The Hobbs City Commission voted unanimously to appropriate funds and authorize the mayor to sign a one-year professional services agreement with the Economic Development Corporation of Lee County that includes subsidies for airline service and other economic development activities.

Deputy City Attorney Mae Jean deRosier DuYon told the commission the agreement covers operating support and several earmarked program funds. "The funds that will be appropriated to EDC are operating $240,000, special project fund funding for $50,000, the retail recruitment fund for $25,000, the airline marketing $200,000, the airline subsidy $2,720,982," DuYon said, and she added the contract also includes a $1,000,000 public-charter air service subsidy that differs from last year's agreement.

The action implements resolution number 76-40, which the commission approved after discussion. The motion to approve was moved by Commissioner Girth and seconded by Commissioner Smith; the roll call was unanimous in favor.

Why it matters: The appropriations are intended to maintain and expand air service options out of Hobbs and to support local economic development. City and EDC officials discussed the arrival of JSX service, a public-charter operator, and how subsidies and marketing will be used to encourage ridership and corporate travel bookings.

Details and staff direction
EDC and airport staff reported early demand for the new JSX flights. Staff said JSX had sold about 75 round-trip seats in its first seven days of sales and had drawn roughly 4,000 visits to its website; officials said the city and county are subsidizing part of the introductory fares. Staff also described the JSX schedule under the subsidy as running outbound and inbound on Fridays, Sundays and Mondays, with the contract subsidizing three round trips per week and leaving open the possibility JSX could add a flight at its own risk.

City staff and EDC agreed to monitor the service and provide additional data. According to staff, EDC/airport representatives will provide regular reports on bookings and employment related to the service (staff said they expect to receive employment reports on a weekly basis, similar to reporting done for United Airlines).

Officials also discussed the existing FLYHOB program and the effect of systemwide delays at Denver on on-time performance. Staff reported that United’s load factor reached roughly 80% for the quarter ending June 30, and that the systemwide construction at Denver has contributed to late inbound flights.

Budget and cost sharing
DuYon told commissioners the airline-subsidy line — $2,720,982 — represents the city’s portion of a subsidy that is divided between Lee County and the City of Hobbs. Staff emphasized that the subsidy structure is intended to cover shortfalls when planes are not full; if flights are fully loaded there is no cost to the city under the subsidy agreement.

What the commission decided next
The commission approved resolution 76-40 and directed staff to continue monitoring ticket sales, load factors and the new JSX service’s performance. Staff said they will follow up with EDC and the carrier on fare availability and scheduling and will provide the commission with ongoing reports required by the agreement.

No litigation, ordinance or statutory citations were invoked during the discussion.