The City of Barrie is willing to hand over the controls when it comes to operation of the Lake Simcoe Regional Airport (LSRA) in order to pave the way for a massive expansion at the Oro-Medonte Township facility.
On Monday night, councillors approved a motion to sell the majority of Barrie's ownership in the airport to reduce its financial commitment toward the $66-million phased expansion, which is needed to create more business and employment opportunities at the Line 7 facility, north of Barrie.
Simcoe County is interested in acquiring a significant portion of Barrie's share, which would see the city's ownership decrease from 60 per cent to 10 per cent. Barrie would then see a reduction in its maintenance, operating, capital and borrowing charges.
The county's purchase of shares from Barrie has an approximate value of $3.7 million.
Deputy Mayor Barry Ward said the city isn't able to justify such a large expenditure to Barrie taxpayers.
"Apart from the matter of pride — it's our airport, we started it and it's kind of nice to think about — there's not really a good argument to be made for why Barrie taxpayers should pay for an airport," Ward told BarrieToday after Monday's meeting, noting any manufacturers that set up at the facility will benefit more than just Barrie,
"It's important for us to have a share of that airport, but I don't know whether we have to own 60 per cent of it," he added.
The city will continue to play a role in the LSRA, but no longer have a majority ownership interest, and would no longer hold title to the land in trust, according to a city staff report.
Coun. Robert Thomson, the city's appointee on the airport's board of directors, said he believes the county is better suited to take on the lion's share of the facility.
"We have local priorities, where it's not really in Barrie," Thomson told BarrieToday after Monday's council meeting. "We'll still reap the benefits of anything that happens out there, so I think it's a pretty good decision. They need the expansion and I think this is the best way to get to it and move toward where they need to be."
By maintaining a 10 per cent stake, the city also retains veto power if a possible airport sale comes up in the future, he added.
Currently, the city has a 60 per cent stake in the airport, with the county and Oro-Medonte Township each holding 20 per cent.
At Barrie City Hall, there has been very limited discussion around the table, both at general committee and council, about the city selling its shares.
However, Ward included an amendment last week which sees the city being able to recoup some of its previous investment should the LSRA corporation be dissolved, or if the land and building assets are sold. Those proceeds would be distributed to the three shareholders on the basis of their historic investments in the airport, including land acquisition.
In the three years prior to the county joining the airport in 2014, the total investment in the airport was $15.8 million, however only $6.585 million was contributed by Barrie and Oro-Medonte as the federal and provincial governments had provided financial support for a runway expansion.
Last summer, the strategic plan for the LSRA focused on a three-phase plan to develop infrastructure, including a runway expansion, in Phase 1 to enhance the corporate aviation business, as well as maintenance, repair, operations. Phases 2 and 3 were identified as being demand-based to include commercial travel. The preliminary budget summary associated with all three phases was close to $66 million.
"The airport is not in a position to debt finance the expansions," says the city staff report. "As such, the expansion can only be financed by its shareholders."
The airport board approved preliminary analysis and design work in August 2018, to assess the scope of work that would be required for the runway expansion and water/wastewater servicing.
The estimated cost associated with infrastructure work required to secure the business prospects is approximately $40 million, which includes investments identified in Phases 1 and 2 of the strategic plan, in addition to water/wastewater infrastructure.
As it sits right now, the current breakdown for the initial $40-million expansion would be $24 million for Barrie, and $8 million each for Simcoe County and Oro-Medonte.
"It's hard to ask local government for that kind of money," Thomson said. "It's quite a bit to ask from residents, so I think this (the city selling its shares) is the best way to get the best of both worlds."
Ward also said it's a big request.
"In reality, we hope to get money from the provincial and federal governments, so we wouldn't be paying $24 million," Ward said. "But even if we have to pay $10 (million) or $15 million, that's still a lot of money when we have other things that we're in the middle of, everything from the new theatre to the police building in the south end. For all of these things, we borrow a lot of money to pay for those kind of things and we don't have a lot of reserves to pay for them."
Ward said it's hard to ask residents to foot such a large bill when the airport benefits everybody.
"If we eventually get passenger service, or even if manufacturers are drawn there, the whole area benefits," he added. "It probably makes sense, from a philosophical point of view, that the county owns a bigger share than us. They're willing to step up and have a greater share in the airport, which means they'll be the ones looking for the $64 million for Phases 1, 2 and 3."
The work on the airport also has to begin sooner rather than later.
"We can't direct business to the airport and then suddenly shut it down to expand the runway," Ward said. "It has to be done before we attract the business."
Ward also says he's confident passenger charter service would work at the airport, which is something they've seen work at other similarly sized facilities in other parts of Ontario.
"People in Barrie would love to be able to drive to the airport and jump on a plane to Cuba or Florida," he said. "But why should Barrie taxpayers pay all of that when it benefits everybody?"
However, Ward says it's prudent to retain a small chunk in the airport ownership, because that will at least give city officials a say in any decisions made.
"The amendment I introduced last week was to say that if it's ever sold, Barrie will get all of its money back," he said. "We're only getting under $4 million for our shares and that money will be used toward our contribution to the expansion. We've put a lot more money into it over the years."
There are privately operated airports in the province, so it's not a stretch for the Lake Simcoe Regional Airport to also potentially go that route.
"I'd hate to see the county turn around and sell it, and there have been private companies interested in buying that airport, but once we lose control, although we still have a veto by having 10 per cent, we could say we're not selling it until we get our money back that taxpayers have put into it over the years," Ward said.
Simcoe County council had previously directed staff to begin negotiations with the other airport partners and have been "pleased" with the progress to this point, "in particular Barrie council's approval yesterday," Trevor Wilcox, Simcoe County's general manager of corporate performance, told BarrieToday.
"Discussions with Oro-Medonte are expected to conclude shortly, which will allow staff to provide a report to county council with the full proposal in August," said Wilcox, who added county council takes a break in July.
Construction of the airport began in 1990 and was funded by the province. In 1991, a 3,500-foot runway was opened. Once federal funding was secured, the second phase of construction started in November 1991 and the airport officially opened in 1993 with a 5,000-foot runway and a modern terminal building.
