In December, the state auditor general released a report on the troubled upstart airline Red Way, saying the company had violated federal regulations and wasted $3.7 million in public funds, including $3 million in federal American Rescue Plan Act funding from the city and Lancaster County.

“It has only been eight months since the State Auditor’s Office completed its investigation of the airport,” Councilman Tom Beckius said in a prepared statement. “It would be wise to slow down and restore public confidence before we move forward.”

Beckius and Sändra Washington said they supported the portion of the tax rate that would be used to pay off bonds related to the $56 million expansion and the airport authority’s small share of the $96 million runway expansion.

The tax rate for operating expenses of $3.7 million was problematic for them. This included a number of deferred maintenance projects and $800,000 that was earmarked as so-called minimum revenue guarantees to attract additional flights to Lincoln.

Beckius made a motion to separate the votes on the debt repayment and operating expenses levies, but did not provide a reason during the meeting. The council rejected the motion by a vote of 5 to 2, with Washington and Beckius voting in favor.

The vote on the airport authority’s overall tax levy passed 5-2, with the same two council members voting against.

Both Washington and Beckius said after the meeting that greater citizen engagement, a capital improvement plan and a strategy to ensure minimum revenues would be needed before agreeing to raise taxes to cover such expenses.

The first mention of the $800,000 earmarked for minimum revenue guarantees was made at the City Council’s public hearing on Monday of last week, it was said, and no major improvements are planned for the period after this year.

“The public participation process should have been much stronger here, and I wish that had been the case,” Beckius said after the meeting.

John Olsson, chairman of the airport authority’s board, said in an interview after the meeting that discussions about attracting additional air service were held during the public hearing in June. In addition, the airport authority completed a master facilities plan last year with a total of $20 million for short- and medium-term capital needs.

Last year, a similar proposal to introduce a tax on business expenses failed, he said. He voted against it in part because he wanted to wait until the master plan was completed.

Washington said they requested a copy of the master plan, which they received late Monday afternoon.

Last week, airport authority officials told the city council that all capital projects would go through a public process before being approved by the board.

They also said that before any money was spent to attract new airline service to Lincoln, it would go through a new airline advisory board, a board committee and the full board to ensure the process was properly evaluated, monitored and transparent.

Although the airport authority is an elected body with its own taxing authority, state law requires the City Council to approve the tax rate on any amounts not used to pay off bond debt.

This means that in 2021, when the Airport Authority approved a 1.75 cent property tax for the first time since 1986, it was not the city’s responsibility because it was used to pay for bonds issued for the airport’s $56 million expansion.

Airport Authority Executive Director Dave Haring said the City Council approved the tax rate in 2021, but it was more of a formality.

This time, part of the tax rate falls below the city’s tax cap because it is used to cover operating costs.

Under state law, the top tax rate in Lincoln is 50 cents per $100 of value, with 5 cents reserved for interlocal agreements, said Chris Triebsch, the city’s communications director. The city’s budget, which the City Council also approved Monday, is 29.5 cents.

The airport authority approved the tax increase in June as part of its more than $25 million budget.

The 2.98 cents per $100 assessment approved by the City Council on Monday is slightly lower than originally projected based on final property valuations. That rate includes 1.61 cents for debt payments for terminal renovations, 0.32 cents for the airport authority’s share of the runway project and 1.05 cents for deferred maintenance and money to attract new air service to Lincoln.

For the owner of a home valued at $281,614—the average price of a home last year—that amount is about $84.

As of 2021, the Airport Authority had not used its taxing authority, which it had had since 1986, and it had been even longer since it had used that authority to collect operating expenses.

Last week, Olsson told council that the airport authority would have to manage an industrial park, 36 miles of runway, 148 buildings, six bridges, rail lines and flood protection measures on waterways.

Priority maintenance projects include bridge repairs, road maintenance, demolition of a building and purchase of emergency equipment to quickly remove aircraft from the runway.