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City releases report on air authority issues

An “exploratory transition” task force is a recommended next step in the process of forming an air authority, according to the report by City Auditor Juan Fuentes. He presented a summary at a Thursday meeting. (Lisa Dunlap Photo)

Copyright © 2021 Roswell Daily Record

The city of Roswell has finished a report analyzing the many financial, legal and operational issues involved in creating a regional authority, which was authorized by a recently passed state law, to manage the airport and other property at the Roswell International Air Center.

City staff are expected to ask the Roswell City Council at some point whether they are ready to begin the process of turning the Air Center over to the authority.

There is also the question, as Air Center Manager Mark Bleth wondered might be the case, whether city leaders will decide the “squeeze isn’t worth the juice,” given what is involved, including that the Air Center has required a substantial city subsidy most years.

“I do not know where we go next with this,” said Mayor Dennis Kintigh at the Thursday meeting of the city’s Airport Advisory Commission, where a summary of the report was presented. “My perception is that the governing bodies will have to make a decision about whether to proceed further.”

City Manager Joe Neeb agreed, although he said at some point discussions should involve Chaves County and eventually other governmental entities in the region.

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“The vision was on the authority and everything else, that the Air Center is bigger than just our community. It affects the entire southeastern corner, so that is where we would look at those relationships,” said Neeb. “But it begins with the City Council to determine how would we allow this to move out from underneath the city’s umbrella.”

A state representative who helped carry the bill and attended the meeting said he hopes that challenges will not deter serious consideration of forming the authority.

“I am pleased that the process is moving forward and that the city is doing its part by looking at the issues involved,” said state Rep. Greg Nibert (R-District 59). “Statutorily, we gave the area an option of the authority. I know there are concerns that the Air Center as an authority could be a non-viable economic entity, so I hope that, as it goes through the process, that people will keep an open mind and see what alternatives might be available.”

In response to the city’s report, Bud Kunkel, chairman of the board of directors of the Roswell-Chaves County Economic Development Corp., the primary advocate for the authority, issued a statement that appears in its entirety at the end of the article.

Idea dating back decades

Economic feasibility studies in 1998 and 2017 concluded that an independent governing body would create more jobs and economic growth at the Air Center, which was a military air base until 1968 but has since been city property.

In 2018, business leaders associated with the Roswell-Chaves County Economic Development Corp. began working with area legislators to pass the bill that enables municipalities or counties in New Mexico with closed military bases to form authorities as political subdivisions as way to increase economic development efforts.

The bill was vetoed by the governor in 2018, but supporters succeeded in their efforts in 2019 when the New Mexico Legislature passed House Bill 229 and Gov. Michelle Lujan Grisham signed it into law.

City staff then began their efforts in February to analyze what is involved in a transfer of the Air Center property and operations.

‘Complex’ privatization process

The June 12 “authority analysis” prepared by City Auditor Juan Fuentes was released publicly at the Airport Advisory Commission Thursday.

The report is now available on the city’s website, roswell-nm.gov/307/Roswell-International-Air-Center.

Some of the more significant points in the 12-section report involve financial and legal issues.

• Using the required Federal Aviation Administration financial reporting method, the Roswell International Air Center has reported net operating losses nine out of the past 11 years (2010 to 2020). For fiscal year 2020, the loss is estimated at $986,299. In addition, using federal and city financial accounting methods, the cost of operating the Air Center operations has been subsidized significantly by the city general fund since 1998. For federal fiscal year 2020, the city subsidy is about $461,846, before adding factors related to water and sewer costs and revenues.

Some of the expenses and costs to the Air Center would not necessarily have to be carried by an air authority. On the other hand, current costs charged to the Air Center do not cover such things as planning and zoning services, which will be required by the FAA.

• Issues concerning water rights and water usage still need to be resolved. The Roswell International Air Center owns some water rights, but they have been integrated with the city water rights.

• Determining the exact boundaries of an authority has not been done yet and isn’t clear in the legislation. The city’s report indicates the Air Center now consists of 54 parcels and about 134 buildings. Would all these be part of the new authority?

• There will need to be a decision about which entity assumes responsibility for the ongoing legal issues involving the state and the U.S. Army Corps of Engineers and concerning the need to clean up aquifer contamination. The contamination was caused by chemical run-off from when the airfield was an air base. The report indicates 10 other land sites on the airfield could require remediation efforts as well.

• The Federal Aviation Administration has 39 requirements for issuing operating certificates to airports. The certificates cannot be transferred, so the authority would have to apply for a new one. Work needs to be done to determine how to meet those requirements, including proving that the authority has the financial stability required to manage annual FAA grants.

• Coordination still needs to occur with as many as five state agencies that could have authority over some of the actions involved in a transfer of property and operations.

The “information presented in this report is not all inclusive of the issues to be considered during this process,” the report states. “Some of the lessons learned from the other communities that explored the idea of airport privatization is that it is complex, lengthy, time consuming, requires financial support and support from stakeholders.”

The report also indicates that consultants will be needed to help with the work involved. Which entity would pay for those consultants has not been determined.

The report concludes with the recommendation that an “exploratory transition” task force be created to guide future discussions and actions.

Kunkel: ‘182 successful authority models’

In addition to being chairman of the board of directors for the Roswell-Chaves County Economic Development Corp., Bud Kunkel was a member of the Air Center Task Force that worked on the authority legislation and now serves on the Airport Advisory Commission.

He provided this response to the release of the city report:

“The goal of the Roswell-Chaves County Economic Development Corp. and the local business community was to build on the information provided by two previous studies funded by the city of Roswell. Both of these studies concluded that an ‘airport authority’ would better serve the operation of the RIAC than the existing operation of the RIAC by the city.

“Both the Chaves County Commission and the Roswell City Council were in favor of investigating the potential for an authority. The Roswell-Chaves County EDC was authorized by the Roswell City Council to proceed with developing legislation to authorize an authority. This was accomplished during the 2019 legislature and the authority legislation was signed into law by the governor with overwhelming support. The Roswell-Chaves County EDC and the task force authorized by the City Council accomplished what many felt would never be accomplished.

“An appointed authority will provide certainty to private investors because it is composed of business people who will be completely focused on creating jobs and improving the RIAC. There are 182 economically successful authority models in the United States.

“Mayor Kintigh has consistently opposed efforts to create an authority and has worked tirelessly to ensure the authority is never put into operation. His efforts have been due to his belief that the city of Roswell can better operate the RIAC than an authority. In addition, he has stated numerous times that an authority cannot be a self-sustaining entity. He has asked numerous times for an authority proponent to prove that he is in error.

“The problem with this approach to what is likely the most important aspect to improving the economy of Roswell and Chaves County, and the region as a whole, is that the negative mindset of a non-business-oriented person will not be likely to change what a 50-plus-year process has shown to be wholly inadequate to maintain the RIAC and develop jobs to improve the local economy.

“The RIAC is the most critical component of the future of Roswell and Chaves County. The Roswell-Chaves County EDC and the local business community urge the Roswell City Council to strongly consider the opportunity that is now available to our area to further investigate development of an authority before the city can no longer recover from the neglect that has been shown at the RIAC over the last 50-plus years.”

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 311, or at reporter02@rdrnews.com.

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Lisa Dunlap is a general assignment reporter for the Roswell Daily Record.