HomeMy WebLinkAbout158-11 RESOLUTIONRESOLUTION NO. 158-11
A RESOLUTION APPROVING A BUDGET ADJUSTMENT IN THE
AMOUNT OF $300,000.00 TO PAY DOWN A LOAN FROM THE GENERAL
FUND FROM INSURANCE PROCEEDS RECEIVED FROM THE AIRPORT
HANGAR FIRE IN 2009
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves a
budget adjustment, a copy of which is attached as Exhibit "A", in the amount of $300,000.00 to
pay down a loan from the general fund from insurance proceeds received from the airport hangar
fire in 2009.
PASSED and APPROVED this 6th day of September, 2011.
APPROVED: ATTEST:
By:Alifr.,_ 0----- By:
ro LD J qiirr ,Mayor
OtA144,
SONDRA E. SMITH, City Clerk/Treasurer
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City of Fayetteville, Arkansas
Budget Adjustment Form
V11.0415
Budget Year
2011
Division: Aviation
Department: Transportation Services
Request Date
9/6/2011
Adjustment Number
BUDGET ADJUSTMENT DESCRIPTION / JUSTIFICATION
To use a major portion of the insurance proceeds from the 2009 hangar fire to pay down the Principal on the General
Fund Loan to the Airport, and to pay the prorated amount due the General Fund that arose from the Council
Resolution 130-10 change in the date of the annual payment. Since economic conditions have dramatically slowed
General Aviation activity and growth, prospects for using the insurance proceeds as capital for new hangar
construction have not materialized since 2009 and are unlikely in the near term. The Airport currently has two large
hangars vacant. The Airport Advisory Board proposed using these funds to pay off a large portion of the debt and
thereby significantly reduce the Airport's annual payment on the Loan. The Loan payments are structured as Prin+Int
on th mg balance. The len th of the term of the Loan will not change.
le
ate
ft.>
Budget Direct Date
Departm
t Director
Date
ck. g-fi -20
Fina Director Date
Chief of Staff
Date
Da
YIiL
Prepared By: James Nicholson
Reference:
Budget & Research Use Only
Type: A B C
General Ledger Date
Posted to General Ledger
Checked / Verified
jnicholson
Initial Date
Initial Date
TOTAL BUDGET ADJUSTMENT
Increase / (Decrease) Project.Sub
Account Name Account Number Expense Revenue Number
Building & grounds maint
5550.3960.5400.00 (309,001) 09021 . 1
Principal payment
5550.3940.5500.00 305,626
Interest expense
5550.3940.7501.00 3,375
J:\James\2011\Budget\BAForm_2011_GF Loan Paydown 090611
EXHIBIT
1 of 1
Ray M. Boudreaux
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
9/6/2011
City Council Meeting Date
Agenda Items Only
Aviation
Division
Action Required:
Transportation
Department
Action Required: A Resolution to approve a Budget Adjustment to move budgeted funds in the Hangar Fire project,
#09021, to expense acounts in the Airport Administration program in order to make a one-time payment on the
Principal of the General Fund Loan to the Airport and make the pro -rated Principal and Interest payment resulting
from Resolution 130-10.
309,001.00
Cost of this request
5550.3960.5400.00
Account Number
09021 1
Project Number
Budgeted Item
X
337,661.00
Category / Project Budget
Hangar Fire
Program Category / Project Name
Airport Capital Exp
Funds Used to Date Program / Project Category Name
337,661.00
Airport
Remaining Balance Fund Name
Budget Adjustment Attached
X
/ —
Date
f -ii- it
Date
+CLA Ck —(LL—
Finance and Internal Services Director Date
')"?'11
Date
ate
109-06
Previous Ordinance or Resolution # 130-10
Original Contract Date:
Original Contract Number:
Received in City 0 8-1 9-11 A10:58 RCVD
Clerk's Office
Comments:
Revised January 15, 2009
Aft
ave
ARKANSAS
1
City Council Meeting of: September 6, 2011
Agenda Item Number:
eAVIATION DIVISION
FAYETTEVILLE EXECUTIVE AIRPORT • DRAKE FIELD
CITY COUNCIL AGENDA MEMO/STAFF CONTRACT REVIEW MEMO
TO: Mayor Jordan
THRU: Chief of Staff
THRU: Staff/Contract Review Committee
THRU: Terry Gulley, Transportation D.
FROM: Ray M. Boudreaux, Aviation Direc
DATE: August 19, 2011
SUBJECT: Approve Fayetteville Executive Airport, Drake Field early pay -down of
the hangar loan in an effort to improve cash flow to the Airport Fund.
RECOMMENDATION: Approve pay down of the airport hangar loan from the General Fund in the
amount of $300,000.00 from the insurance proceeds received from the hangar that burned in 2009.
BACKGROUND: During Airport Board Strategic Planning sessions and budget discussions, the
Airport Board recommended to the staff that we should investigate paying down the loan from the
City General Fund to reduce annual expenses and improve cash flow in the current economic
downturn. The airport fund currently has approximately $1M in the airport use of fund balance and
the liability of $517,416.12 on the General Fund Loan for construction of two corporate aircraft
hangars. In 2009, the airport insurance policy paid $350,000.00 to the airport fund for the loss of one
of the older corporate hangars leased at the time to Lance Creamer. The airport will not replace the
hangar in the near future. Airport fund obligation is to pay off the loan over 15 years and we have
been making regular payments totaling $54,134.00 in 2011 (the payment decreases each year as
interest is paid on the unpaid balance). An early payment on the principal would decrease the
airport expense budget by more than $32,000.00 in 2012. The early pay down will leave the airport
use of fund balance above $500,000.00 which has been the Airport Board and staff goal for the
minimum cash balance. It is essential to keep a minimum cash balance to fund grants that are paid
back to the airport fund on a reimbursable basis like those issued by the Arkansas Aeronautics
Commission.
BUDGET IMPACT: This action will pay from the Airport Fund $300,000.00 to buy down the
principle amount owned to the City of Fayetteville General Fund. Remaining principle owed to the
General Fund will be $217,416.12.
Attachments: Staff Review
Budget Adjustment
Amortization Schedule
Journal Entries
4500 SOUTH SCHOOL AVENUE, SUITE F • AIRPORT TERMINAL BUILDING • FAYETTEVILLE AR 72701
479.718.7642 • 479.718.7646 FAX - www.accessfayetteville.org/government/aviation
airport_economic_development@ci.fayetteville.ar.us
RESOLUTION NO.
A RESOLUTION APPROVING A BUDGET ADJUSTMENT IN THE
AMOUNT OF $300,000.00 TO PAY DOWN A LOAN FROM THE GENERAL
FUND FROM INSURANCE PROCEEDS RECEIVED FROM THE AIRPORT
HANGAR FERE IN 2009
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves a
budget adjustment, a copy of which is attached as Exhibit "A", in the amount of $300,000.00 to
pay down a loan from the general fund from insurance proceeds received from the airport hangar
fire in 2009.
PASSED and APPROVED this 6th day of September, 2011.
APPROVED: ATTEST:
By: By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
New amortization 15yrs @ 3% - Original period expired Resolution 130-10, July 20, 2010
AIRPORT LOAN AMORTIZATION
DATE PRINCIPLE INTEREST INTEREST DUE PRINCIPLE DUE TOTAL PAYMENT
Jun -08 700,000.00 0.05 35,000.00 46,666.67 81,666.67
Jun -09 653,333.33 0.05 32,666.67 46,666.67 79,333.34
Jun -10 606,666.66 0.05 30,333.33 46,666.67 77,000.00
Jul -11 554,374.42 0.03 16,631.23 36,958.30 53,589.53
Prorated Payment June 5 - July 19, 2010 Due to GF
Due July 20, 2011
Jul -12 217,416.12 0.03 6,522.48 15,529.72 22,052.20
Jul -13 201,886.40 0.03 6,056.59 15,529.72 21,586.31
Jul -14 186,356.68 0.03 5,590.70 15,529.72 21,120.42
Jul -15 170,826.96 0.03 5,124.81 15,529.72 20,654.53
Jul -16 155,297.24 0.03 4,658.92 15,529.72 20,188.64
Jul -17 139,767.52 0.03 4,193.03 15,529.72 19,722.75
Jul -18 124,237.80 0.03 3,727.13 15,529.72 19,256.85
Jul -19 108,708.08 0.03 3,261.24 15,529.72 18,790.96
Jul -20 93,178.36 0.03 2,795.35 15,529.72 18,325.07
Jul -21 77,648.64 0.03 2,329.46 15,529.72 17,859.18
Jul -22 62,118.92 0.03 1,863.57 15,529.72 17,393.29
Jul -23 46,589.20 0.03 1,397.68 15,529.72 16,927.40
Jul -24 31,059.48 0.03 931.78 15,529.72 16,461.50
Jul -25 15,529.76 0.03 465.89 15,529.76 15,995.65
166,925.21 700,000.00 866,925.21 628,925.20
= Actual Amount Due July 20, 2010 - July 19, 2011. Currently budgeted.
= Combined Amount of BA & JE to be submitted to City Council Sept 6 meeting. Loan paydown.
Date 09/06/2011
Journal Entry Number
JOURNAL ENTRIES
Initials: JN
Prepared by:
James Nicholson
Entered:
TRANS - AIRPORT LOAN
Accounting Supervisor
Journal Entry Numb&
Account Number
Amount
ij
Sub
Project Proj
Transfer
Due to/from
Account Name
Sub
Fund Dept Dept Base Detail
DEBIT CREDIT
Advance Payable
5550
1403
00
305,625.57
Interest Expense
5550
3940
7501
00
3,375.34
Due to General
5550
1400
00
309,000.91
1010
Due from Airport
1010
0400
00
309,000.91
5550
Advances to other funds
1010
0403
00
305,625.57
Interest revenue
1010
0001
4708
00
3,375.34
Prorate Prin/Int 6/5-7/19/10; RES 130-10
Principal paydown
Entered:
TRANS - AIRPORT LOAN
Accounting Supervisor
Journal Entry Numb&
RESOLUTION NO. 130-10
A RESOLUTION TO AMEND SECTION 2 OF RESOLUTION NO. 109-06 TO
LOWER THE ANNUAL PERCENTAGE RATE AND THE MONTHLY
REPAYMENT AMOUNT
WHEREAS, two corporate hangars were constructed with two $250,000.00 SAAG
grants and a loan of $700,000.00 from the General Fund to be repaid over fifteen years at a 5%
annual interest rate pursuant to Resolution No. 109-06 passed on June 6, 2006; and
WHEREAS, interest rates have fallen substantially due to the poor economy which
justifies reducing the 5% annual rate to 3%.
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby amends
Section 2 of Resolution No. 109-06 by repealing Section 2 in its entirety and enacting a new
Section 2 as follows:
"Section 2: That the City Council of the City of Fayetteville, Arkansas
hereby approves the attached revised Financing Plan to cover the
remaining portion of the City's initial match of $700,000.00 with
repayment to be made over 15 years from the date of this amendment at a
3% annual interest rate on the declining balance."
PASSED and APPROVED this 20th day of July, 2010.
APPROVED: ATTEST:
By:
LI
EL
JORD , Mayor
A6A,./L—.._ By:
SO City ClerklTreasurer
RESOLUTIONNO. 109-06
A RESOLUTION AUTHORIZING AIRPORT STAFF TO APPLY
FOR AND ACCEPT TWO (2) SAAG GRANTS IN THE AMOUNT
OF $250,000.00 EACH FROM THE ARKANSAS DEPARTMENT
OF AERONAUTICS TO FUND A PORTION OF THE COST TO
CONSTRUCT TWO (2) CORPORATE HANGARS AT THE
FAYETTEVILLE MUNICIPAL AIRPORT; APPROVING THE
FINANCING PLAN TO COVER THE CITY'S MATCH OF
$700,000.00; AND AUTHORIZING THE MAYOR TO IMPLEMENT
THE NECESSARY BUDGET ADJUSTMENTS TO EFFECTUATE
THIS RESOLUTION.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas
hereby -authorizes Airport staff to apply for and accept Two (2) SAAG grants in
the amount of $250,000.00 each from the Arkansas Department of Aeronautics to
fund a portion of the cost to construct two (2) corporate hangars at the
Fayetteville Municipal Airport.
Section 2. That the City Council of the City of Fayetteville, Arkansas
hereby approves the Financing Plan to cover the City's match of $700,000.00,
with repayment over 15 years at a 5% annual interest rate on the declining
balance.
•
Section 3. That. the City Council of the City Of Fayetteville, Arkansas
hereby authorizes the Mayor to implement the necessary budget adjustments to 00„„no
effectuate this Resolution.
.7:1
By:
- -
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444/Groo
4"mi, tttt
DAN COODY, Mayor
PASSED and APPROVED this 6th day of June, 2006.
APPROVED:
ATTEST:
By:
DRA SMITH, ity Clerk