Council convenes holiday meeting to save air service
When I first learned that Mammoth Lakes had called a Special, Emergency Town Council meeting on July 4 at 2 p.m., my first thought was, “Am I being punk’d?”
At 2 p.m., this reporter (the only newswriter there) filed into Suite Z, along with between 30 and 40 concerned citizens who had also got wind of the meeting. Public comment drew remarks about the meeting’s short notice (issued late in the day July 3) and intrusion on the holiday, nevermind that all four of the Councilmembers on the dais were all in shorts, at least two still in their parade garb.
But the subject turned out to be very serious, the stakes being having commercial air service (courtesy of Alaska Airlines) or not.
Mammoth Mountain Ski Area Chief Marketing Officer Howard Pickett and Town Manager Dave Wilbrecht briefed Council that urgent action is needed to close a $325,000 shortfall in summer and fall subsidies to assure jittery executives at Alaska that Mammoth is committed (and perhaps more important) and capable of guaranteeing air service.
The hitch: with no money available by combing through the Town’s budget, Council is considering how to potentially poach the Measure U funding stream.
“We’ve seen a progression of subsidies, but also a progression of year-round air service,” Wilbrecht noted. “[The Town is] bankrupt right now. We’re very tight and disciplined in terms of expenditures, so [finding the money in the budget] is off the table.”
Options discussed included essentially appropriating unused funds and unencumbered money from the new fiscal year’s projected revenues, taking out a loan against Measure U or going through an accelerated Measure U application process, hoping to qualify under the “mobility” clause.
After the pilot round of funding last fiscal year, Measure U had $84,415 in leftover money, to be used for “planning, construction, operation, maintenance, programming and administration of [Mobility, Recreation, and Arts & Culture] facilities and projects.” Appropriations for this fiscal year are estimated at more than $900,000.
Pickett said he’s been hearing about potential problems from the airlines for about six weeks, but things apparently only recently came to a head when a proposal to close the shortfall by either significantly reducing travel dates or shutting off air service September through November was rejected by the airline, which said that if that were the case, it would likely opt to pull out of Mammoth service altogether.
“There are two modes of thinking within Alaska: one that thinks we need to be in this market, and another sees uncertainty within the Town, and looks at it in terms of risk management … go to a better market with a better guarantee of return,” Pickett explained.
MMSA serves as guarantor on the contracts, since the Town is legally prohibited from doing so. This past winter, MMSA shelled out $3 million to cover United Airlines and Alaska Airlines service, when it only had budgeted $1.3 million. A summer subsidy for Alaska Airlines of $775,000 found MMSA only left with $300,000 to kick in, and Mammoth Lakes Tourism, which for the past two years has shouldered funding for air service, only able to fund $150,000 after its budget was cut for the new fiscal year.
Mono County is not included in the figures at this point. The County is reportedly mulling upping its commitment from $85,000 to $100,000, but is still in budget deliberations and that figure is far from final. “We have three Supervisors representing [Mammoth] right now; it could be a good litmus test,” Councilmember Rick Wood noted.
Pickett’s charge: urgency. He is being pressed for a contract. “We’re well past the point of needing to sign a summer subsidy deal,” he advised. “The airline has been selling seats and operating flights, but even our supporters inside Alaska are worried that no subsidy could be the end of our relationship.”
He went on to relate that brand identity and operational considerations are part of what worries Alaska executives.
MLT Executive Director John Urdi also outlined the hit to economic benefit to the town if Alaska service were to be lost, which he said would be well into the millions of dollars.
Councilmember John Eastman asked if the lateness of the hour means the damage is done. Pickett said the wait has been long, but didn’t think any damage was irreparable. “Every day we delay, however, the situation worsens,” he added. “Even if we can’t do it, I’d rather know now than a week from now.”
Eastman pointed out the economic situation of the town. “It’s not that we don’t want [air service], but it’s important that [Alaska Airlines] understand that we’ve had a bad ski year, MMSA has had layoffs, we’ve had to cut our budget and enter into bankruptcy,” he said.
Pickett replied the airline is aware of that, but also that filing a Chapter 9 petition doesn’t do anything to help the Town’s perception with wary executives.
Councilmember Michael Raimondo reminded Council and those present that subsidy is a guarantee, not revenue that’s spent up front.
Nonetheless, how Measure U would factor into covering the subsidy was a source of concern expressed during public comment. John Wentworth, who sits on the Measure U Steering/Application Committee, expressed a need for transparency and preservation of the public process, recommeding that no matter what the course of action, the Town should at least fill out a Measure U application. Also from the same committee, Bill Taylor urged vetting of any Measure U move through the committee, saying the Council should go through the same process it adopted. He did acknowledge, however, that the impact of borrowing [from Measure U], given a reasonable expectation of short term repayment, would probably be nominal.
Committee member Joyce Turner was worried about whether using Measure U funds would amount to supplanting, replacing municipal funding rather than enhancing or improving.
Lisa Isaacs questioned the severity of Pickett’s “emergency,” referencing a quote that she said was once stuck on MMSA’s purchasing department wall. “Lack of planning on your part doesn’t constitute an emergency on my part,” she recalled. “That’s where we’re at now. We just went bankrupt and now we’re talking about subsidizing a business. We have never equated air subsidies with mobility.” Isaacs went on to warn that she thinks use of Measure U funds for that purpose would be illegal and recall elections could result.
Wood countered by saying he thinks that the language is somewhat open to interpretation. He also said any decisions he makes on this or any subject wouldn’t be influenced by any threats of recall. “The Town filed a Chapter 9 petition, but the sun came up today, we have business to conduct and this is part of business,” he responded.
Mayor Matthew Lehman, who along with Raimondo sponsored the agenda item, said the Town’s main fault early on was not putting a full-time air service funding mechanism in place. Airport Commissioner Deb Pierrel, who said she plans to re-up for her seat, agreed. “We don’t want to lose our momentum, but we are being reactive,” she said, adding a call for “shoring up for the long haul.”
Others advocted taking time to evaluate the situation. Mono County Tourism Commissioner Danna Stroud, who’s also part of the Eastern Sierra Air Alliance, said she only sees six uses for Measure U money, and isn’t convinced an air service guarantee is a good fit. “Don’t bypass the process unless you want to rewrite the ordinance,” she said.
Stroud suggested filing an application, studying feasibility, transient occupancy tax growth and return on investment. “Tell us if we can sustain it, and if we’re getting the money to justify subsidies,” she requested. “Perhaps it’s not time for September through November air service. Maybe it’s time to walk away.”
Pickett told The Sheet studying the issue is fine, given enough time. Right now, it’s also a function of how long we can wait to reply to Alaska, he indicated.
Planning Commissioner Mickey Brown, delegate to the Economic Stimulus Council, disagreed with Stroud and other critics. “Air service is not a kneejerk discussion item,” Brown stated. It is, she insisted, part of the Town’s exhaustive, lengthy General Plan vetting and also a top priority mentioned in the recently adopted Destination Resort Community Economic Development Strategy document.
Jim Smith, also on the Measure U Committee, pointed out that future budget revenue is to be be directed to the settlement that otherwise could have been available. “Emergencies happen, it’s okay,” Smith said, adding that, “Two things will help get us out of this: MLT and air service.”
“Wow, you’re all right to one degree or another,” Lehman observed regarding public comment. He went on to outline many facets not brought up previously, such as $1 million in lost enplanement funds from the Federal Aviation Administration for capital airport improvements that would have to be scrapped, the work that went into the Airport Layout Plan Update Narrative, lots of marketing efforts and spent money that would have to be cast aside, and the difficulty finding another carrier as cost effective to operate at the airport, assuming we could find one that wants to be here.
“I’d hate to lose that over one season of subsidy,” he said, adding he was ready to move on authorizing a loan then and there. Eastman mentioned the $20 million the Town has put into airport improvements, but suggested a roundtable of various partners and stakeholders (TOML, Mono County, MMSA, MLT, Mobilty and Airport commissions) to brainstorm ideas.
Wood said he would like to make a commitment to air service, but also said he’d “like more detail.” He also blasted critics of MMSA regarding air service. “I’m tired of attacks on MMSA and how they’re the only ones who reap the benefits. It’s part of the community, and employes 2,500 people.” Pickett noted that MMSA picks up the subsidy tab for the winter season, and still partners during summer months, when lift ticket sales aren’t an issue and the Town benefits as much or more from air service.
“This isn’t an MMSA issue, it’s a community issue,” Urdi added.
“[The Town] committed to air service and it’s our responsibility to find the money,” Wood continued. “The only questions are how much and from what fund?” Wood went on to say he’s not ready to commit Measure U funds, though he thinks the language is subject to interpretation as to whether air service qualifies. Council, he added, might well have the authority to override the process, “at the risk of political fallout.”
Lehman told The Sheet he thinks the solution would be either a loan, a very accelerated Measure U application process or a plan C that has yet to come forward. At press time, Wilbrecht was organizing the aforementioned group workshop meeting for Monday or Tuesday. Council is expected to call another Special Meeting Wednesday to evaluate options and decide on a course of action.
Meanwhile, should Alaska Airlines decide to cancel its Mammtoh service, it’s as yet unclear as to whether or for how long tickets already sold would be honored, or if planes would be reassigned immediately and tickets refunded.