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Commercial air service funding secured for city of Pikeville WYMT-TV (Hazard, KY)Web site

 

Reporter: Paige Quiggins

PIKEVILLE, Ky. (WYMT) – It is a project that has been in the works for quite a while and on Friday, officials in the city of Pikeville announced they have been able to secure funding to bring commercial air service to eastern Kentucky.

“If it’s ever going to happen, this is going to be the time,” said Jared Arnett, President/CEO of the Southeast Kentucky Chamber of Commerce.

Officials said that time has come.

“It’s just not conducive to the global economy to not have ticketed service right here locally,” said Arnett.

Arnett and many others said it was the time for officials to announce $1 million in multi-county coal severance money has been set aside to help bring commercial air service to the region.

City officials said it is an economic boost that will help industrial parks within the region. He said when they are told the closest airports are in Lexington or Louisville, it changed the game for some.

“When these site developers say ‘we want to come look at it’ and when we tell them you have to fly in and drive three hours, we really don’t even get into negotiation stage,” said Arnett.
“If we could have the opportunity where they could fly right in, see our sites, it would make a tremendous difference.”

Mayor Pro-Tem Jimmy Carter of the City of Pikeville said it will affect more than a dozen surrounding counties.

“This definitely makes us the hub of eastern Kentucky and with commercial air service, it solidifies the whole deal,” said Carter.

The project’s consultant said carriers must agree before the project fully takes off.

“We are in a great position to go and make our final push on recruiting with the two airlines who have expressed interest in this market so our intent to be now to get in front of them as quickly as we can,” said Luke Schmidt.

Schmidt said they could know that answer by March of next year and if the two considering commercial carriers commit by then, it will likely take six months to a year from then for the services to begin.

Officials said this million is in addition to a $750,000 federal grant which has already been set aside for the project.

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Commercial flight info to be gathered (Corbin) Times-Tribune

Article originally posted to the Corbin Times-Tribune Web site http://thetimestribune.com/local/x543538315/Commercial-flight-info-to-be-gathered

 CORBIN — By Carl Keith Greene / Staff Writer


By Friday, Aug. 31, information regarding installation of a commercial flight from the Somerset airport will be ready.

Information will be released from a survey that has been taken in the Corbin, London and Somerset areas to help with the decision whether or not to seek a commercial flight.

In February, the Somerset-Pulaski County Development Foundation began to survey 15 counties in the area.

The counties have a population of 384,000.

Martin Shearer, executive director of the foundation, said, “Business and industry leaders throughout the region have asked repeated when air service will be restored” at Somerset.

He added that “A bigger reason is that all of us in the community, from a business and economic standpoint, should be able to make our existing business and travel connections.”

The nearest commercial flight locations are at Lexington to the north and Knoxville, Tenn. to the south.

He also said that if local commercial flight will be out and in at the Lake Cumberland Regional Airport, it could boost the future of economic develop in the region.

There has been no charter service at either the Somerset or London fields for several years.

So, Shearer said, commercial flights will simplify travel efforts to get to and from the Somerset area.

Luke B. Schmidt, who worked up the first survey, said he is in the middle of a more detailed survey sent by e-mail in the past week.

That went to every member of the Somerset, London and Corbin chambers of commerce as well as members of industrial communities in each city.

He added, “This second survey builds on the first and is to provide a bit more information regarding demand for air service in southern Kentucky.”

In the first survey, the Lexington airport is the regular airport for travelers from this region followed by Louisville and Cincinnati.

Survey participants want air service to key business destinations.

The participants recognized that having reliable airline service in Somerset is good. It would eliminate early morning drives to Lexington.

And for air service to be successful, service to a major connecting hub is needed.

Schmidt encouraged business and professional people who have received the current survey to complete it and return it to him no later than Aug. 31.

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Fiscal court approves air service resolution (Pikeville) Appalachian News-Express

Article originally posted to the Appalachian News-Express Web site: http://news-expressky.com/

By: Chris Anderson News Editor
Efforts to establish commercial air service in Pike County got a boost on Tuesday, as the Pike County Fiscal Court, after weeks of heated controversy, approved a resolution supporting the use of multi-county funds in the effort to establish the service.
During a special meeting Tuesday, court members, by a 5 – 2 vote, approved the resolution, bringing about the end of weeks of speculation over whether the effort to attract commercial air service to the Pikeville – Pike County Regional Airport would die at thte court’s feet.
Only Dist. 6 Magistrtate Chris Harris and Dist. 1 Magistrate Jeff Anderson voted against the resolution, with both officials expressing the opinion that they don’t think the proposal to establish the service will be successful.  Harris, who discussed the plan in depth during the meeting, has been outspoken in recent weeks with his opposition to the proposal.  He cited a study which showed the plan by which the City of Pikeville, the Southeast Kentucky Chamber of Commerce and the Pikeville – Pike County Airport Board are operating has a low success rate.
Anderson, in whose district the airport lies, said he wants the service to succeed, but does not think it will.
Dozens of people attended the meeting to hear the court’s decision on the resolution.  Among those were representatives of the City of Pikeville, the chamber and other organizations.  Airport consultant Luke Schmidt gave a presentation similar to the one he presented previously at a commercial air service forum hosted by the Appalachian News-Express in which he detailed the plan to attract a commercial carrier.
However, Schmidt’s presentation was unsuccessful in swaying Harris’ opinion of the plan.
Following Schmidt’s presentation, Harris, while thanking Schmidt for coming before the court and presenting his information, criticized parts of the plan which called for a “revenue guarantee” plan to be established in the event flights from the Pikeville – Pike County Airport are not profitable.  Such a plan, Harris said, is akin to “corporate welfare.”
Harris conceded that the county needs commercial air service but questioned the cost of establishing the service.
“Many of us here would like to see commercial air service in Pike County: that’s not the issue,” Harris said.  “The issue is, ‘At what cost do we want to see commercial air service in Pike County?’  At a time when we are looking at a loss of jobs, declining tax revenue, a limited amount of funding, I don’t think Pike County, right now, I don’t think we can afford this kind of project.”
Harris said he believes the information provided thus far regarding the plan has been “one-sided” as a result of a “publicity campaign” by those in support of the plan, which he said, includes the chamber of commerce, and the News-Express.
Harris questioned Schmidt about the plan and its perceived requirement for matching funds in addition to federal grant funds already secured for the project.  He also presented figures from a 2008 U.S. Office of the Inspector General audit regarding the Small Community Air Service Development Grant which showed the grant has a “dismal track record” of success.
Harris said proposals to attract commercial air service using the Small Community Air Service Development Grant as its foundation have been successful only 30 pecent of the time, according to the study.  He added that the study shows that the success rate did not increase more than 10 percent, even with increase community financial support.
He said such a success rate is an unsafe investment.
“That’s not the kind of investment I would make with my money,” Harris said.  “If you only had a 30 percent chance to get a return, to get a success, ‘Is that the kind of investment I would make with my money?’  And that’s the way I look at the public’s money.  ‘Is this something that I would do with my money?’  And it’s not: a 30 percent success rate is not a good track record.”
Harris added that the audit shows that cost subsidy plans such as that proposed for Pike County has a zero percent success rate.
Schmidt said he had read the study and agreed that the plan using the grant has a low success rate.  He added, however, that many of the failed plans were for areas of the country with only a small population base and which were hundreds of miles away from larger population bases.
Anderson followed Harris comments with comments of his own, expressing a belief that the service will fail.
Those magistrates’ voices, however, were the only ones of opposition.
Dist. 5 Magistrate Hillman Dotson said he is unsure if the proposed plan will be successful in establishing a profitable commercial air service in Pike County.  He added, however, that investing in the plan to attract commercial iar service is similar to the county investing in the development of industrial parks.
“I’ve been on the cour for several years now and we’ve invested millions of dollars in our industrial parks and we’ve seen some of them pass and some of them fail,” he said.  “That’s an example of what we’re doing today: we’re putting multi-county money to test to see if it will make money.”
Dotson, who along with Dist. 3 Magistrate Leo Murphy, attended the News- Express air forum, said the proposal could fail, jsut as what happened with the investment the county made in the former Sykes call center at Mossy Bottom.  The center, most recently operating under the name ACS, closed in May.
“This might fail, but it might be a success,” he said.
He went on recall the developemnt of the Eastern Kentucky Exposition Center, saying that some on the court was in favor of the facility while others were against it.  He said the issues surrounding commercial air service are similar to those which were considered when the Expo Center project was in development.
“I think the Expo has not made money.  I don’t thnk it will make money, but it has brought a lot of good things to Pike County,” Dotson said.
Southeast Kentucky Chamber of Commerce President and CEO Jared Arnett, who was the only person who chose to speak as part of the meeting’s public comments portion, said commercial air service will help to maintain industries currently established in Pike County and will also help attract new industries to the county.
Arnett said the air service will help to begin to diversify the region’s economy.  He adeed that the plan should be given the chance to succeed, even if it is only a slim chance as illustrated by the study presented by Harris.
“I’ll say that, 30 percent likelihood of success is better than 100 percent likelihood of failure,” Arnett said.
The resolution nearly died for lack of a second after Pike County Judge/Executive Wayne T. Rutherford made a motion to put the resolution to a vote.  Dotson seconded Rutherford’s motion after several seconds of silence from the court.
As the court members were polled for their vote, Dist. 2 Magistrate Vernon “Chick” Johnson said his opinion on the plan has shifted several times..  He went on to say that he would vote in favor of the plan, but warned those spearheading the effort to not come before the court to ask for more money in the future.
Similar warnings accompanied votes by Murphy, and Dist. 4 Magistrate Kenneth Robinson before the magistrates voted in favor of the resolution.
Rutherford, who has been outspoken in his belief that the county had been left out of the development of the plan, did not comment on the plan prior to the vote by the court to adopt the resolution.  Following the the passage of the resolution, Rutherford, who also voted in its favor, siad commercial air service will be another tool in the county’s “tool box” for economic development.

 

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PCFC to use coal severance to attract air service Williamson (WV) Daily News

Article originally posted to the Williamson Daily News Web site: http://www.williamsondailynews.com/view/full_story/19712368/article-PCFC-to-use-coal-severance-to-attract-air-service?

Pike_Fiscal_Court_backs_use_of_coal_severance_funds_to_develop_airport0_1344367671

JULIA ROBERTS GOAD

Staff Writer

PIKEVILLE, Ky. — In a heavily debated decision, the Pike County Fiscal Court agreed to support request a to use multi-county coal severance funds to fund efforts to bring commercial air service to the Pikeville/Pike County Airport.

In a courtroom filled to near capacity with people involved in the debate, the Court approved the resolution 5 – 2. Judge Executive Wayne T. Rutherford reversed his previous position and voted to throw his support behind the request currently pending before the Kentucky Department of Local Government of an appropriation of $1 million from the multi-county coal severance tax fund to the City of Pikeville, to be used to support the initial profitability and long-term sustainability of an airline.

The money is part of a proposed revenue guarantee package that would be used to recruit a major airline to service the airport (whose code letters are PBX). That package has been a point of contention at Fiscal Court. The Floyd County Fiscal Court has already passed a resolution supporting the use of the tax money to attract an airline to PBX.

The concept is that some money is set aside in as the revenue guarantee fund.

An airline doing business in the county would set a financial goal for each month. If the company falls short, money from the revenue guarantee package would be used to bring the amount of money the airline makes up to the monthly goal. The money would be given to the airline on a monthly basis so the company would not incur financial losses during the first two years of operation.

The Airport Authority has already secured a $650,000 grant from the Department of Transportation which would be part of the $2.5 million package, along with money from counties in West Virginia and Virginia that would be serviced by the airline, and funds from a travel bank.

Luke Schmidt of L.B. Schmidt and Associates, a consulting company, hired by the City of Pikeville and the Eastern Kentucky Chamber of Commerce to study bringing commercial air service to Pike County, gave a snapshot of the project so far, calling the project He said commercial air service is vital to supporting existing businesses as well as recruiting new ones to Pike County.

Two court members, District One Magistrate Jeff Anderson and District Six Magistrate Chris Harris, were the only “no” votes when the court voted to support the request.

“Until now, in the public eye, but it has been a one-sided conversation in favor of the project,” Magistrate Harris said.”That is due, in large part to a publicity campaign by the Chamber of Commerce, the newspaper … you have done a good job at getting the word out for your side of the story. But there is the rest of the story.”

“My opinion of what we are looking at is corporate welfare,” Harris said. “We are making sure that airlines will make a profit.”

He added that, if PBX has such potential for profit, he did not understand why the Airport Authority was having to work so hard to bring their service to PBX.

“I am surprised that only two airlines are interested if we are guaranteeing these folks that they’re going to make money,” Harris said.

“You can characterize it as corporate welfare, but I think it is a job creator,” Luke Schmidt said. “The money is there, communities apply for it every year, if the money is available, doesn’t it make sense to try to get your fair share it?”

“No,” Magistrate Harris said. “I don’t subscribe to that theory, that there is this money out there, and we need to waste it before somebody else does. That’s a different philosophy maybe than a lot of other politicians have, I don’t think just because the money is there that we need to go waste that money. I think we, as elected officials, have a duty to the public to protect their tax dollars, to only use their tax dollars on projects that have a good likelihood of success.”

Harris said that with the bleak financial outlook the county is facing caused by the decrease in coal severance funds, he felt government should be spending less money, not investing in the airport project.

“The coal industry is cutting back,” he said. “The airlines are cutting back because less people are flying. Our population in this area is declining. Those are facts.”

He said he thought the project was trying to attract airlines “by throwing tax dollars at them.”.

“We’re saying, ‘Here, look at all this money you can have if you come here and operate,’” Harris said. “If our area was a good candidate for commercial air service, it wouldn’t be much of a sale. I’m not convinced that this project will continue after the subsidy ends.”

Harris said people in his district do not see the project as a benefit to the county.

District One Magistrate said that while he appreciates that the Airport Authority is operating in a more transparent and communicative manner, he still does not think the commercial air service is a viable project for Pike County.

“We want the area to progress,” Anderson said. “But we have had layoffs, it’s like the industry has taken a tremendous gut-punch. We need to manage our money efficiently and effectively. Will it succeed? I don’t think so, I hope I’m wrong.”

Judge Executive Wayne T. Rutherford has had a position that the Fiscal Court was left out of much of the latest airport business by the City of Pikeville and the Airport Authority. He has publicly opposed the use of multi-county money to support the revenue guarantee, but changed his position – with reservations.

“No one worked harder to build this airport than I did,” Rutherford said. “The city needs to sit down with us, and not go off on your own with projects we have worked on. I have had serious doubts, but we are a progressive community and we need to stay that way. I am willing to take a chance, we need to move on.”

Read more: The Williamson Daily News – PCFC to use coal severance to attract air service

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Fiscal Court approves resolution 5 to 2 WYMT-TV (Hazard)

PIKEVILLE, Ky. (WYMT) – It was a highly anticipated vote by some Eastern Kentucky leaders.

The Pike County Fiscal Court was asked to pass a resolution asking for multi-county coal severance money that would help fund commercial air service.

The fiscal courtroom was packed Tuesday with people waiting and wondering what the fate of commercial air service would be.

Without a resolution from the court asking for multi-county coal severance money, the possibilities for air service would be unlikely.

They have debated the topic for months, and Tuesday’s meeting was no different.

“I feel like we need to look at this airport as the potential for growth for pike county,” said District 5 Magistrate Hillman Dotson.

Some disagree.

“The overall success rate for this program is thirty percent. Now that’s not the kind of investment i would make with my money,” said District 6 Magistrate Chris Harris.

After everyone had spoken their opinions about commercial air service, it came down to the vote. Many people say they were not sure how it would end up.

Judge Rutherford made the motion, and after a long pause the vote was on.

The court passed the resolution five to two.

Supporters call it a victory for the region.

“It’s a sign on progressive vision, and I think it creates a positive business environment for local industry and new industry looking for the area,” said Jared Arnett, Southeast Kentucky Chamber of Commerce President.

Others fear it will be money wasted.

“For us to say there’s this extra money sitting over there we just need to grab it before someone else does, I don’t fall in line with that,” said Harris.

But for now all they can do is wait and see.

The court should know in about a month if it is awarded the multi-county coal severance money.

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Pike leaders to address air service: Community input sought Medical Leader

Article originally posted to the Medical Leader’s Web site: http://medicalleader.org/pmc_news.html?id=3913&section=Community%20News
By: Mary Meadows – mary.meadows@pikevillehospital.org, Staff Writer
Published: 08/03/2012
PIKEVILLE — Local leaders who have been working to obtain commercial air service in Pike County encourage the public to help them meet their goal.Those leaders, Luke Schmidt, a consultant working to bring the commercial air service to the county, and representatives of the city of Pikeville, the airport board and the Southeast Kentucky Chamber of Commerce, are asking local residents to voice their support for commercial air service by contacting members of the Pike County Fiscal Court and/or Judge-Executive Wayne T. Rutherford’s office.On Tuesday, Aug. 7, the fiscal court is expected to vote on a resolution that approves the city’s use of $1 million in multi-county coal severance funding for the project.

Multi-county coal severance funding must be approved in the county that would host the proposed project and by another neighboring county that would benefit.

The Floyd County Fiscal Court has already approved the resolution, but commercial air service project leaders have found resistance from the Pike County Fiscal Court.

Floyd County Judge-Executive R.D. “Doc” Marshall feels it would be a good investment to use multi-county coal severance funds to bring commercial air service to the region.

“The benefits of corporate people to be able to locate into our area — be it businesses, small factories, restaurant chains, anything that has a group [that travels via plane] — for them to be able to come to a nearby adjacent county, which is our next door neighbor, Pike County, would benefit Floyd County, for sure,” Marshall said.

The U.S. 23 sewage project that is currently underway will open up Floyd County to new businesses, Marshall explained, and those business leaders will need an efficient means of travel.

During a July 17 meeting, the Pike County Fiscal Court took no action on the proposal, and Magistrate Chris Harris, who did not attend the meeting, voiced his opposition, via letter, to using “local tax dollars to subsidize commercial air service.”

Schmidt compared the proposal to the ways county, city and state governments authorize tax incentives for new industries.

“Anytime an airline starts a new route or expands into a new market, particularly a smaller market like Pikeville, they want to be assured that they are not going to be losing money left and right,” he said. “This is similar to recruiting new industry into a community. Many local governments approve tax incentives for that company, and it’s all designed to help that industry get off to a good start.”

Coal severance funding would ensure the airline that its revenue targets will be met during its first two years of operation in Pikeville. If its revenue goal is, for example, $2 per month and it makes only $1, then coal severance funding would help the company to make up the shortfall.

Schmidt, on behalf of the chamber, city and airport board, issued a press release on Aug. 1 encouraging public support in the matter. He reported that 121,000 passengers fly out of the region from other airports each year.

“When it comes to establishing airline service, it’s all about connectivity — the ability to connect PBX [the airport] literally with the world and the global economy,” he said in the press release. “The proposed service that we are working on will do just that — connect Pike County with the global economy.”

NOVA Pharmacy owner Joel Thornbury noted a local commercial air service would save his pharmacy between $5,000 and $10,000 annually. Appalachian Wireless Marketing Director Danny VanHoose also favors the resolution.

“Think about what this will mean when a community wants to recruit a new business or industry to the region and the CEO of the prospect company can fly commercially right to the heart of the Central Appalachian Region,” he said in the press release. “Simply put, it means new jobs.”

A local commercial airline will also help Pikeville Medical Center, President/CEO Walter E. May said. He has asked Rutherford and county magistrates to pass the resolution.

“Pikeville Medical Center spends thousands of dollars each year on commercial air travel,” he said. “In addition, the hospital spends thousands of dollars each year chartering aircraft in order to meet our mission of serving the region and our patients. Having this service in town will help our medical staff as they travel in and out of the community. This service will also help us recruit new physicians to the community.”

Commercial air service proponents are not seeking funding from the county; only the permission to use multi-county coal severance funding.

Schmidt reported that two commercial airlines have expressed interest in providing service at the Pikeville-Pike County Airport. If made available, the service would benefit residents of 13 counties in eastern Kentucky, southwestern Virginia and southwestern West Virginia.

The city’s multi-county coal severance funding request is one of 29 multi-county coal severance funding applications that are being considered by state officials, and it’s the only application that is currently incomplete, Schmidt reported. He isn’t sure whether the resistance of Pike County leaders will affect the decision of state leaders who distribute the funds.

“Hopefully, this issue will be resolved next Tuesday,” Schmidt said. “I would hate to see us lose this funding.”

If the court approves the resolution, notification of multi-coal severance funding grants should take approximately one month, Schmidt reported. He will then provide a community incentives package to encourage the two airlines to offer commercial services in Pikeville.

Schmidt encourages local residents to get involved.

“Anyone interested in commercial air service should pick up the phone and call their magistrate or the judge and share their support and encourage the members of the fiscal court to vote yes on the resolution,” he said.

 

 

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Transparency is not ‘nitpicking’ (Pikeville) Appalachian News-Express

Article originally posted to the (Pikeville) Appalachian News-Express on July 20, 2012 http://news-expressky.com/

By Monica Kern
Transparency is not ‘nitpicking’

Pike County has witnessed two political controversies in the past couple of weeks: The spat between County Judge-Executive Wayne Rutherford and the ANE over

Rutherford’s efforts to establish a natural gas filling station using coal severance tax funds, and the decision of the Pike County Fiscal Court to refrain from voting on a proposal to support an application for $1 million in severance tax funds to attract commercial air service to Pike County Airport

Examination of these controversies reveals common themes that are illuminating. First, Rutherford is neck-deep in both of the controversies. That’s not necessarily  roblematic, as he rightly should be involved in the county’s decisionmaking regarding fiscal priorities given his position as judge-executive. What is less admirable,  However, is that both controversies demonstrate a noticeable unwillingness on the part of Rutherford and other Pike officials to engage in transparent decision-making.
This lack of transparency is particularly evident in the case of the natural gas filling station, where Rutherford at first seemed to suggest that a company led by his cousin, T. Edwin Coleman, would be a partner in the effort but later appeared to deny such a connection. But there’s a similar lack of clarity with respect to the airport case, as it’s not at all clear whyattracting commercial air service would be deemed an important priority four years ago but not worthy of consideration today.

What both controversies make painfully apparent is that Pike County deserves a more open and objective process for deciding how to use coal severance tax funds. To

the ordinary citizen, the current system comes across as far too arbitrary, far too secretive, and far too driven by secondary aims such as rewarding friends and relatives of those in power rather than advancing the public interest.
It’s possible that I’m wrong about that. It could be that the coal severance tax funds are being allocated in the best possible manner for the county. The problem is that the people of Pike County simply don’t know if that’s the case because we’re not given the data that would allow such a determination.

In an ideal world, an open call for proposals for severance tax funds would be issued, and a summary describing the proposals along with a detailed specification of  robable

economic impact, who would benefit, and the number of new jobs created would be circulated. The public could then judge for themselves the merit of the funding  decisions actually made.

This doesn’t happen, obviously. Too often the relevant decisions are made behind the scenes, and elected officials are subsequently not willing to answer questions about

how these decisions were made, as we saw last week when Rutherford refused to answer a reporter’s queries about the natural gas filling station project and instead accused the ANE of “nitpicking.”

With all due respect, asking to be informed about how and why millions of dollars — funds that are supposed to be allocated for improving the economic stability of Pike

County — are distributed in a particular manner is not “nitpicking.” It’s political accountability, and it’s a basic right of any democracy.

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Public shows support for Pike airport The Williamson (WV) Daily News

Public_shows_support_for_Pike_airport0_1342583580Staff photo/JULIA R GOAD Business leaders and elected representatives supported the airport Monday night at the East Kentucky Expo Center. L-R Rep. W. Keith Hall, Sen. Ray Jones, Jared Arnett with the East Ky. Chamber of Commerce, Pikeville City Manger Donovan Blackburn, Rep. Leslie Combs, Luke Schmidt and Bill Hickman, Airport Authority Chairman.

Julia Roberts Goad

Staff Writer

PIKEVILLE, Ky. — Members of the community, business leaders and elected representatives met at a forum at the East Kentucky Expo Center to discuss plans for the Pike County Airport.

Those who spoke included Sen. Ray Jones, Reps. Leslie Combs and W. Keith Hall and Bill Hickman, Chairman of the Airport Authority.

Luke Schmidt of L.B. Schmidt and Associates, a consulting company, addressed forum to outline the project. L.B. Schmidt was hired by the City of Pikeville and the Eastern Kentucky Chamber of Commerce to study bringing commercial air service to Pike County.

“There have been many twists and turns along the way,” Schmidt said. “But there clearly is a market for scheduled air service here. It would service 13 counties, in Kentucky, Virginia and West Virginia.”

Schmidt said there were two goals needed to provide that service. The first is to recruit a regional airline that is linked to a major airline, and secondly to connect service in Pike County to a major hub such as Charlotte, N.C. or Atlanta.

Schmidt told the Court the best tool for recruiting an airline to Pike County would be a revenue guarantee package.

The concept is that some money is set aside in as the revenue guarantee fund.

An airline doing business in the county would set a financial goal for each month. If the company falls short, money from the revenue guarantee package would be used to bring the amount of money the airline makes up to the monthly goal. The money would be given to the airline on a monthly basis so the company would not incur financial losses during the first two years of operation.

Schmidt said the Airport Authority is in negotiations with two well known airlines, who decline to be named due to confidentiality agreements.

At Monday evening’s forum in Pikeville, those present showed overwhelming support for a regional airport.

Jared Arnett, Vice President of Operations at the East Kentucky Chamber of Commerce, said transportation is key to business.

“We started this because our members identified the lack of air service as a barrier to growth or recruiting businesses,” Arnett said. “A hundred years ago, the C&O Railroad came to Pikeville, and we have the Mountain Parkway, which opened us up to external markets in Pennsylvania, West Virginia and Tennessee. But now things have changed, we need to appeal to a global economy.”

He said the region is losing business to other markets.

“We have the infrastructure, the industrial parks,” he said. “But we have no commercial air service, and without it, businesses will not come.”

Donovan Blackburn, Pikeville City Manager, said that according to studies done there are enough passengers to support the airport.

“In the counties we would serve in Kentucky, Virginia and West Virginia, there are 333 flying each day,” Blackburn said. “That’s 17 flights a day, the opportunity is here.”

Members of the community spoke at the forum about the difficulties of both personal and business travel.

Joel Thornbury owns a chain of pharmacies in the area and travels frequently for business.

“I spend about $15,000 or $20,000 a year in hotels and fees because I have to go to other airports,” Thornbury said. “That is money lost to our community. How many hotel stays are lost because we don’t have an airport?”

Danny Vanhoose with Appalachian Wireless said other companies’ executives have to drive from other airports, and it is an inconvenience.

“It’s a disconnect,” he said. “It’s like our representatives don’t understand what business needs.”

Rep. W. Keith Hall shared the frustration of doing business without commercial air service.

“I have been working with an Indian company,” Hall said. “We signed a 25-year contract with them, and I had to apologize to them for having to drive from Lexington. It is a deterrent to progress. This is a win-win for Pike County. We need to have vision, without vision, we perish.”

Dr. Samuel King is a Pike County native, a graduate of Belfry High School, Pikeville College and the UK School of Medicine, he has practiced in Pikeville for 29 years.

“The people we have here are visionaries,” he said, speaking to the panel at the forum. “We need to make things better. Apathy is an attitude, not an action. We need to continue to have vision, we need to be pro-active.

Read more: The Williamson Daily News – Public shows support for Pike airport

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Stalled? Pike Fiscal Court balks… (Pikeville) Appalachian News-Express

Article originally posted to the (Pikeville) Appalachian News-Express Web site http://news-expressky.com/

By Chris Anderson
News Editor

A consultant hired to help attract commercial air service to the Pikeville-Pike County Airport said thisweek that the prospects for attracting a commercial carrier to the county may take a nose dive following recent fiscal court inaction.  At a special meeting of the Pike County Fiscal Court on Monday, county officials failed to pass a resolution supporting the efforts of several agencies to attract commercial air service to the Pikeville-Pike County Airport. The court also expressed strong opposition to a request for the county’s support in using $1 million in multi-county coal severancetax money as part ofthe efforts to attract commercial service.

During Monday’s special meeting, Pike County Judge-Executive Wayne T. Rutherford told air service consultant Luke Schmidt several times that he and the other fiscal court members support the efforts of the City of Pikeville, the Pikeville-Pike County Airport Board and the Southeast Kentucky Chamber of Commerce to attract a commercial air carrier to the Pikeville-Pike County Airport.  Although the court members expressed support for having commercial air service at the airport, they failed to make a motion to pass a resolution which would have pledged support for the plan.

According to the proposed resolution, the court, had they approved the resolution, would be in support of commercial air service at the airport and the efforts to secure the service. The proposed resolution, which received no motion for approval from the court members, made no mention of supporting the use of multi-county coal severance funds in the effort, which Schmidt said was vital to the plan’s success.

The lack of an approval of the resolution came after a question by the News- Express last week  regarding the multi-county coal severance funds, which was answered by Rutherford spokesperson Brandon Roberts, who said a resolution would be presented and likely approved by the court. With the court’s lack of support for the plan and unwillingness to sign off on the multi-county coal  severance use, money already secured through a federal grant may be in jeopardy, Schmidt said.

“If we’re not successful in raising this money through the coal severance tax, not only will you not get a carrier, but then we’ll have to return that grant to the federal government. Some other airport would get to use it,” Schmidt said.

Schmidt said grant funds secured by the City of Pikeville through a federal aviation grant — whichtotaled $750,000 — were planned to be matched bymulti-county coal severance funds. The plan was outlined in the City of Pikeville’sapplication for the grant funds, Schmidt said.

Schmidt said during the meeting that the Floyd County Fiscal Court had already passed a resolution in support of using the multi-county funds and told the News-Express in a recent interview that another county’s court would likely express support for the same sometime this week. Members of the Pike Fiscal Court, however, said the money could be used better elsewhere and the matching funds for the plan should come from the Pikeville- Pike County Airport Board, which Rutherford said possesses a bank account with a balance of more $6 million.

Dist. 3 Pike Magistrate Leo Murphy said the multicounty coal severance funds should not be considered for the plan. “If we’re going to use it, I’d rather see it come out of that $6 million that’s there already because we have so many things in Pike County that we need right now and we’re going to have a lot more needs in the future for our tax money,” Murphy said, adding that an area of his district — referring to the Ridgeline Road area — has no water service and water is having to be transported to the area. “I think we got a whole lot more needs for severance money than what that’s for.”

According to discussion at the meeting, however, the airport board’s bank account may be off limits. Rutherford said airport board officials received a letter from the federal government stating that the funds must stay in possession of the airport board. Schmidt repeated a similar explanation several times when questioned by the court as to why the airport board’s money was not being considered. Dist. 5 Magistrate Hilman Dotson said he did not understand the money situation in regard to the plan and the airport board’s involvement. He said he also believes the multi-county coal severance money could be used better elsewhere.

“We don’t have any control over the airport board and how they do their affairs or what they used their money for,” he said. “I would much rather see this coal severance money used for  the promotion of tourism in Pike County. We’re talking about jobs, economic development. You know, that would get our jobs going if we have some money to promote our trail system, our tourism and get things going in Pike County.”

Dotson said he is for anything that could be done to get commercial air service in Pike County, but did not understand the reasoning for why the resolution was needed.

Rutherford’s main point of contention, however, seemed to revolve around the timeframe on which the county was approached for support. At the beginning of Schmidt’s address to the court, Rutherford detailed the efforts by the county to establish the airport after plans for an airport at Marions Branch, now a part of the City of Pikeville, fell through. Rutherford said the county paid to have a study performed which ultimately resulted in the establishment of the current airport.

Rutherford stated several times during the meeting  that the City of Pikeville hadnothing to do with the establishment of the airport and now, he is “disappointed” that the county has allegedly been left of the planning and efforts to attract a commercial carrier to the airport. “Along the way, this body got left out,” Rutherford said. “Seems that, for some reason unknown to me, they (the fiscal court)  were never mentioned. We kept reading the paper, and news releases would go out that we were going to have a commercial airline service and that the  city had filed for some $800,000 and then the announcement came out.”

Rutherford took several shots at the City of Pikeville during the meeting, including its annexation of the airport into the city limits, an issue for which Rutherford said Schmidt is not responsible. “You can’t help all these other issues,” he said. “You couldn’t help it when the city, without even coming and talking to us, run a 10-foot corridor up a hollow, took the airport into the city without even coming down here and consulting us. I mean, you know, come on now, we build the airport, we get it up and running, the city comes in and runs a utility corridor, takes it in. Them side issues, you can’t handle.”

Rutherford also referenced the county’s alleged lack of inclusion in the commercial air process process when Schmidt said he was not requesting money from the Pike County government, but was instead requesting only a pledge of support for the use of multicounty severance tax funds.

That statement was not well received by Rutherford, who said multi-county coal severance funds are Pike County dollars and that Pike County pays 32 percent of the state’s coal severance tax dollars. “That’s for economic development and that’s for jobs and that money is for infrastructure and I would agree this comes under that,” Rutherford said. “But this application, we were not asked to be a party to this application, I’m talking about this body (the fiscal court). Nobody talked to us about it. Nobody advised (the fiscal court) about it.

“We … was very surprised when you walked in and then said, ‘Now we want to get $1 million  through you all.’ That is Pike County (money). That’s mined by people in Pike County — coal miners that’s gone under these hills and mined that coal,” Rutherford said.

Later in the meeting, Rutherford blasted Schmidt for requesting money for the project. “I’m disappointed — I’m sure that the rest of the people are, sitting here at this body — that we’ve been left out of the process and then brought back in it when you needed money,” Rutherford said to Schmidt.

Others took issue with the timeframe of county’s involvement, as well. Dist. 1 Pike Magistrate Jeff Anderson, in whose district the Pikeville-Pike County Airport lies, said the county was being brought in on the “butt end” of the plan. Anderson added that he does not believe commercial air service will be successful in Pike County. Anderson also took issue with Schmidt telling the court he could not name the two airlines which have expressed interest in serving the Pikeville-Pike County Airport.
Schmidt said the process of attracting the airlines would be very “transparent” the county supports the use of coal severance funds, but Anderson said transparency is lacking in the plan. “If you’re going to write a check for $1 million, I think we all need to know who the payee is going to be,” Anderson said, adding that Schmidt not being able to name the airlines is not very transparent. “I know your remarks were sincere, but I’m like the judge, we weren’t included initially.”
Anderson said he understands some people know names of carriers, and Schmidt confirmed such. Schmidt said the City of Pikeville, the chamber of commerce and the airport board know who which airlines are interested. “I don’t know why … this court needs to be kept in the dark if we’re going to be asked to vote to commit $1 million of multi-county money,” Anderson said.
Dist. 6 Magistrate Chris Harris also criticized the plan, saying the current proposed plan puts  taxpayers of the hook if the service is not successful. Harris said he met with Schmidt at the request of former Southeast Kentucky Chamber of Commerce President Brad Hall. Harris said he is not if favor of the plan. “My opposition to this proposal doesn’t have anything to do with whether or not the city asked us to be a part of the grant application or not. It just has to do with the fact that I just don’t think it’s a very smart use of tax dollars,” Harris said, adding that he would only support the  plan if it called for the airline to be self-supporting.

“If we supplement their income now to get them  going, then in another year or two years, we’re going to be supplementing their  income again. So if it’s a good idea, and the airport board wants to put their money into it then I say that’s what they should do. I can’t say that I support it because I don’t think that it’s a good use of taxpayer dollars.”

Schmidt said model for the plan allows all parties to the plan to have input into the contract in order to get everything they want up front. Schmidt said the revenue guarantee for the plan would only be used if airline reports monthly shortfall on its revenue target. Money would then be used to make up shortfall, he said. “It would not be a blanket subsidy. We’re not in favor of that,” he said. “We want to get this carrier in here; we want to get them to a sustainable position as quickly as possible.”

Appalachian News-Express • Wednesday, June 27, 2012 • Page 11A