Airline traffic nationwide is down 96% during the pandemic, and the Central Illinois Regional Airport is no different, perhaps even a percent more, said Airport Director Carl Olson.
That’s based on data from the latter half of March and the picture so far in April. Olson said CIRA is planning the same for the month of May. June might be better, but not significantly better, said Olson.
Property taxes generate 37% of operating revenue in the $4.4 million general fund for CIRA. The bulk of operating money comes from business activity. Olson said CIRA brings in almost $2.8 million per year from landing fees, car rental, food and beverage space rental, fuel sales, fees from companies providing aircraft services, and farmland leases.
“Right now, with no commercial activity in terms of corporate flight, limited private aviation, and really no commercial airline activity, that revenue stream is at risk. And that’s something we’re having to come to terms with,” said Olson. “We’re doing alright, but it’s going to be a long road.”
The first half of the month of March was strong, Olson said, but revenue for the entire month was down nearly 50%. April results are not yet in, but Olson said it reflects the latter half of March.
Capital funds are separated from operating funds. Olson said all capital projects are fully funded, mostly through FAA grant, and those continue to move forward.
Olson said the airport also has health cash reserves and a low debt level.
Some of the money to pay for bonds issued to allow construction of the current terminal building comes from operating revenue. Debt service in the fund backed by airport passenger enplanement money is about $800,000 per year, Olson said.
“Our first priority is to protect those debt service funds so the obligation does not fall to the taxpayers,” said Olson.
CIRA received $4.6 million through the federal CARES Act intended to relieve organizational stress caused by the pandemic. The CARES money would more than cover debt service depending on operating revenue. And Olson pointed out not all airport operations revenue depends on passengers, farmland income for instance.
“So, it’s going to be a combination of the CARES funds, operating revenue and possibly use of some of the airport's reserves going forward over the next 12 to 36 months."
CIRA recently completed a multi-phased bond restructuring. Olson said the organization had been on schedule to be debt free by 2029 and possibly 2027, and the current reality should not change that.
Olson said the airport will not need to program the $800,000 out of CARES funds because there will be some operating revenue and increasing amounts as a potential recovery goes on but he said it is one of the multiple lines of defense to prevent taxpayer liability.
The airport levies 4 cents per $100 of assessed valuation for residents of Bloomington-Normal. That rate is unchanged since the creation of the authority in 1964, said Olson. Efforts over a period of years to get legislative authority to broaden the taxing district to all of McLean County and reduce the rate have yet to succeed.
The Airport Authority Board had already passed a tentative budget before the pandemic and economic shutdown made it obsolete. Olson said staff will rework that plan to reflect the new reality and pass another tentative document, and then finalize it in June instead of the usual passage in May.
“The second half of March told a story. The first full month of April now with this operating environment will tell us a story. And based on that data we’ll put the new budget together,” said Olson.
Olson said the airport has allowed business tenants to reduce contractually obligated hours of operation so they can survive. He said CIRA has not yet had to consider forgiveness of rent or allowing delayed payment. Olson said they will have to see how long the situation goes on.
“We also expect this to be a long return to the new normality. This isn’t going to be just like turning on a light switch. Once scheduled flights come back to a regular schedule, it doesn’t mean they’re going to be oversold like they were two months ago, right?” said Olson.
He said the airport is well-positioned to cope with the new pressures brought by the pandemic caused economic hit.
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