REPORT TO THE CITY COUNCIL
February 14, 2019
FROM: KEVIN R. MEIKLE, Director of Aviation
Airports Department
SUBJECT
Title
RESOLUTION - Authorizing the Submission of an Application to the California Infrastructure and Economic Development Bank for Financing a Capital Improvement Project
Body
RECOMMENDATION
Approve the attached Resolution authorizing the Director of Aviation or other authorized representative to submit an application to the California Infrastructure and Economic Development Bank (IBank) for a loan for the construction of a parking garage and related work at Fresno Yosemite International Airport (FAT).
EXECUTIVE SUMMARY
The requested Resolution is necessary for the IBank to formally consider, and if approved, offer a low interest $35 million loan to Airports to fund a parking garage at FAT. The parking garage is estimated to cost $45.8 million. The $10.8 million balance will come from Airport equity.
The IBank is planning on considering the Airports loan application on their February 27, 2019 Board meeting. There is no commitment to execute the loan with this action. If the IBank approves the application, Airports plans on seeking Council approval of a second Resolution in April 2019 to accept and execute the loan documents. Funds then will become available in July 2019, which will allow Airports to begin project cost reimbursements.
BACKGROUND
The advantages of a proposed IBank financing are an interest rate of 3.15% and lower costs of issuance. If the Airport were to issue a standard General Airport Revenue Bond, the interest rate would likely be in the 4.2% - 4.5% range. Therefore, the IBank financing affords the opportunity to realize significant interest expense savings, equivalent to an estimated Net Present Value of $4.8 million, which equates to $8.2 million in total debt service payments - an estimated 13.7% project cost savings.
The recently completed FAT Master Plan Update recommended a number of capacity enhanc...
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