Charlotte Douglas Airport Governance Still in Limbo

BRADENTON, Fla. – As the Federal Aviation Administration and a court mull over who has the right to own and operate Charlotte-Douglas International Airport, a controversial regional panel created by the Legislature to operate the airport is taking shape.

Four members have been appointed to the 13-member Charlotte Douglas International Airport Commission, and others are being sought, according to the Charlotte Observer.

Under a law passed earlier this year, commission members must be appointed by Oct 1. The city would retain ownership of the airport’s assets, and would be required to continue issuing bonds deemed necessary by the commission.

Charlotte, which has operated the airport for more than 70 years, filed a lawsuit July 30 challenging the constitutionality of the state law and citing concerns raised by the FAA about the airport’s operating license under the new commission.

A judge granted an injunction blocking the law until the FAA completes a review of the bill.

Charlotte Mayor Patsy Kinsey said in an op-ed piece published in the Charlotte Business Journal Sept. 6 that the city has “never been given a credible reason” why lawmakers changed the governance of the airport, and that some arguments for the change are based on misrepresentations, including the fact that some people believe the city wants “to raid the airport’s revenues to use as they please” even though it can’t.

“Federal law clearly provides that airport revenues cannot be used to fund non-airport municipal services or programs, and the mayor and council have never done so,” she said.

In response to a perception that the city has “meddled” in airport operations, Kinsey revealed that the city received a letter in February 2010 from the Internal Revenue Service. She provided no details about the letter but said it led the city’s finance department and tax attorney to identify “several accounting violations made by the Aviation department with respect to the city’s tax-exempt airport revenue bonds.”

“While the IRS allowed these violations to be corrected without penalty, a financial, debt management, and accounting policy was put in place by the city and agreed to by the former aviation director to ensure that similar violations would not occur in the future,” said Kinsey.

Charlotte has issued $694 million of senior-lien airport revenue bonds for Charlotte Douglas, which are rated A-plus by Fitch and S&P, and Aa3 by Moody’s. About $175.2 million of special facility revenue bonds are also outstanding.