioners discussed a joint powers agreement that would form an air service board, with representatives from the cities of Ketchum, Sun Valley and Hailey to distribute funds from a 1 percent supplemental local-option tax to help secure air service for Friedman Memorial Airport.

Voters in each city must approve the supplemental tax on Nov. 6 for the full amount, an estimated $2 million, to be collected. The Sun Valley City Council voted Aug. 21 to put the measure on its ballot and to enter into the joint powers agreement to form the board. 

As of press time Thursday, Ketchum and Hailey were still considering the wording of the agreement and ballot language.

Hailey’s participation on the board—even if voters there reject the funding proposal—is deemed crucial because it is a co-owner of the airport with Blaine County.

The idea to raise funds through an increase in local-option tax rates was originally proposed by the Fly Sun Valley Alliance, an organization that helps negotiate minimum-revenue guarantees with airlines that might not otherwise fly into a relatively risky resort market such as Sun Valley.

The commissioners’ main concern Tuesday was that if Hailey does not pass the new tax, the city would not receive a seat on the air service board that the agreement creates. The county would instead take a voting seat on the board, with a weighted 10 percent vote compared to more than 50 percent for Ketchum.

In an interview, Fly Sun Valley Alliance President Eric Seder said that the reason for the county stepping in is to ensure that an airport owner remains on the air service board, based on the attorney generals’ opinion allowing public funding to be used for air service. 

“My concerns are more about what the
city of Hailey thinks as a co-owner of the airport.”

Larry Schoen
Blaine County commissioner

The opinion states that cities, counties and regional authorities have the right to operate and maintain airports and use public funding for those airports, including maintaining air service.

Based on this section of the opinion, Seder said that “use of public funds for minimum revenue guarantees, per the Attorney General’s opinion, is most clearly allowable if an airport owner is involved.”

During Tuesday’s meeting, Commissioner Larry Schoen also raised the issue of fairness. He advocated that representatives from both Hailey and the county—or a representative from the Friedman Memorial Airport Authority, the airport’s governing board—have seats at the table whether or not the LOT passes.

“My concerns are more about what the city of Hailey thinks as a co-owner of the airport,” he said.

Seder said Hailey had requested not to be included in the agreement or air services board if Hailey voters reject the tax.

“This very specifically came from Hailey,” he told the commissioners. “They said, ‘If we do not pass it, we do not want to be on [the board].”

However, in an interview Thursday afternoon, Hailey Mayor Fritz Haemmerle said the City Council had not discussed the subject.

“It never dawned on us that we’d get a seat on a board to decide how other people’s taxes were spent,” Haemmerle said.

He said the issue would probably be discussed at the Thursday night meeting.

Commissioner Tom Bowman said he would attend the meeting to find out Hailey’s wishes.

“Frankly, we would be happy to have [them] on there to ensure that [they] have a voice, at least a seat at the table,” Schoen said.

Commissioner Angenie McCleary questioned whether the weighted-votes system is fair.

If all cities pass the supplemental tax and enter into the joint powers agreement, a voting-distribution system based on anticipated revenue collections would give Hailey roughly a 25 percent vote, Ketchum 51 percent and Sun Valley more than 25 percent.  The county would not have a vote unless the city of Hailey did not participate—in which case, it would receive a 10 percent vote as a co-owner of the airport, and the remaining votes would be distributed accordingly. 

Seder said that all major decisions would require a two-thirds majority to pass.

“If it were up to me, there would be a much more equal percentage between not only the county, but the cities,” McCleary said. “We’re all in this for air service. That would show that we are really all in this together.”

Fly Sun Valley Alliance board member Dick Fenton said the agreement started out with equal votes for all members, but Ketchum asked that votes be proportionate to the amount of local-option tax funding contributed. The resulting percentages are a compromise, he said.

“That was as close as we were going to get to getting everyone to play well together,” he said.

Bowman said that as the county is not contributing funding, he would support the county’s approving the agreement as written—especially as the county would not be held liable in potential legal disputes with the airlines.

“Cities have all of the risk,” he said. “We share all of the benefits.”

The agreement will be on the county’s agenda for Tuesday, Sept. 4, pending Hailey’s decision on Thursday. The Hailey City Council’s decision was not available as of press time Thursday.

Kate Wutz:

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