Friday, September 20, 2019

RTA creates air command group to help shape future air service

Only one elected official on subcommittee, but gets RTA a seat at the table sooner 

By Alissa Johnson

On Friday, May 6, the Gunnison Valley Rural Transportation Authority (RTA) formally created a new subcommittee to help grow the local air program. The move, approved in a seven to one vote, is part of an ambitious Strategic Air Plan also adopted on Friday that aims to increase the number of enplanements to 45,000 by 2020—a 40 percent increase in economic impact over 2013.

The goal is to bring all major players in the air program to the same negotiating table, including the RTA, Crested Butte Mountain Resort (CBMR), the Gunnison–Crested Butte Tourism Association, airport representatives and the recently formed Gunnison Crested Butte Air Alliance, a new non-profit made up of local business representatives supporting the local air program.

The result is a seven-member subcommittee that includes only one elected official and will oversee and recommend to the RTA the allocation of revenue guarantees to airlines that serve the local airport, a $1.3 million budget for next winter. While the majority of the board was in favor of the approach, it did create heartburn for one member concerned about transparency and management of public funds.

Ambitious goals

The Gunnison Valley Air Service Strategic Plan unveiled on Friday sets clear goals for growing air service into the Gunnison-Crested Butte Regional Airport. First and foremost, it outlines the creation of a public-private partnership called Air Command to help meet those goals.

It empowers the Air Command to make decisions, commit financial resources, be legally able to receive both public and private funds and have the authority to conduct “coordinated negotiations” with airlines. It also establishes a budget for the partnership as a sub-fund of the RTA.

Under the plan, the RTA funds all revenue guarantees with airlines, and CBMR commits its previous revenue guarantee funds to marketing for air service and the valley, though the amount isn’t stipulated.

The remainder of the plan outlines specific goals that the partners will work toward, such as maintaining a strong fund balance, increasing the number of enplanements to 45,000 by 2020, increasing the number of annual skier visits to 500,000 or more during the same timeframe (a 25 percent increase), reducing “leakage” to other airports, and improving connectivity for business travelers.

Better negotiations with airlines, stronger marketing

As the previous chairman of the RTA, county commissioner Paula Swenson helped develop the strategic plan and the Air Command concept. She outlined what she sees as its benefits to the board of directors.

“One of the concerns we’ve had with air service planning over the years is the way this board is made up of elected officials, and when we have meetings and have a lot of information brought to us from the airlines, which is proprietary, we can’t have a robust conversation about contracts,” she said.

In addition, different air service partners handled different parts of the program. The RTA and its consultant negotiated some contracts and CBMR and its consultant negotiated others. The left hand didn’t always know what the right hand was doing, and the airport and the Tourism Association were often out of the loop altogether.

“One of the things that boiled up to the top was how we can have better communication and have more robust conversation about air service. How do we grow it and be able to have better communication with the airlines without making all of their proprietary information public?” Swenson explained.

The result was Air Command, with two voting members from the RTA (the board chairman and the executive director), two voting members from CBMR, and one voting member each from the Tourism Association, the airport, and the Air Alliance. The seven members will collectively review and negotiate service contracts with airlines and bring recommendations to the RTA.

“First blush from the airlines is that they like this model. They like being able to talk to funders, marketing people, and the airport all at the same time, so as they develop guarantees for the upcoming year and developing contracts, they’re talking to everybody who has a dog in this fight,” Swenson explained.

A sub-fund of the RTA budget will also be dedicated to the new Air Command to cover revenue guarantees to the airlines. Executive director Scott Truex explained to the Crested Butte News, “Each season, the Air Command will come to the RTA and say this is what we would like to do and this is what we think it will cost. Do you have the funds to support this?”

If approved by the RTA, those funds will be transferred to the sub-fund so that the board chairman, as part of Air Command, can sign contracts with the airlines. Under TABOR (the Tax Payer’s Bill of Rights), a public entity cannot sign a contract without having the money set aside to cover associated costs.

For next winter’s air service, that amount is $1.3 million to cover revenue guarantees for air service similar to last year. Of that amount, the RTA hopes to pay only 30 percent to 50 percent, depending on how the flights perform.

Concerns about transparency and fiduciary responsibility 

The idea of Air Command did not sit well with Crested Butte mayor and RTA board member Glenn Michel. “I’m new to this board and I keep hearing that, but I have a strong sense of transparency and fiduciary responsibility, and reading through this, I’m a little bit astonished that we’re going to give money to an organization with one elected official on it,” Michel said.

He also saw problems with trying to skirt transparency, but Swenson disagreed. “We do have control over this organization because we appoint the members. It’s exactly why it’s set up like this,” Swenson said.

“To me it raises red flags and I’m uncomfortable,” Michel countered, wondering why the RTA couldn’t use executive sessions to discuss proprietary information and negotiations.

Swenson confirmed that the RTA already does that, but the executive sessions don’t solve the communication issues, particularly given the disparate negotiations handled by consultants and CBMR.

“Now the chair of the RTA will be in all of the email exchanges with the airlines. I also understand your transparency issue but actually, this gives the RTA chair much more involvement and understanding so he can report better back to the board,” she said.

“What this does is allow us to be collaborative instead of reactive because we get to work with our partners from the beginning and create a community-wide collaborative plan instead of each of us reacting to what the other is doing,” added Truex.

New RTA board member Janet Farmer, a Mt. Crested Butte councilmember, wanted to know if appointing more elected officials had been considered.

Swenson confirmed that it had, but air service consultants had made a strong argument for having the executive director on the committee. “If we get to having three [representatives] we have to have [the meetings] in public,” she said.

“That’s the argument,” Michel said, but both Swenson and Truex said that the negotiation cannot take place in public. They both felt that due to the nature of working with airlines, the important conversations were happening in private but without consistent RTA representation.

“These discussions have always been happening but have been happening without anyone on this board participating,” Swenson said, reiterating that the new arrangement brought everyone to the same table and gave the RTA greater participation. She also emphasized that the buck stops with the RTA.

“The RTA is the purse strings… If [the recommendation] is not in alignment with what this board wants, then we get to say no,” she said.

General support from the board

After much discussion about the function of the Air Command, Michel said, “I feel like I’m the one everyone is looking at right now and I feel this is proper vetting and would encourage the board to jump in… If we’re not understanding this we’re not going to have buy-in from the public.”

The remainder of the board, however, saw value in the set-up.

As a new board member, Farmer said, “I was aware of the entities having different conversations. The theory of this is excellent.”

Board chair Roland Mason suggested that with the RTA covering revenue guarantees and CBMR putting its funds toward marketing, there will be better promotions in the areas where people fly.

Gunnison mayor Richard Hagan saw the potential to ease tensions. “I’ve been through the way we were doing it before and my experience was that these disparate entities working [separately] created a competitive atmosphere and we would come together in executive session to work through some of those animosities… I see this as front-loading that and making these decisions together.”

“I would agree. It becomes a group of the right individuals in the room working together to make recommendations to this board based on what seems to be a well thought-out and strategic plan,” said Matt Schwartz, Gunnison councilmember.

In the end, the board approved both the strategic plan and Air Command in votes of 7 to 1, with Michel voting against both. “I’ve spoken and we know where we’re going. I’m not going to support it and I believe there might be some unintended consequences,” he said.

The strategic plan will be reviewed every six months, with the opportunity for the RTA to amend the strategic direction and the functioning of Air Command. Truex believes that the plan makes the RTA more transparent than before. “It lets people know where we’re headed,” he said.

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