Wednesday, May 04, 2016

Greeneville-Greene County Municipal Airport (KGCY) Future Still Not Grounded

Greeneville Mayor W.T. Daniels, center, speaks Tuesday during a workshop regarding the Greeneville-Greene County Municipal Airport.

The Greene County Commission's continued involvement with the Greeneville-Greene County Municipal Airport remains up in the air.

Members of the Greeneville Board of Mayor and Aldermen, Greeneville-Greene County Airport Authority and ten members of the Greene County Commission gathered on Tuesday in the hopes of smoothing some of the turbulence caused by Greene County's possible departure from the airport.

The commission is set to decide the county's continued role at its May 16 meeting.

Tuesday's discussion stemmed from a Feb. 22 letter from Greeneville Mayor W.T. Daniels to Greene County Mayor David Crum.

Daniels' letter stated that the airport had insufficient funds to cover a legal judgment levied against it. In December, Chancellor Douglas T. Jenkins ruled that garnishments against the airport's monthly rental revenue would continue to pay a nearly $800,000 judgment, plus interest, awarded to Baker's Construction Services Inc.

Baker's previously filed a lawsuit alleging breach of contact on the part of the Airport Authority related to ongoing projects at the airport.

In his letter, Daniels presented the county with two options -- either partnering with the city to cover the judgment, with each entity paying $400,000, or allowing the town of Greeneville to pay the entire judgment and transferring all ownership to the city, which is already the fiscal agent for the airport.

"In my opinion, we're going to have to pay the debt off," Daniels said Tuesday. "We're going to have to get Baker's Construction off our back."

Daniels also said because the airport's revenue stream is being garnished, the airport will not have the funding it needs to operate.

"We have some issues at the airport and they definitely need to be addressed," Daniels said. "The clock's running."

The airport's revenue is around $284,000 annually, Daniels said. The facility's yearly expenditures are approximately $271,000, leaving a profit of about $13,000 per year.

Airport authority Chair Janet Malone said the garnishments, the largest of which started last fall, are attached to the rental of airport facilities, excluding its T-hangar, and fuel flow fees. The total monthly garnishment, she said, is around $14,000.

Commissioner Paul Burkey, who represents the commission on the airport authority, said he agrees with Daniels that the judgment needs to paid off. He said the county and town could co-sign on refinancing the airport's debt or each could come up with $400,000 to cover the judgment.
"We're not up against the wall on either of those choices as I see it, and you can figure out which one you like the best ," Burkey said. "My opinion is that the airport authority is a self-financing and, generally, revenue-positive enterprise. I think (the refinancing) makes more sense because it keeps us out of the check-writing business for the airport."

The authority discussed refinancing at its March meeting. Malone said $2.2 million in debt, which includes the judgment, could be refinanced. She said revenue generated from the T-hangar alone would be enough to pay the debt if it is refinanced on a 20-year schedule.

Malone said Tuesday it would be take 60 to 90 days to begin the refinancing process.

"Whether we had the issue between the city and the county as far as ownership and administration, it would be fiscally irresponsible for us not to refinance our existing debt," she said.

Ron Woods, attorney for the town of Greeneville, said that if the county wishes to opt out, the city and county would have to reach a comprehensive agreement regarding the airport's debts.

Greeneville Aldermen Keith Paxton and Sarah Webster, as well as Johnson, said they would like to see a paid, full-time manager brought on board to oversee airport finances and operations.

"I personally feel that the airport, a stable, successful airport, is a very critical part of the infrastructure for any future growth in all of Greene County," Webster said.

Commissioner John Waddle said a move by the county to discontinue its involvement would not absolve its debt responsibility, as the county has signed off on some of the airport's debt.

"I think this is a good investment for us, and I really think we need to stay in it," Waddle said.

Commissioner Tim White said he, too, wishes to continue involvement with the airport, as it is an economic recruitment tool.

Walter Johnson, who serves on the airport authority, said it is the "responsible thing" for the county to continue its involvement.

Burkey added that the future potential of the airport is strong.

"I think it's important for the future of Greene County to put a unified voice forward to say, 'This is an important facility that makes us attractive, more attractive than the hundreds of other municipalities and counties that are vying for economic development that we're in competition with,'" Burkey said.

Commissioner Dale Tucker questioned the value of the airport, but said it is time for the commission to make a decision.

"I feel like the majority of the commission does feel the airport is very much necessary, I really do," Tucker said. "I know it's necessary.

"The bottom line is this -- we have to decide in a couple of weeks whether or not we want to spend money to get this garnishment off the airport."

Commissioner Brad Peters said he would like to see the joint venture come to an end.

"I feel like as long as there's two parties involved, one is always going to weigh the other one down, no matter what," Peters said. "That's just the way joint ventures are. And whether it's the city running it or owning it, or the county, I would like to see one body take it and run with it and the other one shake their hand and say, 'Thanks for the work you've put in and good luck.'"

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