By JULIA ROBERTS GOAD
Staff Writer
PIKEVILLE, Ky. - The Pikeville/Pike County Airport Authority asked the Fiscal Court for its support to secure funds to recruit an airline to service commercial flights to the county.
Luke Schmidt, with L. B. Schmidt and Associates, a consulting firm, outlined the plan to bring commercial air service to the airport, located near Harmon’s Branch.
Judge Executive Wayne T. Rutherford gave a brief history of the airport.
He said the property was jointly purchased years ago by the City of Pikeville and the Fiscal Court, including the mineral rights to coal on the property. The money from the sale of the coal that was mined as part of construction at the site was was put into an account for development of the airport.
Then, Rutherford said, the “government withdrew from the project. We looked at three locations to put the airport, but the one we have now was determined to be the best one.”
The location the airport is now, near Harmon’s Branch, was purchased by the County, Rutherford said.
“Then the City became part of the Airport Authority again,” Rutherford said. “That airport is there because of the Pike County Fiscal Court.”
He said last year, the Airport Authority asked the Fiscal Court to fund a feasibility study, a request the Fiscal Court denied. Then, Rutherford said, the study was done with money from the Pikeville/Pike County Chamber of Commerce.
“We have worked to bring commercial air service here,” Rutherford said. “Then along the way we, as a body, were left out. We heard about commercial air service in the paper.”
“I have always been for the airport,” Rutherford said. “All of the magistrates have said they were in favor of this service in the county.”
Schmidt addressed the Fiscal Court at their regular meeting. 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 has already secured a $750,000 from a Small Community Air Service to provide money for that revenue guarantee. He said the Authority, along with the Eastern Kentucky Chamber of Commerce and the City of Pikeville, is asking the Kentucky Legislature for $1 million in multi-county coal severance tax funds for that guarantee.
Schmidt asked the Pike County Fiscal to agree to support that request.
But the Court had reservations in asking for coal severance tax money for the revenue guarantee package.
“Pike County supplies 32 percent of the coal severance money in Kentucky,” Rutherford said. “This Court was not asked to be included in applying for the $750,000 grant, we have not been included even in news releases about the airport. I am disappointed that we are left and then brought back in when they need money.”
Rutherford said he has asked how much money the Airport Authority has, and found out that amount is $6 million.
District One Magistrate Jeff Anderson asked Schmidt why the Airport Authority was asking for $1 million in coal severance funds if they had $6 million.
Schmidt said there were restrictions on the money the Airport Authority has, although he was not certain what those restrictions were.
“I am not the person to ask,” Schmidt said. He said coal severance money was to be used for economic development, which the airport would be.
Members of the Fiscal Court said they had doubts to the feasibility of a regional airport. Schmidt used an example of a small airport in Manhattan, Kansas, to show how a revenue revenue guarantee package could work to establish air service in a small airport.
But PCFC Deputy Judge Executive John Doug Hayes pointed out that he Manhattan Kansas area has a much larger population, more college students and a more stable tax base.
“They don’t rely on coal,” Hayes said.
Magistrates on the Court said they felt there were more pressing matters coal severance funds could be used for. DIstrict Three Magistrate Leo Murphy said the county’s citizens have more basic needs than air service.
“I want air service too, but let them use their $6 million,” Murphy said. “We have needs in the county, There are people in my district without drinking water, we have to truck water to them. There are more needs for coal severance money.”
Another concern of the Court was that although Schmidt said there were two major airlines who are interested in providing service in Pike County, neither of those companies wanted their identities to be disclosed.
“I have great reservations,” District One Magistrate Jeff Anderson told Schmidt. “It is not transparent.” He said that the City and the Airport Authority know who those companies are, but that the Court did not. Schmidt explained that the City of Pikeville and the Airport Authority were his clients, and as such he could not disclose any confidential information that might hinder the project.
“It is a competitive issue,” he said. “If carriers see their name in the paper, it will blow our chance out of the water.”
But the PCFC was not convinced that an airport was a worthy project in such financially challenging times.
“My objection is that it isn’t a smart use of our tax dollars,” District Six Magistrate Chris Harris said. “If we supplement their income now, where will be in two years? If a was self-supporting, then an airline would want to come in.”
“The Airport board should come and talk to us,” District Two Magistrate “Chick” Johnson said. “They act like they are hiding something. We have never seen letters, or anything about this. They need to come to us; coal severance money is all we’ve got.”
In the end, Rutherford put a motion on the floor to support the request for $1 million in coal severance funds for the revenue guarantee, but none of the Magistrates seconded the motion, and it died without a vote. It will be carried over to the next Fiscal Court meeting.
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