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Utah County offers up to $78 million; Provo staff seek $19.5M now to begin airport terminal expansion
Summary
Airport staff presented a proposed interlocal with Utah County committing up to $78 million toward a terminal expansion. The county would provide $19.5 million up front; the city will present two resolutions for council action to accept the interlocal and appropriate the initial $19.5 million.
Provo airport staff described a proposed interlocal agreement with Utah County that would provide up to $78 million to support expansion of the Provo Municipal Airport terminal, and asked the council to appropriate $19.5 million immediately if the interlocal is finalized.
Airport director Brian Torgerson told the council the county has already contributed earlier support for the airport project and that the proposed interlocal would commit up to $78 million in project funding. The county’s initial $19.5 million would be available shortly after the interlocal is signed and, according to staff, would be applied to the first construction phases: ticketing, baggage screening and early apron work. Torgerson said the county’s support follows prior county contributions and that the interlocal contemplates bonding options and other mechanics to minimize interest expense.
Torgerson and finance staff said the county contribution is sourced from a county tourism-related tax and that the interlocal is structured to protect bond coverage (for example, by setting aside coverage multiple required by bond underwriters). Staff described two options for cash flow: the county could issue the bond and remit funds to the city or the city could issue debt backed by county payments; either structure is being evaluated to secure the most favorable rate and to maximize the construction dollars that go to the terminal.
The presentation included project details and a rough timeline: apron expansion and early site work are expected to begin in coming months with an anticipated multi-phased terminal expansion ultimately accommodating up to 10 gates in full buildout. Staff estimated total project funds already identified at roughly $132 million, including federal and UDOT contributions, and said the first tranche of apron work is estimated at about $30 million with FAA and UDOT participation for some elements. Staff said the $19.5 million from the county is the first item the city must appropriate if the interlocal is signed; staff planned two resolutions for council consideration in the near term (one to accept the interlocal, one to appropriate the $19.5M).
Council members asked how tourism-tax revenues back the county pledge, what protections exist if tourism revenues decline, and whether the county pledge is legally guaranteed. Staff said the county’s commitment is an obligation that will be treated as pledged revenue in any bond structure and that county staff have agreed to mechanisms that will preserve coverage requirements; staff described the county as cooperative in structuring the support.
No formal council action was taken at the work session; staff said the two resolutions (interlocal and appropriation) will be scheduled for council action in the next two weeks.
