County denies air funding request from CBMR, Chamber

New report shows revenues down $300,000

The Gunnison Board of County Commissioners turned down a request from Crested Butte Mountain Resort and the Gunnison-Crested Butte/Mt. Crested Butte Chamber of Commerce for funding to help cover Continental Airlines’ start-up costs at the regional airport.

When the two entities approached the commissioners last month to make an initial request, they were told that the Local Marketing District’s reserve fund might be big enough to handle the county’s share of Continental’s start-up costs at the airport.
At a meeting Tuesday, August 3, Chamber of Commerce director Richard Bond, along with CBMR vice president for sales and marketing Daren Cole and director of central reservations and revenue management Jeff Moffett, made their case again that the airline service would benefit everyone.
“I really think this is the year of collaboration,” Cole told the commissioners. “The RTA and CBMR are working much better in terms of the dollars we have brought to the table this year to make sure that we can maintain a solid level of air service.”
The flights would service Houston, which is a major tourist market for the Gunnison Valley.
Cole acknowledged that CBMR was making an unprecedented request at an unprecedented economic time for the county, but assured the commissioners that the resort is “trying to be as efficient as we can. The dollars we’re asking for, we think, will have a good return and we want to help start building up the fund balances again.”
But, the commissioners heard from county attorney David Baumgarten, who had done some research since the last meeting and felt the county would be close to violating the statute that defines how LMD funds can be used.
Baumgarten said the statute specifically prohibited the county from using the money to subsidize capital improvements.
The start-up costs for bringing the extra air service to the valley could reach as high as $100,000, but will likely be closer to $60,000. The money will go to put the equipment, signs and colors up in the terminal to make an area of it Continental-ready. To some, that might seem like a relatively major capital improvement.
After the bad news had been delivered from Baumgarten, the deathblow came from county manager Matthew Birnie, who referred to an expense report with the LMD’s budget data through June.
“You can see that the annualized collections are projected to be just about $300,000 less than the budget. You can see what that does to the reserves,” Birnie said, pointing out the bottom line of the report showing an annualized fund balance of 7.3 percent, down from the budgeted 29 percent.
Birnie went on to point out that the county does pump more than $1 million into the valley-wide marketing effort every year.
“So relative to collaboration, $1.1 million of the public’s money is going to marketing, based on the majority of citizens wanting it used for that intent,” Birnie said, adding that using the LMD money to fill the request would be a “pretty significant policy departure.”
Birnie concluded, “At this point, just from a strictly fiscal perspective, it appears unwise to spend unbudgeted expenditures when your collections are $300,000 less than what was anticipated.”
Commissioner Paula Swenson jumped in to point out that the county had already gone $150,000 into the LMD reserves to maintain marketing of the valley at its current level.
“We’re taking our reserve line from nearly $520,000 last year to only $80,000 this year,” she said, “so we are already hugely over-extending our revenue stream to keep our marketing out there as much as we possibly can.”
Commissioner Hap Channell agreed, saying “The bottom line is, the [decline in] budget revenues… this year has really thrown us into a new situation here.”
Looking for some glimmer of hope, Bond asked if it made sense for the request for funding to be made again after the county determines how much money came in during July and August. “You know we don’t have a hard estimate from the airline yet,” he said.
But Channell didn’t want to hear the same plan presented on a delayed timeline. He said he was worried about the precedent that filling the request would set for the future.
“The principle that I’m trying to get at is the precedent of our governmental entity … subsidizing private business in this manner,” Channell said. “I’m just not sure if I’m comfortable with us subsidizing a business, with the precedents of it, with the expectation going forward.”
But the commissioners didn’t close the door on the chamber and resort all together. Instead of giving the money to CBMR, the commissioners agreed they would rather give the money to the Tourism Association (TA), the county’s active marketing arm, which could then pass the money down the line.
“I think that I would be inclined if the TA were to make a request. That’s our collaboration,” Channell said. “What we are best at and what we are set up to do statutorily is to collaborate with the TA and the RTA. So if the TA were to come and request additional funding from reserves for additional marketing of Continental, I would look upon that as being different.”

Mt. Crested Butte Town Council update
Following their meeting with the BOCC, Bond, Moffett and Cole attended the Mt. Crested Butte Town Council meeting to report on their visit to the county. Bond recapped the county meeting for the council, but didn’t revisit the request for funds from the town for Continental startup costs. He reiterated the commissioners’ concerns and unwillingness to use the airport enterprise fund, and their concerns about a declining LMD fund balance. Bond said the county would consider a request for funding from the TA, which could then be used to provide additional marketing to offset the $60,000 CBMR theoretically would pull from its marketing budget to cover the startup costs.
“At the end of the day we agreed to wait for another month or two when we hopefully will have a better understanding of what the Continental [startup] costs will be,” summarized Bond. “So we left it undecided; but to be decided at a future meeting.” Bond will meet with the RTA and the TA soon, and afterward plans to set another meeting with the BOCC.
CBMR’s director of central reservations and revenue management Jeff Moffett said what he took away from the county meeting was “a real theme of collaboration and cooperation. We are having a meeting with the TA and RTA in Gunnison to go over airline marketing plans. We’re going to put our heads together and make sure no stone is left unturned.”