HomeMy WebLinkAboutIR 9211 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9211
To the Mayor and Members of the City Council March 23, 2010
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SUBJECT: AVIATION FUND LOANS
The Aviation Department has determined, with the assistance of the City Attorney's office and
Finance Department, that it is possible to make loans from the available Aviation monies for
buildings at the City's airports as well as to other City funds. The Aviation Department operates
with three different funds which maintain a fund balance. These funds are as follows:
• Municipal Airports Fund (PE40) used for operations of the Aviation Department. Average
Fund Balance of$960,000.00.
• Gas Well Projects Fund (P240) used for capital projects and one-time expenses as approved
by City Council. Approximate Fund Balance $14,000,000.00.
• Aviation Permanent Fund (T125 & T126) invested and interest earned for capital projects and
one-time expenses as approved by City Council, Approximate Fund Balance
$17,800,000. 00.
In order to determine if these funds could be used on an interim basis for other city or airport
projects, the Aviation Department, City Attorney's Office and Finance Department have reviewed
applicable Federal Aviation Administration policies and State law. Based upon this review it has
been determined that loans may be made from these Aviation Department 'Project' and
'Permanent' funds if the money is repaid with interest. The types of projects may include facilities
built on airport properties and loans to other city funds.
Projects currently under consideration include: loans to land lease tenants for buildings to be built
on airport property; loans to the Storm Water Fund for advance funding for projects; loans to the
General Fund for Fire facilities and equipment at Station 42 (Spinks). Please note the loans for
buildings on airport property are for buildings that will, at the end of the land lease, become City
property in accordance with State law and Federal policy,
These loans would be paid back to the applicable aviation fund with interest as stipulated by
Federal Aviation Administration policy. The interest rate being considered would be the 10-year
Treasury Bill rate plus 1%, which would then adjust every 10 years for the specific loan. This rate
is currently 3.63% which would set the loan interest at 4.63%.
The Aviation Department has provided no-Tice to the Federal Aviation Administration that the City
intends to do these types of loans. For questions or additional information please contact Kent
Penney, Airport Systems Director at 817.392.5403.
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Da Fisseler, P.E.
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City Manager