TheTimesTribune.com, Corbin, KY

Local News

July 8, 2014

Airport debt discussed by board

Board seeks savings by refinancing $450,000 loan

CORBIN — By John L. Ross / Staff Writer

An attempt to refinance the Williamsburg-Whitley County Airport debt load hit a roadblock Thursday during a special-called meeting of the county’s finance committee.

That committee, appointed by the Whitley County Fiscal Court, includes 3rd District Magistrate Jamie Fuson, 2nd District Magistrate David Myers, county treasurer Jeff Gray and Evelyn McCullah.

Also in attendance for the nearly two-hour meeting was airport board chairman Tim Mays, board vice-chairman Rich Prewitt, and Don Stricklin, who has been working with the airport board to rebuild the financial records and has led the charge in attempting to secure refinancing options for the board.

The airport currently owes two different banks a total of more than $450,000.

Refinancing that debt would combine the loans into one, and reduce the interest rate.

During the last fiscal court meeting June 17, Judge/Executive Pat White Jr. discussed the refinancing issue with board members.

To begin that discussion White said the Court had been asked to act as a guarantor on the refinancing of loans owed by the airport.

White said refinancing would be a substantial savings to the airport board and encouraged Court members to agree to the refinancing plan. The airport would pay $3,108 a month in interest compared to the $4,130 a month they are paying now if the plan is approved, Gray explained during that meeting.

The airport has also achieved tax exempt status from the Kentucky Revenue Service for the first 60 months of the loan.

The court would not be alone in this refinancing process, however. The court is guaranteeing 67 percent of the loan and the city of Williamsburg is guaranteeing the other 33 percent.

During that meeting Myers said he had several questions, which he got to ask Thursday afternoon.

“Part of my concern in being hesitant (was that we) know our position with the Williamsburg-Whitley Airport Board,” Myers said Thursday, adding that White and Williamsburg Mayor Roddy Harrison both were able to appoint members to the airport board without court or city council approval.

Myers asked about the ownership of the airport, and about the loans entered into “in the past without our signing off on it.”

Mays explained that those loans were for the new terminal building and the modifications that were necessary for the 911 Dispatch center, but he was unsure specifically “which loan went for which project.”

Mays also told the committee that the board, county and city own the Williamsburg-Whitley County Airport -- Myers added that with the Judge/Executive and city mayor appointing the board members directly, “that controls capability.”

The 10-member airport board consists of five members appointed by the Judge/Executive, and five members appointed by Williamsburg’s mayor.

Myers asked other questions concerning fuel inventory and billing, which Mays and Stricklin both explained how that part of the operation worked.

Myers then expressed his concern that “all of a sudden these loans are an issue.”

Mays explained that “certain” people “involved in the board and in the management,” that there was a lack of communication internally and externally with the banks from which the loans were made.

He added that at one point the communication was so bad that the airport was in danger of foreclosure simply for the lack of a signature.

Mays assured the committee that the current board members insist on being above the board and are behind the idea of transparency with the board’s work.

Fuson said that his concern was the commitment. “(We’re) paying $5,000 a month (to the airport) now,” he said, adding that coal severance monies were drying up. “It’s the commitment that worries me -- being the guarantor is what bothers me about it.”

Mays explained that the “biggest need” at the airport is a full-time facility manager.

He explained that the board itself, with the help of lineman Doug Doughty, have been handling the current day-to-day management of the airport.

“We save money where we can to get the budget in shape for hiring a manager,” Mays said, adding that had a full-time facility manager been in place, “many of these problems could have been caught sooner.”

It was then learned that at one time tourism dollars paid the airport manager salary -- Gray added that it could still be done that way.

Mays said that from the time the salary was paid that way, several people have filled the manager’s shoes.

Myers asked whether Mays felt that mismanagement was the issue. “I can’t really say,” he said. “My impression is that it’s a little bit of it.”

“If the loan was in good standing, would we even be here today?” Myers asked.

No one answered that question, but Prewitt felt that the original board was comprised of folks concerned with aviation, while the current board held members who “are lovers of Whitley County rather than the aviation field.”

He added that the airport is the county’s “underutilized jewel.”

Mays agreed.

Prewitt then added he didn’t feel the airport’s recent issues came from mismanagement as much as it was miscommunication.

He said that no one had the intent to allow things to go awry, but that “this is a case where (we) weren’t meeting regularly enough,” and were more involved with airport maintenance rather than managing the airport.

“That in itself is why I’m concerned,” Myers said.

Fuson said he felt the refinancing should be “a last resort.”

He wanted to do something else that wouldn’t “tie up” the fiscal court. “It (doesn’t) look good to me where the airport is going,” Fuson said, adding that with the current “track record” no one would buy this as a private business.

Currently, the county pays $5,000 to the airport and Williamsburg pays $2,667 each month.

The problem with these two airport loans? The two of them mature this month. It was also learned that the refinance plan “extinguishes” the airport’s imminent debt and gets some of it paid down.

“We’re on the spot,” Myers said, adding he did not want to make the airport a taxpayer burden. The committee then learned there were no options available “that don’t tie up Whitley County.”

“If fiscal court doesn’t do this, what’s the next move?” Myers asked.

“We’re kind of handcuffed,” Mays answered. “(It will) take a lot longer to do the things we need to do at the airport -- I would submit that the airport is going to be in a lot better shape if we go through this process.”

Mays felt this was the best course for the airport. “That’s better for everyone involved,” he said. “There’s less of a chance of the airport going under with this loan in place.”

Myers added that the loan would likely only increase the airport’s cash flow by about $800 a month, and asked about looking at costs and a way to hire an airport manager.

Mays said they would have to suspend the search for a manager.

Myers asked if there was money to pay $40,000 for a manager, which was a salary discussed earlier in the meeting.

Mays said that with the restructuring of the debt and the additional $800 monthly “we’d be that much closer to getting a manager.”

Right now, approximately $35,000 “could be squeezed” to pay a manager.

Myers felt asking fiscal court to provide additional monies in the “short term” until the board had a better plan and outline for the future. “It’s got to be a plan to go forward to make it work,” Myers said. “(That) would be my recommendation -- that’s where I stand on it.”

He added that if the airport board got a better footing on the finances maybe they could “get a loan on their own merit.”

No official decisions were made during this committee meeting, but it will be discussed during the next Whitley County Fiscal Court meeting. The committee will also likely meet again July 14.

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