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05/30/2008 Peachtree City Airport Authority (PCAA) Special Meeting Minutes Friday, May 30, 2008 Aviation Center, Peachtree City - Falcon Field 5:30 PM Members Present - Chairman - Jerry Cobb, Bill Flynn, John Cordner, Aviation Director- John Crosby, Assistant Aviation Director - Barry Griffith, A.A.E., and alternate Gerald Stuart, Absent - Greg Carroll, Airport Attorney - Doug Warner 1. ANNOUNCEMENTS None, II. APPROVAL OF MINUTES Motion made by Bill Flynn and seconded by John Cordner to approve the May 8, 2008 Regular Meeting Minutes; motion carries 3/0, III. REPORTS Aviation Director - John Crosby reports that construction is going well for the Taxiway "F"/Navaids project. That there have been some concerns over the quantities of dirt moved by the general contractor (Massana) and that our consultant (PBS&J) is reviewing the initial and current ground surveys. Mr. Crosby reports that fuel sales are down due to high oil prices and that there is presently no end in sight. Staff provided a brief report on the airport's financials and fuel sales to date. Bill Flynn indicated it was difficult to get an accurate picture on where the Airport stands financially with the limited information presented. IV. OLD AGENDA ITEMS None. V. NEW AGENDA ITEM 08-05-01 To authorize the PCAA Chairman to execute an agreement for a Line of Credit with the Bank of North Georgia for PCAA's share of current Georgia Department of Transportation grants and for the purchase of Area "C" environmental mitigation credits and for future Federal, State or other funding requirements subject to PCAA and Bank approval. Chairman Cobb stated that he had been in touch with David O'Rear with the Bank of North Georgia and that the proposed line of credit would be in the amount of $500,000 with unsecured rate of 3.75% for an interest only loan that would be good for one year. Chairman Cobb stated that this money was needed as the Airport's portion for the State grant for the new glideslope equipment and site preparation expenses. Mr. Flynn asked if there was a commitment fee? Chairman Cobb indicated that it was $2,500. There was discussion as to how much money would be needed initially and the amount of $250,000 was mentioned. Mr. Flynn asked if the commitment fee would be less if less money was borrowed under the line of credit? John Crosby stated that the line of credit would be used for this year's portion of the State's grant for the glideslope equipment and for mitigation credits needed for the next phase of construction for Area "C". Mr. Flynn asked if it would not be better to secure a long term fixed rate loan for the grant match amounts due to the interest rates being as low as he as seen in a while. Mr. Flynn stated that a 20-30 year permanent financing note for the principal portion of the amounts needed should be looked at before the Authority votes on the line of credit. He stated that the Authority should take advantage of the low rates now and lock in the loan amounts because in time the rates could shift and the banks may not be willing to loan large amounts of money in the future. Chairman Cobb stated that the bank was agreeable to establishing a loan when the Authority was ready to do so. The line of credit is a short term solution. Chairman Cobb stated that the Airport would need collateral for a long term loan for which Mr. Flynn responded that this would not be a problem as the Airport's balance sheet shows asset values over $IIM. Further discussions ensued regarding the current financial needs for the current project and the next phase. Mr. Flynn stated that it would be smarter and cheaper to look at a long term loan versus a line of credit as this would allow us to expend $200,000 now and roll the remaining amounts in the long term loan at a fixed, low rate. Mr. Flynn asked staff to establish a comprehensive financing assessment for current and future projects. Mr. Crosby stated that approximately $156,000 was needed now and that another $204,000 would be needed by the end of the year. Mr. Crosby also stated that the FAA will allow a 15% amendment to the current grant as an overrun of the original grant amount of approximately $1.5M. That due to the first bidder (Prince Ventures) declining to accept the contract and the additional costs associated with the second lowest bidder (Massana), (Also due to the FAA's error in publishing correct information in regard to the precision runway approaches, the FAA has agreed to allow this grant amendment,) however, amendments normally require the sponsor to front the money first and get reimbursed later which could take up to one year. The line of credit would also be needed in the short term to cover the amendment costs. Mr. Crosby stated that due to ongoing problems in this year's federal appropriation schedules, that the Airport stands a good chance of getting fall out money from the FAA since many airports in the state will not be in a position to accept money at this time and do not have projects ready to bid. Mr. Flynn requested options on how funding can be obtained for the Authority to review for both short term and long term project requirements and that a strategy be implemented for each item. Chairman Cobb stated that staff has been forced to use some reserve funds to pay for upcoming projects such as the ASOS relocation as the FAA required the money in advance. Chairman Cobb stated that it was his goal to keep the reserve funds intact so that the $300,000 in reserves would be available if needed for other pressing financial needs if necessary. Mr. Flynn stated that this was a valid point and that there are other financial instruments other than a line of credit, such as long term financing, that could be used for capital improvement items. John Cordner requested more detail as to the current amounts needed for grant match and requested staff provide a cash flow analysis for the remaining amounts needed for future projects. Mr. Flynn stated that the cash flow analysis should be done for the next 5 years, however, that it is crucial to identify all financing requirements for the next 12 to 24 months. Mr. Flynn stated that alternate forms of financing such as loans based on LIB OR be considered as one of the options. Mr. Flynn requested staff provide the cash flow analysis in the next 30-45 days. Chairman Cobb stated that staff would need to get Authority approval for each draw down on the line of credit and this money would not be used for operational expenses. Mr. Crosby stated that staff could provide this information at the next Airport Authority meeting, however, an immediate need to establish a line of credit or some form of financing still exists. After further discussion, it was decided that a line of credit was in order to help finance existing capital projects that are expected to be completed by year's end. Motion made by John Cordner and seconded by Bill Flynn to authorize the PCAA Chairman to execute an agreement for a Line of Credit with the Bank of North Georgia in the amount of $500,000 and for payment for PCAA's share of current Georgia Department of Transportation grants from the Line of Credit with payment of future Federal, State or other funding requirements subject to PCAA and Bank approval; motion carries 3/0. 08-05-02 To authorize the PCAA Chairman to accept Georgia Department of Transportation State Grant Funds for Fiscal Year 2008/2009. Motion made by Bill Flynn and seconded by John Cordner to authorize the PCAA Chairman to accept Georgia Department of Transportation State Grant Funds for Fiscal Year 2008/2009; motion carries 3/0. 08-05-03 To authorize the PCAA Chairman to accept Federal Aviation Administration Federal Grant Funds for Fiscal Year 2008/2009. Motion made John Cordner and seconded by Bill Flynn to authorize the PCAA Chairman to accept Federal Aviation Administration Federal Grant Funds for Fiscal Year 2008/2009; motion carries 3/0. VI. EXECUTIVE SESSION None. VII. ADJOURNMENT Motion made by Bill Flynn and seconded by John Cordner to adjourn meeting at 6:35 p.m.; motion carries 3/0.