County Manager Tom Sullivan is significantly more confident than he was a month ago that Routt County can afford to build the second phase of its airport terminal expansion next summer.
Working together, county staff, county Finance Director Dan Strnad, YVRA Manager Jim Parker and Sullivan have been able to develop a budget that allows the county to tackle the project next year, Sullivan said Thursday.
As recently as Aug. 13, Sullivan warned the Yampa Valley Airport Commission that there was a possibility the county would delay the second phase of the project for financial reasons. Now, Sullivan said he's prepared to brief the commission at its Oct. 14 meeting on a plan to change the borrowing structure for the $7 million to $8 million the county needs to build the project.
The county dedicated the first phase of the terminal expansion at Yampa Valley Regional Airport in December 2003. It significantly expanded the passenger and luggage check-in area, allowing scanning of checked luggage to take place indoors. However, departing passengers still experienced bottlenecks last winter in the passenger holding area, where people who have been through security wait to board their flights.
Phase 2 would address that problem with an expanded holding area. It also would bring airport concessions onto the main floor and streamline traffic patterns for arriving and departing passengers.
On the "air side," Phase 2 would expand aircraft parking areas to better accommodate larger jets, such as Boeing 757s.
The third phase would move the existing ticketing area to add luggage carousels for arriving passengers.
Overall, the terminal expansion project is budgeted to cost about $22 million, Strnad said. The federal government will reimburse 95 percent of that cost and the county will provide a 5 percent match.
YVRA served 103,482 passengers in 2003, most of them passing through the airport during ski season.
Concerns about financing the Phase 2 terminal expansion arose in August as the county became concerned about financing its new justice center on Steamboat's west side at the same time it finances the terminal expansion. The county is waiting to hear whether it will receive a wetlands permit to build the $15.8 million justice center on land it owns or whether it will have to seek an alternative site. Seeking a new site could increase the cost of the project.
Strnad and Sullivan expressed concern in August that undertaking those two projects simultaneously might limit the county's ability to make other capital purchases.
Complicating the process was a mid-September deadline to pick up some of the federal grant monies for Phase 2 of the terminal expansion. Now, the FAA has given Routt County until Nov. 15 to confirm its plans for the grant money. That development has eased the pressure, Sullivan said.
Strnad has found a way for the county to reduce the annual debt cost of financing both projects, Sullivan said.
"The key piece is that we restructured the debt," Sullivan said. Instead of repaying the money in seven years, county staff is proposing to spread it across 20 years. Sullivan said the plan eliminates the need for another round of borrowing in 2008, and locks in current favorable interest rates.
The new plan could reduce the county's annual debt obligation from $1 million to a little more than $400,000, Sullivan said, freeing cash for other budget categories.
Sullivan said one question that remains is determining the best way to secure the loan. The staff would prefer to secure it with airport property, but that would require the lender to assure the FAA that if the county defaulted, the airport would continue to operate. That could result in lenders charging a higher interest rate.
The Yampa Valley Airport Commission meets at 6 p.m. Thursday in the YVRA administration building.
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