1996/12/30 Resolution 4308 - Airport AuthorityAGENDA ITEM 5 - Airport Authority
on July 1, 1996, The Council unanimously passed Resolution 4274
granting all power of an Airport Authority to the Council, adopted
the Airport Business Plan, and to continue the Airport Board.
{This resolution was to provide a transition to the Airport
Authority that is independently operated from the City. The
Advisory Board was to continue to operate by exploring policies and
options for future operations of the airport, an Airport Business
Plan to be submitted to the Council for consideration and
implementation. on January 1, 1997 the City Council intent was to
create an Airport Authority "independent of the City Council" to
begin full operations and to have complete control of airport
administration.
There appears to me to be some concerns that need to be addressed
more thoroughly before the Council makes a transition to
operational format of the airport. I will address several items
that I question concerning our desire or at least, our timing for
this proposed organizational change.
1. As I have discussed in a previous report, as a basic
philosophy, I am concerned about transferring total authority
that currently is the City Councils, to a board. By making
the change to an Airport Authority, the City Council will lose
all oversight and/or control of airport operations,
maintenance, improvements, or funding. With the Council's
loss of authority and oversight, the citizens of Kalispell
also lose their oversight. This is lost because the citizens
Agenda -December 30, 1996
do have the ultimate "oversight" on the council members -the
election. A Council member can be held responsible for their
actions at each election. An independent board is completely
buffered from politics (probably a good thing) but they are
also not accountable to the City Council or to the citizens
(even in a remote way).
2. Budgeted impacts of a change to an Airport Authority has
not sufficiently been planned for. Although the resolution
anticipates a January 1, 1997 implementation for the
Authority, the budget does not consider the change. The
budget expenditure summary indicates that the 1997/98 budget
for maintenance and operation is parallel (equal) in services
to the 1996/97 budget. In fact the budget was reduced by a
total of $3,125 ($14,685-95/96 $11,559-96/97). There are no
funds budgeted for Personal Services and the Contract Services
line item is for appraisals and cost of land sales.
3. Transition -Record keeping/Changes; Upon the creation of an
Airport Authority (other than the Council) there will be a
complete severance of services from the City. That severance
will include all bookkeeping. The Authority will be a
"component" unit only of the City. This means that the
Authority will be responsible for all records and they must
provide audited financial statement to us to include within
our financial reports. This will require the Authority to be
on the fiscal year as the City.
The Authority, as a self sufficient independent business will
Agenda -December 30, 1996
for City reporting purposes only, be classified as an
Enterprise Fund. The Authority's books should be consistent
with the State requirement for the their chart of accounts and
will have to utilize full accrual basis of accounting to be
consistent with our processes, reports, and record keeping.
If the Authority uses accounting basis that is not compatible
with our system, we should anticipate audit comments on our
financial reports illustrating several short comings.
All budgeting will need to be completed and adopted by the
Airport Authority. All claims, check writing, investments,
record keeping, payroll taxes, payroll reports, insurance
(liability, workers compensation, FICA), and retirement system
record keeping will all need to be in place and continued by
the Authority. Any employees of the Airport Authority will
not be City employees.
A transfer of assets and liabilities will need to be
completed. As of December 17, cash on had was $9,556.66 with
an outstanding account payable for a paving cost of $633.75.
We will make these transfers when the Authority is effective.
Without more than one employee, there will be no segregation
of duties for persons handling billing, collection, and
payables. There will need to be strong oversight by the
Authority members for this area. In addition to the
oversight, a 2 signature requirement for checks will require
Authority members to designate members to co-sign checks.
Reconciliation of bank statements should be someone other than
Agenda -December 30, 1996
the person(s) making deposits or withdrawals.
All services that will be provided by the City will be billed
to the Authority. This would include Parks, Public Works, and
City Shop operations.
4. 1 have enclosed a time line entitled Airport Advisory
Board -July 23, 1996 for your review. I would suggest that the
current status of this time line would be at the fourth bullet
of the list "Adopt Rules, Regulations, etc.". This entire time
line and suggested steps implies, at least to me, that there
is a fundamental shortcoming for planning of the transition.
Those shortcomings "include", lack of in -place policies, lack
of positive steps to begin acquiring land, hangar leases (form
has been approved by City Attorney), lack of funding for
manager, and the biggest chip of all -the lack of a sale of
Haven Field and Daley Field. These land sales fund
improvements that are anticipated for the airport (and
ballfields).
I have enclosed a spreadsheet (December 3, 1996) compiled by
council member Donahue along with a December 18, 1996 memo that he
wanted submitted to the Council. I have added a spread sheet
(December 26, 1996) that outlines some of the differences of a
commission versus an authority.
I also enclosed a memo from the Airport Advisory Board (December
11, 1996) discussing the need to proceed immediately with the
Airport Authority transition. My response to the six points
outlined in this memo are:
Agenda -December 30, 1996
1. Creation of independent authority on January 1, 1997:
Do you really want to give all control to an Authority?
If you do It is premature to do so because:
1. There is no budget to support it properly.
2. There is not a transition period for an
Authority -it begins immediately. Therefore, it is
critical that all policies, plans, improvements,
finances, etc. are in place prior to the change.
If not, I believe the authority is destined to
economic failure or at least a higher frustration
level than ever for the "Board" members.
2. A 2.5 year transition plan is not an alternative. Once
the Authority is in place it is independent of the City and
without financing and/or support from the City. It is a
business enterprise within it's own organization. The list of
items for consideration submitted by the Advisory Board has
valid items to be done or thought out. That is my paint!
1. This can and will be done when the Council determines
the actual organization and implementation time.
2. The Advisory Board and the City can do this now
without a change in organization.
3. This can not be done at this time. There is no
funding in the budget. The next budget begins July 1,
1997. In that budget these costs may be considered for
transfer as part of the Commission/Authority change.
4. This can not be done with an Authority. The
Agenda -December 30, 196
Authority is independent of the City and if we do these
operation items we will be billing them back to the
Authority. This again, shows the need for budget
considerations.
5. Same as #4 except the insurance will not be with the
City budget, it will be through the Authority.
6. If we transfer title, we can not insure as
anticipated in Item #5. We also can not transfer all
City owned property to the Airport Authority since the
Haven Field and Daley Field, specifically, are
anticipated revenue streams to pay debt services incurred
by the City for improvement at the airport and new
ballfields.
7. B-1 will be the initial improvements allowed with
land acquisition and planning for future B-2 usage.
8. Transfer of all current airport funds accounts
receivable and revenue sources other than the TIF funds
can be completed very quickly. With this transfer, as
previously pointed out, all of the responsibilities for
record keeping etc. go with the transfer.
9. This should not be a problem at anytime.
10. Purchase of hangars is not budgeted for in the
regular budget. The transfer to the authority would not
be a problem after or when we own the hangar.
11. Authority can not terminate itself. The "founding"
entity of the authority would have to assure us that
34SK-Tri
everything comes back to the City. However, as pointed
out in their letter, this would happen "in the event of
insolvency". Would the City be able to afford
everything, assets and liabilities coming to the City?
This raises the same question about "total authority"
with no oversight by the Council.
RECOMMENDATION: Without making this report a larger "epistle", I do
not recommend transfer of the Airport Authority to the Advisory
Board. I recommend that direction be given to staff to:
1. Complete the sale of Haven and Daley fields
2. Consider a transition period from January 1, 1997 to June
30, 1997, that will address problems with a commission or
authority especially in terms of budgeting, record keeping,
and asset/liability transfers.
I also recommend that the Advisory Board continue. They should
begin the leases, work on the grants, and continue their dialogue
with FAA for the improvements. The Advisory Board can put together
all of these items and then bring them back to the Council for your
review and approval. FAA wants to know who they are dealing with
for the grant. The answer will be, at this time, the City Council
as the Airport Authority.
This time frame will assure the City that all of the change over,
whether it is to a Airport Authority or to a Airport Commission, is
completed in an organized fashion and more importantly a fashion
that will not "doom" the Authority/Commission to failure from the
first day.
I understand the frustration level of the Airport Board members.
I understand this frustration is a direct result from perceived
historical neglect for airport improvements. However, if we are
going to make changes in operation, I prefer to not be rushed or
not be compelled to change unless we can do them right. This
process can effect the future of the airport more than any single
decision the airport Commission/Authority will make. The powers,
responsibility and finances that we pass to a new agency can make
or break our future.
ACTION REQUIRED: Direction to the staff and to the Airport Advisory
Board is needed. I would encourage you to direct us to your
preference: Authority, Commission or status quo. You may lose some
members of the Advisory Board who may not agree with your decision.
RESOLUTION NO. 4274
A RESOLUTION OF THE CITY COUNCIL TO EXERCISE ALL POWERS GRANTED
UNDER THE °AIRPORT AUTHORITIES ACT" (TITLE 67, CHAPTER 11, MONTANA
CODE ANNOTATED) FOR THE PURPOSE OF OPERATING, MAINTAINING AND
EXPANDING THE KALISPELL CITY AIRPORT, CONTINUING THE AIRPORT
ADVISORY BOARD, AND ADOPTING THE AIRPORT BUSINESS PLAN.
WHEREAS, the City of Kalispell owns, controls and operates a
facility commonly known as the Kalispell City Airport,
and
WHEREAS, § 67-11-102, MCA authorizes a city council to exercise
all powers granted to airport authorities under Title 67,
Chapter 11, Montana Code Annotated until such powers are
conferred upon a municipal or regional airport authority,
and
WHEREAS, the City desires to develop the Kalispell City Airport
and City property surrounding said Airport in accordance
with the Kalispell City Airport Neighborhood Plan,
adopted September 19, 1994, and
WHEREAS, the City desires to obtain assistance from interested
individuals with a knowledge of aeronautics in order to
operate, maintain and expand the Kalispell City Airport
for the benefit of the City and the flying public.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, MONTANA AS FOLLOWS:
SECTION I. That the City Council hereby determines to
exercise all powers which may be granted to
airport authorities under Title 67, Chapter
11, Montana Code Annotated until such powers
have been conferred to a municipal or regional
airport authority.
SECTION II. That the City Council hereby continues an
Airport Advisory Board consisting of seven
(7), who have an interest in and knowledge of
aeronautics and municipal airports, appointed
as follows:
a) Three members who own real property
within the City's Master Plan
jurisdictional area, and
b) Four members who own real property
within the City limits of Kalispell.
SECTION III. The Airport Advisory Board, continued hereby,
shall be a citizen's advisory board to the
City Council to aid the City in formulating
City policy in matters pertaining to the
airport and the adjacent City -owned property.
SECTION IV. The primary responsibility of the Board is to
review existing and proposed City policies
concerning the proposed improvements to the
airport, options of maintenance and operation
of the airport facility, creation of an
airport authority, and options for utilizing
surplus airport property in a manner
supportive of the airport operation and
further report their findings and
recommendations to the City Council.
SECTION...1. That on or before January 1, 1997, the City
Council shall create a municipal airport
authority, independent of the City Council,
with all the authority granted to municipal
airport authorities under Title 67, Chapter
11, Parts 1, 2, and 3 Montana Code Anotated.
SECTION V1. That the City Council by this Resolution
agrees to review the Airport Business Plan as
proposed by the Airport Advisory Board and
implement said Plan, subject to amendments
made by the Council, commencing on
All revenue generated through implementation
of the Airport Business Plan shall be utilized
for Airport maintenance and operations.
PASSED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, THIS tS� DAY
OF uL I , 1996.
�'J U
DougfAs D. Rauthe - Mayor
Attest:
6ta (2 rR C_
Debbie GiUAWd, CMC
Clerk of Council
2
To: Mayor & City Council
From: Norb Donahue, Council Member
Date: December 18, 1996
Re.: City Airport
I believe we are all in agreement that the City airport should be
developed and that the development should get going. The
disagreement, if any, is in the vehicle to accomplish this. Both
the ""Authority"" and a ""Commission"" has been discussed.
I have reviewed the state statutes on the two procedures and
prepared a comparison on many of the major issues between them and
attached a copy hereto for your information.
The "Commission" form can do everything the "Authority" can do,
basically, without giving up City oversight in some measure. And,
once created, the ""Authority"" can go off in its own direction but
still has some power to require the City taxpayers to provide some
funds for its operation. I don't think the general population of
the City will look kindly on such an arrangement.
Also, the "Commission" form requires that the members be City
residents whereas the "Authority" members can be from anyplace and
have no connection to the City except possibly economic. Future
Councils could be very frustrated with an "Authority" yet be
helpless to do anything about it. Once created, a "Commission" has
some degree of independence but the City could retain sufficient
control to prevent a runaway body than they could with an
"Authority".
The "Authority" can issue its own bonds but the "Commission" would
have to act through the City to do so. With the City's record in
bond financing, I'm sure it would be able to get a better rate of
interest than an "Authority" that has no history whatsoever. An
"Authority" may not be able to sell bonds at all because of its
lack of history and liquid assets and, if it did, the City would
have to underwrite them in case of default — this is extremely
important!
We also have to face the fact that down the line, possibly 15-20
years, the current airport may prove impractical and we (a future
Council) would want to discontinue it. Under an "Authority", that
would be most difficult to accomplish.
Mayor and City Council
Page 2
December 18, 1996
It is my feeling that the "Commission" form is the better for the
best interests of the City and its citizens. Recruiting a
"Commission" should not be too difficult and possibly there should
be a couple members of the Council designated as members initially.
At any rate, we should get moving on this project right away.
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1. Determination of composition and appointment criteria for
Authority members.
2. Provision of matching funds and application for State
Aeronautics grant and/or loan to cover cost of eastside fencing by
January 31, 1997 deadline.
3. Commitment by City of two-year salary for part-time airport
manager at approximately $1,000 per month plus negotiable benefits,
based on experience.
4. Continued mowing, snow removal, incidental maintenance, and
security, fire and ambulance services as at present by City at no
cost to the Authority for 21 years, subject to periodic
negotiation.
5. Continued insurance, secretarial, accounting, personnel and
legal services as at present by City at no cost to Authority for 21
years, subject to periodic negotiation.
6. Transfer title of all City -owned airport property to the
Authority after any necessary initial sales (specifically including
``- Daley Field), and also transfer existing leases within the City
Airport boundary.
7. Facilitation by the City of zoning and annexations to implement
Airport Neighborhood Plan, and final "Airport Layout Plan"
acceptable to FAA, using target of the "B-II/visual" standards.
8. Timely transfer of all current airport funds, accounts
receivable, and revenue sources including airport TIF funds to the
Authority. Interim budget preparation by the City.
9. Clearing of all encroachments on City airport property at any
point, but especially along south and southeast boundary, and
simple fencing to be installed by the City. (Possible volunteer
assistance.)
10. Purchase (or lease -purchase) of Thomas hangar by City to be
accomplished and transferred to Authority.
11. Provision to be made for Authority to terminate itself in a
reasonable time in event of insolvency, with return of all assets
to the City. (No reference for this found in MCA.)
Agenda -January 6, 1997
AGENDA ITEM 8 - AIRPORT AUTHORITY/HAVEN FIELD
BACKGROUND/CONSIDERATION: I have enclosed a late memo (3:00 p.m.
Friday) from the City Attorney. Upon receiving his answers from
Mae Nan Ellingson concerning both the sale of Haven Field and the
Airport Authority, I recommend we (re)discuss the options that are.
now available.
RECOMMENDATION: I recommend that the Council authorize the third
advertising of -he offering for Haven Field. I also recommend that
we reconsider the Airport Authority transition. If we create the
Authority, we will not have the capability to finance the airport
improvements by TIF funding. I believe we should (re)analyze the
original funding plan. The City would complete all projects,
through TIF, and upon completion of these improvements, we would
then turn the airport over to a Commission/Authority at that time.
ACTION REQUIRED: A MOTION to authorize the readvertisement for
Haven Field is needed to proceed according to the Bond Attorney's
advice. A decision for the airport administrative structure will
need to be addressed.
icll l
� 0i �jl�
Incorporated 1892
Telephone (406) 758-7700
FAX (406) 758-7758
Douglas Rauthe
Post Office Box 1997
Mayor
Kalispell, Montana
Zip 59903-1997
Clarence W. Krepps
City Manager
City Council
Members:
January 3, 1997
Gary W. Nystul
Ward I
TO: Clarence Krepps, City Manager
Cliff Collins
Ward I
FROM: Glen Neier, City Attorne
Norbert F. Donahue
Ward 11
RE: Airport Authority--AirportlAth tic Complex Redevelopment Plan
Dale Haarr
Ward II
At the Council Workshop of December 30, 1996 the Council requested that I make
)in, Atkinson
inquiries with Mae Nan Ellingson of Dorsey and Whitney, regarding the sale of Haven
Ward III
Field through negotiations with a private developer. At approximately 12:30 P.M. on
Lauren Granmo
January 3, I received a call from Mae Nan.
Ward III
Pamela B. Kennedy
I explained to her that the City had advertised the Haven Field for sale on two occasions
Ward IV
and had not received a responsive bid for the property. I indicated the general parameters
M. Duane Larson
of the Advertisement, indicating the City had required earnest money and a minimum
Ward IV
bid of $4.48 per square foot.
In her opinion, the City should again advertise the property for sale, without setting
minimums and without requiring earnest money from prospective developers. She could
not recommend proceeding with private negotiations, when other competing interests
may have had proposals which were not acceptable under the minimums, but might be
viable under a "wide open" offering.
We also discussed a concern that has been expressed as to whether or not the City
could, after creating an Airport Authority, contribute tax increment revenues for
improvements to the airport. In Mae Nan's opinion, once an Authority is created, the
property belongs to the Authority, and that the City could not legally transfer funds to the
Authority for improvements to the Airport.
RESOLUTION NO. _ A3_0$_
A RESOLUTION CREATING AN AIRPORT AUTHORITY TO EXERCISE ALL POWERS
GRANTED UNDER THE "AIRPORT AUTHORITIES ACT" (TITLE 67, CHAPTER 11,
MONTANA CODE ANNOTATED) UPON APPOINTMENT AND QUALIFICATION OF THE
FIRST COMMISSIONERS THEREOF, FOR THE PURPOSE OF OPERATING,
MAINTAINING AND EXPANDING THE KALISPELL CITY AIRPORT, REPEALING
RESOLUTION NO. 4274, AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the City of Kalispell owns, controls and operates a
facility known as the Kalispell City Airport, and
WHEREAS, § 67-11-102, MCA authorizes a City Council to create an
Airport Authority to exercise all powers granted under
Title 67, Chapter 11, Montana Code Annotated, and
WHEREAS, the City desires to develop the Kalispell City Airport
and City property surrounding said Airport in accordance
with the Kalispell City Airport Neighborhood Plan,
adopted September 19, 1994, and
WHEREAS, the City, in order to achieve it goals, considers it
t necessary to create an Airport Authority pursuant to
�- Montana law for the purpose of operating, maintaining and
expanding the Kalispell City Airport for the benefit of
the City and the flying public.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, MONTANA AS FOLLOWS:
SEC N--I. That the City Council hereby creates the
Kalispell City Airport Authority to exercise
all powers which may be granted to airport
authorities under Title 67, Chapter 11,
Montana Code Annotated for the purpose of
operating, maintaining and expanding the
Kalispell City Airport.
SECTION II. That on or before the effective date of this
Ordinance the City Council shall appoint a
seven (7) member Kalispell City Airport
Authority Board in accordance with § 67-11-
is\wp\airauth.wpd
103, MCA, whose members shall be qualified for
office on July 1, 1997.
SECT-19WLIil That the Airport Advisory Board, created by
Resolution No. 4274, is hereby continued until
the appointment and qualification of the
Kalispell City Airport Authority with•the same
duties and responsibilities as set forth in
Resolution No. 4274.
SEION Iy. That this Resolution shall take effect on July
1, 1997.
PASSED AND APPROVED BY THE CITY COUNCIL AND THE MAYOR OF THE CITY
OF KALISPELL, THIS 6TH DAY OF JANUARY, 1997.
DOUGLAS D. RAUTHE - MAYOR
Attest:
Debbie Gifford, CMC
Clerk of Council
is\wp\airauth.wpd