BIA Service Fee Still Up in the Air

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Thursday November 03, 2011

South Burlington City Manager Sandy Miller uses a “three-legged stool” metaphor when he explains South Burlington’s request for a Burlington International Airport (BIA) service fee from the City of Burlington.  According to Miller, the creative tripartite arrangement was constructed years ago by Brian Searles (then BIA General Manager), former South Burlington City Manager Chuck Hafter, and both cities’ attorneys: Steve Stitzel for South Burlington and Joe McNeil for Burlington.

One of the stool’s legs is an agreed-upon tax assessment designed to avoid costly and protracted litigation between the two municipalities regarding BIA’s value. The second leg provides for a significant discount on BIA’s stormwater fees.  The third leg “fee for service” simply recognizes the essential need for and value of the other two legs.

“Without the agreement containing the tax assessment, the stormwater fee, and the fee for service,” Miller explains, “the tax assessment would come into question and the stormwater fee would almost certainly have to be adjusted to reflect the normal charges everyone else pays.” Miller adds that he is “not aware of any other entity receiving a stormwater ‘discount’ like the one that has benefitted Burlington/BIA.”

“In particular,” Miller further emphasizes, “South Burlington’s Stormwater Utility and Public Works staff estimates that if Burlington/BIA were paying on the same basis as other ratepayers, they would have been paying between $90,000–100,000 more annually as a stormwater fee which, coincidentally, is in the same range as the annual fee for service charges.” Without the trilateral agreement, Miller underscores, “there is absolutely no basis for Burlington/BIA to receive a discount on the stormwater charge.”

Because South Burlington has billed Burlington $205,000 for two years (FY 10 and FY 11) of the “third leg” service fee, the Burlington City Council met on October 24 to discuss the question. They did not resolve the matter. Instead, they sent the issue to the Burlington Airport Commission (an advisory body) for past history and advice concerning possible resolution.

The Burlington Airport Commissioners (Gene Richards, Miro Weinberger, Jeff Wick, South Burlington representative Peter Plumeau, and Jeff Munger) then met in executive session October 27th regarding their charge. Commission Chair Gene Richards said that the Commissioners “discussed and debated” the “past and future” relationship between Burlington and South Burlington but felt the need to gather further information before making any specific recommendations to the Burlington City Council.

The Burlington City Council’s next meeting is scheduled for November 7; Council members hope to have a report from the Airport Commission by that date. South Burlington City Manager Sandy Miller says that he understands Burlington’s need to follow what he terms a “due diligence” process.

Richards stresses that the Airport Commission wants to fashion a “fair” resolution that “reflects the law of the State of Vermont.” He said that the Commission will meet again before the Burlington City Councilors get together, but that the Commission’s meeting may not take place until the morning of November 7.

The monetary quarrel is reminiscent of a dispute between Burlington and Winooski two decades ago. At that time, Winooski assessed and taxed extensions of BIA that, based on federal law, reached into the airspace immediately above Winooski. The novel argument was supported by Harvard Law School Professor and tax expert Oliver Oldman and wound up before the Vermont Supreme Court.

The Supreme Court rejected Winooski’s claim. “Despite [Winooski’s] imaginative and effective presentation,” the Court concluded, “we are unwilling to usurp the Legislature’s role by a liberal interpretation of the statute [under which the surfaces] above the airport would constitute ‘land’ within the meaning of [the tax law].”

Burlington and South Burlington hope to work out their pecuniary differences without such litigation.

SOURCE: Bill Wargo, Correspondent