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Harrietstown pares down airport project as costs rise

Council approves use of local funds if grants can’t bridge gap

A private jet prepares for takeoff at the Adirondack Regional Airport in Lake Clear in October 2018. (Enterprise file photo — Lou Reuter)

LAKE CLEAR — The Harrietstown Council last week awarded contracts for its $8.5 million upgrade of the terminal at the town-owned Adirondack Regional Airport. The council also authorized the potential use of up to $200,000 from the town’s airport reserves to bridge the gap in funding for the project if it cannot secure grants to cover these costs.

Councilman Johnny Williams was opposed to using $200,000 in local reserve funds on “principal,” and voted against accepting bids for the airport work, saying he was opposed to the idea of using taxpayer dollars toward a project that was supposed to have no local taxpayer cost. But other members of the council said it is the fiscally responsible thing to do to keep the project moving, and that $200,000 is a fraction of the airport’s reserves. The other members voiced concerns that a delay could make the town lose the state grant.

The town got an $8.5 million grant from state Department of Transportation in 2022 to upgrade its terminal building. This was a rare grant that does not require any match from the town. Typically, grants would require a 5% to 10% match with local taxpayer money.

After getting the grant, the town shared a conceptual rendering of the redesigned terminal — what Councilwoman Tracey Schrader called a veritable “Taj Mahal.”

By this, she means this was never actually going to be what it looked like — it was a dream. The plans included reclaimed pine wood siding, a water fountain, a fireplace and high-end materials overall.

This initial concept was estimated at costing $16 million — twice the grant amount. So the plan was scaled back, focusing more on infrastructure than the look. But even focusing on the state-mandated goals for the project would push the cost over-budget. The cost of construction is higher now than it was when the town got the grant two years ago, so the state asked the town to chip in funding to cover the gap.

Town Supervisor Jordanna Mallach said she is pursuing other sources for the funding — state and federal grants — but the town is not guaranteed to be awarded these.

“I do believe there are — through several different venues — additional opportunities for us to get additional funding,” Mallach said. “We just need one of them to work … in order to make up that difference.”

If they are not awarded, though, the town has now agreed to use reserve money to cover the contingencies.

Airport Manager Corey Hurwitch said the DOT recommended a higher contingency fund than was initially budgeted for — somewhere in the 5-10% range, which would be a contingency of between $360,000 and $720,000. He said this is a recommendation, but not a requirement.

Mallach said that she met with the state and held fast that the town does not have money budgeted to put toward the project. She said the state asked the town to look in its reserves.

Mallach said they found there was $2.6 million in the airport’s fund balance reserves. Of this, $2.3 million is accessible, with the rest designated for equipment reserves. She said she didn’t realize the reserves were so big and said its size shows they have a “cushion” — an ability to absorb costs.

The debate

The reserves were built up over time through unused money rolling over at the end of the budget year. Mallach said there is not a lot of fixed income in the airport budget. Its budget is based on projections, but the actual revenue it brings in fluctuates on a variety of factors.

On years where fuel sales, landing fees and other revenue is higher than expected, that extra income gets put into the fund balance. Mallach said the airport fund balance sees $200,000 to $400,000 in growth annually.

“It’s really hard for me to tell the state of New York that we can’t come up with $200,000 to balance out this project,” Mallach said, given the “healthy” fund balance it currently has.

Williams felt this was “improper.”

“I don’t feel right spending taxpayer money on something that was never supposed to cost them a cent,” he said. “It doesn’t feel good to me.”

Mallach said this would have no impact on taxpayers. The money was already levied. Also, it is supposed to improve the building’s energy efficiency, creating an eventual savings. She felt using the reserves would be in the best interest of the community.

Town Accountant Beth Bevilacqua said she felt the same way as Williams for a long time. But after looking at the fund balance, she feels comfortable with the town using a portion of it.

Williams was strongly against the idea, even if the money comes from the fund balance and not from new tax dollars, and even if it has no impact on the taxpayers. He wanted a guarantee that no taxpayer money would be spent. But the other board members said they couldn’t promise that. The board would vote on any fund balance transfer to the project.

These reserves are referred to as a “rainy day fund” for emergencies.

“Being over-budget is not an emergency,” Williams said, adding that he feels it is using taxpayer money under false pretenses.

Schrader pointed out it’s not good to keep too much money in reserves. Towns should be spending taxpayer money to improve things, she said, not hoarding it. She said it would be a sign of “good faith” to taxpayers to use this money for improvements.

Mallach pointed out the contingency money is only used if they need it. If not, nothing happens.

“There isn’t an intention to move any money right now. It’s just knowing it’s there as a buffer, if and when it’s needed,” Mallach said.

When it comes time to pay bills down the line, if the town hasn’t won a grant by then, then the town would use it.

Mallach amended the resolution to accept the bids to include language that the town would “continue to pursue additional funding sources.”

Williams voted against accepting the bids. The bids still passed 3-1. Councilwoman Ashley Milne voted “yes,” but with reservations. Councilman Jeremy Evans was not present at the meeting last Thursday.

Mallach said the town accepted bids, which were over budget, and will now make cuts to the bids to bring them below the budget line.

Things they are discussing eliminating are the pine exterior, a fireplace, the size of the glass facing the runways, signage and a propane tank buried underground. The town council has not voted on any of these specifics yet.

They want all of these things for different aesthetic and safety reasons, but will have to choose what is not necessary currently.

Williams said he finds the current designs after the cuts “lackluster.” The project is costing more to do less than what was hoped for.

“To me, this thing has been so severely pared down that it doesn’t even resemble what we started with, what we all were so excited about,” Williams said.

Williams said he wants to like the final project. If they’re spending taxpayer money on it, he wants something to show for it.

Hurwitch said they’re not getting everything they want, but they are getting critical improvements to the building’s accessibility, its foundation, its leaky roof and other infrastructure.

Hurwitch said this work still needs to happen. If it doesn’t happen now, it will have to get done later, which will cost taxpayers more then, he said.

Mallach said this stuff is “not sexy,” but important — it’s the boiler, the roof, the wastewater system.

The town is discussing coming back to do the aesthetic upgrades later, using this current project as a “springboard” to get more grants.

Frustration

Williams initially moved to table this vote last week, until Evans was able to attend. Mallach said Williams was stopping forward movement because a council member was on vacation, and accused Williams of using Evans as “leverage” to avoid making a decision.

Williams said Evans is the fifth member of the board, on the airport council and that he values Evans’ input.

Mallach was caught off guard by Williams’ proposal and was visibly frustrated.

“I am literally speechless at this point in time and for my professional benefit, I’m calling a five-minute break,” Mallach said.

Schrader accused Milne, Evans and Williams of talking secretly outside the meetings and coordinating.

“I feel like there’s discussions happening behind the scenes with certain board members,” she said. “(Evans) is putting us in the weeds and micromanaging this project.”

She said Milne and Evans didn’t say much at the previous meeting.

“If you had a problem, you better be talking about it then,” Schrader said. “Stop being wishy-washy and figure out, are we going to move forward or are we not?”

Williams and Milne said the details of the project just came to light recently and they were grappling with it.

“We’re going to lose this money,” Schrader said at one point. “It’s a huge mistake.”

Schrader and Mallach said it felt like Williams was trying to “torpedo” the project. He said he wasn’t, and that he was just concerned with the “principal” of using taxpayer money.

Fear

Several members of the town council and staff said they were worried too long of a delay in the project could sink the whole thing. The town already had an extended schedule approved by the state, but there are deadlines for the grant coming up. Hurwitch said they are doing fine now, but if things get pushed down the road, if state does not see enough progress, it could potentially pull the grant funding.

“We have a revised schedule that DOT is aware of, but everything hinges on moving forward,” Hurwitch said. “Any delays at this point would put the entire project closer and closer to at risk.”

He said if the upgrades in this project do not happen, they would need to be paid for later — likely at a higher cost to the taxpayer.

Schrader, a contractor by trade, consistently brought up the fact that the cost of building materials is only going up. These prices will not go down, she said.

Bevilacqua said her concern is that the town has already paid $600,00 in consulting fees to Passero for this project, and if they don’t move forward and the state pulls its grant, it would put the taxpayers on the hook to pay for that.

Williams said not much would make him comfortable with taking money out of the fund balance and approving the bids. Mallach said then he should vote “no” on accepting the bids and not delay the project.

Milne initially considered tabling the vote, but later said she sees that “time is money.”

Williams said he did not want to delay the project and eventually rescinded his motion to delay the vote.

Public information

At a meeting two weeks ago, Evans proposed a public messaging campaign about the project and the town’s decision to use its fund balance money.

“It’s not new money, but it is local taxpayer-generated money. It can evoke negative emotions,” Evans said.

The town’s goal had been to not spend any local taxpayer money. Evans said they did all this work and couldn’t quite get there using the budget from the state. But the town’s been prudent in spending from the airport fund balance, so it can afford to cross the finish line if it draws from there. He said the can still pursue more grant funds so they don’t have to use fund balance.

Evans said they should tell the public what the plan is, that they plan to use he fund balance to fill the gap.

Schrader said she worries that if they say anything, the public will react negatively.

“It doesn’t matter what we tell them, it’s still going to come out as a negative,” she said.

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