The Sumner County Regional Airport is in financial trouble, but a county committee took steps last week to shore up some of its financial problems.
The airport board received tacit clearance from the county budget committee Monday to stop making $2,500 monthly payments to the county to get past a cash-flow crunch. The committee also unanimously approved a multi-pronged approach for a longer term solution to dig the airport out of its debt hole.
Airport Authority Chairman Jim Egan reported cash flow had been negative since March. He outlined the dire situation and asked for help.
“I was seeking some assistance — any assistance,” Egan said.
County Executive Anthony Holt said the airport would run out of money in two or three months if nothing was done.
Legal fees from a years-long court battle between the county and previous airport board are a major cause of the cash crisis, according to Egan. As of June, a new board, now with 10 of 11 members appointed by the county this year, took control.
County Attorney Leah Dennen advised budget committee members not to vote on whether to allow the airport board to suspend $2,500 monthly payments that have been paying down a $300,000 loan from the county to the airport under a 2010 agreement. However, she said, the county could choose to take no action if the board stopped paying, and it would achieve the same result.
The committee recommended three actions to shore up the airport long-term:
• One is an $800,000 loan of which the airport board would only have to pay interest until the end of 10 years, when it would be required to make a balloon payment of the principal. At that point, the County Commission could choose to forgive the loan. The county would loan the money from an $11 million capital projects fund established from the sale of Sumner Regional Health Systems in 2010, also known as the hospital fund. The state comptroller would have to approve the loan.
• A second proposal closely follows state law for a three-year loan, automatically renewable for two more three-year periods, also with a balloon. It also requires comptroller approval.
• The third was to attempt to change state law to allow counties to make loans to another county entity without the comptroller’s authorization. That would have to wait until the state legislature reconvenes in January.
Either way, any of the three options would have to be blessed by the state, though the current comptroller’s office has typically frowned upon counties taking on more debt, commissioners said.
The $800,000 would cover:
• Matching funds of about $155,000 to $200,000 for a federal grant that will pay for regrading the older end of the runway opposite the recent extension.
• $195,000 owed to the county from the 2010 loan agreement.
• An outstanding balance of about $400,000 against a $750,000 line of credit collateralized by two parcels of land. The airport acquired the land for the Airport Road realignment project that is part of an overall airport expansion, according to Register of Deeds Office records and the City of Gallatin.
Source: http://www.tennessean.com
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