Still no agreement among entities on airport debt

Published 12:04 am Thursday, July 23, 2015

0422 thru twin hangars

The Covington County Commission took no action on an agreement to refinance South Alabama Regional Airport’s debt Wednesday, despite meeting in a special called meeting to do just that.

Commissioners expected to approve the agreement, which representatives of the county and the cities of Opp and Andalusia have been working on for weeks, but Commission Chairman Bill Godwin said the agreement still isn’t ready.

The plan is to restructure airport debt including two 2006 bonds, a 2011 PNC loan and a Covington Electric Cooperative loan. When the 2006 bonds were issued, the three government entities agreed to secure the debt.

The bonds are callable in August, and the commission and the cities plan to refinance their portions of the debt separately to fit their needs.

Godwin said the agreement – which is being hashed out by attorneys – is almost done.

“We started out with one and we’re beginning to narrow our differences,” he said.

In June, the entities presented a proposal to the authority, which was drawn up by Opp city attorney Rainer Cotter, which made demands including that the entities would be involved in the leasing or selling of airport property; and that the authority would grant a mortgage or similar security investment to secure the debt.

Since members of the airport authority didn’t agree to some of the terms, it was agreed that the three entities, airport authority chairman Gary Smith and SARA co-directors Jed Blackwell and Misty Jones would negotiate.

In 2006, the cities of Opp and Andalusia and the county commission entered into an agreement in which they secured bonds for the airport. The bond was structured so that lease payments for the facilities the bonds were used to build would pay off the note.

DRS announced in 2014 that it would not renew its lease on the twin hangars at SARA. Money from the lease payment is the airport authority’s means for paying the debt. Since there was no tenant, the three entities have picked up the payments since earlier this year.

In June, the airport authority entered into a contract with the Kearns Group LLC, and now some officials including Godwin and Opp Mayor John Bartholomew say SARA has the funds to pay its debt service.

The Kearns Group is paying $25,000 a month for space at one of the twin hangars at SARA.

Godwin said there is another special-called meeting set for July 29, and he hopes to have the agreement done by then.

“It’s going to be on the agenda,” he said. “I keep putting it on the agenda because it’s a five-day notice. When it’s ready, I want to act on it.”

In other business, the commission:

• approved budget amendments to the sheriff’s office, school resource officers, EMA and data processing departments. The amendments were made to individual line items to keep the overall departmental budget in balance;

• gave County Administrator Karen Sowell the authority to negotiate a maintenance contract with CenturyLink; and,

• approved an agreement with Tollbooth TV, Inc. for it to film inside the county courthouse.

The special-called meeting next week will be held at 8:30 a.m.