The City of McKinney has officially been is in the airport business for roughly three weeks, but Councilman Ray Ricchi has begun to openly question the wisdom of the city’s recent $25 million deal.
Ricchi told TownSquareBuzz.com that he now fears that the city may not be able to recoup the money it paid for Schuler Development’s airport assets in its purchase of McKinney National Airport (formerly Collin County Regional Airport).
“The cost of this operation is going to far exceed the expenses and end up not justifying the current action,” Ricchi told TSB. “The city needs to treat this enterprise like a full private business and not like we’re using ‘Monopoly’ money.”
“Don’t forget that we’re the stewards of the citizens’ money. I take that responsibility very seriously.” – Ray Ricchi
The city is now in control of the land, hangars, buildings and lease agreements at the airport. The city is also in charge of fueling operations at the airport, taking over the fixed base operations from Cutter Aviation.
Ricchi has become more vocal during airport-related discussions at council meetings and has recently voted against any agenda item that relates to the airport. He said that he initially voted for the city’s airport deal based upon the belief that the city would be not be “getting into the airport business ourselves.” He said he voted for the airport deal under the assumption that the city would be bringing in outside help to run the fueling and fixed base operations.
Ricchi originally voted in favor of the city’s airport purchase, but expressed concerns when the council approved it. “We don’t need to be a gas station,” Ricchi said when the airport purchase was approved. During the Sept. 3 council meeting, Ricchi also said, “We don’t need to be in the airport business, but we need to be able to control the city’s interest in the airport. We need to reduce our debt and work to sell these assets to help our city.
“We farm out the management of the golf course, the (Dr Pepper) StarCenter and the tennis courts. Why should this be any different?” Ricchi said. “That’s why I supported the airport purchase initially, because I thought we’d be utilizing outside management for these operations.”
Ricchi said that he still hopes that the city reconsiders its current operations at the airport. “I didn’t realize we were going to be creating another government empire,” Ricchi said. He said he’s like to see the city “let the experts do their jobs instead of dabbling in the private sector.”
Ricchi has also questioned some of the financial figures in the city’s recently approved airport operations budget. During the council’s Oct. 15 meeting, City Manager Jason Gray presented the council with an operating budget for the airport. The presentation to the council members showed that, according to the city’s projected costs and revenue, the airport would generate over $350,000 in profit in the city’s first year of ownership and operation.
“The easiest way to break even is based on fuel sales and the fuel sales numbers are all over the board,” Ricchi said. “These numbers don’t correlate to anything.”
Ricchi said he is concerned that the city is not equipped to monitor fuel costs and fuel prices at competing airports on a daily basis and adjust accordingly. “The city government just isn’t set up that way, but now we must be,” he said. “We don’t have a choice.”
Gray disagrees with Ricchi. He told TSB that the numbers in the approved budget are based on Cutter’s previous fuel sales and a complex and vetted methodology based on expected sales. “It’s way more than a guess,” Gray said. “The numbers are solid. They’re conservative.”
Gray also said that he anticipates the city turning a profit on the airport every year. “We feel like we’ll be $350,000 to $400,000 to the good every year,” Gray said.
Ricchi also recently questioned Gray about the cost of setting up the city’s FBO operation at the airport. During the November 5 meeting of the city council, Ricchi asked Gray about the startup costs of the city’s FBO operation and if those figures were available for the council’s review.
At that meeting, Gray told Ricchi that the specific breakdown of how much cost was being absorbed by each of the city’s departments was not currently available. Gray said that this is the normal procedure for the city’s budget. “Generally speaking, when we provide a budget ordinance to the council, we provide a grouping of functions that we have,” he told TSB. “Council approves budgets on a fund level, not on a department level. Most of council wants to be at the macro level and not get into line item detail. That’s typically the level that the council wants to stay at.”
That’s a big problem in Ricchi’s eyes. “Every penny of taxpayer dollars must be accounted for and be able to be tracked and justified,” he told TSB. “According to Mr. Gray, it doesn’t appear that we (the city) have that ability. I don’t believe that. It’s not that we can’t (track those dollar amounts). It appears that we won’t.”
Ricchi said that despite his recent negative comments, he initially supported the airport purchase because he felt that the city controlling the airport could be good for economic development in McKinney. “I’m not against it,” he said. “I just think we’re going to mess it up. Don’t forget that we’re the stewards of the citizens’ money. I take that responsibility very seriously.”