CC Minutes - 11/18/98 Work Session

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City General Fund due to a major capital improvement for the airport in future years. With regard to spending money on marketing, Ms. Nathanson said two things mitigated her concern: 1) although money was spent on airlines that did not stay, there was a net gain; and 2) while those airlines were here, they provided competition for the major airline and held ticket prices down and increased flights. She concluded that based on the what she has learned and pending further analysis, it appeared the reserve fund was needed. Mr. Laue said the discussion, in fact, was about setting up a management sub fund that could be spent at the airport's discretion--something he did not oppose and left to the airport management and its advisory committee. He questioned that the $1.13 million management sub fund was enough to have any influence on air traffic in the region, adding that that would be determined by the growth in the community, the way it evolved, and the competitive advantages or comparative disadvantages regionally. Mr. Johnson said he supported the proposal because it is consistent with how the council and City has historically used reserve funds and there is no history of the council "raiding" reserves. He said the council was justified in treating reserves for the airport and Hult Center differently, describing them an entrepreneurial activities. He discouraged the council from raiding those reserves. Mr. Lee said what the airport was in fact asking for a "flex money" to compete. He asked the airport to reduce ticket prices for students, reminding the council that students infuse much money into the local economy. Ms. Swanson Gribskov said she was ready to support the staff recommendation, noting that the City Manager's comments were important to the discussion. Mr. Tollenaar said he also was ready to support staff's recommendation with one qualification: marketing the airport and air service and the community as distinguished from making cash payments to airlines. He asked that if the airport management were considering cash payments to any airline, it come before the council for approval. Ms. Andersen suggested it would be more effective to schedule a subsequent work session to discuss strategies the airport might consider for airline recruitment in general. She indicated that non-general fund six-year forecasts were due after the first of the year and that seemed an appropriate time to report back on this item. Mr. Johnson quoted from the briefing statement: "Authorization to expend these funds would be subject to the normal budget process." Mr. Meisner reiterated his request for more detailed figures. The bigger issue, he said, is to look at things the City does in isolation. He pointed out that the council's goals and service priorities do not include the airport and the capital needs of the airport should be weighed against all the Minutes--Eugene City Council November 18, 1998 Page 7 11:30 a.m.