Entities make demands of airport
Published 12:04 am Wednesday, June 17, 2015
The cities of Opp and Andalusia, along with the Covington County Commission on Monday, gave the Airport Authority a proposed resolution with a handful of demands dealing with the airport bond debt.
The three entities are working on refinancing deals for their portions of the nearly $12 million in debt the airport authority has incurred.
According to the proposed resolution, which was drafted by Opp attorney Rainer Cotter, the county would be responsible for $4.9 million; Andalusia, $3.9 million; and Opp, $2.6 million.
The demands included:
• Once either of the three satisfies their respective bond issues as part of the new refinancing, proceeds should continue to be given to the entities;
• Should the facilities, which include the twin hangars, Vector building and Shanklin building need repairs or insurance, the entities are willing to contribute funds for the reimbursement of the authority. The costs would be divided equally among the three entities;
• The entities asked to be involved in the leasing or selling of the property;
• They have also requested that he authority grant a mortgage or similar security investment to secure the debt.
• That the authority pay $7,000 per month split equally among the entities. This is money the authority has been paying on the 2006 B bond issue and that the authority pay $3,000 per month in DRS funds.
Board Chairman Gary Smith said he had reviewed the proposal and it was not acceptable to him.
“The board is responsible for what happens here,” he said. “By doing that, the board is advocating its authority.”
Additionally, Smith said some of the funds from a lease agreement would need to be held back for repairs and other unforeseen expenses for the airport.
Opp Mayor John Bartholomew said he was trying to get feedback.
“I still have to take this to my council and get it approved,” he said. “They want the money back. They feel like they are getting $2.6 million in debt and they want the money back to pay on the bonds.”
Vice Chairman Dr. Chuck Burgess asked how it would work it they came up with an amount needed for repairs and that the entities would contribute to that.
“Say $50,000 to have in an emergency fund at the same percentages you’re paying,” he said.
If repairs had to be made, the entities would ante up some more money to get the reserve fund back to the cap.
“Then, they could get 100 percent of the income of the lease of Vector and the twin hangars,” he said.
Board Attorney Anne Sumblin said they had discussed this method before, but in conversations with Cotter, it was not something Opp wanted to do.
County Chairman Bill Godwin said he had proposed setting up the reserve fund.
“I sent it to Rick (Clifton), but it never circulated,” he said.
Sumblin refuted that statement and said it had circulated.
It was suggested that the three entities, Smith and the SARA co-directors meet and hash out a compromise, and then circulate it by email on how it would work.
“Time is of the essence for me,” Bartholomew said. “Interest rates are going up.”
Another issue brought up was by Godwin, who was concerned about having to make the payments and then being asked to help with operational costs.
“If we don’t have facilities leased, we are making the payments and you are going to ask for more,” he said. “There is a point where we, as a county, can’t do anymore.”