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Bemidji Regional Airport Authority to seek $1.3 million in bonding for terminal project

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Bemidji Regional Airport Authority to seek $1.3 million in bonding for terminal project
Bemidji Minnesota P.O. Box 455 56619

The Bemidji Regional Airport Authority decided Wednesday night to seek $1.3 million in bonding to complete its terminal project, including a jetway and parking lot improvements.

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The move came with a 3-1 vote, with Commissioner Jim Lucachick opposed as a favored a lower $1.1 million bond issue.

"That can be a self-fulfilling prophecy," Lucachick said. "You bond at that level, you will spend it. There are no incentives to save."

But Commissioner Ron Johnson said the $1.3 million is needed to finish the total project, that $1.1 million would only finish the terminal renovation itself. "If we want to complete the project, we will spend it."

Johnson's first motion for a $1.3 million bond issue failed for lack of a second. Then Commissioner Jack Frost's motion for a $1.1 million bond issue failed in a 3-2 vote, with only Frost and Lucachick in support.

Frost appeared undecided, arguing for and against either bond issue amount, and Commissioner Roger Hellquist said he wanted more information or he would have seconded Johnson's first motion.

The bonding will be used as a local match to state and federal funds used on the project, Airport Authority Executive Director Harold Van Leeuwen said. About $997,000 will be used to match funds for the $8 million terminal expansion and renovation, and the rest for the purchase of a jet bridge in 2012 and parking lot improvements in 2013.

"We don't do this now (bond at $1.3 million), we'll be back to bond again to complete the project or levy it on taxpayers," Hellquist asked, and was told that would be the case.

"I don't know why you would want to put this onto the taxpayers," Johnson said the Frost and Lucachick. "Or you don't want to finish the project."

Hellquist asked Van Leeuwen how important the jetway was, a jet bridge to allow passengers to embark and disembark from regional jets through an enclosed bridge right to the plane door, to wooing another air carrier to Bemidji.

The Airport Authority has approached Allegiant about flying into Bemidji, and its minimum requirement is a jetway.

"It's not just Allegiant," Van Leeuwen said. "For people 50 or 60 years old, or handicap people, it's hard to climb those steps into an aircraft, especially in the winter. It's a safety issue as well.

"A jetway would allow people to enter any large aircraft," he added.

Airport Authority Chairman Marshall Froyd asked Van Leeuwen to prepare bond issues at $1.1 million, $1.3 million and $1.5 million for consideration. The $1.5 million issue was quickly discarded as too much.

"No direct tax dollars are involved in any way, shape or form," Froyd said. The bond will be repaid with passenger boarding fees, of which the airport gets $4.39 from each passenger coming or going.

In the airport's worst year, that would amount to 21,500 enplanements or $94,385 annually. With a $1.3 million bond issue, annual payments would range from $92,090 to $97,082, Froyd said.

Van Leeuwen recommended the $1.3 million level, citing $1.22 million as the total cost of the terminal, jet bridge and planned reconstruction/expansion of parking lot, entrance and resulting landscaping restoration.

"I must have been snoozing, but it's been the intent all along to bond?" asked Lucachick, who joined the Airport Authority in January. He noted bids for the terminal expansion were $1 million over estimate and that work continues with the contractor to cut costs through deducts.

Froyd said it was, with hopes of keeping the bond issue under $1 million and that it was intended as local match money. The bond issue for the terminal is under $1 million, but the $1.3 million completes the project.

Lucachick reiterated, as he has several times, to Van Leeuwen that he wants a copy of the Airport Authority's bylaws.

He also asked for Froyd's assurances that the bond issue would not be paid off with taxpayer dollars.

"I'm on the picket fence," said Frost, who agreed with Lucachick to seek the lowest bond issue but also that the Authority cannot go back for another bond issue later or go to taxpayers.

In the final vote, Frost decided to go with $1.3 million but was the last to vote. Had he voted against it, Froyd would have broken the tie vote.

Now bid documents will be prepared asking for a 20-year general obligation bond issue of $1.3 million and will be sold to financial houses.

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