Creating an AIRPORT AUTHORITY requires Considerable Deliberation–TVC

TVC map, airport, terminal, tower, aerial photo
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AIRPORT = Attractive Nuisance & Public Utility

Governance at TVC airport from 2 Counties to one Authority

Important Predicates for Consideration

 

Airports are both an attractive nuisance and a public utility. Those attributes assure that their governance is a matter of high community concern. The Cherry Capital Airport (TVC) Traverse City, MI is the primary transportation link for the State’s Northern region; its commercial traffic ranks third in the state.

Michigan Map

Governance is a legal and political issue. If the elected charged with governing an airport can define their constituents’ interest, there are legal mechanisms which can be written to define allowable actions which may be taken by those managing the specific attractive nuisance/ public utility. Issues like the below need be addressed by the politicians in their decision about delegating powers to managers or an authority:

  • Future Air Service: TVC already has commercial flights; so, an authority would be hard pressed to prohibit additional operations. The runway length is a legal delimiter of the types of airplanes which may fly. If the neighbors regard future noise from an airport to be a concern, then language retaining some degree of control over lengthening the runways. The attractive nuisance aspect comes in play here—if a major airline seeks to add larger equipment to TVC, that likely would provide added commerce to Northern Michigan. A too restrictive provision may hurt that economic stimulation.
  • FAA Grants: Free AIP dollars are tempting—a capital project will be heavily paid for by the FAA. If the TVC authority signs the grant, the airport extends the life of federal rules applying (i.e. closure, economic discrimination among users, environmental requirements, hiring, etc.). Do the Counties want an opportunity to be heard before these federal restrictions are lengthened?
  • The airport becomes a legal island: aviation revenues may only be spent on airports. Aviation taxes also be used for operating and capital expenses. For example, a county child care center on TVC grounds must be charged rent by the authority to the county. Conversely, any services provided by the county/municipality should be paid for by the authority.
  • Political Fiefdom: surprise one of the hidden perquisites of an elected official is to “ask” the airport to hire someone to work at the airport. That leverage diminishes or disappears once an authority is created.
    • A corollary: airports are sources of major contracts- terminal vendor, construction contracts, parking management, consultants, etc. The elected official’s impact loses some clout when an independent authority is created.
  • Citizen Input: As an elected official, it is a normal function to provide an introduction to the airport director to someone from your district.
  • There’s more: the interface between airports and their neighbors have a number of variations. All politics are local; so, there are other considerations which may need to be reviewed before the authority terms are agreed to.

Historically, airport authorities have been quite successful. Management of all the technical aspects of airports (i.e. FAA safety compliance, aircraft noise, runway lighting, snow removal) require deep experience in these areas. Attracting new airline service is another specialized skill. Municipalities and counties do not always include such qualifications when hiring the airport professionals. It is tempting to promote someone from within.

TVC snowy departure

Authorities are not perfect. Problems arise when the terms of the charter are not carefully written. The below stories illustrate a process (almost a year running) that suggest that the issues are being aired.


Traverse City Record-Eagle

Excerpts:

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Cherry Capital Airport works on flying solo as authority

TVC meeting

SUTTONS BAY — An advisory board recommended changing the Cherry Capital Airport’s governance model to an authority, which could take the airport’s ownership out of the hands of Grand Traverse and Leelanau counties.

The Leelanau County Board of Commissioners responded by saying, ‘not so fast.’

Trustee Tony Ansorge wanted to know what is prompting the change, especially when the airport is in the black, expanding and under excellent management.

“I don’t see the problem at Cherry Capital today that needs to be addressed because we’re in good shape,” Ansorge said. “What problems are we trying to address by changing the structure?”

Steve Baldwin

 

Airport management consultant Steven Baldwin said the advantages of changing to an authority would have it operating under one board instead of three.

It would eliminate the airport commission that now governs the airport and create an authority that could make decisions without having to go to both the Grand Traverse and Leelanau County boards for approval, Baldwin said.

Other options looked at by the AGAC are to modify NRAC’s powers, pursue legislation to create an authority different from that allowed in the Airport Authority Act, known as Act 95, or make no changes.

Any change must be approved by both county boards.

Baldwin’s company, Steven Baldwin Associates, is being paid to look at the airport’s strategic and business plans and governance model as part of a three-year $250,000 strategic plan. Funds are coming from the airport’s leasing and parking fees.

Soutas-Little worries about eminent domain — the right of a government to take private property for public use, saying that under an authority the airport could condemn property without having to go through the counties.

Baldwin said the airport will always be able to exercise eminent domain whether it goes through an authority or the county.

“Eminent domain is reserved for those properties at the end of runways that are hazardous and the property owner refuses to clear,” Baldwin said.


Turbulence jostles proposed Cherry Capital Airport changes

 

  • Feb 11, 2020

    TVC logo

TRAVERSE CITY — Six public input sessions in two counties have not grounded skepticism over a proposed change in airport governance, even as approval moves closer to take-off.

“My spidey sense has been up since the start of this discussion,” Grand Traverse County Commissioner Bryce Hundley said Wednesday. The buying and selling of land, the definition of non-aeronautical uses, the ability to roll debt . . .there’s all sorts of concerns around that.”

Hundley suggested updating the airport’s current oversight mechanism rather than changing to an authority, at the last meeting of the Grand Traverse County Board.

Janik does not have the same assignment, however, and a joint session between the two commissions is scheduled for March 17 at 3 p.m. [1]at the Leelanau County Governmental Center.

Alger said he expects a draft of an incorporation document to be presented then.

“These issues need to be addressed carefully and thoughtfully before this board votes willy-nilly to abandon their shared oversight of the airport,” said Sylvia McCullough, a frequent commenter at commission meetings, on Wednesday.

“You need to show us why you want to go to an authority,” said Ted Iorio, another regular commission meeting attendee. “It just doesn’t seem to make sense.”

 

Other concerns have centered around the possibility of a land-hungry airport authority, which would gobble up people’s houses and businesses to expand runways. Something both Board Chair Rob Hentschel and Airport Director Kevin Klein, say will not happen

“Eminent domain is the kind of thing, as a public official, we avoid like the plague,” said Hentschel. “Every other avenue would obviously be followed.”

An expansion is planned at the airport, but of the terminal, not the runways, Klein said.

“It’s within the terminal area, the footprint of the terminal, and we will expand to accommodate that,” Klein told commissioners. “But no expansion of the airport is identified in the current master plan.”

Klein said record passenger numbers and air traffic has lent an urgency to the discussion of governance, but also of a planned expansion of the terminal itself, within the next six to seven years.

“It’s broke,” Hentschel said, about the current oversight mechanism. “Yes, the commission’s end date isn’t for 20 years yet, but typical agreements at an airport are 25 years.”

Alger shared answers to commissioners written questions in a 17-page document. Another written document with the questions citizens asked at the six informational meetings is forthcoming, he said.

Commissioner Gordie La Pointe, a one-time skeptic, said the more he learns about the change to an authority, the more he supports it.

“I went into this thinking, why do we have to change,” La Pointe said. “But the more I think of this, going 10, 20, 30 ,40 years down the road, I personally am leaning more toward an authority.”

The next meeting of the airport commission is scheduled for Feb. 25, beginning at 3 p.m. at the airport in the upstairs conference room. The airport commission meetings are open to the public.


 

Questions remain on governance of Cherry Capital Airport

  • Feb 13, 2020

TVC entrance

SUTTONS BAY — Leelanau County commissioners are still questioning whether the Cherry Capital Airport should change from a commission to an authority.

A change in the governance model of the airport has been the topic du jour of several board meetings and public hearings in Leelanau and Grand Traverse counties, which share ownership of the airport.

The airport is now governed by the Northwestern Regional Airport Commission, which is made up of two members from Leelanau and five from Grand Traverse.

Steven Baldwin, a management consultant hired by the airport to look at making the switch, has said an authority would allow for the buying and selling of property, have more control over zoning and have the ability to make decisions without having to go to both county commissions for approval.

Leelanau County Administrator Chet Janik said zoning and eminent domain are the biggest issues he hears about regarding the change.

Airport executive Director Kevin Klein told commissioners at their executive session Tuesday that eminent domain cannot be Kevin Kleinused exclusively for economic development. He said he has no records of it ever being used by the airport to acquire property.

Commissioner Tony Ansorge said he would like to see the cost difference between a commission and an authority, saying he’s not yet convinced why the change is needed.

“I’m not ready to drink the Kool-Aid yet,” Ansorge said.

Commissioner Debra Rushton wants to see sample articles of incorporation and options of what airport governance structure and cost would look like. A motion requesting that Janik have that information at the county board’s regular meeting Feb. 18 was unanimously approved.


Cherry Capital Airport closer to self-governance

  • Nov 7, 2020

 

 

 

TRAVERSE CITY — Cherry Capital Airport is another step closer to self-governance, following a 5-1 vote by Grand Traverse County Commissioners, passing a “Notice of Intent” resolution supporting an airport authority.

“There are very few communities of our size that have regional airports and are not putting in taxpayer money to support them,” said Commissioner Addison “Sonny” Wheelock, Jr., who voted in favor.

Continuing to tie them to the two counties to make every decision is complicated and is going to become even more of a problem,” he added. “I think it is going to be cleaner if the counties step back and allow the authority to run the airport.”

Under an airport authority, both county boards would continue to appoint members, Cherry Capital Airport Director Kevin Klein said, though the new body would have more autonomy.

 

“Having this authority impacts certainly Grand Traverse County and Traverse City in a way that — I just want it to be closer and more accountable to the elected officials,” Hundley said.

“I know the votes are there, I get that,” he added. “My hope is that 10, 15 years down the line, there will have been nothing that went wrong, and everything is great, and it’s all smooth sailing and I will just have been wrong. But I’m not convinced.”

Some members of the public previously questioned whether an authority would be responsive to residents and business owners who live and work near the airport.

“The airport is run well and Kevin has been open to communicating with us, but there are still some issues,” said Traverse City resident, Ted Iorio, a longtime critic of the transition to an authority. “When you get right down to it, an authority is a way to centralize power. It’s more difficult for the public to have the input you would want.”

On Wednesday, commissioners were provided with a final draft of the “Articles of Incorporation” which are required by an authority model. Alger, Janik and Klein worked together on the document.

Leelanau County Commissioners have yet to pass their “Notice of Intent,” though the issue is on the agenda for their Nov. 10 meeting. The two boards did meet for a joint study session Oct. 13, in which representatives indicated their support of a transition from a commission to an authority, documents show.

Iorio said he’d suggested the Articles of Incorporation document include a requirement that an authority have a citizens advisory committee, sand was disappointed to see in the final draft it did not.

“It’s not need {sic} in the Articles of Incorporation,” Klein said. “It is good business practice though, and the airport can institute it.”

Commissioner Gordie La Pointe said at Wednesday’s board meeting, that the document was a guideline and future adjustments can still be made.

“As time goes on, if the two boards determine that these Articles of Incorporation have to be modified or enhanced, it can in fact be done,” La Pointe said. “I’ve read through this, I am very comfortable with it and I think it’s the right thing to do.”

State law addresses such a transition in Public Act 95, which in 2015 amended a 1945 Michigan aeronautic law, to require the Notice of Intent and a public hearing, prior to the formation of an airport authority.

“I feel really good about our future,” Klein said, of the vote. “They have put the airport in a position to move forward and build on this model for years to come.”

The public hearing is scheduled for Dec. 2.

[1] Articles on the meeting are not available through Google.

TVC snowy departure

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