Supes back air subsidy afterall
Mono County’s Board of Supervisors took to the air on Wednesday, beginning deliberations on the 2011-2012 fiscal year budget. The three-day process offers a comprehensive review, department-by-department and line-by-line, giving the Board a last chance to make any changes, before voting on the final budget to be enacted.
According to a briefing by Mono County Finance Director Brian Muir the total budget amounts to $63 million, including $37 million in general fund expenditures and $26 in miscellaneous other funds. The total is a decrease of $8 million from last year overall and $4 million in general fund spending.
In an unexpected deviation from its previous flight plan, however, the Board changed policy course when it came to the turbulent issue of air service subsidies. Last year, the Board made a much haggled over $45,000 commitment to put some critical lift under the wings of the “shoulder season period” for commercial air service at Mammoth Yosemite between the end of summer and mid-December. Earlier this year the Mono Tourism Commission and other air service partners including Mammoth Lakes Tourism, the Town of Mammoth Lakes and Mammoth Mountain Ski Area, had hoped to boost that commitment by as much as $215,000 to help fill the gap left by MMSA, which is focusing on fully subsidizing winter air service, its busiest time of year.
That $215,000 figure, however, initially met with considerable resistance from four of five Supervisors.
On Wednesday, Alicia Vennos from Economic Development, and Mono County Tourism Commissioners Danna Stroud and Chair Jimmy Little, lobbied for at least some amount in Horizon Air subsidies. No one on either side of the dais, however, had any illusions that it would be anything close to $215,000. Vennos also said the County has been invited to be a player in the revived concept of an Eastern Sierra Air Alliance (ESAA), which would include the Town of Mammoth, Mammoth Lakes Tourism, MMSA and other stakeholders.
Perhaps the biggest, most significant shift in position was that of Board Chair Hap Hazard. Yes, he reiterated previous concerns about not only the expense but the fundamental concept of the County’s backing air service. Ironically, however, it was Hazard who pitched the notion of an increase that started the discussion down the runway.
Regardless of any related anecdotal success stories, Supervisor Larry Johnston, along with Supervisor Tim Hansen, would like to see non-anecdotal, hard numbers indicating the bang the County’s getting for its buck.
Hunt asserted that the County should want to have a seat at the ESAA table, and Stroud echoed that point, emphasizing what she said were millions that are being spent by airlines and destination marketing organizations on emerging markets such as China and Brazil, and having year-round access to the region can only help bring more travelers to Mono County.
Muir was critical of the subsidy, at least for now, positing it was essentially giving money away to a “private enterprise,” which it must be assumed is already profitable. He recommended deferring any action to mid-year, saying if there’s evidence of TOT or other revenue gains, the Board can act at that point. Hansen agreed. “I’m all for air service, but we should let this thing grow on its own, and determine how valuable it is, instead of just throwing money at it,” he commented.
Little waited patiently during the initial discussion, but commented that he sees it as purchasing a service, not purchasing “seats,” equating the potential of air service to that of any other startup business. Instead of a cart before the horse scenario — last time, service was committed to with no plan — this year he said a plan is being developed to frame the commitment with marketable data. Next year, if service continues, he suggested the County can promote it immediately, and travelers will be able to plan and book ahead.
“I think [Mammoth Lakes Tourism Director John Urdi] is doing a good job, many questions are being addressed and we’ll have statistics this year that we didn’t have last year,” Hazard said. “I do think we got the return on our $45,000, and am willing to increase that by $40,000, which will get us through to January. Do I think we have a good deal and good relationship with the rest of the partners? Not yet, but I’m willing to put $85,000 on the table to further the discussion.”
The $85,000 would be in the form of guarantees, but only the amount owed at the end of the season would be charged against it. At that point, any amount left over, even if it were the whole amount, could be transferred into the contingency fund or turned around and spent for additional marketing, over and above that generated by the airline for promotional materials.
That amount, Stroud indicated, could result as much at least $265,000 in the form of in-kind promotion and collateral material from both Horizon Air and Mammoth Lakes Tourism. (That figure was based on the calculated return from last year’s $45,000 commitment.)
“In any case, we need to have skin in this game and remain a partner with a seat at the table,” Supervisor Vikki Bauer noted. That, she said, means showing a commitment and in turn means increasing participation, both points on which Hunt agreed.
Johnston cautiously supported Hazard’s $85,000 compromise, on the condition that it remained a placeholder in the budget and no checks needed to be cut until January’s mid-year review.
The policy change passed 4-1, with Hansen dissenting largely on the grounds that “District 4 benefits least by far from air service.”
Budget in brief
Muir said the budget will require a an additional $1,250,000 in General Fund department trims to bring it into balance. No employee step increases or cost-of-living allowance (COLA) increases were budgeted.
After balancing the proposed budget, there is a remaining General Fund balance of $500,763 available to fund policy items and contingency, without appropriating any funds from the General Reserve. The General Reserve funds available are $2,273,212. A policy item is included to establish a contingency at 1% of General Fund expenditures per the Board’s budget policy.
In addition, a policy item is included to loan an additional $750,000 to the Solid Waste Enterprise Fund to make up for the shortfall that occurred between the start of last fiscal year and the recent implementation of a tipping fee increase.
Looking ahead, Muir said he doesn’t see a lot of major change in the County’s budget forecast. Property tax revenue projections indicate a flattening trend, or at most a 2% decline. The budget was set for final changes and a Friday vote. For updates, visit www.thesheetnews.com.