Hopes for new airport terminal grounded
| Saturday, Jul 11 2009 12:00 PM
Last Updated Wednesday, Jul 15 2009 12:09 PM
MEADOWS CARRIERS COME AND GO*
Current:
United Airlines
US Airways
Gone:
American Airlines
American Eagle
Continental Express
Delta Air Lines
ExpressJet Airlines
Mesa Airlines
Mexicana Airlines
SkyWest Airlines
*Carrier information since 1996
Sources: Kern County Department of Airports, Californian archives
PASSENGER BOARDINGS
1970: 67,663
1971: 62,199
1972: 66,396
1973: 81,167
1974: 98,001
1975: 97,357
1976: 114,482
1977: 127,748
1978: 147,866
1979: 95,205
1980: 95,309
1981: 60,958
1982: 49,538
1983: 74,663
1984: 76,025
1985: 115,569
1986: 125,281
1987: 136,607
1988: 121,921
1989: 125,656
1990: 137,101
1991: 133,115
1992: 119,026
1993: 109,102
1994: 113,273
1995: 108,561
1996: 108,365
1997: 120,896
1998: 128,165
1999: 140,153
2000: 142,391
2001: 129,136
2002: 97,051
2003: 90,634
2004: 119,147
2005: 146,786
2006: 173,737
2007: 166,403
2008: 142,839
Images
William M. Thomas Terminal.
Henry A. Barrios / The Californian At mid-morning Toxie Myers is one of a few people waiting at the William Thomas Terminal at Meadows Field in Bakersfield. A sharp decline in operating revenues as airlines have pulled service from Meadows Field has put the airport at risk of being a drain to the general fund of the Kern County Airports Department.
The jewel of Kern County's airport system may soon be a financial millstone for taxpayers.
In 2003 the county borrowed $13.2 million to help build the William M. Thomas Terminal at Meadows Field.
Airport planners assumed the new terminal, and renovation of the old one for international flights, would draw tens of thousands of new commercial airline passengers and generate enough money to pay off the debt.
They were wrong.
Now Kern County taxpayers will almost certainly be required to foot the bill in coming years.
Airports Director Jack Gotcher still insists the Thomas terminal is still a good thing for Kern County.
"It was an investment for the future and it was the right thing to do," he said.
FICKLE PARTNERS
Airline passenger revenues -- from ticket sales and federal aviation grants -- are supposed to fund the current $1 million annual debt payment.
But fickle commercial airliners, which flocked to Kern County in the middle of this decade, abandoned Meadows Field in 2008.
Three airlines dropped service to the hub last year; "enplanements" plummeted.
Mexicana Airlines was the most painful loss. The airline took with it Meadows Field's only international flight -- to Guadalajara, Mexico.
Its exit came just a year after the county's general fund floated the Airports Department a pricey line of credit to renovate the old Meadows Field terminal for Mexicana and to house U.S. Customs.
"The airport is strapped with repayment" of the general fund loan, said General Services Director Jeff Frapwell. "It's kind of a double-whammy."
BROKEN BUDGET
The Airports Department has had to pitch in $300,000 a year to cover the annual Thomas Terminal loan payments.
And between June 30, 2006, and January 27, 2009, according to an audit, cash advances from the general fund line of credit jumped from $3.1 million to $10.6 million.
Kern County’s annual principal and interest payment on the original $13.2 million loan will remain at just over $1 million a year until the debt is paid off in 2024, while airport ridership revenue drops away beneath it.
Gotcher hopes efforts to diversify the airport’s business into cargo, and capture taxes from surrounding land development, will stabilize and balance out the department’s finances.
The bottom line is that passenger airlines will probably not pull Meadows Field out of its financial funk anytime soon.
"The Airports Enterprise Fund will not be a self-supporting fund for some years in the future," Gotcher stated in his response to the Auditor-Controller's findings.
UNLIKELY SCENARIO
Kern County Airports Department finances have always been closely tied to airline passengers.
But despite dramatic county and city of Bakersfield growth, Meadows Field has seen little growth in passenger tallies over the past four decades.
A record 173,737 flyers used Meadows Field in 2006. But the previous annual record was set nearly three decades earlier, in 1978.
The passenger count slumped to 142,839 in 2008 and is expected to drop another 25 percent when 2009 is complete.
A 2006 master plan for Meadows Field projected an annual growth in enplanement of 2.7 to 3.4 percent -- putting the airport's ridership well above 221,000 by 2025.
While Gotcher believes commercial passenger service will come back some day, he said it probably won't ever provide for all of Meadows Field's needs.
"The airlines are very unstable," he said.
HOPE FOR THE FUTURE
Without more airlines, more flights and more destinations, the county airport cannot expand its passenger business and earn more money. So the department is seeking to expand into other parts of the airport business.
Cargo is a big hope for Meadows Field.
Gotcher said the county has a 40-year lease with AirCargoPort, which hopes to bring an Asian cargo carrier into Meadows Field.
The company starts paying on its lease this October, Gotcher said, but business is slow now and there are no plans for when it might bring a cargo carrier here.
Another air cargo lease, at the north end of the airport, is also in talks, Gotcher said.
The other hope, Gotcher said, is an airport enterprise zone that would capture part of the property taxes produced when land near the airport develops and flow that cash into the airport fund.
Kern County supervisors will ponder that in the next few weeks.
RELATED FIGHT
The county's attempt to keep its airports from becoming a drain on the battered general fund has landed it in a nasty lease dispute with a local doctor.
Airport officials and Dr. Dale Stewart have been locked in a duel of wills for more than a year over a new lease for Stewart's 40,000-square-feet of offices and hangers at the department's anchor property, Meadows Field.
At stake is around $24,000 a year in new revenue to the county.
But the two sides are fighting like it's millions.
A county property agent recently wrote a letter to Stewart's tenants encouraging them to stop paying rent to the doctor. It implied the county would take control of the buildings Stewart purchased, along with the last years of a 30-year lease, from another doctor in 1999.
Stewart said he plans to settle the lease after the protracted battle, largely because of the letter to his tenants.
But he argues he's been strong-armed into letting the county triple his lease payments from around $1,000 a month to $3,000 a month, and that the county plans to jump the lease price to $6,000 within five years.
"Everything the county is doing is legal. It just doesn't pass the sniff test," he said. "It's my fault. I read the lease (in 1999). I assumed that I would be dealing with honorable people."
Gotcher said Stewart has been paying a lease that is 30-years-old and far too low compared to what other airport lessees pay. An appraiser hired by the county set the value of Stewart's lease at $11,000 a month but the county tried to be reasonable and set the new lease at a manageable level for Stewart, Gotcher said.
"We're not trying to pick on him. We're not trying to get rich off him," Gotcher said.
Stewart, who said he made $71,000 in profit on the property last year, doesn't see tripling his lease as a reasonable approach.
"That's their attitude -- that they're doing me a favor," he said.
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MEADOWS FIELD TIMELINE
1927: County supervisors buy land and build Kern County Airport No. 1, now called Meadows Field.
1930s: Commercial flights begin.
1997-1998: Plans for new terminal are developed. The county breaks ground in June 2003.
2003: County borrows about $13 million to help pay for new terminal. Repayment by 2024 is expected to be made primarily from the airport fund, but the county's general fund is legally on the hook for any shortfalls.
Feb. 27, 2006: William M. Thomas Terminal opens at Meadows Field.
August 2006: Former airports director Ray Bishop leaves; current director Jack Gotcher takes over top spot.
March 2007: International flights between Bakersfield and Guadalajara launch from the old terminal on Mexicana Airlines.
April 2008: Flights to Guadalajara end due to high fuel costs.
May 2008: ExpressJet announces it will pull out of the market in August, ending local service to San Diego and Sacramento. Also in August, US Airways ends flights to Las Vegas.
July 2008: Delta announces it will stop service in Bakersfield in September, taking with it local service to Salt Lake City. High fuel costs are cited as the main reason.
