Despite feeling it should not be necessary, the St. Clair Board of Aldermen agreed during its most recent meeting to open a separate bank account for the St. Clair Regional Airport.
Last month, the city received a letter from the U.S. Department of Transportation stating that “the agency will not consider closing St. Clair Regional Airport ... until the city corrects deficiencies at the airport.”
One of the three points listed in the letter was addressing operational and financial issues in relation to a complaint filed with the Office of the Inspector General saying that the city is mismanaging funds at the facility. The complaint was filed by one of the hangar tenants. One of those tenants, Jim DeVries of Pacific, has accused the city of “stealing money from the airport.”
Figures from the city show that the airport has operated in the red every year since 1997, when a separate line item was created in the general fund to track income and expenses at the facility. The city has had to use other monies from the general fund to make ends meet at the 80-acre site.
St. Clair is trying to close the airport located between Interstate 44 and Highway 47 on the north side of the city to make room for retail development. Permission is needed from the Federal Aviation Administration because the city obtained federal grants to fund improvements at the facility.
The other two points in the letter are resolving the formal and the informal complaints regarding the increase in tenant rental fees and making adequate repairs at the facility. With Mayor Blum having to break a 2-2 aldermen deadlock, the city previously voted to roll back hangar rent back to the 2012 rate of $175 per month.
Late last year, because the city’s books showed the airport was continuing to lose money, the board opted to increase the rent to $300 per month in an effort to break even.
The city also is working on making requested repairs, including spending additional money to make sure the runway and taxiway are adequate.
As far as the financial issues, the aldermen on Jan. 7 were given copies of the city’s airport financial records from 2009, 2010, 2011 and 2012, which showed the facility lost money in each of those four years. In 2007 and 2008, the same held true.
“These show all our revenue and expenses,” City Administrator Rick Childers said at the time, adding that the city’s books are audited every year and that the annual audit never has come back with any red flags attached.
“This is already noted by our auditor as separate a fund as it can get,” he said.
During that earlier meeting, Ward 1 Alderman Zach Fuchs asked if the FAA is looking for a separate checking account that would cost the city more money, more time and more manpower to oversee and manage.
“That is correct,” Childers said.
During the most recent meeting, Childers said his recommended solution to address “allegations regarding fund management at the airport,” is to open the separate bank account for it and to contract with a certified public accounting firm not affiliated with the annual city audit “to create and manage a separate bank account in a separate bank for the airport.”
He also said it could cost the city up to $1,200 annually to take the action.
“I don’t understand why they (FAA) want us to do this, but if this is the route we need to take, then that’s what we’ll do,” Ward 2 Alderman Travis Dierker said shortly before making the motion that was approved.
Before the vote, Ward 1 Alderman Nathan Tate asked what happens if the account runs out of money.
“The city has subsidized the airport every year,” Childers said. “We’ll have to write a check (out of the general fund) to the new account.”
The only revenue for the facility comes through the hangar rental rates.
None of the tenants who rent space at the airport live in St. Clair.
After several years of discussion with the federal organization, in late August last year, Blum sent a letter to the FAA specifically asking that it allow closure of the 80-acre facility. Closing the airport has been at the top of the mayor’s and aldermen’s priority list since he first took office in 2007.
Blum’s letter asked for a decision by Thanksgiving.
The conclusion of the USDOT letter stated that future discussions will be limited to issues related to the city completing the steps detailed in the letter.