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Bemidji Regional Airport Authority: First property tax levy approved

The Bemidji Regional Airport Authority set its first levy Wednesday, a new levy that will appear on property tax bills in 2010.

Authority commissioners unanimously approved $450,000 as the first property tax levy for the former Airport Commission which became a tax-levying airport authority in January..

Commissioners first considered a levy of $425,000 but boosted that to $450,000 in consideration of pending federal legislation that would raise the required matching funds for federal grants from 5 percent to 10 percent.

Still, the levy amount is $10,000 lower than what Beltrami County and the city of Bemidji now provide the airport in funding as a jointly operated facility, said Airport Authority Executive Director Harold Van Leeuwen.

"We know where we need to go, but we want to make sure we're doing what we told the public," said Airport Authority Commissioner Joe Vene, also a Beltrami County commissioner.

The city's two members on the authority moved the levy -- City Councilor Roger Hellquist motioned the levy amount and City Councilor Ron Johnson seconded it. It now goes to Beltrami County Auditor-Treasurer Kay Mack to be certified.

"It's better setting this now right out of the chute than to do it later," Johnson said, in anticipating that the higher federal match will take effect.

When the authority was formed, authority commissioners pledged a tax wash -- that the new levy by the authority would equal or be less than the monies given now to the airport by the city and county.

"Those bodies will now have to determine their level of levies," Leeuwen said.

But Authority Chairman Marshall Froyd immediately returned that the city and county decisions "are not issues here at this meeting."

The city and county have each provided $180,000 to the airport. The County Board has said it may offset property taxes by that amount, while the City Council said it may use the extra money for Bemidji Regional Event Center operating costs.

Levying at $450,000 should allow the Airport Authority to keep that levy amount stable for three or four years, Leeuwen said. It also receives funding from landing fees at $7 a passenger, rental or lease fees from businesses on the airport property and state and federal grants.

The authority's accountant, Bob Maas, prepared a cash flow chart through 2010 and said tax collections will come to the authority with 40 percent of total collections in June, 45 percent in December, 10 percent in January and a final 5 percent eventually rolls in.

The cash flow account should average more than $300,000 a month, with a projected balance of $355,000 in checking and two money market reserve accounts by December 2010, Maas said.

"We should have 1½ to 2 months in operating costs in the reserve" at any given time, Van Leeuwen said.

An emergency reserve account of $150,000 is held by the city and county -- half with each -- that can be moved over to the airport authority now, he said.

The added tax will mean about 14 cents per $1,000 value of a home, or an extra tax of $13.62 for a $100,000 home, Vene said. Also, the added cost to commercial property would be 20.4 cents per $1,000 of value, or another $20.43 in taxes to a $100,000 commercial property.

"This is not a new tax, and this is very transparent," said Airport Commissioner Jack Frost, also a Beltrami County commissioner.

"As the community grows, the tax per capita will go down," said Johnson. An expanding tax base would lower taxes for individual property owners, if assessed value and the amount to be levied remain constant.

"The airport will help the community grow," he said.

Airport work

Commissioners approved a resolution to accept $500,000 in federal economic stimulus funds which will be used for ramp rehabilitation. The amount doesn't need to be matched by local funds, Van Leeuwen said.

The state will begin work July 6 on a long-awaited replacement of the airport's VOR equipment which allows aircraft to navigate and land at Bemidji Regional Airport in inclement weather and at night.

The VHF Omnidirectional Range equipment uses a radio frequency to electronically figure course information, allowing an aircraft to safely navigate from Point A to Point B.

Originally estimated at $500,000, the project contract is now $831,000 and will be fully paid by the state. The work is to be completed by Sept. 22, with flight checks yet to be set.

Commissioners by consensus decided to turn away three applications for construction manager for the planned $7.5 million airport terminal renovation and expansion, instead deciding to use a team approach with current consulting and architectural firms on the project.

The move could save the airport $225,000, Froyd said. The firms interviewed "were all overpriced for what we are expecting. We don't need a construction manager, or owner's representative, whatever you want to call them."

Bids for those services ranged from $500,000 to $750,000, he said.

Delta meeting

Airport managers from several Minnesota cities met earlier Wednesday in Bemidji with officials from Delta, the successor to Northwest Airlines, Van Leeuwen said.

"The good news is that the pricing structure has been figured out between the two airlines, and it will be fairly consistent," he said. Managers had complained with Northwest that ticket prices from their airports to Minneapolis-St. Paul varied widely.

Also, Van Leeuwen said, Delta is working on an add-fee, such as $100 each way, for a passenger flying from a regional airport to Minneapolis-St. Paul to connect to one of Delta's major flights elsewhere.

While Delta plans to reduce its fleet -- from 1,400 jets to 1,300 and its regional CJ jets from 500 to 450 by 2012 -- Bemidji should see the same flights, Van Leeuwen said. Delta's regional carrier will keep three flights a day, with smaller planes in winter and larger jets in summer.

Delta is also interested in offering regional airports promotion fares in the winter, such as special group rates.

"We had an unwillingness from Northwest to upgrade planes so we can move (college) hockey teams out of here," Van Leeuwen said. "Delta will upgrade airplanes. They're willing to bring in a larger plane for hockey teams, or for such events as Moondance."

The larger plane would be one of the day's fights, and not an additional flight, he said.

The Delta delegation toured Bemidji and left with more of an understanding, Van Leeuwen believes. "One of them wondered why a city of 12,000 needs such air service, but I told him that we serve 100,000 people, and on the tour I showed them we have such things as a super Wal-Mart and super Target."