CB town council debates merits of giving to air program

Using town fund balance to keep RTA fund balance healthy

At least one Crested Butte councilperson voiced concern about allocating town funds to, in his view, help supplement the Rural Transportation Authority (RTA) budget even though the RTA has a growing fund balance.

Members of the RTA board, which is made up of elected representatives of the various municipalities in the county and the county commissioners, have gone back to their boards to try to cover an $89,000 shortfall to fulfill a contract with United Airlines for service to Houston.
The total Minimum Revenue Guarantees (MRGs) for United for next winter is $353,000 with the RTA covering $264,000. Crested Butte Mountain Resort has signed another contract with American Airlines for service to Dallas that will cost up to $1.3 million and the RTA is paying $230,000 of that contract.
“My problem is that we set up the TA [Tourism Authority)] and RTA to handle these issues,” said Schmidt. “It looks like the current RTA fund balance could handle this shortfall.”
“It could, but we need a healthy fund balance when we go to negotiate MRGs with the airlines,” responded RTA executive director Scott Truex.
“I get that we are all in this together. I’m a big supporter of the RTA. I drive a bus from the airport,” said Schmidt. “But building a fund balance on the backs of other governmental entities and their general funds makes me uncomfortable.”
“Historically, the RTA carried big fund balances,” added Crested Butte Mayor Aaron Huckstep. “The RTA board is trying to focus on establishing consistent air service. Next winter we will have 4 percent fewer seats than last year. There is a very practical limitation on what the RTA can do alone. We aren’t the only resort facing these types of airline issues.
“If we help the RTA in this particular instance, it is more likely to be a one-time request,” Huckstep continued. “It’s not something the municipalities want to get in the habit of doing. But I think it is worthwhile to help build these reserves and bolster the winter economy.”
“This helps stabilize the RTA down the road,” added Councilperson Roland Mason. “It’s a longer-term approach.”
“It is getting more and more expensive every year to fund the air program,” Truex stated. “We’re lucky to be down just 4 percent in winter seats. Steamboat is down 11 percent.”
Truex explained that some Saturday flights in January have been eliminated, as they were poor producers. “I have high expectations to not pay the guarantee caps this year,” he said, “if we get some snow. Now, if the caps are not paid in full, and the town money is not necessary, then the town would get some or all of its contributions back.”
“I think using marketing dollars specifically where we’re flying would help,” said Mason.
“Everyone is aware that we need to really start thinking outside the box because the box isn’t working,” said Truex.
“This is a good opportunity and this shortfall helps cover the Houston flight MRGs, which is an important flight for the valley,” said Ethan Mueller, CBMR vice president and general manager.
A straw poll showed that the council didn’t have a philosophical issue with donating town money to the air program.
“If no one else has a problem using funds from our fund balance to help the RTA fund balance, I guess in the spirit of cooperation we should make a donation out of the town transportation fund,” said Schmidt.
Town Manager Susan Parker said there was $98,000 in the Crested Butte transportation fund. Those monies must be used for transportation or related projects. “In the short term, using that money could compromise our ability to renovate the Clark’s Market bus stop,” she told the council.
Parker said that taking town fund balances to fund RTA fund balances wasn’t popular in town hall. “To draw down our reserves to help build their reserves while we have been making sacrifices, is a hard thing,” she said. “As part of this ‘gift,’ I think the RTA should maintain the same standards of fiscal prudence that we are.”
The council voted 6-1 to donate $20,000 from the town transportation fund to the airline program. The check will be written to the RTA. Councilperson Shaun Matusewicz voted against the move saying he didn’t want to donate more than $15,000. The funds will come out of the town’s 2013 budget.