BRADENTON, Fla. - The process used to appoint the board members who oversee the Cincinnati/Northern Kentucky International Airport is "atypical" compared to the process used by similar U.S. municipal airports, according to Fitch Ratings.
Currently, all seven voting members of the Kenton County Airport Board are appointed by the elected county judge executive.
In August, Kentucky Auditor Adam Edelen released an audit that reviewed operations and expenses of the Kenton board. Edelen recommended that the board be restructured and expanded to 11 members so that appointments are made by regional officials, including three from Ohio.
Edelen said he would recommend the change in structure to the governor and Legislature.
"Fitch sees the possibility of this change in appointment structure as potentially beneficial and more consistent with the structures of other U.S. airport credits, but is unable to assess at this stage whether the proposed structure adequately addresses the concerns raised with representation or broader board governance," analyst Charles Askew said in a commentary Sept. 16.
Fitch will continue to review the issues raised in the audit, including the status of the governance structure, said Askew.
Edelen said the airport had served a "political appendage" of the judge executive "for far too long," literally controlling an airport that serves a metropolitan area of 2.1 million people that is critical to the economic vitality of the region and two states.
He noted that the airport is routinely ranked as one of the most expensive in the nation, having lost hundreds of daily flights since 2005, and attributed some of the airport's status to board dysfunction.
The auditor launched a special examination after local media reports raised concerns about board travel, spending, and governance. The airport's finances were not included in the review.
Edelen found questionable contracting and withholding reports from the public, no formal written contract with the board attorneys since 1962, high costs for attending industry conferences, reimbursements in violation of board policy, excessive costs for board meals, and nepotism.
While Fitch said the audit delved into issues about contracting and travel expenses, it was not aware of any operating concerns or reporting corrections with regard to the airport's financial statements.
"Fitch notes a credit strength of the airport has been the executive team's ability to preserve high levels of liquidity and financial flexibility, and maintain a low debt burden amidst declining levels of passenger activity over the last decade," Askew said. Fitch assigns an A-minus rating and stable outlook to the airport's revenue bonds.
