Eight months after cutting Tweed’s subsidy amid a budget crisis, the DeStefano administration is urging aldermen to throw the airport a line.
In a request to the Board of Aldermen Monday, Tweed New Haven Airport Authority asked aldermen for $160,000 in “supplemental operating support” to keep it afloat this fiscal year.
Click here to read a cover letter from executive director Tim Larson (pictured). Click here to read the proposed budget amendment.
Mayor John DeStefano, Jr. is backing the bailout plan after cutting Tweed’s subsidy in May, when he argued that everyone must make a sacrifice.
The new request met a skeptical response from the head of the Board of Aldermen, Carl Goldfield.
“My inclination is not positive,” said Goldfield Monday. “We’re trying to shrink our commitment to the airport, not expand it.”
Aldermen didn’t vote on the proposal Monday. It will be assigned to the Finance Committee for a public hearing later this month.
Amid a round of budget cuts and layoffs in May, DeStefano slashed Tweed’s city subsidy by $250,000, leaving it at $550,000 per year. Arguing that a crisis called for spreading out the pain, he cut aid to other city partners such as the Shubert Theatre and Market New Haven. He also leaned on city unions for $6 million in concessions.
Eight months later, the mayor is again up against a budget crisis, warning that a new round of layoffs may be in store if unions don’t come up with another $10 million in concessions.
This time, the city economic development team is arguing to give Tweed back much of its subsidy.
Why the mid-year bailout?
Tim Larson gave a few reasons in his letter to the board.
Larson took over in February as the head of the Tweed New Haven Airport Authority, which leases the airport from the city and manages operations. He said the request is the last step in a plan to dig Tweed out of a crippling deficit for FY08-09.
Tweed began the fiscal year with a $2.7 million budget and a projected operating deficit of $750,000, Larson wrote.
What caused the hole?
“The Authority’s poor fiscal condition is due in large part to construction-related service disruptions and legal fees associated with two federally-mandated Runway Safety Area (RSA) improvement projects,” Larson wrote. The state also cut funding, mid-year, by $30,000.
To tackle the debt, the authority made budget cuts and hiked up fees.
At the end, it was left with a shortfall of $332,431 for FY08-09. (Click here to read the airport’s budget as submitted to aldermen.)
Larson hatched a plan to dig out: Split the debt between the business community and the city. If approved, the city’s grant would be matched by a $160,000 in private funds from the Regional Leadership Council, an association of business leaders, Larson said.
At a time of budget crisis, with city workers facing the threat of layoffs, why should the city give Tweed a mid-year handout?
“These are important questions and you should be assured they will be answered,” responded Larson in an email Monday afternoon after being posed that question. “We expect the Board of Aldermen to schedule a public hearing on this Communication in the next week or two, and Tweed staff will make a full presentation at that time.”
Meanwhile, Chrissy Bonanno, deputy economic development director for the city, shed light on the subject. She said the city embraced the plan after Tweed demonstrated months of hard work.
When aldermen approved the subsidy this year, they asked the Tweed authority to report back on its progress towards self-sufficiency.
The authority has taken a proactive approach toward that end, Bonanno said. Larson reported back to the Finance Committee on Sept. 10 and has been engaging full-throttle in a campaign for community benefits and outreach.
“They’ve done all the things that the Board of Aldermen has asked them to,” said Bonanno. Tweed has reached out to regional partners, and got the Federal Aviation Authority to reimburse legal fees that the airport spent in defending litigation from East Haven.
Why should the city hand out more money at a time when government employees risk losing their jobs?
Bonanno responded with a line of argument often brought up for quasi-city agencies.
“The risk is if the airport closes, it reverts to being a city department,” she said. That, she said, would leave the city on the hook for a $2 million operating budget.
“In the event the Authority declares bankruptcy, dissolves, or otherwise fails to meet its obligations due to a shortfall of funding, then the city will retake possession of the airport and become solely responsible for its operation and financial obligations,” warns the proposed order submitted by the airport authority.
Cutting Tweed’s subsidy this year proved “a great opportunity” for Tweed to “go back to the drawing board,” Bonanno argued. The authority benefited from an “invigorated” board under the leadership of a new chairman, Mark Volchek.
“They did responsibly review the budget,” Bonanno argued. “They did reach out.”
She said the city is eager to move forward with the “Time Is Now” plan, which calls for “noise attenuation systems, traffic calming, homestead tax credits and other community benefits.”
“We can’t just go on doing the same thing at Tweed,” said Bonanno, “or we’ll end up in the same position.”