In the red again: St. Clair County gave $5.6 million to subsidize MidAmerica last year

News-DemocratOctober 8, 2013 

File photo of MidAmerica Airport.

ZIA NIZAMI — znizami@bnd.com

MidAmerica St. Louis Airport remained in the red last year despite increasing revenue nearly $2.2 million, according to the latest audit of the airport.

MidAmerica, which is owned by St. Clair County, has never made a profit since it began operations in 1998 and failed to do so again in 2012. The $313 million airport posted a $3.8 million loss, mostly due to $5.9 million in amortization and depreciation. The Mascoutah-based airport received about $5.6 million in St. Clair County funds to subsidize its operations in 2012.

When solely comparing operating income to operating cost, the airport was more than $1.85 million short of breaking even.

St. Clair County Chairman Mark Kern and Airport Director Tim Cantwell could not be reached for comment.

The latest audit is more evidence the county should give the airport to the Federal Aviation Administration or Air Force, according to Stop 158 President Richard Skillings. Stop 158 is a local citizens group that has pushed for the county to relinquish control of the airport for more than a year.

St. Clair County residents are subsidizing a passenger service for the entire region and county officials' plans to bring cargo freight to the airport will not pull the airport into the black, Skillings said.

"Even now revenue on the airport is more on interest earnings than on aeronautical-related revenue, which I think reflects on the inactivity the airport has," Skillings said. "It will never be profitable ... We can't continue to throw good money after bad."

St. Clair County Board member Mike Baker, a Democrat from Mascoutah, represents the district hosting MidAmerica airport. Baker said the airport struggled due to a decline in passenger service in the airline industry shortly after its opening, the economic downturn following the Sept. 11, 2001, terrorist attacks, and the lingering recession.

"I am very optimistic about the airport and surrounding area," Baker said. "I think the timing was wrong but nobody could foresee the future. I do believe (MidAmerica) has a bright future."

Fellow board member Ed Cockrell, a Republican from New Athens, said he did not share Baker's optimism for the future of the airport unless the County Board assumed more responsiblility for the venture.

"The County Board must begin to be in control of the purse strings unless the airport is going to continue in the same negative spiral it's been," Cockrell said. Cockrell and three other board members, two of whom are Democrats, have been pushing since July for a vote to transfer control of the airport from an appointed commission to the board.

Skillings said the most reasonable approach to turning the airport over to the federal government would stem from Congress waiving the county's financial obligations related to funds received for the airport's construction, which he estimates is about $154 million.

However, he said he's "quite pessimistic" county leaders will pursue the option. "I don't think there's any interest in the county," Skillings said. "It would take a couple of elections to change the face of the county for there to be any interest in that."

Baker said he did not favor turning the airport over to the federal government. He added he believed business would grow at the airport and it would become "a viable asset for Mascoutah and the county."

Cockrell said all options should be considered, including attempting to sell the airport for the amount the county is obligated in debt and owed to the federal government. No one has been able to tell what that amount would be, he said.

"After tens of millions of dollars subsidizing the airport for this long, nothing should be off the table," Cockrell said. "Something may not have made sense five, 10 years ago, but it could in the future."

The county has $91.2 million in long-term outstanding debt -- more than $70 million of which is related to airport activities, according to the audit.

On a bright note, the airport saw revenues increase about $2.2 million compared to 2011. The increase in airport revenue stems from additional capital funding from the Federal Aviation Administration and the state of Illinois, according to the audit.

Cockrell said he believed the airport should not be dependent upon federal and state grants for revenue instead of business ventures.

In the past five years, the airport has received more than $28.7 million in county funds to subsidize its operations. Included in the $5.6 million in payments last year, the county gave $983,400 in cash and covered $3.6 million in debt for the airport.

Auditors anticipate the county will continue to subsidize the airport "in the near future."

"With little improvement in the economy, management anticipates that the county will be able to maintain most services for the near term while maintaining the current property tax rates," the audit states. "However, it is anticipated that the county will not be able to increase budgets again and that general fund balances will continue to help finance airport operations in the near future."

Cockrell said it appears "there's a blank check for MidAmerica Airport" from the county and those funds could pay for other services, such as additional sheriff's deputies or a needed expansion of the county jail.

"To say the county isn't suffering because of that subsidy I think is shortsighted," Cockrell said. "Where does it stop?"

The audit adds the county reserves have "been sufficient to weather the economic down turn of the past several years."

The county had about $150 million in combined funds at the end of 2012, a decrease of $7.2 million from 2011 after a transfer of nearly $5.6 million to airport. About $20 million of county funds remain available for spending at the county's discretion.

The St. Clair County Board accepted the audit of the 2012 fiscal year during its most recent meeting on Sept. 30. J.W. Boyle & Co. completed the audit.

Contact reporter Daniel Kelley at dkelley@bnd.com or 618-239-2501.

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