“This is our lifeline. This is the real deal…”
Along with Mt. Crested Butte, Gunnison County and the city of Gunnison, the town of Crested Butte is indicating a willingness to utilize public funds to help support the community air service program. The Town Council members voiced some concerns with the idea but agreed to the concept in a spirit of cooperation with the ski resort and other government entities and made it clear they felt the airline program is an economic lifeline for the entire valley.
While no hard number was settled on by the town, the council bandied about a figure in the $20,000 range for next year. That will go toward an $89,000 shortfall in the Minimum Revenue Guarantee (MRG) for next winter’s United Airlines flight between Houston and Gunnison.
While a $1.3 million MRG with American Airlines has been covered for the Dallas to Gunnison flight, by Crested Butte Mountain Resort, the Gunnison Valley Rural Transportation Authority and some private donations, the Houston flight has an MRG of $353,000. Of that, $264,000 has been covered, primarily from the RTA. CBMR has signed the contract with United so the flight is already loaded into the system and people can book it. There will be 22 round-trip flights next winter and the hope is to fly in at least 1,700 people on that airplane.
“This request isn’t coming formally from the RTA, “ explained RTA executive director Scott Truex. “The members of the board said they would make their best effort to raise the $89,000 shortfall.”
The RTA board is made up of elected representatives from the county and three municipalities in the county.
“Let’s be honest and recognize that the city of Gunnison probably won’t contribute the same amount as us or Mt. Crested Butte,” said Mayor Aaron Huckstep.
Mt. Crested Butte has “earmarked” $20,000 in town admissions tax funds. The county commissioners on Tuesday indicated they were on board but said they would review the request during budget sessions. City of Gunnison Mayor Jonathan Houck has said their council would be looking at their economic development funds as a possible source for a contribution but no firm number or formal action has yet been decided.
“I think the county should pay the lion’s share,” said Councilperson Shaun Matusewicz.
“These numbers are staggering,” said Crested Butte Councilperson Glenn Michel, “but there is a correlation between the number of people flying in and the amount of money spent in the valley.”
CBMR Vice President and General Manager Ethan Mueller said for each person flying into the valley, an average of $1,300 is spent. “With a load factor of about 60 percent, you can see we are talking millions of dollars,” he told the council. “You can get a sense of the amount of dollars floating into the local economy. It is complicated but it can have a profound effect and it goes throughout the valley.”
Mueller said the resort recently learned that they didn’t have to pay last year’s full $1.3 million MRG to American Airlines. Instead, because of what they presume to be high late-season ticket prices, the resort had to pay only $564,000.
“That shows we’re doing better,” Mueller said. “While we were surprised at the low number, it was a pleasant surprise. And if it is because of a high price point, it says something about our dedicated March customer.”
Truex said, given that guarantee amount, he was surprised that the MRG stayed the same as last year at $1.3 million.
“We are cautiously optimistic about the future,” said Mueller. He related an anecdote to the council how a group had booked the resort and had a great time. When it came time to get them back, the group extolled the virtues of the resort and the town but chose another resort. “It was simply because of the travel struggles that they chose not to come back,” Mueller said.
“We definitely have an air program that is facing some challenges,” said Huckstep. “It’s the case at small airports all over the country.”
The town staff voiced some concerns with the request. Town Finance Director Lois Rozman said, “There is no question all of us understand the need for air service to the valley. When the staff first heard about this idea we were preparing to ask them to make more cuts to their departments. So it didn’t sit well with the staff to hear the town was going to donate more money to other entities while they were being told to cut and cut yet keep up the quality of service. There’s some angst there. The staff understands the need for the air service and it would be better if this was a one-time deal.”
Councilperson Jim Schmidt asked that if sales tax rose and thus filled the coffers of the RTA beyond its projected budget, if the town could get all or a portion of its money back by the RTA picking up the $89,000 shortfall instead of adding to its reserve fund-balance.
Truex said having a reserve actually facilitates the ability to sign contracts with the airlines with larger MRGs. It can make it easier for everyone in the long run.
“The idea of extra money going into the RTA fund-balance bothers me,” Schmidt said. “For the RTA to build up its fund-balance on the backs of other government entities doesn’t seem fair to me.”
The rest of the council asked that the RTA board discuss this suggestion at their June 28 board meeting.
“This is our lifeline right now,” said Michel. “It impacts everyone we know whether they have a job or own real estate. It’s CBMR. It’s the economy. It’s the real deal. The amount of gain we get is tremendous. Without it we’re in a world of hurt.”
Michel said he had no problem helping to bolster the RTA fund balance if it helped the air program in the long run. “This is in the spirit of cooperation we have been trying to foster with the other government boards and CBMR,” he noted.
“And that is really appreciated,” said Mueller. “To see it across the board is meaningful and may be a way to get us out of this debacle we’re in. It pushes the needle forward in a responsible manner.”
Huckstep complimented Mueller for his efforts and the company’s contributions to the air service program. “We appreciate your support of this as well,” he said.
The council agreed that they would indeed help make up the MRG shortfall but did not commit to a hard figure. They want to get some input from the other government entities to determine what sort of agreement and financial number can be worked out. The next RTA meeting where the various representatives will meet to discuss some details is slated for Thursday, June 28 in Crested Butte.
With the Dallas and Houston flights settled, the resort is still waiting to see how many flights a day United plans to fly into Gunnison from Denver. Last year, there were three flights. Mueller said they won’t know the amount of service on that route until the end of summer.