Board of Finance backs $520,000 interfund loan with airport to buy 201 Flint Avenue

The City of Burlington Board of Finance voted unanimously Jan. 13 to recommend that the City Council approve a $520,000 interfund loan with Burlington International Airport to purchase 201 Flint Avenue and to approve a related FY2025 budget amendment.

City staff told the board the loan would be made from airport funds and repaid by the Department of Public Works (DPW). Brad, a city finance staff member who presented the financing strategy, told the board the loan would carry a 4% interest rate and that the city was requesting a three-year repayment term with a three-year grace period tied to revenues generated by the solid-waste generation tax. "We had the available fund balance and were amenable to the repayment terms," he said.

The presentation said the purchase would consolidate the city’s soil-management operations at one modern, permitted facility; free space at 339 Pine Street so the Chittenden Solid Waste District (CSWD) can expand a public drop-off center; and allow the city to apply option payments already made toward acquisition. Staff said banks considered for the purchase either declined or raised environmental concerns about the intended soil-management use, which led the city to the airport loan option.

Board members asked about FAA oversight and legal review. A staff member said the airport’s legal team and counsel for the city reviewed the transaction and that a formal legal opinion and the airport’s revenue-use policy were consulted to confirm the loan and proposed use of airport revenue complied with applicable rules. "With that legal counsel, I think we’re going to be in a compliance position to get this forward," the staff member said.

The board’s final motion — introduced to match language in a department memo attached to the agenda — authorized the interfund loan, subject to city attorney review, and authorized an FY2025 budget amendment to use fund balance from the water fund (Fund 460) in an amount not to exceed $140,000. The motion also authorized the mayor, chief administrative officer and DPW director to execute instruments approved as to form by the city attorney.

Councilor Arlo moved the motion; Councilor Roberts seconded. The motion carried unanimously.

Background and next steps: City staff said the loan is structured as a short-term instrument and allows early repayment. Staff also said the airport retained interest payments within city organizations rather than paying an external lender. The board's recommendation goes to the full City Council for final approval.