The Crested Butte News Serving the Gunnison Valley since 1999
“I think lead by example is exactly what we’re trying to do here”
The Mt. Crested Butte Town Council wanted to “lead by example,” in the effort to maintain some level of air service for the valley this winter, agreeing to pitch in $20,000 toward the $89,000 shortfall in the Minimum Revenue Guarantee being required by United Airlines.
The Minimum Revenue Guarantee (MRG) is the airline’s way of making sure it doesn’t lose too much money flying to airports that might not turn a profit otherwise. Gunnison-Crested Butte is one of those airports and this year Crested Butte Mountain Resort, along with the Rural Transportation Authority (RTA), has to hand over more than $1 million in revenue guarantees to American Airlines and United.
While CBMR will pick up the bill for the American flights, the RTA is left covering the costs of the United MRG. In a year when the organization is trying to rebuild its capital reserves, the bill was more than the RTA’s budget would bear. So the municipal representatives on the RTA’s board started raising the $89,000 still needed for the United flight.
At a meeting Tuesday, July 17, the Mt. Crested Butte Town Council reviewed a Memorandum of Understanding between the town and the RTA that had been drafted and wanted to be the first among the local governments to commit to the cause, putting up $20,000.
Councilman Chris Morgan, who is also the chairman of the RTA, said, “The idea of the letter is so everybody understands who’s paying what and when it’s going to be paid. The idea is that the municipalities, or other funding partners that come in for this $89,000, will pay their money last.
“So if the Houston flight comes in $89,000 underneath the cap,” Morgan continued, referring to the point at which the airline would start collecting its MRG, “we don’t pay anything.”
Gunnison County has tentatively committed to pitching in around $20,000 in their next budget cycle and the town of Crested Butte has suggested they might donate but haven’t said how much. The city of Gunnison has put in $10,000.
“CBMR has agreed to make up whatever is not made up by the communities, although they believe the $89,000 is the responsibility of the local municipalities and possibly some other funding partners,” Morgan told the council.
Before this year, CBMR and the RTA had covered the cost of the MRG alone. The resort, which is largely dependant on the business air travel brings, put in the lion’s share and the RTA made up the difference with what it earned through a .35 percent tax on sales inside the city of Gunnison and a .6 percent tax in the rest of the valley.
After several slow winter seasons sapped the RTA’s capital reserve, the organization’s board wanted to rebuild its fund and the towns of Crested Butte and Mt. Crested Butte, the city of Gunnison and Gunnison County all seemed happy to help with the MRG. But being the first to make it official made some members of the Mt. Crested Butte council wonder if there would be an equal commitment from the other municipalities.
Responding to a comment that Councilman David O’Reilly made about Gunnison’s level of commitment, Morgan repeated a familiar refrain. “I have concerns about that as well, just in general. Mt. Crested Butte has the smallest municipal budget, the smallest population, the smallest amount of sales tax revenue,” he said. “But in a number of different taxes, we pay the same or more than the other municipalities do. So I share your concern.”
He gave the example of the multi-jurisdictional sales tax that funds the Gunnison County Land Preservation Board and the town’s contribution to the countywide Housing Authority.
“I agree with you too, David,” Mayor William Buck added. “It’s definitely an uphill battle and I would consider our approval of this as leading by example.”
Councilman Gary Keiser said, “I think lead by example is exactly what we’re trying to do here.”
And lead they did. The council voted unanimously to sign the agreement to help fund the RTA’s share of the MRG to the tune of $20,000. The money will come from Admission Tax funds.
