City may help, but $1.8M loan is needed through county
The Crescent City Council has agreed to provide funding that would help the Border Coast Regional Airport Authority complete its runway safety area expansion project.
The Council committed up to $20,000 a year for five years to help fund a debt service of up to $1.8 million.
But Council members directed airport authority staff to provide at least a five-year projection of revenue and expenses and a copy of the debt agreement before making a final decision.
"For you and the lender to make a firm decision on this, you need to see more detail," said City Attorney Bob Black, who also provides legal counsel for the airport authority. "There are too many things that are floating, not in terms of who's in or who's out, but what are the terms of this?"
Airport officials are approaching all government agencies in a joint powers agreement with requests to help pay for the debt service - an interim financing loan from Del Norte County. If all six members participate, the annual debt service payment would be about $20,000 each, according to the city's staff report. If only five participate, the debt service payment would be $24,000 per entity.
The airport authority board approved requesting the interim financing loan from the county at its Feb. 5 meeting but has yet to approach the Board of Supervisors, said Jeannine Galatioto, the authority's special assistant.
The $1.8 million loan would be for a term of five years, Galatioto said. It could also be amortized, or spread out, over a period of 20 years at up to 3 percent interest. But, she said, the airport authority at this point is only asking to enter into a five-year interim loan.
So far, the Brookings City Council has offered its support, but hasn't committed to a dollar amount, said Susan Daugherty, the airport authority's program manager. The Curry County Board of Commissioners offered its support for the airport, but didn't have the funds to loan, she said.
"They still want to meet with us," Daugherty said. "It doesn't mean they won't ever have the funds and it doesn't mean they won't be able to help us with some grant fundings."
Airport officials have also met with Elk Valley and Smith River rancherias, who also sit on the authority board, Daugherty said.
The $1.8 million would pay for additional environmental review and provide contribution funding for construction of the runway safety area project, according to the city's staff report. About 95 percent of the $20 million project is being funded through a grant from the Federal Aviation Administration.
The project must be finished by Dec. 31, 2015, to meet FAA requirements. The airport may lose its commercial airline service if the authority doesn't meet that deadline, Daugherty said.
"We're asking members, can you contribute to making payments so we can go before the lender with some security that they're going to have some repayment of their loan," said Galatioto. "We're asking for a budgeting tool. We're requesting to be able to go to the potential lender and be able to say we've asked all entities to contribute in the next funding cycle."
Even though she said she supports the airport and acknowledged its importance to the city's economy, Councilwoman Kelly Schellong said she was concerned about making a 20-year commitment and holding future Councils to it.
Schellong said she wanted to see the debt service agreement before making a final decision.
"A 20 year commitment for this Council is a big endeavor for a debt that's not ours," she said. "There is no magic ball to know if we're going to be able to afford ... we don't even know what that payment is."
Mayor Rick Holley said he worries about the city making a 20-year commitment only to find the airport's Essential Air Service subsidy has ended. Holley was referring to discussions at the federal level of doing away with the subsidy program.
Del Norte County Regional Airport isn't likely to lose its subsidy due to its remoteness, Black said. If Congress does change the Essential Air Services program, subsidies for other rural airports within 50 miles of a "hub" airport would be in jeopardy. The closest hub airport to Crescent City is Sacramento International Airport, he said.
Councilwoman Kathryn Murray, who represents the city on the airport authority board, urged the Council not to delay its decision.
"The Coastal Commission granted us a conditional permit, which was that we get the environmental work completed," she said. "We were given a permit for getting the work done by March... I think that is a critical factor in our delaying any kind of commitment."
The California Coastal Commission awarded a coastal development permit to the airport authority for its runway safety area expansion in September. Daugherty said the airport authority is still working to obtain a permit from the Army Corps of Engineers.
Airport officials also hope to construct a new 14,800-square-foot terminal.
Reach Jessica Cejnar at email@example.com.