While the city was developing its 2009 budget, the Pay for Performance Agreement the city has with the Branson Airport LLC (BA) at Branson Creek was discussed. Under the agreement the city of Branson is obligated to pay up to $2 million dollars a year for the next 30 years to BA for a potential total $60 million.
Under Section 2 of the agreement entitled “Pay for Performance Fees: Cap” the city has agreed to pay BA “$8.24 per inbound passenger arriving at the BA Airport on scheduled and charter flights from another airport of origin.” The amount paid shall be determined on a quarterly basis based on the “quarterly passenger count record, which shall be derived from the records of scheduled and chartered airlines serving the BA Airport and provided to the City by BA.” The agreement expressly provides that all outbound passengers from the BA Airport as well as passengers whose trip originates in Springfield and terminates at the BA Airport will be excluded from the passenger count used to determine the payment.
Except for the term “inbound passenger” and the exclusion for outbound passengers and inbound passengers from Springfield there is no other performance criteria in the agreement. When asked if there was any other terms filtering what triggers the obligation of the city to pay the $8.24 in the agreement current City Administrator Dean Kruithof, who was not the city administrator when the agreement was signed said he did not. He continued, “In other words, Passenger A could visit Branson from New York by air every year of the agreement and the City would pay the $8.24 for each visit.”
Kruithof went on to say, “I have always understood the spirit and intent of the agreement was to pay for visitors flying to Branson, with the hope they will stay in the city and contribute to our economy. I also understand the amount is calculated to break even if the visitor spends $100 in Branson, with any additional expenditures going to the benefit of our tax collections.”
The agreement is subject to an annual appropriation by the city to meet its obligations and states that the city intends to appropriate adequate funds to meet its obligations under the agreement on an annual basis during the agreement. It also states that neither the city nor BA will challenge or contest the reasonableness of the terms, extent, or duration of the agreement.
Neither the city of Hollister nor Taney County has signed a similar agreement with BA. Hollister City Administrator Rick Ziegenfuss said that although Hollister will support the airport in various ways it does not have a similar agreement. Presiding Taney County Commissioner, Chuck Pennell said that BA had approached Taney County to sign a similar agreement but they could not agree on a standard to use to determine which inbound passengers the fee would be paid on and which it would not.
The schedule for the Taney County Commission shows it has a meeting scheduled with representatives of BA for 9:30 a.m. Oct. 29 for the purpose of discussing a “Revenue Sharing Agreement.
Furnished Courtesy of the Branson Daily Independent.
