May 14, 2006

IMG Narrative

The more and more I look at the IMG reports, the thing that truly amazes me is their recommendation that we should extend the agreement with MassPort. If you want check out page 2-4 entitled "Governance" at http://www.ci.worcester.ma.us/reports/IMGNarrative.pdf.
Why do I say this?

Currently we are about to end year 2 (June 30th) of the 2nd 3 year operating agreement. In other words June 30th will make the end of the 5th year. Here are the operating results for the first 4 years (all losses):

Fiscal Year Ending

2005 -1,920,586
2004 -2,288,131
2003 -2,378,854
2002 -1,938,700

Fiscal Year ending 2006 looks the same as 2005, approximately $2,000,000. Of course the effect on the City of Worcester has not reflected these monies due to the varying percentages subsidized by MassPort. Bottom line is that at the end of the 5th year of 6 years with MassPort, the airport has consistently lost $2,000,000 per year.

Reminds me of a quote “We have a sound, unremitting, 10-year history of losses at the airport, and they are getting worse,” said City Manager Eric Anderson in regards to their airport (Tacoma Narrows). IMG further goes on to state the an extenion with MassPort will result in 1 to 1.3 million cost to the City of Worcester each year. Based on the past results and future forecasts, why would IMG recommend an extension of the agreement?

Despite the finances, maybe this would be acceptable if we had the results, but we have only one airline flying four times per week to Sanford-Orlando? Think that would be a pretty hard arguement to make.

Is it MassPort's fault? I say no and make the same analogy, as I have before, between renting an apartment and owning a house. If you rent an apartment, you are not going to spend monies on major improvements since you will never reap the rewards of the increased value. MassPort has been a huge help financially, but has not made the commitment to turn around ORH. Can you blame them??? What's in it for MassPort if they turned around ORH in 3 years? Answer---Nothing.

It appears to me that MassPort has the ability through their mission statement, the power through the legislature and the financial ability to buy ORH not to mention save Worcester alot of money. Our own consultantant, IMG, estimates 1 to 1.3 million per year from the General Fund, if we extend the agreement at the end of this agreement June 30th, 2007.

SELL ORH.

3 comments:

Anonymous said...

Selling makes sense?? I would think an airport located in the second, I mean third largest city in New Egland and only 45 minutes from Boston could catch a couple of eyes. If Worcester is interested in only saving money then lets just give it away with a clause for guarantee service to 5 major cities.

Anonymous said...

I have a question, a little off topic, but did the airport commission officially change the name of the airport, because the article on Wikipedia.org has the airports official name as Worcester Metrowest Boston Airport, saying that the board officially voted to change the name on May 11th, 2006. if you want to check it out, just go to wikipedia.org and type in Worcester Regional Airport...I thought they were just thinking about the name change, but did they really pass it? or is this false info?

Bill Randell said...

I believe this is false information. My understanding is that the airport commission has presented the recommendation to the City Manager. From there he will present to the City Council, who then will vote on the name change.