Airport director: It will take money to make money at Meadows Field County Airports Director Richard Strickland had some sobering news for the Kern County Board of Supervisors on Tuesday.
Debt is outpacing revenue.
But with renewed investment in Meadows Field Airport and the William M. Thomas Terminal, Strickland believes new airlines can be recruited and new revenues generated.
The Kern County Department of Airports has been gaining some elevation after losing altitude for years following the Great Recession. But challenges continue to loom.
On Tuesday morning, Strickland laid out those challenges in a report to the board and outlined a four-year financial plan he hopes will help the department soar into the future.
First, the challenges:
The William M. Thomas Terminal, conceived as a critical component to Bakersfield’s transportation future, was built in 2006 at a cost of more than $33 million. A federal passenger facility charge of about $9 million — revenues collected as part of the cost of airline tickets — was authorized by the Federal Aviation Administration to defray the cost.
The primary debt incurred for construction of the new terminal was $20.3 million.
The debt is scheduled to be paid off in 2023, Strickland said.
A year after the terminal was finished, Kern’s first international service to Guadalajara, Mexico, began flying out of the old terminal — after Kern County poured another $8 million into its renovation.
Then the recession hit, fuel prices climbed and international flights ended. Dreams of a busy and vibrant local airport were deferred.
Fortunately, Strickland said, supervisors in 2003 agreed with the County Administrative Office’s recommendation that the general fund subsidize the Department of Airports’ payments on the debt if funds were not available from the department’s enterprise fund.
Meanwhile Strickland, who was hired to head the department in April 2013, said he has been developing a four-year plan that will focus on core revenue generation.
“Air service development is absolutely critical,” he told the board, “to increase core revenues and cure leakage.”
More than half of local air travelers drive to Los Angeles rather than taking off from Meadows Field. That “leakage” must be reduced, he said.
Strickland told supervisors he has plans to:
* Extend the passenger facility charge authorization by two years to provide an additional $1 million in federal funds;
* Apply proceeds from the planned sale of Lost Hills Airport to capital reinvestment; and
* Claim approximately $2 million of passenger facility charge-eligible Thomas Terminal construction expenditures by “going back in time” and asking for funding that Strickland said should have been part of the original deal.
In February, supervisors wrote off a $4.2 million debt the department owed the county’s main capital improvement fund.
To reach his goal, Strickland said, millions more must be spent on runways, jet bridges, a new in-line baggage system and other improvements.
