An Airport Bond Failed, Again

Results are in, and the airport bond of 2023 failed worse than the last failed airport bond of 2015. 

Saturday's failed final bond vote (not official) showed a total of 21,846 votes cast. Of those votes, 41% were cast for the bond, and 58% were against the bond. It looks like a doubling of voters in an off-year election too!

Here are the results from the failed $50M airport bond election from November 2015 48% for the bond and 51% against the bond. A total of 10,473 votes were cast in that election.  

In this particular election, there were 7 propositions on the ballot:

Prop 1 Passed - street projects

Prop 2 Failed - airport improvements for land acquisition and hangar construction

Prop 3 Passed - public safety facilities

Prop 4 Passed - municipal building improvements for a library expansion

Prop 5 Failed - downtown parking structure

Prop 6 Passed - flood protection in some areas

Prop 7 Passed - to revoke $13M in park bond capacity (MCDC pays instead)

See the Community Impact article about the 2015 bond election

Vote NO on Prop A Resources

 Please Share Resources. Encourage People to Vote NO.

Vote No on Prop A by Brie Ann 

MC2C Reasons to Vote NO

Tom's Reasons to Vote NO - Tom came up with the NO signs. Citizens helped with Tom's GoFundMe page to pay for the signs.

Current Airport Reinvestment Zone's Financial Plan

$4M Worth of Consultant Reports Paid for with Taxpayer Money

Mayor's pro-airport PAC website - The PAC has over $40k in contributions from commercial real estate interests, developers, and construction companies. 

Mayor's PAC City Filing as of April 6th

Full disclosure: I volunteer my time and money to do all research, writing, etc. for McKinney Citizen to Citizen

FIVE Reasons to Vote NO on Prop A

1.  Too Many Questions and Questionable Answers for this Venture

·       Taxpayers will be paying the debt service on the $200M (total cost with interest will be ~$380M) for at least the next 24 years IF the stars align and all variables work out: like if a big airline carrier comes, if TKI offers comparable and competitive flight options to lure away DFW and DAL travelers if they park their cars and eat food at TKI, etc. 

·       The debt service we pay for this bond will be money that could have gone to police, fire, streets, parks, etc.

·       Prop A can be a tax increase! No one can promise it won’t happen. The venture can fail. The venture could happen slower than projected.
PROPOSITION A “THE ISSUANCE OF $200,000,000 GENERAL OBLIGATION BONDS FOR A COMMERCIAL AIR SERVICE TERMINAL AND RELATED IMPROVEMENTS AT THE CITY’S AIRPORT AND THE IMPOSITION OF A TAX SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS.”

·       The city and City Council have not provided most voters an opportunity to ask questions in public and on the record about any business or financial plans. George Fuller’s PAC has held meetings advocating for the bond—big difference. 

·       The environmental assessment (paid for by the city) has not been completed with the required input from the public, TxDOT, or the FAA. Environmental mitigation could be costly. Those costs are not baked into the business plan.

·       The mayor is using corporate and PAC funds paid for by construction and real estate company donors to promote the bond while making many contradictory statements on social media:

-Fuller said the FAA controls what times the airport operates and whether we have cargo or passenger service. 

-He also said that if we vote yes on the bond, we’ll be saved from cargo and freight service.

-He also said that if we don’t vote yes, we could end up with an Alliance-type airport that is all cargo at all hours of the day, even though Alliance airport has two 11,000 ft runways. TKI does not.

-Fuller also said that flight schools and their small plane flights could be the cause of more pollution than 737s.

2.  Few Direct Benefits to the City Taxpayers Footing the Bill

·       In 2010, the airport and the commercial areas around the airport were made into a reinvestment zone (TIRZ#2). See the map here. See the project plan here.

·       The amount of property, sales, and use taxes the city gets is a static base amount, generally under $1M. This base amount will not change much—even if the airport is successful.

·       Any profits made over that base amount established in 2010 stay in the reinvestment zone and must be spent on the airport, per the plan.

·       Other taxing entities will benefit, but they will share no part of the bond burden.

3.  The Airport Does Not Have to Be Expanded

·       It does not have to be converted into passenger or cargo either. It can stay a general aviation airport continuing to make money.

·       The city can attract retail and commercial with much less than a $200M + taxpayer investment.

·       Nothing in the Airport Master Plan requires expansion. Airport master plans are required by the FAA, and they must address potential options for the future of the asset: get rid of it or stay the same, do some things, or fully expand.

·       The 2019 Airport Master Plan specifically says that an airliner like Southwest will not come to McKinney. See pages 2-45 and 2-46. It also said smaller carriers, like Spirit, would most likely come. All the financial and economic benefit models are based on at least one large carrier coming. 

·       Since 2013, taxpayers have paid about $100M to get the airport to become mostly self-sufficient. Maybe it’s time to take a breather.

·       A select few have always wanted to build out the airport. Voters do not have to bear the burden of their ventures, visions, or schemes.

4.  The Entire Plan is Based on a Weak Demand Analysis

·       The airport business plan and all economic impact projections ($4M total in consultant fees) are based on a small study commissioned by the city of McKinney of potential demand in our area for a commercial airport done in 2020 called the Traveler Insights Survey.

·       The survey found 75% of travelers might consider using TKI (which is a combination of three answer choices).

·       The study was based on a survey of 302 people around North Texas. The results indicate travelers would consider using McKinney’s airport (TKA) if certain requirements are met: competitive pricing, non-stop flights, and multiple flight options. If those requirements are not met, travelers will just keep going to Dallas Love and DFW. Voters will still have to pay back the $200M bonds.

·       Is a “might” or a “would consider” reason enough to spend $200M? 

·       Travelers fly out of DAL and DFW because they have options for flights, prices, and carriers.

·       The corporation & PAC sending out fliers with backing from construction and real estate interests, wrote that this airport would be a “boutique passenger terminal.” See the flyer sent out around 3/7/23.

·       If TKI aims to be a boutique airport, it will be smaller and more expensive. It will not attract people who want multiple flight options, competitive pricing, and carrier options.

5.  Vote NO If You Do Not Want McKinney to Become an Airport Town

·       If the bond fails, McKinney will have a chance to stay a Unique By Nature city that balances the tax base between residential, industrial, and commercial.

·       If the bond passes, McKinney will become a town focused on construction, passenger air traffic, and freight.

·       McKinney ISD has lost nearly 1,500 students since 2018 as it is. All other districts around McKinney are growing, while MISD slowly bleeds students:

In 2018, MISD’s enrollment was 24,791

By 2022, enrollment had fallen to 23,379 see report here, p. 120

·       The Heard Natural Science and Wildlife Sanctuary is a 289-acre museum, natural preserve, wetlands, and bird sanctuary located close to the airport. Bird conservation has been a mission of the Heard since its founding in 1967. Airports, and their flight paths, are incompatible with nature preserves. No in-depth environmental assessment will be completed regarding the impacts on the Heard until the city applies for Part 139 with the FAA. 

·       Will families want to move to a city with a busy passenger/freight airport? Or will they move to the cities surrounding McKinney because they offer a more person-friendly, less polluted atmosphere?

 

 

Adding Context to the 1st Non-Official Filmed Airport Bond Q&A

George Fuller, acting as a citizen, hosted a McKinney Area Democratic Club Q&A at his business in support of the incumbent MISD school board members up for re-election and the $200M airport bond. The video is here.

I’m adding context to several things he said.

1.  (starting about 3:25) GF asserted that if the McKinney ISD school board members on the ballot are not re-elected, “…watch our school district go down in the tank and watch every company run for the hills.”

I’m sure he feels passionate about reelecting these incumbents, but MISD already has a lower rating than the surrounding districts (B instead of A). The district has also been slowly losing students since 2018, while surrounding ISDs continue enrolling more students. Maybe companies have been running for a while. Maybe their employees are choosing to be in other districts already.

Enrollments at MISD over the years

 Find this here, pg. 120

2.  (about 7:00) GF says, “It [the airport] kicks off about $3.5M in taxes, property, school, college, and county. Does everyone know why it’s important to everyone in the room? That means if they’re paying $3.5M worth of taxes, we’re not.”

How? How are taxpayers getting that back? The city and MISD collected more in taxes this last year than the previous year (even though the tax rate was lower due to property valuations being higher). Additionally, the money brought in through the airport reinvestment zone (TIRZ) is not even part of this calculation for the city. How does that fit in? 

City of McKinney

MISD

3.  (at about 14:00) GF says, “The FAA has reviewed and put out a first draft that they [garbled]…first open house, the second on April 19^th, but they look at what’s the impact on water, wildlife, air quality, ground transportation…”

This statement is not correct. It is also misleading. The FAA is not performing this environmental assessment. McKinney Airport’s engineering firm of record, Garver, is performing the study that is still ongoing. According to the timeline given by Garver and all city information, the FAA has not gotten the preliminary report yet.

These two open houses GF talked about are hosted by Garver and the city. They are only open houses. Public hearings are required for public input, and those will not be completed until AFTER the bond election. The FAA is supposed to review the findings after the bond election too.

Here’s the city's explanation of the process:

Click here to see it on the city website. 

 

Guest Post Regarding McKinney Becoming an Airport City

 Guest post by Tom Michero

Surprisingly, McKinney is one of the fastest-growing cities in the U.S., yet its student enrollment has been flat for 10 years at 24,000. Meanwhile, nearby Frisco has one of the fastest-growing ISD in the nation and currently enrolls 67,000 students. Why is that? The answer has enormous implications for the McKinney Independent School District and involves whether or not voters pass the airport bond on May 6.

Frisco’s enrollment success is due to families moving to Collin County and choosing a school district with a top-notch performance record. Most rating agencies rate the FISD half a grade higher than MISD. Families choose the Frisco ISD because of its outstanding reputation for academic excellence, innovative programs, and wealth of extracurricular opportunities and experiences.

Frisco has businesses and institutions that attract parents with high academic degrees who instill in their children a desire for higher education. More than 65% of Frisco adults have a Bachelor’s Degree or higher. These highly educated parents represent a tremendous earning power. This higher income level is reflected in Frisco’s higher home values and active retail and cultural environment. This kind of economic activity is the engine behind FISD’s growth. A city that attracts employers looking for workers with the type of advanced education found in high-tech, finance, medical, teaching, engineering, and design will have a vibrant school district.

McKinney lags Frisco in attracting educated workers by 22%. Only 51% of the adults in McKinney hold Bachelor’s Degree or higher and that number is likely to drop if McKinney spends $200 million to pay for the proposed McKinney airport expansion. Much attention has been given to the “economic impact,” with some estimates as high as $1 billion annually. That number is certainly optimistic, but what is certain is that the airport will be attractive to cargo carriers and easily surpass any passenger service the airport generates.

The MISD will experience the economic impact from the airport expansion in two phases; construction and operational. The construction phase of the airport expansion expects to draw two to three thousand workers to the city. The airport will take about two to three years to complete creating an influx of students before the MISD sees any revenue generated by the airport. Later, in the operational phase, the area around the airport will become a distribution depot for companies like Amazon and Fed Ex. Supporting businesses will follow that include warehouses, distribution centers, moving equipment suppliers, aircraft service firms, trucking services, and economy hospitality. To understand what is coming to East McKinney, one only has to look at the environment around Fort Worth’s Alliance Airport.

Businesses that airports attract do not, for the most part, need workers with higher degrees nor offer high pay. Families with parents in these fields will have relatively lower incomes and will seek affordable housing. Developers will, no doubt, be there to develop apartments and housing that match their lower incomes. The median home value in McKinney is 22% lower than in Frisco. The correlation between education, home values, and the resulting tax revenue can’t be ignored. A better educated community produces a better funded school districts.

Companies attracted by McKinney’s airport expansion will make it difficult for the MISD to grow academically. Instead, the district will need to focus its resources on technical training to meet the needs of its student body. The lack of academic focus (along with a lower paying job-market) will ultimately diminish McKinney’s housing and retail activity. This shift in economic activity will leave the MISD with less money, fewer students, achieving less academically.

An enlarged airport will bring industrialization to McKinney and continue to make Frisco, Plano, and Celina more attractive to families. When that happens, the MISD will experience declines in enrollment and McKinney’s reputation for being a desirable place to live, work, and play will spiral downward.

Teachers, trustees, parents, and other stakeholders in MISD’s future should consider what the airport bond actually means for them. If voters pass the airport bond on May 6, the district should prepare to address the needs of a growing trade-oriented student environment and doing this with less available funds. The MISD stakeholders would do well to Vote No on the airport bond and ask the City Council to adopt policies that attract businesses and enterprises that make McKinney a desirable and culturally vibrant place to live, work, play, and LEARN.

Why Did Fuller et al. start a corporation to promote the airport bond?

A couple of weeks ago, McKinney's Mayor, George Fuller, announced a website that would be online in short order. It is located here. 

The small print on the website says, "Political Ad Paid for by McKinney Above the Rest, Inc." The corporation paperwork, with Fuller as one of the directors, was filed on March 7th, 2023. 

The Fuller et al. corporation might have been started in response to an organic, common-man effort by local resident and activist Tom Michero to collect enough money on GoFundMe to make signs AGAINST the airport. He started the fundraiser in February and has a Facebook group called "Keep McKinney Unique." He was also featured in a DMN article here. 

McKinney Above the Rest, Inc. includes Fuller, David Brooks, Daniel Craig, and two more as directors. We know of Brooks from Independent Bank and other economic incentives given to him over the years. We know of Craig from Craig Ranch, a few airport land sales to the city, and other economic incentives given to him over the years. 

They also endorse the $200M airport bond, obviously. There are now pro-airport signs around the city.

I took a screenshot of various parts of the site on March 17th. I'm glad I did. Not only had it not been checked for errors, but comments were also written that the MCDC and MEDC had made monetary commitments. I searched and could not locate any public hearings or discussions on the agendas for the MEDC, MCDC, or city council meetings. 

Now, the language on the site reads a bit differently. The money has "been requested" from the MCDC and the MCDC. 

 

McKinney Airport Money Spent Timeline to 2022

Edited: Updated the costs of the airport to the citizens. As of 10/2022, we've spent a ballpark of about $90M-$100M on the airport. 

Since the FBO (airplane gas station, hangars, etc.) purchase in 2013, most of us have not really understood that the city of McKinney treats the FBO and the rest of the airport as two entities. Consequently, when the city says the FBO is making a profit, many think the whole airport is making a profit. The FBO makes money off of the existing airport infrastructure. The FBO also makes money with every airport upgrade or investment in hangars, runways, parking, land purchases, etc. We forget, though, that the airport side is getting millions of our tax dollars sunk into it every year. If our general fund has put in millions of dollars into the airport infrastructure, subsidizing the FBO operations, and subsidizing the FBO by paying its loans, an announced $565k profit by the FBO isn't that impressive. 

If some taxpayers are hoping the entire airport entity will someday be self-sufficient, they will be very disappointed. If some other taxpayers are hoping some trickle-around economic development comes from the airport being subsidized by us forever,  they'll be happy. There is no end date for subsidizing the airport. We'll never know for sure the real economic impact that the airport does or doesn't provide either. This makes it difficult for us to decide if if the continued expense is worth it or not. 

It is important to remember that the 2004-2012 city CIP was at $71M. This spending is since that $71M. 

Below is a running total and financial timeline of our contributions to the entire McKinney National Airport. The bold amounts total at the end. This is the updated version on 1/22/18.

Date	Description of Event/Purchase/Funding Source	Cost
Pre-FBO Purchase	The city spent a lot of money on the airport before the FBO purchase in 2013 too.
2013	Flight Based Operations (FBO) Purchase by city for plane gas station, passenger terminal, 5 large box hangars, 93 T-hangars, and office building. Property tax money is made off the planes in the hangars. The property tax on planes fluctuates because the value of planes decreases over the years. Fuel sales fluctuate due to price of fuel and demand. From the Sept 3, 2013 CC meeting on item number 13-902 (for the FBO purchase), these are the minutes: “Mr. Gray stated that there is a revenue stream that includes the real estate side with the leasing of hangars and the fuel sale side which would fund the debt service of the airport to close this transaction. The City’s projections indicate that the airport will become more self-sufficient and be able to match some of the federal grants with airport dollars as we look to improve the airport over time. This purchase would allow the City flexibility to sell the FBO at some point, if we wanted to, or lease or sell any of the hangars that are currently out there.” At the same City Council meeting, Councilman Harris asked Jason Gray directly if the profits from the FBO would pay for the debt service costs of the FBO purchase. Jason Gray said that was correct. According to the minutes, Councilman Ussery was the only one to vote against the purchase (it was a 6-1 vote). However, Councilman Ricchi stated that he didn't think the city should be in the gas station business. He said he'd rather the airport assets be strategically sold. The first of 20 debt service payments of $1. 3M each was due in 2016. The city paid it, not the airport FBO. The Airport Operations Fund kept the payment they were to pay and put it in the Airport Construction Fund. (per City email 11/28/2016). 2017 debt service payment was also paid by City. Both loan payments paid by city (instead of by the FBO) were authorized by City Council both years when the budgets were passed.	$25M
2014	Airfield Maintenance Building – in CIP and done	$67k
2014	Start of year budget supplementals – for new car, computer, fuel tank, and sprayer.	$41k
2015	Start of year budget supplementals from 8/7/15 for food, training, supplies, overtime, etc.	$77k
2015	$50M airport bond failed to get taxpayer approval
2016	MCDC paid $1.5M and the city paid the rest of the purchase of a 15,000-sq. ft. hangar (per 12/12/16 email). Hopefully, this is the transient hangar	$1.69M
2016	Start of year budget supplementals from 7/27/2016 for large box tug, golf cart, hanger floor scrubber, fox cart, security camera.	$70k
2016	Mid-year budget supplementals for various maintenance projects (HVAC, water leaks, siding & valves).	$420k
2017	Airport Parking Ramp Reconstruction – in CIP and done	$5.8M
2017	Construction of Hangar #2-paid for with CIP city money	$1.37M
2017	Toyota Hangar- city took out a loan from the Solid Waste Fund to pay for it	$6M
2017	Budget supplemental from 8/4/17 aircraft tug, city paid	$91k
2017	City is involved in a lease-to-own type of public private partnership (like the downtown parking garage) with a company to refurbish the existing FBO and add some parking, etc. MEDC is providing $4M. MCDC is providing $4M. And, an $6M investment by a private company to build and then lease to us for 20 years with the option to buy.	$16M
2018	City spent general fund cash on the purchase of 190 acres of land on the southeast side of the airport (they want to purchase a total of about 500 acres eventually).	~$23M
2018	Airport Master Plan Update – in CIP	$333k
2020	Private company, Western LLC, contracted in 2017 to build FBO, terminal, and hangar files for bankruptcy leaving project unfinished and exposed to elements for a year	$Oops
2020	City contracted with McRight-Smith Construction and the city used emergency funding and process to finish the project.	$6.8M
2022	SECOND company working on FBO, terminal, and hangar files for bankruptcy leaving 6 weeks of work left and workers unpaid	$Oops
	Total ballpark because there was more spending than this up to 2022 (without fixing the costs of the twice bankrupt public private partnership venture)	~$90M-100M+