Wednesday, January 21, 2015

Mayor breaks tie, OKs hangar project: Norfolk Regional Airport (KOFK), Nebraska

A proposed $1 million hangar project and taxiway at the Norfolk Regional Airport was cleared for take-off Tuesday.

But Mayor Sue Fuchtman first had to break a tie vote by the city council to approve local financing for the Norfolk Airport Authority project.

Financed with grants and loans, the eight-plane hangar building will require a property tax increase estimated at $60,000 annually for 10 years as the local share for debt service.

After discussing the issue for an hour, the council voted 4-4 on the resolution authorizing the increase. The mayor, who only votes to break ties, then cast the deciding ballot in favor.

After voting, Fuchtman urged the airport authority to keep the city informed.

“The question I would ask you to ask is what percentage is funded by the tax dollars to take care of those rental hangars because I think that’s one of the things that has been very concerning,’’ she said.

The mayor said one of her friends, who has an airplane hangared there, has seen improvements made at the airport.

“I think we can further answer some questions and concerns of some of this council. We’re willing to work with you and be a part of it,’’ Fuchtman told members of the airport authority.

Voting for the measure were Dave Fauss, Shane Clausen, Jim Lange and Josh Moenning. Against were Corey Granquist, Thad Murren, Dick Pfeil and Rob Merrill.

Some discussion focused on who should pay for the hangar and taxiway — businesses and individuals who own private aircraft or the taxpayers.

“Are we asking the taxpayer to subsidize a hangar with their tax dollars?’’ Merrill said.

“Basically,’’ responded Dan Geary, chairman of the airport authority.

But he went on to say the $70,000  from annual hangar rentals goes toward airport operations and is money the authority doesn’t have to ask the city for.

In the past, the authority had accumulated as much as $800,000 from hangar rentals, Geary said, and could pay for hangars. That practice has stopped, and the authority now comes to the city for capital projects.

He further noted that the authority has raised rental rates, effective Jan. 1. All 46 hangars are occupied, and new requests for space from aircraft owners are turned down.

Jerome Bahm, the authority’s accountant, said the authority hadn’t received any budget increase for five years in a row, and only this past year received a 3.5 hike from a rise in valuations, as other city divisions did.

Merrill asked if the authority had looked at raising rental rates even further to pay for the project. He wondered whether hangars are full because rents are cheap.

“We don’t think so,’’ said Terri Wachter, the airport manager who noted that rates at similar airports in Nebraska were examined to come up with the new rates at Norfolk. Future annual increases are built into the rate structure as well.

It would take a 60 percent increase in rental rates to pay for the project, according to the authority.

It was further noted that some local businesses have built their own hangars at the airport on leased land.

Shane Weidner, city administrator, said the airport is important when business prospects come to town.

“The investment we make in our airport . . . is invaluable. Absolutely it’s an economic development tool,’’ he said.

With the green light from the council, the authority can now submit final paperwork needed for loans and grants that have been approved by the Federal Aviation Administration and Nebraska Department of Aeronautics.

City sales tax up

Norfolk has experienced a big increase in local sales tax revenue.

It’s reflected in the last three months of sales tax collections, which are ahead by 13 percent of a year ago. The receipts totaled $2.1 million, or $249,213 more.

Randy Gates, city finance director, attributed the rise to purchases made in the wake of  the June hail storm.

“It’s not exactly how you want your economy to grow,’’ Gates told the council.

But it means sales tax revenue is trending much better than anticipated by the city. Norfolk levies a 1.5-cent tax. It will increase by half a cent this spring to pay for improvements to the public library.

The tax on keno also is yielding more revenue. Norfolk received net proceeds of $44,785 for December, which is $5,868 above the budgeted average of $38,916.

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