Bill Zimsky on Airports, Roads and Bridges – Guest Opinion

Guest Opinion: Bill Zimsky on Airports, Roads and Bridges in La Plata County

william-zimskyNow that the voters have rejected mill levy increases for both the expansion of the airport and for a dedicated fund for improving the County’s roads and bridges the natural follow up question is how should proponents of these two proposals move forward in order to ultimately accomplish their respective goals.  The short answer for both issues is to hold tight, gather more data, see how the national and local economies fare over the next few years, and explore other funding mechanisms.

Before addressing each issue, for the purposes of full disclosure I need to state that I voted for the airport expansion but against the road and bridge mill levy.

Airport Expansion

The voters soundly rejected imposing a 20-year mill levy on property owners to fund the airport by a 62% to 38% margin.  Unlike a certain other election that was held on Tuesday, this result surprised absolutely no one.  Nonetheless, even in the face of such a sharp rebuke, proponents are encouragingly undeterred.  An environmental assessment will proceed, since it is a necessary prerequisite for any future expansion. In addition, proponents are taking another look at the proposed expansion plans and presumably looking at other funding mechanisms.

There is an undeniable need for an expansion of the airport.  In his op-ed piece published in the Herald, Roger Zalneraitis, Executive Director of the La Plata Economic Development Alliance emphasized a number of reasons why expansion is necessary:  to add room to bring in a third airline to increase competition; a tarmac that is too small for the larger aircraft the airlines are deploying; delays caused by one de-icing facility and inadequate baggage handling areas; no storage space for aircraft parts, which sometimes cancels flights; and an undersized security area that can cause passengers to miss flights.

In addition, there is no denying that while the facilities have remained essentially unchanged, other than the addition of a much needed waiting area, use of the airport has steady increased over the past years.  Enplanements have doubled from 96,560 in 2003 to 193,537 in 2014.  Despite low economic growth since 2008, enplanements increased by 44% from 2008 through 2014 (134,386 to 193,537).  Although there was a slight decline in 2015, that was attributable to the withdrawal of services by Frontier Airlines made in seasonal flights and the decline in 2016 reflects the loss of Frontier Airlines.

So, in face of a sound defeat in the face of an obvious need, how can the proponents flip the vote?  To answer this question, one has to understand why people voted no.  I believe that these voters fall into four groups, some of which are overlapping.

The first group of no voters do not want expansion of the airport because they fear, as the saying goes, “if you build it, they will come.”  There is a segment of the population that does not want “them” to come.  This segment is against both population growth in the region and increased tourism.  No matter how proponents tweak the expansion proposal, these voters are going to be against any type of airport expansion.

The second group are voters who almost uniformly vote “no” on tax increases.  I am usually in this group, but was persuaded to vote in favor of the proposal by the arguments presented by the proponents.  Thus, based on my personal experience, some of these voters are what political operatives classify as “persuadables.”

The third group consists of persons who believe that a mill levy is not the proper mechanism to raise the funds.  These voters are not convinced that, as John F. Kennedy said (using a borrowed phrase),  “a rising tide lifts all boats,” or at least would not lift their boat.  In other words, while they probably agree that the airport expansion will benefit the local economy, they believe that such benefits will only inure to a small segment of the community that directly benefit from increased tourism or an increase in population.  Some members of this group could be converted from no to yes if the proponents focused on the benefit of the expansion of the airport for the community at large.

It does not appear that there is an appropriate alternative funding mechanism that could help garner support from this final group of voters.  Currently, the FAA is willing to contribute $40 Million to the expansion of the airport, but that commitment is based on the airport authority obtaining a $40 Million bond.  In turn, the only way to get a bond is through the imposition of a mill levy or a sales tax dedicated to paying off the bond over twenty years.   Increased user fees or lodging taxes, which would be paid by those who would directly benefit from the airport expansion, are insufficient bases on which to obtain a bond.

An increase in sales taxes would incur resistance from some voters who are now in favor of expansion.  Moreover, sales taxes are generally regressive, i.e., they have a bigger impact on poorer residents who, in turn, generally enjoy less benefits from the expanded airport.

The final group are those that do not believe that expansion is necessary, or at least, not necessary at this time.

Thus, I believe that the proponents should re-group and bring this issue to the voters in 2018.  This additional time will provide the proponents the opportunity to quietly campaign to convince the persuadably “no” voters that the expansion is necessary and would benefit the community as a whole.  In addition, two more years of increased enplanements may help to convince some that the expansion is indeed necessary.

The other advantage of submitting the vote during an “off year” election, is that the voter pool decreases and the proponents can more easily identify voters who participate in off year elections and be able to make more personal contacts.  (23,215 ballots were cast in the 2014 off-year election, while 31,561 ballots were cast this year.)  Every political consultant agrees that the most effective method of both persuasion and getting the voter to actually cast a ballot is through personal contract, multiple if possible.  Putting together a two-year campaign may enable the proponents to make the necessary personal contacts to flip the vote.

County Road and Bridge Mill Levy

For the second consecutive election, the voters told the County that they are unwilling to establish a $45 Million fund to be spent under a 10-year Road and Bridge Capital Improvement Plan by 2.4 mill levy increase that would sunset in 10 years. In the 2015 election, the vote was 52% to 48% against.  Undeterred, the County tried again and the voters rejected the proposal by the same margin.  It should be noted that last year’s vote was on an “off year” election with 12,671 total votes cast on the issue, while this year’s vote total was much higher, 29,456, since it was during a presidential election.  In other words, voter sentiment regarding this proposal has cemented.

The voters have spoken (twice) and the County should listen and hold off on trying to get this measure passed for at least another four years.  In the meantime, the County is going to need to fund the needed road and bridge repairs by reallocating funds within the County’s budget to road and bridge needs, one of the options suggested by the La Plata County Fiscal Sustainability Steering Committee that the Board of County Commissions convened to study this issue.

Such reallocation presents the County with a great opportunity to demonstrate that additional funding for road and bridge projects will be put to good use if the County believes that it is necessary to go back to the voters with another long-term capital improvement plan.

The justification for the mill levy increase was that the County’s tax revenues have declined in the recent past and the decline is projected to continue.  A four-year hiatus will allow the voters to determine whether the County’s projected decline in tax revenues manifests itself and, if so, to what degree.  As the County has noted, the driving factor in the dip in tax revenues has been the decline of oil and gas production coupled with a drop in natural gas prices.  These trends may continue, but it is more probable than not that gas prices will rebound over the next four years.  In addition, it is possible that production may actually increase if oil and gas companies are able to successfully produce from the Mancos formation in La Plata County.  Production from horizontal wells completed in the Mancos formation have proved promising in the both the Piceance Basin in northwest Colorado and in the DJ Basin in Weld, Arapahoe and Adams counties.  If oil and gas companies seek to develop the Mancos formation in La Plata County, the County should welcome such develop and not make it unnecessarily burdensome to so.   (As a point of full disclosure, I am an oil and gas attorney who stands to benefit if more wells are drilled in La Plata County.  That being said, my plate is more than full working for clients who are operating in other parts of Colorado as well as in the southern San Juan Basin and the Permian Basin in New Mexico, as well as the Bakken and Three Forks formations in North Dakota. )

Finally, the County should also explore funding mechanisms other than an increase in the mill levy.  As noted above, some voters rejected the airport expansion based on the argument that the people benefiting from the airport expansion should bear the costs.  While I do not believe that this reasoning is sound with respect to airport expansion, I do see the merit of the argument with respect to funding road and bridge projects.

The Fiscal Sustainability Steering Committee recommended two other funding mechanisms, a use tax and impact fees, both of which are more equitable with respect to funding.   A use tax recovers lost sales taxes on vehicles purchased outside of the County when those vehicles are registered in the County.   It would also recover lost sales taxes on construction materials when the County issues a building permit.  These taxes are fair since they are directly related to road usage.

Imposing impact fees for new construction is another equitable method of revenue collection since it is tied directly to road usage.  As the Committee stated: “Such fees provide the development community a degree of cost-certainty and appropriately shift a portion of the cost for needed infrastructure investments from all taxpayers to the direct beneficiaries of those improvements.”  For a point of reference, the County left about $2 Million on the table by not imposing impact fees on the Three Springs development that is directly affecting county road usage.


  • Tim Walsworth

    Great analysis and perspective Bill, thanks for sharing.

  • Kara Komick

    Thanks for sharing, I feel like these issued get very confusing to most of us. The wording can make all the difference.

    • Melissa Youssef

      I think that is a really good point Kara!

  • Peter Marshall

    Very interesting and helpful analysis. I would love to see more attention given to the implementation of a use tax – it may not make up the entire funding needed, but every bit helps and it has an added benefit of helping keep dollars local. Thank you for sharing.

  • Matt Kenna

    Interesting read Bill, thanks

  • W Warman

    As laplata county residents for these past 35 years we have seen many tax issues come and go. Remember when the school board wanted the money to upgrade the schools? Before the current site is now there was a junction creek liquor on the curb. The voters finally, after many attempts said yes. Hence, not all voters can be categorized as Bill’s article alludes to on this occasion of the tax increase measure. One segment of laplata citizenry is a “category” that fails to garner attention on this list. That is the retired, fixed income seniors whom have paid taxes and supported local projects all these years. It occurs that the very agencies seeking to raise taxes are seen ,by some of the taxpayers, as being bloated with excessive administrators and consultants. The very same agencies are saddled with, for the average working man or woman, salaries way out of proportion to what the laborers and restaurant and resort
    area see in the paychecks. I’ve heard the argument” Oh’ we need that to compete for the best talent”. No offense but the rest of us came to enjoy the area and all it has to offer. In short ,these agencies need to look inside to make change rather than the seemingly never ending demand on the resources of those senior and retired laplata county residents. This article has not been edited so, please ,excuse the errors of grammar.

  • Laurie Sigillito

    Thank you Melissa for your efforts in providing updates from your perspective and to being open to other using your platform to share their views.

    I always feel that we learn much more about a ballot item when it losses than we hear and understand it before the election!

  • John Ritchey

    The Airport Commission & other county/city officials should pay attention to the fact that the current airport proposal was crushed by a huge majority of Democratic, Republican & Independent voters. It was not a partisan vote. If the proponents, who spent $33K vs. $0 for the opponents, simply pitch the same thing, they may well see the same result. You listed your perceptions as to why voters rejected this proposal. Your list omitted what I believe is the concern of many. From day one, the folks pushing the airport had their minds made up to shoot for the moon by building a new airport in a new location. Many of us do not think the Airport Commission ever gave serious consideration to doing a more cost effective remodel & expansion at the existing location. It was always “all or nothing” from the beginning. I just returned from a steelhead fly fishing trip to northern British Columbia. My final destination was an airport located in Terrace, British Columbia, a mountain town in many ways similar to Durango. Terrace’s regional airport (note the word “regional”) is about the same size as our airport and has many of the same issues facing our airport. Those issues are being addressed by more than doubling the size of their airport including adding more counter, office & storage space, significantly expanding TSA space, adding another baggage carousel, building another passenger gate, doubling parking, and more. They are solving those needs by utilizing the existing airport’s footprint with a mixture of new construction and remodeling the original space – all at a cost of 11 million dollars usd ($15M cnd) instead of what will end up being nearly $90-$100M was currently proposed in the recent election. Until the Airport Commission re-thinks its approach and puts forward a scaled down proposal, utilizing the existing location and airport building, I believe significant opposition will reappear, irrespective of what funding mechanism is proposed. Counting on a smaller voter turnout to turn the tide is a mistake. Just look at the road & bridge vote. It failed by the same % margin in both an off-year and general election cycle. So, put me in the category of those who thought the current proposal was excessive in scale and not fiscally responsible.

    Melissa, thank you for the opportunity to use your blog.

  • Bill Zimsky

    Good critiques of my article by W. Warman and John Ritchey.

    With the risk of going overboard with my “categories” analysis, senior citizens living on a fixed income, as well as those who are scrapping by earning low wages in the tourism sector, are part of the second group – those who are inclined to vote no on all new taxes. Their rationale, however, is a bit different from the smaller government, less taxes, cohort to which I belong – they are naturally resistant to higher taxes because it has a direct effect on their limited discretionary income and, for some, their ability to pay bills. (While low income wage earners do not own property, they indirectly pay property taxes in the form of higher rents because landlords are naturally, and with good reason, going to pass off any property tax increase on their tenants.) Thus, this sub-group may not be as persuadable as the libertarian leaners since their opposition is grounded in a valid concern regarding their economic situation which is unaffected by the merits of any proposal.

    Mr. Ritchey’s point about re-thinking the scale of a proposed expansion instead of “shooting the moon” is well made. I hope the proponents give serious consideration to assessing whether a smaller scale proposal can adequately address the major concerns regarding the current configuration of the airport. There very well may be enough voters who shared these concerns but were not convinced that the scope of the proposed expansion was necessary to satisfy them. However, if a smaller scale proposal will not meet the needs identified by the proponents, I would hope that instead of trying to obtain approve for a less than adequate plan, the proponents instead re-assess how to obtain voter approval of an adequate plan, even if that means waiting a number of years for taking another run at it.

    And thanks to those who read the article and and extra thanks to those who took the time to comment.

  • Roger Zalneraitis

    John- great story about Terrace, BC. I looked it up. Terrace embarked on this expansion after their 2013 enplanements hit 93,000. They were expanding their terminal from 27,000 sf to 44,000 sf to meet those 93,000 enplanements.

    In comparison, our terminal- without our tent- is 37,000 sf and we had 193,000 enplanements in 2014 (100,000 more than Terrace did when they realized they had a problem) when the consultants identified that by international standards we’d need something around 80,000 sf to address our problems.

    Let’s use Terrace’s example. They are building their terminal to be sized at roughly 2.1 enplanements per every square foot of terminal space. If we did something similar for our enplanements, we’d need a terminal of 92,000 square feet. We were proposing, instead, an 80,000 square foot terminal. I’d hazard to guess that Terrace is overbuilding based on enplanement/square foot ratios I’ve calculated for other airports at towns similar to our size. In the U.S., we seem to run closer to 2.4-2.8 enplanements for every square foot of terminal.

    Their terminal is costing $16 million to build? That’s $600 psf (that includes not only the new space but the renovation of almost 12,000 square feet of existing space). Our 80,000 sf terminal was going to cost about $43 million, including the parking spaces needed for it. Loading both those costs onto the terminal itself yields a build cost of $537 psf. Our other costs were associated with the new tarmac, taxiway, utilities, and a CDOT-mandated road entry. That CDOT entry is an $8 million cost that we *have* to do no matter what our expansion is, by the way. Even if we could do $15 million in improvements to our current terminal to fix our problems (which Terrace BC clearly shows we can’t), we’d still need to pay another $8 million just for a new state-mandated entrance plus associated fees for expanding or paving our parking.

    So, if we were to look to Terrace as a model, we’d be looking to spend even MORE money on a terminal OVERBUILT to international standards. The Terrace expansion looks small until you normalize for passenger count and building costs. When you do, you see that our proposal was more economical and rightsized for the passengers we have to accommodate.

    The fact is there are severe deficiencies at our airport. The plan that was proposed was not acceptable to the voters, primarily for the reasons Bill Zimsky outlined. But just because people vote no on a ballot initiative doesn’t mean the problems we have magically disappear.

    Do a Go Where Your Bags Go tour. Read up on the master plan documents. Please. The problem is real. We have to find a different way to address those problems- clearly not with a property tax increase- but they must be addressed. Even places like remote British Columbia get this and provide appropriate solutions. We can at least be as forward thinking as Terrace and Kitimat, BC… can’t we?

  • John Ritchey

    Roger and Bill, Thank you for your cogent comments. I genuinely appreciated the opportunity to see your responses and learn more about your thinking.

    I do disagree with some of the numbers Roger presented. The figure I obtained less than two weeks ago was $15M from an official at the Terrace BC Airport, not $16M. But irrespective of who is correct, the above figure of $16M quoted by Roger was in CANADIAN dollars. The current exchange rate is 0.74 USd vs. 1.00 CNd. So, Roger should be using 0.74 x $16M or $11.84M, 26% less, in order to compare costs. And, why are we using the figure of $40M for La Plata County tax payers? The actual number for LPC tax payers is $62M (principal & interest). Assuming a Federal contribution of $40M might happen, we are really discussing a project cost of more than $100M, assuming there are no cost overruns. And, I may have missed it, but I did not see in the Airport figures a set-aside for cost overruns, nor did I see a figure for inflation and cost estimates for future phases. I think taxpayers are entitled to see all of those numbers in one place in plain English.

    I have no personal axe to grind in this. I am a voter who doesn’t fall in any of the categories mentioned by Roger, Melissa and Bill – I am not anti-government, not anti-any property tax increase (I voted for school bond and Road & Bridge), not on a limited fixed income and I did not think there were too many “asks” on the ballot. It would be fair to call me a fiscally conservative voter who is frequently skeptical of tax increase proposals. I have been a principal, including taking the lead role, in several multi-million dollar building & remodeling projects. I have seen how proposed large projects quickly devolve into a wish list from various competing constituents. I have also seen how consultants are given marching orders to arrive at a certain outcome. Full disclosure: I have been hired as a consultant many times in my professional career.

    Finally, I am not in denial that airport improvements need to be done. I fly out of Durango 7-8 times a year, so I think having a functional airport is essential. I have attended most, if not all, of the City & County airport public meetings as well as taken the airport tour. I have read the Airport Master Plan documents and also spoken with one member of the County Budget Committee at length about the airport proposal. I did not find sufficiently strong arguments in the Master Plan regarding why most of the proposed changes could not be accomplished at the present site, as was envisioned when the original airport was constructed. No real attention was paid to what were the most ESSENTIAL, HIGH PRIORITY needs for the airport project, irrespective of its final outcome. Rather I saw a document pushing one ALL-INCLUSIVE outcome, including moving to an entirely new location – without serious consideration being given to other (scaled down) alternatives. I sincerely hope the Airport Commission will take a fresh look, rather than just being wed to a proposal that was soundly rejected by the voters. The fact that they are moving forward on the $1.1M environmental study suggests otherwise.

    Thanks to Melissa for the opportunity to further discuss my concerns. I do feel like I already taken up too much of this space, so I will not be responding further.

  • Jennifer Prosser

    So we need expanded baggage handling and counter facilities, and a new runway. That doesn’t sound like we need an $84 million dollar expansion. I have traveled at peak times, and our airport doesn’t seem to be splitting at the seams, so to speak. I think further analysis of when and how these passengers are actually arriving would be valid. Are things breaking down during times of peak travel, and how much? While I am sympathetic to the people who have to work at the airport in crowded conditions during peak times, I am not convinced that an $84 million expansion is the answer. And I have NEVER seen a project of this magnitude come in on budget, so aren’t we actually looking at probably a $100 million expansion? And if there are cost overruns, where will the money come from? You are going to have to do a lot more convincing to get me or most people in this town to vote for such a huge project, especially when it involves raising our property taxes. Average folks are stretched to the max in this town, it is very expensive to live here. And while the property tax increase may seem moderate to some, every penny counts, to others. So we must find a workable compromise that our community can really get behind, not just another packaging of the same project delivered through ‘personal contacts’ over the next two years. A poo sandwich is still a poo sandwich, no matter how your package it.
    Appreciate your comments and analysis on this issue.

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