County to loan airport $1.5 million

By CANDY NEAL
cneal@dcherald.com

Dubois County will loan the Dubois County Airport Authority up to $1.5 million for the ongoing runway extension project.

The Dubois County Council unanimously approved providing the loan during its meeting on Monday.

“It doesn’t make any sense to me to force you to go do a bond issue and spend more taxpayer money, which is what you end up doing,” Council President Jerry Hunefeld told the airport authority representatives at the meeting. “If we do it this way, you will spend less taxpayer money.”

The authority will have until November 2022 to repay the funding used. After some discussion among council members, they settled on a 0.5 percent interest rate on the loan.

The authority will draw money from the $1.5 million as needed, instead of taking the entire loan in one lump sum.

The $13.1 million runway extension project at the Huntingburg Airport includes expanding the runway 500 feet and widening it to 75 feet, lowering County Road 200 West and installing a tunnel over the road, dirt work and electrical work. The Federal Aviation Administration is covering 90 percent of the project costs; the airport and the Indiana Department of Transportation are also contributing about 5 percent each. The project is being done in two phases, each with its own grant. The first phase was the tunnel and dirt work; the second phase will be electrical work and the runway extension and widening.

At the council’s September meeting, authority attorney Phil Schneider explained why the loan was needed. In July, workers discovered poor soil that had to be removed and replaced. The work to fix that unforeseen problem cost an additional $1 million. The FAA directed the airport to proceed with the work and has said that it will process the change order to reimburse the authority for the cost. But the funding for the change order will not be sent to the airport until the FAA closes out the grant.

Also, the FAA holds the last 5 percent of the funding it provides as a retainage, until it closes out the grant.

Project contractor Weddle Brothers will complete the work and issue the bills for the work, including the work to remove and replace the poor soils, to the authority well before the authority receives the extra funding, Schneider said. This is the impending cash flow shortage the authority has to contend with, and it could be as much as $1.5 million. It could late 2021 or early 2022 before that funding is received from the FAA, he said. Taking out a bond issue or trying to get a loan with a bank or financial institution would likely yield high interest rates.

The funding will be completely paid back when the authority receives the reimbursements from the FAA. Although authority officials expect to receive the funding in late 2021 or early 2022, the council decided on Monday to make the loan due by November 2022.

“Working with federal grants, they don’t always come when you expect them,” council member Becky Beckman said. “We don’t want to put them (the airport authority) in another bind.”

The authority will repay the loan as soon as it gets the funding from the FAA, Schneider told the council.




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