Best of both worlds?

Kyle Gillis

Some organizations are private enterprises, some are public, and some appear to want the best of both worlds.

Count the Reno Tahoe Airport Authority among the latter.

During nearly all of 2010, the Reno Tahoe Airport Authority repeatedly rejected citizen requests for details of the compensation being given airport CEO Krys Bart — even though public-employee salaries are recognized subjects of Nevada transparency-in-government laws. (See for state and local government-employee compensation information procured through Nevada’s open-records law.)

The issue kept attracting attention, in part because the RTAA’s 2010-11 budget listed the cost of Bart’s office at $603,000 annually. That sum — spread over the CEO and one secretary — would have significantly exceeded even the compensation of the director of Las Vegas McCarran International Airport, Randall Walker. And McCarran — according to the primary international authority on airport traffic, the Airports Council International — handles over 10 times the traffic of the Reno airport.

According to the ACI, final figures for 2009 placed McCarran as seventh in North American passenger traffic, while Reno-Tahoe placed 68th. More than 40.4 million passengers were reported going through McCarran, while fewer than 3.8 million went through the Reno airport.

Bart’s reputed compensation also kept raising eyebrows because, for the first six months of 2010 (as throughout 2009), all other Reno airport employees were under a salary freeze that even prohibited merit increases.

Jones-Vargas attorney Ann Morgan, representing the RTAA, answered at least three different requests for information about Bart’s compensation with letters arguing that the regional airport is exempt from Nevada’s open-records law.

“Neither the legislature nor Nevada Courts have defined or interpreted the terms ‘public books and public records,'” wrote Morgan in a February response to a request from John Howitt, president of the Reno-Tahoe Aviation Association. The association represents most of the airport’s local pilots and aircraft owners — many of whom believe, says Howitt, “that the airport should be using its monetary resources for airport infrastructure and not for executive salaries that are well in excess of our community standards.”

After reports began circulating that the RTAA board on Nov. 18 had given Bart an even more generous benefit package — including bonuses that would bring her total compensation for the past three years to over $1 million — Morgan met more requests for information with the same arguments as before.

When Howitt on Nov. 19 requested records on Bart’s latest compensation package, Morgan wrote back three days later that, “Neither the legislature nor Nevada Courts have defined or interpreted the terms ‘public books and public records’ to include documents produced by the Reno Tahoe Airport Authority.”

On Nov. 23, Nevada Journal, a publication of the Nevada Policy Research Institute, independently requested details of the compensation of Bart and other airport executive officers. Having received no answer by Dec. 8, Nevada Journal repeated its request, this time by certified mail, return receipt requested. On Dec. 15, Morgan replied with the exact same language used in the Nov. 22 letter to Howitt, adding, “Accordingly, it is the position of the RTAA that the information requested does not qualify as a public record.”

However, as a Reno Gazette-Journal news story revealed the next day, members of the RTAA board had already realized that continuing to deny public requests for Bart’s compensation information was only digging an ever-deeper legal/public-relations hole.

NRS Chapter 239, the Nevada public-records law, is quite clear. “The purpose of this chapter,” it begins, “is to foster democratic principles by providing members of the public with access to inspect and copy public books and records to the extent permitted by law.” It continues: “The provisions of this chapter must be construed liberally to carry out this important purpose,” and “[a]ny exemption, exception or balancing of interests which limits or restricts access to public books and records by members of the public must be construed narrowly.”

Moreover, on the same day that Morgan was refusing Nevada Journal‘s request for particulars on Bart’s compensation package, RTAA Board Chair Randi Thompson was going public with the very same information, giving it to the Gazette-Journal,.

“The new contract went into effect Wednesday and raises Bart’s annual salary to $253,800,” reported the RGJ‘s Ray Hagar in the Thursday, Dec. 16 paper. “She also is eligible for 4 percent raises in the second and third years of the contract and performance bonuses of up to 20 percent annually.

“At the end of the deal, Bart will be eligible for a $180,000 retention bonus and $120,000 signing bonus.”

Aggregated, the salary changes and bonuses would total over $1.09 million.

Hagar wrote that “documents provided by the airport” indicated that “Bart’s package is on par with other CEOs at similar-sized airports.” However, the Gazette-Journal story reported no independent verification of that assertion. Rather, alongside the story, the paper reprinted — as objective background information — the RTAA’s own promotional description of itself on the airport website.

Readers were again presented with the RTAA refrain that it “receives no tax money” and “operates as a business” — a justification the authority frequently offers for not obeying Nevada open-records law.

However, the RTAA never explicitly deals with the question of how — without such transparency — the public can be assured the authority is handling its responsibilities, and the public resources in its care, with integrity.

State law, interestingly, clearly identifies the authority as a public entity:

  • Throughout NRS 474, the RTAA’s enabling act, the authority is referred to as “…a special government corporation,” an organization that will “…serve a public use,” and the facilities of which are “… for a public and governmental purpose.”
  • Section 28 of the chapter clearly labels the authority as a “public employer” and enrolls multiple categories of airport employees in the state public retirement system, PERS — the liabilities of which Nevada taxpayers are obligated to fulfill.
  • NRS 474 also states that the RTAA Board of Trustees “…has the power to levy and collect general (ad valorem) taxes on and against all taxable property within the geographical boundaries of the Authority,” i.e., Washoe County.
  • It adds that any tax burden resulting from the RTAA “…will be spread over Washoe County rather than coming to rest solely upon the principal municipality of Washoe County.”
  • Under its legislation, the RTAA has the power to initiate eminent domain proceedings against Washoe County property owners.
  • The RTAA can also, with the permission of Washoe County, Reno or Sparks, draw on the taxpayer-funded public-employee manpower of those jurisdictions.

Although NRS 474 also states that the RTAA “…shall keep, maintain, and make available for public inspection written minutes of each public hearing, Jones Vargas attorney Morgan regularly responds to requests for those minutes with an assertion that the authority is not legally required to make them available but provides them only as “a courtesy.”

Problems with the Reno airport date back further than 1977, when Bill Raggio, the long-time Washoe County state senator, ushered the RTAA’s enabling legislation through the Nevada Legislature.

The legislation, Senate Bill 198, took the airport away from the City of Reno, over the protests of the then-mayor, city manager, several council members and others, and made it a regional entity, where the power to appoint RTAA board members was shared among Reno, Sparks, Washoe County and the county “Fair and Recreation Board” — the original name of the Reno-Sparks Convention and Visitors Authority. Several gaming executives testified for the bill.

Under Raggio’s legislation, the RTAA’s independence from the appointing local governments was assured through a provision that denied the local governments the power to recall board members over policy differences. An extensive legislative record of Senate Bill 198 is available on the Legislative Counsel Bureau website.

In the main lobby of the Reno-Tahoe Airport, a prominently displayed bronze bust of the long-serving state senator greets people as they enter. The bust is inscribed: “The Father of the Airport Authority.”

Raggio’s law firm — Raggio, Wooster and Lindell — only merged with the Vargas firm in 1991. The latter’s merger with the Jones firm, forming Jones Vargas, occurred in 1997.

The RTAA’s legal-services contract is highly lucrative. According to the authority’s 2010-11 budget, remuneration under that contract was $590,736 in 2009-10. For 2010-11, the remuneration is to increase approximately 9 percent — to $642,248.

Although Jones Vargas attorney Morgan had a noteworthy conflict of interest in the matter of Bart’s compensation — given Bart’s ability to largely determine the level of remuneration the Jones-Vargas firm would receive — the RTAA board allowed Morgan to serve not only as RTAA counsel, but also as counsel for Bart.

Perry Diloreto, a Reno developer who has been outspoken on the issue of RTAA transparency, thinks the fact that nearly all RTAA employees are in PERS means the RTAA should be publicly accountable.

“If all your employees are in a public savings system and you’re receiving public funds, you need to be visible,” he told Nevada Journal. “Reno has asked all public employees to take cuts of some type, yet [RTAA board members] can give their president a bonus almost without telling anyone about it.”

The RTAA states on its website that “no local tax dollars are involved in operating Reno Tahoe International Airport” and that it is “totally self sufficient financially.”

Nevertheless, the RTAA — under authority granted it by state law — does receive federal tax dollars from the Federal Aviation Authority. According to a 2006 audit, the RTAA completed $24.4 million worth of projects funded by federal grants, whereas in 2005 the RTAA only completed $1.7 million worth of federal grant projects.

Brian Kulpin, the RTAA’s director of marketing and public affairs, said the RTAA receives $15 to 20 million annually in Airport Improvement Program grants from the FAA, an amount he called “above average” compared to similar-sized airports.

Kulpin added the grants are funded by “user fees” and cannot be used for the day-to-day operations of the airport.

In 2009, under the Obama Administration’s American Recovery and Reinvestment Act — widely known as the federal “stimulus” legislation — the airport authority received at least $6.3 million.

Nevada and U.S. taxpayers are obligated to eventually repay those moneys.