Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Airport Finance topic
No spam. Unsubscribe anytime.
Council approves matching Lewiston27s interest on Hangar No.5 loan to keep intercity equity
Summary
The council approved modifying Auburn27s agreement to refinance Hangar No.5 at 2.58% interest to match Lewiston's action; director said the change adds roughly $8,5002D$9,000 per city per year in additional cost but keeps parity between the two cities that jointly support the Auburn-Lewiston Municipal Airport.
Transportation Director LaBonte provided history on Hangar No.5 (built by a private developer and initially leased to Lufthansa, later leased to Elite Airways), explaining that the two cities previously financed acquisition and subsequent refinancings through intercity loans from city fund balances. After a series of tenant and payment issues that left the airport with operating and vacancy challenges, Auburn had proposed an interest-free, 20-year treatment of the remaining loan principal to ease annual obligations.
Two weeks after Auburn27s prior action, Lewiston reconsidered and voted to add interest to its portion of the loan. LaBonte recommended Auburn match Lewiston27s 2.58% interest rate for equity and parity between the cities. He said the added interest would increase Auburn27s annual payment by roughly $8,600 (order of magnitude), and that the airport board continues to work toward breaking even and eliminating the $205,000 per-city subsidy in the long run.
The council voted by show of hands to approve amending the agreement to refinance the Hangar No.5 principal for 20 years at 2.58% interest (vote 7-0). Council discussion acknowledged the awkwardness of charging the city subsidy to pay a city loan interest payment but favored parity with Lewiston.
Ending: The amendment passed; the airport and both cities will proceed with the 20-year refinance at 2.58% to keep the interlocal arrangement aligned.
