BRADENTON, Fla. — Charlotte, N.C., officials said they are examining their options following the General Assembly's passage of a second bill taking control of Charlotte Douglas International Airport operations and funds away from the city.
On Friday, the last day of session, state lawmakers passed Senate Bill 380 which appears to be an attempt to remove flaws in earlier legislation that could have led to a default on bonds.
Lawmakers also repealed an earlier bill that created an independent authority to own and operate the airport.
Charlotte City Manager Ron Carlee said he believed the General Assembly realized that its original bill was "fatally flawed" and repealed it.
"Unfortunately, they didn't stop there and created a new last-minute proposal that once again follows a unilateral path without regard to the 78 years of expertise held by the city of Charlotte in managing Charlotte Douglas International Airport," he said.
"The new bill is extremely complex," Carlee said. "Therefore, the city is not making rash judgments about what it does or does not do. We are studying the bill thoroughly and examining the full range of options open to the city."
Like the original bill, SB380 is a local bill that does not require the signature of Gov. Pat McCrory, former mayor of Charlotte.
Carlee said that Brent Cagle, the airport's chief financial officer, will continue to serve as interim aviation director for now.
SB380, like the prior legislation, appoints long-time director Jerry Orr as the director of the new board established by the bill.
Orr had become a central figure in the airport battle between the city and Republican lawmakers, who hold the majority of seats in both chambers. Orr also supported an independent authority to take over ownership of the airport.
"We are undaunted by the General Assembly's interference with airport operations and we will do all that we can to mitigate the impacts of the legislation and to ensure stability at Charlotte Douglas," said Carlee.
The new bill creates the Charlotte Douglas International Airport Commission as an "agency" of the city to run the airport. The commission will be composed of 13 members with a majority appointed by Charlotte's mayor and council. The city retains responsibility for issuing bonds for the airport in the new law, as well as the power of eminent domain as it pertains to airport needs.
The repealed law had an 11-member independent authority that would have taken ownership of the airport from the city, and a minority of members would have represented Charlotte. It would have given the independent authority authorization to issue bonds, as well as the power of eminent domain.
Though both laws allow the new board to control all revenues, bond funds, and debt service funds, the bill passed Friday also contains a new provision stating that it will not impair the city's obligations to bondholders. It is not clear if that language was added to prevent a declaration of default, which the city had predicted under the now-repealed bill.
Charlotte has $694 million of senior-lien airport revenue bonds outstanding that it issued for Charlotte Douglas International Airport. The senior bonds are rated A-plus by Fitch Ratings and Standard & Poor's, and Aa3 by Moody's Investors Service. Some $175.2 million of special facility revenue bonds are also outstanding.
The airport is a large-hub facility enjoying a stable-to-growing travel base benefiting from its location and status as a primary US Airways hub. The airport's debt structure is "extremely low" for a large hub airport, Fitch said in April reaffirming its rating.
Charlotte Douglas was built by the city in 1932, and is run as a self-sustaining enterprise. It has four runways, and nearly 100 aircraft gates.
City officials had filed suit against the state after the first bill was passed. That suit became moot when lawmakers repealed the bill.
Carlee said it was premature to speculate on the actions that could be taken by the City Council with regard to the newest legislation. He said that he would make recommendations about the legislation, but did not indicate when.