Wednesday, July 20, 2016

Pittsfield Municipal Airport (KPSF) concerns addressed in study group meeting: Study group hears report on history of leases, establishment of airfield's 1980 business park

PITTSFIELD — A study group examining operations at the Pittsfield Municipal Airport has apparently put to rest concerns about lot leases and income from a business park carved out of airport property during the mid-1980s.

However, the group still is dealing with several key decisions as it prepares a list of recommendations on the airport for Mayor Linda M. Tyer — who appointed the nine-member ad hoc committee earlier this year at the request of the City Council — to consider.

Among those are whether to request "a forensic audit" of the operation from the Federal Aviation Administration; whether to lease the entire airport management to current fixed-base operator Lyon Aviation or another private firm, and whether an enterprise fund, similar to those that fund the water and sewer systems, should be established for the airport.

Barry Clairmont, treasurer of the Pittsfield Economic Development Corp., which operates the Westwood Business Park on 30 acres of former airport property, and PERC President Jay Andersen gave a detailed presentation on the history of the park from its creation in the 1980s that ultimately seemed to satisfy members of the study group.

Councilors Christopher Connell, Melissa Mazzeo and Donna Todd Rivers, who originally called for the study, had cited apparent gaps in paper record or questions concerning how the park was created and how the leases — some for 40 years at a dollar per year — were decided upon.

Connell and others have pushed for the airport to become more self-sufficient financially by raising additional revenue to off-set annual city appropriations. He has been highly critical of the business park leases, 85 percent of the revenue from which goes to PERC and 15 percent to the airport.

Clairmont said the paperwork showing needed approvals from the FAA, the Massachusetts Aeronautics Division, the city Community Development Office and the Airport Commission had likely been submitted to the study group earlier but was not arranged in chronological order.

On Monday, he methodically went through how the business park was established. That included the airport providing 25 acres of its more than 600 acres of land, the city paying for and adding another five acres, and an agreement being worked out during the 1980s to have PERC develop and manage the park.

Key points, he said, are that the lease revenue — just over $20,000 annually on seven park lots — is split based on the percentage of money provided to develop the facility by each entity. The airport donated 25 acres of undeveloped land determined to be worth about $90,000, Clairmont said, while the city provided five acres and $431,189 in federal Community Development Block Grant funding for utilities and to create the park. Those figures determined how the lease revenue is split, he said.

Clairmont also said the federal Department of Housing and Urban Development, which provided the city with the CDBG funds, requires that any revenue from such a project go back into a program that is an eligible use for the grants, which does not include an airport operation. A Certified Public Accountant, Clairmont said the agreement is a standard one in such development projects involving government funding. The lease revenue that now goes to PERC is used for small business assistance programs and for economic studies to benefit the city.

Clairmont also presented paperwork that showed approvals were obtained from all the involved parties for the lease agreements and the revenue split. "This is where the FAA is saying, 'we are OK with this,'" he said at one point.

In fact, Andersen said, by creating PERC in the 1980s to manage the park, the city was able to keep the park revenue from going back into HUD coffers for projects elsewhere.

He added that "there would be no development if not for PERC," as the Airport Commission did not want to develop or manage a park, and the city today would not have gained the property tax revenue — about $130,000 annually — from the buildings constructed there.

Connell still expressed frustration over the length of some of the park leases and the low rates, but he dropped those objections after C. Jeffrey Cook said it seemed a waste of time for the group to keep exploring the issue, which did not seem to offer much opportunity to enhance airport revenues.

Cook said the explanation of how the park was created and the lease revenue proportioned seems rational. "I would like us to move on," he said, adding, "I don't think this is going to lead to any 'ah ha' moments."

The PERC officials have said the low-payment, long-term lease agreements were offered as an incentive to the first businesses to locate at the park.

Connell did press, however, for other recommendations to the mayor, including his request for a "forensic audit" by the FAA of past and current operations and to seek information on how to more efficiently manage the facility and enhance revenues.

Airport Commission Chairman Christopher Pedersen said major airport expansion projects, which receive significant federal and state funding, are already audited on multiple levels, and the airport budget is audited each year along with other city department budgets.

He indicated he would favor a "best practices" review of the operation.

And Connell said he wants to ask the mayor to explore setting up an enterprise fund similar to those that fund the water and sewer departments for the airport. He said the funding would be separate from the city budget and could encourage greater efforts to raise more revenue and control costs.

Pedersen said that topic has been discussed many times by the Airport Commission, but potential problems were noted — including that if the airport did begin producing more revenue the money would stay in an enterprise fund and couldn't go back into the city budget, as currently is the case.

In light of a proposal being explored to lease land for a solar array on airport property — which airport Manager Robert Snuck has termed a possible "game changer" in terms of revenue — it might be a bad time to establish an enterprise fund system, Pedersen said.

He added that such an arrangement might also "make it more complicated" than the current management system without significant benefit.

There was no further discussion Monday of whether to recommend seeking bids from private firms such as Lyon Aviation to lease the entire airport and subcontract services such as runway clearing, mowing and other maintenance now done by the city.

Group Chairman Thomas Sakshaug said he will prepare a list of recommendations to be sent to the mayor and plans to ask for a group vote on each item.

After members indicated they would like to submit questions about small airport management to the FAA, Sakshaug asked for questions to be submitted prior to an Aug. 15 meeting.

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