Airport, profit center for city, is worth F$113.6 million

The business interests of city government are mostly funded by customers. (Graphic 2013 CAFR)

The business interests of city government are mostly funded by customers. (Graphic 2013 CAFR)

By David Tulis

The city, as a commercial actor, improved the value of its airport in 2013 by F$8.35 million. It’s net financial position is F$103.14 million, according to the city’s yearly net-worth statement. It has total assets worth F$113.59 million.

The airport company, operating under a city authority, spent F$13 million, pulled in F$10.12 million in charges and beamed from F$9.51 million in capital grants and contributions, the city government’s comprehensive annual financial report said (p. A-18).

The airport authority has debt of F$6.26 million in from 1990 for its terminal. The city is obligated for any shortfall between revenues and payments due, but has not been called on for surety of the IOUs (p. A-48).

The authority was established under Title 42 of the Tennessee Code Annotated; taxpayers are responsible for its debts (p. A-19).

Demand for info

April Eidson of Little Chicago Watch activist group is demanding the city make available for public inspection paperwork pertaining to a F$7 million bond issue on behalf of the airport. “As many people may recall,” Mrs. Eidson says in a Facebook post, “the airport authority board spent millions constructing a government-subsidized private plane facility [managed by] Wilson Air in 2010 to compete directly with the privately owned TAC Air.

“There simply was not a market for a government-owned, private plane facility. To date, Wilson Air is operating in the red to the tune of more than $1.3 million. Now, the airport authority seems to have realized that the $10 million dollar taxpayer investment at Wilson Air is not working out, so they wish to buy out the private competition that actually pays rent at the Airport.”

Taxpayers backstop city businesses

Taxes upon land holders in Chattanooga are “without legal limit,” the CAFR says. “The rate, as permitted by Tennessee state law and city charter, is set annually buy the city council and collected by the city treasurer. Property taxes are secured by a statutory lien effective as of the original levy date of Jan. 1” (p. A-24).

Attorney Hugh Moore said Wednesday at a meeting to approve F$10 million in debt that neither city nor the airport are liable for them. However, the CAFR says taxpayers are on the hook for general obligation bonds priced at F$225.17 million, plus the interest at rates ranging from 2 percent to 5.5 percent over 15 to 30 years (p. A-31).

Source: “Airport Authority Approves $10 Million In Revenue Bonds, But Gives No Details On Project,”, Jan. 7, 2014

City of Chattanooga, Tennessee, CAFR 2013, 194 pp.

Interested in CAFRs?

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