New Gary airport board flying into turbulence

2013-08-24T14:30:00Z 2013-09-18T16:02:08Z New Gary airport board flying into turbulenceKeith Benman keith.benman@nwi.com, (219) 933-3326 nwitimes.com

The new Gary/Chicago International Airport Authority appointed in one week will face a series of daunting tasks, including a recent consulting spree that has plunged its budget in the red.

Just since April, a Times analysis shows the Airport Authority has run up at least a $1.2 million tab for 10 different consultants.

"They have consultants watching consultants watching consultants over there," said state Rep. Ed Soliday, R-Valparaiso, who sponsored the bill for reforming the Airport Authority in the Indiana House last session.

The huge tab for consultants is not only of concern to legislators like Soliday. Bidders on the Gary airport's $100 million privatization project also are raising questions.

In addition to a tab of almost $400,000 for just eight consultants hired since April, the authority also faces a potential tab of up to $840,000 for three consultants hired for its current privatization project.

The Airport Authority has made it known publicly it wants to have the winning privatization bidder pay that bill; although the request for proposals issued by the airport July 22 does not mention it as a bid requirement.

Soliday said if the entire authority board is not replaced by appointing authorities as called for in Senate Bill 585, it is essentially "game over" for Northwest Indiana when it comes to legislative help for economic development.

"They are good people on the (airport) board," Soliday said. "It's not that they are bad people. But they are not used to dealing with these large, complex, big money contracts and projects."

Last week, a spokesperson for Gary Mayor Karen Freeman-Wilson said the mayor will announce her four appointments to the authority over the next 10 days to two weeks. However, she did not say if she will reappoint any of the four current mayoral appointments to the board.

The press secretary for Gov. Mike Pence said the governor has not yet decided on his appointment to the board. Under Senate Bill 585, Pence's appointment will be the chairman of the authority.

Soliday said it may be impossible for the governor to find a qualified person willing to chair the Airport Authority unless every member is changed out.

"You need a board that knows how to ask the tough questions and how to get them answered," Soliday said.

Last month, city and airport officials announced the airport's $166 million expansion project would again be delayed after seven years of sporadic progress. Also in July, the authority approved the largest borrowing in the airport's history, which will put it $35 million in debt.

In addition, income statements recently obtained by The Times under an access to public records request show the airport will spend $1.24 million more than it will take in this year. That operating deficit is mainly due to expenses for consultants and other contractual services, which will eat up almost 58 percent of the airport's current $3.82 million budget.

Even with expenses outrunning revenues by that amount, the airport still expects to have a cash balance of $274,296 at year end, according to airport spokesman James Ward. That means the airport will have burned through almost the entire $1.52 million cash balance it had available at the beginning of 2013.

Year-to-date through the end of July, airport expenses were outstripping revenues by $353,940, according to the airport income statements.

In late June, Airport Finance Manager Carolyn Keith warned the airport authority board it was bringing forth large expenditures when there were no new resources to pay for them. She stated those costs were approaching $500,000 not provided for in the airport's original $3.3 million budget for 2013.

Since then certain line items have been reduced, Ward said.

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