HomeMy WebLinkAboutAgenda Bill 3.F 10/04/2004�i
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CITY OF PETALUMA, CALIFORNIA
AGENDA BILL OCT 4 -.2004
Agenda Title Resolution Authorizing the Submittal, of an
Meeting Date October 4, 2004
Application, Acceptance of Funds .and' Execution of a Loan
Agreement with the California Department of Transportation,
Division of Aeronautics, for a Low- Interest Loan for the Petaluma
Meeting Time 3:00 PM
Airport Hangar Project (C1'00103)
❑ 7:00 PM
Category (check one) ® Consent Calendar ❑Public - Hearing ❑New Business
❑ Unfinished Business ❑ Presentation
Department
Director:
Contact- Person
Phone Number
General, Administrative
Joe .. e r (�
Michael Glose
778 -4303'
Services
Cost of Proposal $ 2 million
Account Number
3299-C100
Amount Budgeted 2'mi'llion,
Name of Fund:
Caltran_ s Divison_of Aeronautics
Attachments to Agenda. Packet Item
1) Resolution a
Summary Statement
On July 22, 2004, three bids were received- for the Petaluma. Municipal Airport Hangar Project
C`1 00103, which consists of five ,(5) aircraft storage hangar buildings (approximately. 73,000 square
feet). Bids ranged from a high of $4,906.44,8' t6 a low of $4,783,245.10 from North Bay Construction,
approximately $700,000 above the Engineer's Estimate of $4;066,858: Among other possible factors,
the unexpected high bids were attributed to the rising. cost of steel, fuel and cement. Staff has
recommended that City Council authorize rejection of all bids at,this time, with approval to re -bid the
project in a few months when additional funding is secured.
In anticipation of approval to re -bid the project, staff is requesting Council authorization to proceed
with the: application process, for a low - interest loan Trom Caltrans. Division.of Aeronautics. In spite of
the increased construction costs, staff feels that the vi'abilityof.the project remains strong. The demand .
for hangars is growing, and an analysis ^of the airport's financial status indicate& that it is in a,positive
position to pay back all loans.
Recommended City Council Action /Suggested Motion
Council to adopt the resolution, authorizing the submittal' of an application,, acceptance of funds and
execution of a. loan agreernent with the California Department of Transportation, Division of
Aeronautics, for a low- interest loan for'the: Petaluma Airport;Hangar Project C109103.
Re 4 w d b" Tinance.Director- :=
Revi ed' b ;. orne :
2004': ate
Anuoved-bv Citv Manager:
Date:
at EP 2 '2
Tod ' ` s ate:'
Revision # and Date Revised:
File Code:
'Sept. 4$, 2064
S;Ai ort \Hangar Project\.Agenda Bills
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CITY OF PETALUMA, CALIFORNIA
OCTOBER 4, 2004
AGENDA REPORT
FOR
RESOLUTION AUTHORIZING THE SUBMITTAL OF AN APPLICATION, ACCEPTANCE OF FUNDS
AND EXECUTION OF A LOAN AGREEMENT WITH'THE CALIFORNIA DEPARTMENT OF
TRANSPORTATION, DIVISION OF AERONAUTICS, FORA LOW - INTEREST LOAN. FOR THE
PETALUMA AIRPORT HANGAR PROJECT
1. EXECUTIVE SUMMARY
On July 22, 2004; three; bids were received for the Petaluma' Municipal Airport Hangar
Project C 100103, which consists of five (5) aircraft storage hangar buildings
(approximately 71;000 square feet). Bids ranged from a'high of $4,906..448 to a low of
$4,783,245.1.0 from, North Bay .Construction, approxiiriatel'y $700,000 above the
Engineer's Estimate of $4,066,858. Among other - possible factors, the unexpected high
bids were attribute' &to the rising cost of steel, fuel, and cement. Staff has recommended
that City Council authorize rejection of all bids at this time, with approval tore -bid the
project in a few months, when additional funding is secured.
In anticipation of approval to re -bid thel project, staff is requesting Council authorization
to proceed with the application process for a low - interest loan from Caltrans Division of
Aeronautics.' In. spite of the increased construction costs, staff feels that the viability of
the project remains strong.. The demand for hangars is growing, and an analysis of the
airport's financial status indicates that it in a positive position to pay back all loans.
2. BACKGROUND
Staff recommends re- bidding the project and proceeding with the loan process to obtain
additional funding. ,Initial conversations withCaltrans indicate that the funds are
available, and with hangar expansion, the airport will be;in a viable position to repay all
associated loans. Repayment projections, have been based on economy of scale, so
reducing the scope of the project.is not a financially viable alternative.
3. ALTERNATIVES:
a. Authorize application for the loan, acceptance of funds and execution of a loan
agreement withthe'California Department of Transportation, Division of
Aeronautics.
b. Do not: authorize application for the loan, thereby reducing the scope of the
project.
I
4. )FINANCIALIMPACTS •
Revenue Source(s): California Department of Transportation
Division of Aeronautics
o from han ar g rentals and fuel ales.e Addition al p 9 j0 0 00 f_unds year in revenue,
primarily - g s year
forthcoming
from FAA grants- totaling approximately $800;000.
Operating expenses fall in the range of $650;000, plus an additional $420,000. -ft
repayment of State loans which are suffibiently covered by fuel sales and hangar revenue
(none of which are included in the City's recently refinanced Certificates of Participation
COP's)
The, recently refinanced COP's include existing a%rport debt of $2:6 million (from prior
hangar projects and_,airport acquisition), along` with $3'.227 million for the new project,
totaling approximately $'6.3 million.. Total yearly payments. for the new COP's are
approximately $440,000 per year.
The increased debt service costs will be offset through.the increased hangar revenue and
- associated , fuel sales. Hangar will be.adjusted, as necessary, to insure the enterprise
continues to operate in the black. •
5. CONCLUSION
A low-interest loan from Caltrans' Division of Aeronautics „is available. With
authorization to make application for these funds, staff will submit the: appropriate
paperwork to the State.
6. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL • IDENTIFY SUCCESS OR
COMPLETION:
Application and execution of a ;loan agreement - will be made for a low - interest loan, from
Caltrans Division of Aeronautics in ; the neighborhood of $2. million allowing the
Petaluma Airport Hangar Project C100103 to proceed, as originally planned.
7. RECOMMENDATION
Council to adopt the;resolution, authorizing the: submittal of an application, acceptance of
funds. and, execution of a loan agreement with'the. California Department of
Transportation Division of Aeronautics, for a low-interest loan for the Petaluma Airport
Hangar P,roj ect. C100 103.
s \pf &s \airport \agenda\hangar project
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AUTHORIZING TH&SUBMITTAL "OF;AN APPLICATION', ACCEPTANCE OF FUNDS AND
EXECUTION OF A LOAN AGREEMENT WITH THE CALIFORNIA, DEPARTMENT OF
TRANSPORTATION, IDIVISION OF AERONAUTICS, FOR LOW = INTEREST LOAN FOR THE
FOLLOWING REVENUE GENERATING PROJECT ArTHE PETALUMA MUNICIPAL AIRPORT
FOR THE
`PETALUMA,MUNICIPAL AIRPORT HANGAR PROJECT C100103
WHEREAS, the Department of Transportation, Division of Aeronautics, provides
financial assistance to public entities in the form of loans pursuant to Public Utilities Code
Section 21602 and the California .Airport Loan Regulations; and
WHEREAS, the 'City Manager has recommended that the City apply for a loan in the
amount of $2 Million to accomplish above Project:
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Petaluma authorizes the filing of aloan application with the California Department of
Transportation, Division of Aeronautics, for.the above Project.
BE IT FURTHER RESOLVED THAT the City Manager is authorized to execute the
loan application form, .including .its, acceptance;. and the City Clerk is directed to attest the
signature of the City .manager and affix the seal of the City to the documentation, when
appropriate