Supervisors looking at long term and short term solutions to concern about negative balance in the Aviation Fund

There is a lot of positive in the mid year report to be discussed this Tuesday during the Board of Supervisors meeting. One item, however, caught the eye of a regular reader.

Here is the link to the agenda:

https://humboldt.legistar.com/MeetingDetail.aspx?ID=456442&GUID=354E375A-DB08-4993-9162-E573BD3CA646&Options=info&Search


The item that this reader was concerned about:

3530 - Aviation Enterprise Fund The Aviation Enterprise Fund began this fiscal year with a negative fund balance of ($674,128). It should be noted that the fund received a $500,000 loan from Motor Pool in the current fiscal year to assist with cash flow. This loan will contribute the negative fund balance resulting in a negative balance of $1.2 million at the end of FY 2015-16. The department now estimates that the negative fund balance may be even larger due to decreased federal reimbursement for security services from the Transportation Security Administration and unanticipated employee related expenses. Based on the 5 Year Financial Forecast that was before your Board on February 2 the Aviation Fund has an ongoing annual structural deficit of over $500,000. The continued negative cash balance and structural deficit in the Aviation Enterprise Fund raises concern. This is because enterprise funds are classified by accounting standards as "business-type activities" and are supposed to stand on their own without the sort of short-term borrowing typical of the county's governmental funds. Aviation needs to increase revenues or reduce expenditures to eliminate the structural deficit. If this is not accomplished over the next year the deficit will continue to increase and repayment of the loan will become challenging. This growing liability could have the potential to become the responsibility of the General Fund. The county remains committed to maintaining a regional airport that offers commercial air service and will continue to look for solutions to ensure Aviation's long term sustainability.

I contacted and was able to reach Supervisors Virginia Bass and Ryan Sundberg. They gave some initial comments over the weekend."We will be looking at how we might be able to do things differently as far as re-organization," said Supervisor Bass. "

"It is a much more complex discussion then move X or Y or do x or y."

"In the best of all worlds we could make aviation a separate department or division but given the constraints that we are facing we need to deal with reality and make improvements where we can," said Supervisor Bass.

"This is actually an opportunity for us to excel at reorganization and making sure that we maximize our highest potential. There are no easy answers but the fact that we are addressing our shortcomings is indicative of the proactive agency that we are."

Supervisor Ryan Sundberg said that both, he and Supervisor Bass have been working on short term and long term solutions.

I thank this reader for this tip. I would also encourage this reader and others to provide feedback and suggestions to all Supervisors at the next meeting.