RALEIGH A bill to create a Charlotte airport authority hit a delay in the North Carolina Senate Thursday, and could face a longer one in the state House.
Sen. Bob Rucho, a Matthews Republican, said he pulled the measure from the Senate calendar to get answers to questions raised Wednesday in a committee.
The bill would transfer control of Charlotte Douglas International Airport from the city of Charlotte to an independent authority. The questions have to do with the effect of the transfer on more than $800 million in bond debt.
Members of the Senate Finance Committee on Wednesday questioned whether that debt would have to be re-issued. Rucho said he’s awaiting information from the state Treasurer and other sources.
The city’s bond attorney, the law firm Parker Poe, sent a letter to the city finance department Tuesday saying the city could default on its $800 million bond debt if the airport were switched to an authority.
If the bond holders do not consent to debt being switched to an authority, the city would default, the letter said. The city does not know who the bond holders are at the moment. It could research it at “substantial cost and effort,” according to the letter.
The city’s chief financial officer, Greg Gaskins, told the Observer Thursday that most of the bonds are “city airport revenue” bonds that are paid off little by little each year. The remainder are so-called special facilities bonds, which are used to fund hangars and other airport projects, he said.
Gaskins said he didn’t know offhand when the city would fully pay down the bonds.
“It’s pretty far out in the future, because we continue to issue them, year after year,” he said. Some of the bond debt may stretch at least to 2022, he said.
For bondholders, transferring airport oversight might come as a shock, Gaskins said.
“How would it affect the bank if you told them the same thing: you’re going to abandon your house and someone else is going to take it over?” he said.
The airport bill, introduced earlier this month, has been on the fast track despite opposition from Mayor Anthony Foxx and the Charlotte City Council.
Even if the Senate passes the bill soon, it’s almost certain to slow down in the House.
“I am personally prepared to slow it down to the end of April if we need it,” said Rep. Ruth Samuelson of Charlotte, one of the House GOP leaders. “I sort of view this process as one that’s going to raise questions that hopefully (we) find the time to find the answers to.”
Samuelson said that would allow the House and Senate to still take the steps to create an authority by the end of their long session in early summer.
Foxx, who is in Washington D.C. for a U.S. Conference of Mayors meeting, issued a statement about the delay.
“Today, the N.C. State Senate finally pumped the brakes on its rush to destabilize Charlotte Douglas International Airport and the City of Charlotte,” Foxx said. “Maybe they are just beginning to understand the massive issues with this measure, which our entire City Council raised in a recent letter. There is still no explanation as to what problem is being solved by this radical measure or who is pushing for this change.”
In its letter to the city, Parker Poe said that the city should consider the implications of the possible airport transfer on the city’s other enterprise funds, including transit, water and sewer, and storm water.
In issuing future bonds, the letter said, those departments should include a disclosure stating that the General Assembly could transfer control from the city to an authority. Staff Writer Steve Harrison contributed.
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