Nemeth Article

Sorry, there is no story from part Airport Chairman and current Commissioner Nemeth, instead we have an editorial . Before you read the editorial, do you think the editorial is critical about the decision to extend the current agreement six months? Shocker, but the editorial praises the decision to "take time to get airport agreement right." Did we not have three years to get this agreement done "right". What exactly will six more months provide of time provide to help get it done "right".

In addition we all now know what the exact terms of the said agreement will be so why don't we put these number out on the street, test the marketplace and see if anyone else may be interested in paying more, let me explain. First you need to understand that airport breaks there losses (there are no profits) into two categories:

1. non-operating (mainly debt service) approximately 800,000
   
2. operating losses approximately 1,400,000

Right now the operating agreement consists of MassPort subsidizing 68% (952,000) of the operating losses while the tax-payers of Worcester paying the remaining 32% (448,000) and 100% of the non-operating losses. Obviously these numbers change slightly as the underlying losses change, but you get the picture.

Now the deal on the table is as follows:

1. non-operating expenses will be paid 100% by the tax-payers of Worcester
2. operating losses will be paid 100% by MassPort

In the end the City of Worcester would save not having to pay 32% of an operating deficit, which currently means a savings of $448,000 based on an operating loss of 1,400,000. It will, however, still cost the taxpayers of Worcester approximately 800,000 per year for the non-operating expenses.

In the end MassPort would pick up this 32% portion and pay the entire operating deficit, now at 1,400,000. Bottom line is that MassPort would in essence be leasing the entire airport for 1,400,000. Now consider this, what if MassPort were to divert some flights to ORH and start making on money on the airport and eventually wipe out the operating deficit? The cost to lease ORH would in essence be nothing.

All I am trying to say is that a deal whereby a leasing entity would have to pay the operating deficit, which is currently at 1,400,000, but have the ability to lower their lease costs by running an efficient profitable airport to nothing would seem pretty attractive??? Today's editorial should have been "now that we all know the selling price of ORHG", lets test the marketplace to ensure we are getting the highest return for the tax-payers or Worcester. Once again the Telegram comes up short.