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June 27, 2012 By admin

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

Filed Under: 2012, Economic Development News, Government Relations News, Latest News Tagged With: Airline service, aviation, Economic development, Government relations, luke schmidt, pike county, pikeville

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