Houston County commissioners authorize advertising for airport T-hangar bids amid FAA funding timing concerns

Houston County commissioners agreed to advertise and solicit bids for an eight-unit T-hangar at the Houston County Airport after hearing staff and a consultant describe the project's funding structure and timing.

Bridal, county staff overseeing the airport project, told the board the current cost estimate is $1,670,000 and that the expected funding mix is roughly 95% from the Federal Aviation Administration, 2.5% from the Minnesota Department of Transportation Aeronautics (state funds), and 2.5% local funds. "Local cost for the project, based on the current estimate of $1,670,000 is $41,750," Bridal said, noting that the estimate could change once the county receives contractor bids.

Silas Parmar, a consultant with Bolton & Menk who has worked on airport projects for the county, urged the board to advertise now rather than wait for formal FAA and state grant offers. Parmar said building-material price volatility means contractor and manufacturer prices are often valid only 15 to 30 days, and "in order to get the best bid price possible here'for this project only is award the contract prior to the FAA and state grants being offered." He added that awarding earlier would let a contractor lock building prices and order materials so construction could begin in 2025 and possibly finish by year end.

Commissioners and staff discussed two main options: (1) advertise and accept bids, then approve a low bid and award a contract contingent on receipt of the FAA grant agreement; or (2) delay bidding and award until the FAA and MnDOT offer the grants, reducing the county's exposure if federal funds are not approved. Bridal said FAA grant offers for the construction portion likely would not be issued until around July, but county staff expected FAA confirmation of the list of pilots desiring to base at the airport before March 18.

Bridal explained how federal entitlement funds are already assigned to Houston County but remain under FAA control until a grant agreement is executed: "1,100,000 is essentially assigned for Houston County Airport. But we can't spend it without them providing that grant and giving us authorization to use it," Bridal said. The staff also described a mechanism the county has used before'borrowing or swapping entitlement dollars with other airports'to meet short-term cash needs pending FAA actions.

Commissioners asked about the risk of awarding a contract and then having the FAA not provide the grant. Parmar replied that a contract awarded without a contingency could lock the county into commitments if federal funding is later denied, and that inserting contingencies into the contract could affect bids. "If you award the bid to somebody, like say month, and, July comes along and all of a sudden the feds says we don't have the money, can we still get out of that?" one commissioner asked. Staff answered that the county could structure award approvals to be contingent on FAA funding.

After extended discussion of timing, contingencies and the county's funding position, commissioners signaled support for moving forward with advertising. Bridal said staff will advertise, open bids and return to the board with the low bid for approval; a final contract award would come later, with staff recommending the board set conditions for award (including contingencies tied to FAA grant execution) when the board reviews the low bid.

The board did not take a specific contract-award vote at the meeting; staff said they would return with bid results and a recommended contract approval, and that they expected to have FAA responses on the pilot/list questions before a March decision on the low bidder.

The board's permission to advertise starts the public-bid process and keeps scheduling options open while staff continues to coordinate with the FAA and MnDOT.

Ending: Staff will advertise the project and return to the board with bids and a recommendation for award; commissioners said they want briefing-level confirmation from the FAA on need and timing before final contract execution.