CC Minutes - 06/24/98 Work Session

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Mr. Tollenaar supported the motion to postpone with some hesitation because it added to the confusion around the issue. Roll call vote; the motion passed unanimously, 7:0. D. Airport Service Issue--Follow up Public Works Department Director Christine Andersen introduced the item. She said that staff had researched ways to expand the "tool kit" available to assist it with airline recruitment. Staff worked with the Federal Aviation Administration on the proposed approach. Ms. Andersen said the approach would allow repayment of general obligation bond debt payment made by the General Fund in support of the airport bond in fiscal years 1992 and 1993. The total for the two fiscal years was approximately $1.1 million. By capturing that non-Airport revenue-generated airport expenditure and converting it to an airport management fund not tied to airport revenues generated through the airport agreements and airline agreements, the City eliminated many of the previous limitations on the use of those funds. Responding to a clarifying question from Mr. Torrey, Ms. Andersen said that staff was asking the council to establish a separate management fund. The funds would still be tied to airport use. She confirmed that the council must act today if it wished to consider the full $1.1 million. Ms. Andersen reviewed the options before the council. Mr. Meisner said that staff argued in the staff notes that transferring the reserves to the General Fund rather than a marketing account was risky because of the volatile nature of the industry and the Airport Fund, but if the council transferred the reserves to a marketing fund and spent the money, there would be no reserves to address that volatility. Ms. Andersen clarified that she was proposing to establish a management fund with more flexibility; it was not limited to recruitment. It would be part of the Airport Operation Fund available for operations, capital, marketing, etc. Mr. Meisner believed that it was risky to establish such a fund because there would still be no reserves. Ms. Andersen said that if the money was moved to the General Fund, it was now a General Fund asset with no connection to the airport, and that created a $1.1 million "hole" in the Airport Fund. She was suggesting that the fund be made part of the Airport Fund with special flexibility, but still anticipated to be expended for airport purposes when the need appeared. She added that the $1.1 million figure was not tied to a projection of its use, but to the FAA's six-year limitation on such a conversion. Ms. Swanson Gribskov suggested that given the lack of time for making the decision, the council move the $1.1 million to the General Fund, and discuss its transfer at a work session on the topic in July. Ms. Andersen said that was a possibility. Responding to a question from Ms. Swanson Gribskov regarding why the sum would be halved if the council did not take action before the end of the fiscal year, Ms. Andersen attributed it to the FAA limitation on how far back the City could go to capture non-airport revenue expenditures in support of the airport. Ms. Swanson Gribskov moved, seconded by Mr. Farr, to direct $1.131,835 from the Airport Fund to the Airport Fund, pending discussion at a future work session of airport operation costs and needs. MINUTES--Eugene City Council June 24, 1998 Page 8 11:30 a.m.