Government and Travel & Tourism

Kent County works on details of airport authority

A draft of proposed legislation allowing the transfer will be reviewed this week.

January 23, 2015
| By Pete Daly |
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The process of transferring the Kent County government’s direct control of the Gerald R. Ford International Airport to an airport authority is under way, with the county Board of Commissioners Legislative and Human Resources Committee considering a key step this week: the draft of proposed enabling legislation allowing it to happen.

Last week the board got an update on the transfer process that included reference to a proposed 40-year annual lease — probably for one dollar — of the Ford Airport to the future Airport Authority.

A lease “means the county still owns the airport,” noted Kent County Corporate Counsel Tom Dempsey, and should the lease be broken, management of the airport would return directly to Kent County government.

The Board of Commissioners’ Legislative and Human Resources Committee will meet Tuesday morning, and its recommendation on the draft legislation will be on the agenda for the full board Feb. 12.

Dempsey told the Business Journal the draft of the enabling legislation in its current form states there would be from five to seven members on the Airport Authority board, which will eventually be appointed by the Board of Commissioners. Up to three members “may” be elected government officials, such as county commissioners. The board members would serve staggered three-year terms, according to the draft legislation.

The draft legislation also states there would be a minimum of one member of the Airport Authority board from outside Kent County, which would reflect its regional nature. Commissioners were also told Thursday the draft legislation stipulates no funds could be removed from the Kent County airport enterprise fund for any purpose other than the Gerald R. Ford International Airport.

Dempsey said there are three key agreements between the Kent County Board of Commissioners and the Airport Authority, spelled out in the draft enabling legislation.

The Airport Authority must be in place with its board members seated before the county can prepare and negotiate the lease, services, and the assignment and assumption agreement. These agreements are approved by both the county and the Airport Authority, subject to Federal Aviation Administration approval of the transfer, according to Dempsey.

The first key agreement is the lease. It has not yet been drafted, but Dempsey said the cost of the lease to the Airport Authority would be “nominal,” with one dollar being the mentioned amount. The airport’s debt, including bonds, is addressed in the lease/operating agreement, which covers the assumption by the Authority of other contract rights and obligations.

An “assignment and assumption agreement” assigns to the Airport Authority all interests and obligations pertaining to outstanding airport improvement, program grant agreements, passenger facility charge records of decision, and all other grant agreements between Kent County and the FAA, the U.S. Department of Transportation, MDOT and the Transportation Security Administration, effective on the date established by the FAA for the commencement of airport operations by the Airport Authority. The Authority will be obliged to comply with the responsibilities imposed under the FAA Airport Assurances.

The third key document is a “service agreement” between the county and Airport Authority, detailing the source and costs of business services for the airport, such as human resources, purchasing, accounting, payroll, etc.

Dempsey said the draft legislation specifies the Airport Authority would be a government entity, subject to all federal and state laws pertaining to the operation of local government.

The FAA will have a major role in reviewing the proposed transfer to an Airport Authority to ensure the Authority does not “surrender its contract” but retains its capability to control the airport to meet its commitments to the federal government.

The draft enabling legislation at this point, which could be revised by the county board, was modeled after the enabling legislation passed in Michigan in 2002 when an airport authority was established at Willow Run Airport in Detroit.

The county board received a detailed report on the transfer process from Steven Baldwin of Steven Baldwin Associates, an airport management consulting firm in Albany, N.Y., which was hired by the county board. Baldwin said the process of transferring management to an airport authority can take from 10 to 12 months.

The process actually began in September when the county board approved the “concept” of a Gerald R. Ford Airport Authority, but Dempsey told the Business Journal the target date of completion now is by the end of 2015.

Policy and general oversight of Gerald R. Ford International Airport are the responsibility of the Kent County Board of Aeronautics — now known officially as the Kent County Airport Board — which is appointed by the county Board of Commissioners.

The concept of an airport authority was first raised in 2011 by county officials; later the county Board of Aeronautics created a governance committee to work with an airport management consulting firm to study the issues.

David Slikkers, a member of the aeronautics board and chair of its governance committee, told the Business Journal last year that Ford airport governance and its management needs to be “agile — somebody who is quick and nimble — to respond to the market changes and shifts that are going on in the industry.”

Slikkers said the biggest issue facing GFIA is “how do we continue to position Grand Rapids as an attractive and desirable market for the airlines?”

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