Agenda - Council - 06/26/1990 - Laserfiche WebLink

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Case 13G, If the Council Determines to Proceed with the Improvemen~ Pro,ram. How Then Will it be Financed? Mn/DOT has indicated a willingness to contribute up to $666,666 (two-thirds share) of a first phase acquisition program of approximately $1,000,000. The remaining $333,333 would be the City's share as the airport sponsor. This program cost would be fully eligible for federal rei~bursement from Airport Improvements Program (AIP) funding at a 90% federal and 10% local cost sharing under a federal project. Thus, the City's actual cost of this portion of the program would be $100,000 based on a 10% share. From a practical standpoint, the City's share of $333,000 would be used towards a 10% share of a $3.3 million project under AIP funding. So how does the City finance the $330,000 to initiate the project and what will the project entail? The current pre-application project (funded 2/3 DOT, 1/3 local) was preparing the pre-application for funding for a federal AIP project. Based on our meetings with Mn/DOT and FAA, the agencies have indicated that the City should initially position itself for a state/local project. We had been in process of preparing the proposed acquisition program for such a project prior to the "stop work" order. A notice to proceed would be necessary to finish an acquisition program tailored to the $1,000,000 budget. We would then present this to Council for your review and action. In general, it appears that such a program would allow for the acquisition of the core parcels comprising the existing airport. The City should receive approximately $45,000 in reimbursement funds for previous airport work. These funds should be applied directly to this phase of the project thus reducing the base amount to approximately $288,000. A possible financing method is to use accumulated funds in the Landfill Trust Fund through a revolving loan with interest. The advantages would be prompt access to funds when they are needed (in this case approximately $288,000, avoiding the expense of a bond offering and a favorable interest rate which would ultimately allow payback to the account. A four-fifths vote is required to use these funds. Should the Council determine to proceed, the City Council would need to adopt a resolution authorizing the Major and City Administrator to enter into an agency agreement and encumber its share of funds. This action requires a similar action as required under Case 12. Staff Reoommendation: Staff at this point is looking for direction from the Council. Should the council elect to proceed, staff would evaluate both the program and financing for your future consideration.