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1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />BENEFIT TO COST RATIOS: <br />20 year period to local share - 5.6:1 <br />20 year period to total development cost - 1.56:1 <br />While many communities approve the use of General Obligations <br />(G.O.) bonds for capital improvements for airport improvements, <br />the public generally is reluctant to finance private hangar <br />storage. For this reason, development costs of hangars have <br />been kept separate. Additionally, hangars should be developed <br />only as a firm demand is evident and development is warranted. <br />Several options to finance hangar construction are available to <br />the City. However, in nearly all cases, the cost of debt re- <br />tirement will require monthly hangar lease rates in excess of <br />what the market will bear. <br />Hangar construction costs including site preparation and paving <br />would be in the $20,000 to $22,000 per unit range. This would <br />require hangar rents of approximately $185 to $190 per month per <br />unit to retire a debt on a 20 year bond at 8%. Typical hangar <br />rents at Anoka and Crystal are in the range of $80 to $125.00 <br />per month. <br />Two considerations should be given to including partial public <br />financing of initial hangar construction into a bond issue. The <br />first and most important is that growth in numbers of based <br />aircraft is essential to the ability of the airport to generate <br />revenues to meet operating and maintenance expenses. Hangar <br />availability to meet demand will be a factor in this growth. <br />Secondly, established older hangar unit rental rates can even- <br />tually be used to help subsidize new hangar development thereby <br />keeping rental rates down to a marketable level. Considering <br />the monthly rental rates acquired for hangars if relatively low <br />interest money is used, it is unlikely that private developers <br />subject to higher interest rates can develop the required number <br />of units at marketable rates. Full use should be made of <br />Mn/DOT'S Revolving Hangar Fund monies using them to offset 80% <br />of hangar costs on an interest free basis for 10 years. <br />This approach including hangar development (maximum of 20 units) <br />would require a bond issue of approximately $1,165,000. <br />Annual debt retirement based on a 20 year term at 8% would be <br />approximately $118,700. <br />Operations and Maintenance O&M Costs <br />The airport currently receives no assistance from federal, state <br />or local funds for operations and maintenance of the facility. <br />No historic data for the existing airfield is available for use <br />as a meaningful comparison since the facility improvements will <br />vastly change operating and maintenance practices. Several <br />2-44 <br />