Why We Passed the Airport Bill
Rep. Ruth Samuelson, Sen. Bob Rucho, Rep. Bill Brawley, Sen. Jeff Tarte, Rep. Jacqueline Schaffer, Rep. Charles Jeter and Rep. Rob Bryan sent an open letter to the Charlotte Observer outlining their rationale for the authority takeover of Charlotte Douglas Airport.
Reluctance to change and an extreme aversion to relinquishing even a scintilla of power are two hallmarks of any government bureaucracy, regardless of size. So it is understandable that city government officials would reject suggestions that they create an independent regional authority to govern Charlotte Douglas airport – even when those suggestions come from the city’s business community, duly elected state representatives and their very own airport governance consultant.
A growing recognition of the need for those charting the airport’s future to have a truly regional perspective and a business mindset – free as much as possible from the influences of ward politics – convinced us that it was essential to establish an independent regional authority despite city officials’ resistance.
Today, we’re writing to urge Charlotte City Council members to resist the instinct to further obstruct the transition and, as a result, do damage to this vital regional resource.
Under the bill passed this week, the state legislature has not seized the airport from the city and will have no say in its governance going forward. The authority board will be made up entirely of appointees of Charlotte metro area governments.
Four of the 11 members will be picked by Charlotte’s mayor and City Council – with at least two of those four coming from the city’s west side. Mecklenburg, Cabarrus, Iredell, Gaston, Lincoln and Union county governments would have one appointee each. The 11th member would be elected by the members of the authority. Each of these representatives would bring airport-relevant experience.
We envision these representatives leading us toward a truly regional airport system with a business orientation that will serve all of our citizens’ transportation needs, and at the lowest costs possible, without interference by local elected officials.
While we would have preferred to come up with a governance structure in partnership with City Council members, it became apparent over the last four months that city officials were not willing to collaborate.
We’re confident the bill we have passed is fair, addressing concerns expressed by many that Charlotte would not be adequately compensated for any investments it has made in the airport. Most airport improvements made over the years have been paid for directly with airport revenue – and not city taxpayer money. But in cases where it is shown otherwise, the authority will reimburse the city for those expenses.
It is well documented that Charlotte Douglas airport has played an essential role in attracting top-tier companies that have created some of our highest-paying jobs. It has also helped make it possible for many homegrown businesses to flourish on an international level.
So why do so many of Charlotte’s business leaders believe that change is needed, and why do we agree? Because they understand that the airport is not like regular city departments. It really is a business. And smart business people don’t wait until the system is broken before they fix it. They look ahead and prepare to avoid dangers and capture opportunities.
Government, on the other hand, is more likely to wait until a system is broken before they fix it, if even then! And it takes time – time that the Charlotte hub doesn’t have.
A smart business person would recognize that when her biggest customer (in this case, US Airways) is undergoing a major reorganization impacting every factor of their business – including hub locations – she needs to be positioned to capture that opportunity. A successful CEO would also recognize that if his world-class COO is retiring after many years running the “ship,” he needs every tool at his disposal to hire and train the best replacement possible.
The system that got us where we are may not be the best system to keep us there.
The city’s consultant said that to maintain our hub status, we needed to run the airport like a business. And, he said, an authority is most likely to provide that perspective.
The N.C. constitution gives state government not just the power but the responsibility to see that local governments operate in the best interests of citizens. It is in that spirit that we passed the airport governance bill this week.
I read this and *still* have no concrete answer as to why this was necessary. “It has to be run like a business”. Well sure it does. What specifically about the current situation suggests it isn’t? Frankly, its one of the few successful ventures that city government is involved in. Why does a body consisting of 11 unelected (by the people) members have any more expertise in running the airport than the current system allows? What future problems are bringing concern, and why does allowing a different group of people address them make everything perceivably any better?
Honestly, I don’t get it, and this joint letter didn’t actually help answer any questions. It didn’t really say anything at all.
What do our readers think of this, as well as “Jerry-Gate”?
Christian – Your comment sums it up for me so I’ll leave it at that except to answer why. In two words, political power. The General Assembly is controlled by the R’s and local government by the D’s. Ruth’s rationale only reconciles using Republican Math.
The City of Charlotte offered to create a regional authority with appointees from surrounding counties, which is exactly what authority backers wanted. No compensation for the land or infrastructure with the only requirement being the City gets to select the appointments. Their response was “you have water balloons and we have bazookas”. To them it’s a contest and it’s not about the airport, it’s about winning.
Well now it’s where no one wanted it to be, the courts. And I think the General Assembly will find their arguments in court are not nearly as persuasive as with their own partisans. The best Ruth, Jerry and Bob, et al, can hope for is the court says it’s true the State has eminent domain authority to take the airport, but under eminent domain it’s required to compensate at fair market value (I’m thinking that would be six to eight billion dollars). At worst it’s thrown out on state constitutional grounds or because of bond holder suits.
Relative to Jerry, he got what he deserved. I don’t care how talented someone is, no employee can thumb their nose at their employer and expect to be around for very long. He said in writing he was resigning, an employer is under no obligation to not accept it. We’re better off without him. What is so amusing is that he sprung himself in his own trap and the City sat back and let him do it. That’s the Charlotte Way.
This reeks of corruption like everything coming out of Raleigh these days…I have read everything I can on this and STILL can’t figure out the real reason behind this coup. If they fear there will never be another Republican majority in Charlotte to serve as a “check” on Democrat corruption/incompetence, how are they gonna feel when Dems from all over the state are telling us how to run the airport and demanding a cut of the “business” profits? These Mayberry Machinations will result in one thing – the loss of our hub status.
It’s absolutely SHAMEFUL the way Jerry Orr was so disrespectfully and publicly mistreated, after serving the airport since 1975 and building it into the unprecedented success story it has been.
Jerry Orr certainly did NOT resign, and anyone with a lick of sense knows it.
If you are at all in doubt as to Mr. Orr’s intentions, you need only ask him. If he “resigned,” why was he unceremoniously “escorted” out of the building? This is typical of the city attorney’s unsavory tactics of circumventing clear intent based solely upon a stretched application of technicality.
Jerry Orr’s letter was simply a timely and professional processing of Raleigh’s action, which City Attorney Bob Hagemann AFTERWARD had a Bev Perdue-appointed Gaston County judge halt – temporarily.
Compare that level of prompt professionalism demonstrated by Jerry Orr with the childish pouting and shenanigans of a Mayor, City Council, City Attorney, and City Manager who are jeopardizing the future of our airport for their own bloated egos, media grandstanding and questionable political agendas.
With unprecedented tax increases during a challenging economy, the wasteful and divisive streetcar folly, closed-door meetings to give away our precious tax dollars to a billionaire for his already-successful private business, the succession process for an interim Mayor organized and decided entirely in private and without public input, a crumbling infrastructure neglected to fund a long list of uptown toys, a fleeing tax base — yes, our Charlotte city government is certainly succeeding in making us “world-class” alright – a world-class embarrassment.
I agree with Christian that something is not right with moving the airport into a regional body. My prediction is that a corporate partner (a public-private partnership) will rule the airport. The public will be left out of decision making, and it will be run by a business — not just “like a business”.
I am inclined to agree with you. This whole thing looks and smells like a bait and switch to privatize the airport along with its $647 million reserve fund.
Zon- again when did Charlotte voters vote to approve CIDA debt?
1935, 1952, about 1975 and 1980. Once again, you have no idea what you are talking aboout. Don’t make me embarrass you again. I won’t be so nice next time.
Zon you can pull those years out of thin air but it is just not true, Why would revenue bonds ever be put on the ballot?
@ Rick – Those dates are public record. Try reading sometime, you’ll be less of an ignoramus. Although less of an ignoramus relatively speaking does not mean much for one as intellectually challenged as you. You would have to do a lot of reading to make noticeable progress. You could take an easier route, just stop making uninformed posts on the internet that are easily disproven with your real name. Then no one will know how developmentally stunted you really are.
Zon- People never voted on airport bonds in 1980- Revenue bonds are never put up for a vote. the Meck board of elections website only goes back to 1995 for election results- Where else should I look You can insult me all you want, but you are wrong regarding CDIA debt being approved by voters. why not post under you name? Balls are not that hard to grow
Zon — or whomever — you have at least mentioned the one relevant thing that has gone totally unremarked upon: debt.
The $64K question is — Does the the shift to an authority give the airport significantly more latitude to both issue debt AND BUY DEBT issued by US Airways? The fact that is question has not be raised by ANY of the players tells me this is the inflection point.
Now, if the city has bought US Airways debt in the past, this is moot. I do not know if it has. Someone — Stan Campbell? — would know. Also US Airways’ lobbyist on Tryon St. — Chuck Allen — would know.
But it is certainly true that authorities who CAN buy debt are smiled upon by US Airways, and all airlines. It is a sort of quid pro quo for traffic and business. Buy our debt and we’ll use your airport.
I also must note the Jerry and crew were dinged by the IRS for using tax-exempt bond money for airport expansion, according to TCO. There is just not enough detail in that reportage to make sense of the issue — but again we are back to debt and its uses.
Dedicated airport debt secured by boarding fees is a pretty straight deal. Maybe that is why no one is worried about buying out existing bondholders. And there are only two gigantic banks across town more than willing to collect fees and issue that new debt to retire the old.
Again, I am just throwing stuff out based on broad experience and frankly do not want to run all this down, but Zon, you should know the specifics if you are as informed as you sound.
No snark or anything — help us flesh out this deal with an eye toward the debt issuance aspects.
Sure. Not certain I follow the question, but will try to respond as I understand it.
I was not aware the reserve airport funds were loaned to USAir. In fact, I am not knowledgeable of where those funds are invested. It’s a very good question.
Relative to airport bonds sold by the City to fund airport infrastructure, the instruments a revenue bonds, the City’s credit backs them up and airport fees pay them back. If ticket fees do not cover the payment of the bonds, the city’s taxpayers are on the hook for payment. The current bonds funded new runways and a new concourse and assesses $3.00 to every ticket incrementally over other fees to service the debt.
Relative to overall airport revenue, USair gets a rebate of about 40% the last I checked. The rest goes to cover operating cost. Which is amazing considering it’s the most cost effective airport in the country.
Hopefully that addresses your comments/questions.
Zon- you continue to amaze us with your ignorance- read the bond prospectus from any of the airport REVENUE bonds issued to fund CDIA, and you will not find one word that obligates Charlotte to “back up these bonds” perhaps your judgement has been clouded by the new photos that Weiner has been texting you?
Rick – You are either incredibly stupid or a very bad liar.
how does trying to educate an ignorant slob/clod about the basic principles of municipal finance make me a liar. I worked for Smith Barney Harris Upham when we underwrote the airport debt- so I know what I am talking about. If you can read at or above an 8th grade level- you can see what I am talking about in the prospectus that were issued with the bonds- (do you know what a prospectus is?)
Speaking of the airport- Foxx has been Sectrans for 3 weeks and we have already had two plane crashes- “doing a great job Brownie”