As the Ole Seagull said in a previous column, “The issue is not about the Branson Airport whether its good or bad, should have been build or not etc. It’s about a Pay for Performance contract (PfP) that has the potential to cost the taxpayers of the city of Branson up to $2 million dollars per year for 30 years.” He went on to point out that in his opinion it is so one-sided and unconscionable on its face that most objective people looking at it would say, “Wow, what a gift for the airport, how can I get the same type of deal simply for running my business?”
It seems as if everyone from the Branson’s burrito/pizza man to the President of the Branson Lakes Area Chamber of Commerce, representatives of the theatre and lodging associations and the Branson Lakes Area Tourism Community Enhancement District (TCED) spoke during the discussion of Branson’s 2011 budget at the Nov. 9 Branson Board of Aldermen meeting. They spoke in support of the city adding appropriations, funding, to the 2011 budget to pay the Branson Airport under the provisions of PfP which the board modified earlier this year. The main arguments seemed to be that Branson makes more money on each person that flies into the airport than the $8.24 it pays and that the provision the city used to deny the payment was a standard appropriation provision found in most city contracts.
As to the first argument, assuming that it is correct on its face, then why doesn’t the city pay $8.24 to other entities that cause people to come to Branson? These would include, but not be limited to Silver Dollar City, Branson’s time shares, organizations such as ticket resellers and packagers of Branson shows, attractions and lodging and tour bus operators who actually spend millions of their own, non-taxpayer, dollars bringing hundreds of thousands of people to Branson?
The second issue relates to the provision relating to the requirement for an annual appropriation by the board of alderman. It is a relatively standard contractual provision that is in the majority of the city’s contracts for goods and services.
The difference is that in the normal contract the contracting party gives the city a product or performs a specific service that is part of their normal business operation, bills the city and is paid. With the PfP agreement the city is paying the airport, a private business, for just operating its normal business. That makes about as much sense as the operator of a bus coming to Branson being paid $8.24 per passenger.
At the Nov. 9 meeting, Steve Peet, Chairman and CEO of Branson Airport, LLC, read verbiage from the PfP into the record saying, “The city represents and warrants to BA that it intends to appropriate adequate funds to meet its obligations under this agreement on an annual basis throughout the term of this agreement. The city is not aware of any impediments to such appropriations at this time.”
During his presentation, in referring to how the airport was built with private financing and how it got that financing, Peet said, “The Pay For Performance agreement was in fact the cornerstone for that financing. We went out and raised 140 million dollars and subsequently increased it to about $160 million. This funding was based on the city’s promise.”
In light of Peet’s comments it should be pointed out that potential investors were given a written “Notice.” Among other things that Notice, in referring to the Pay for Performance agreement (PfP) said, “However, the actual appropriation of such funds is subject to approval by the governing body of the City each year the Pay for Performance Agreement is in place, and there can be no assurance that future governing bodies will appropriate such funds.”
In addition, there was a reference from that provision to another Section entitled, “CERTAIN RISK FACTORS” which repeats substantially the same verbiage. It’s interesting to note that Peet did not mention either the standard appropriation verbiage or the verbiage in the Notice to potential investors during his presentation to the board.
What does all that mean in terms of what will happen with the 2011 appropriation? Probably not a thing. It’s not about the financial health of the city, what will bring the most people to Branson, legality, logic or honor. Whether it be Seagulls, burrito/pizza men, mucky mucks from various boards and associations and whether they know what they are talking about or not, at the end of the day it’s all about politics and clout, not a strong suit of an Ole Seagull or the average taxpaying voter who, one way or the other, will foot the bill.
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