Loan May Assist Airport
By Amy Burroughs, The Paducah Sun, Ky.
Sep. 14–County officials are considering a low-interest loan rather than a new tax to help Barkley Regional Airport cover a revenue shortfall.
Bobby Lacer of the Kentucky Association of Counties gave a presentation to the McCracken County Fiscal Court and the airport board Aug. 30 about KACO’s leasing trust program, which allows counties to borrow money at a low interest rate.
Commissioner Ronnie Freeman, who invited Lacer to speak to the court, said the board could obtain a seven-year loan with a lower interest rate to refinance its 10-year loan.
The airport has $1.2 million in debt resulting from capital improvements and an annual deficit of at least $250,000, according to airport board Chairman Neil Archer.
“I was looking at every option I could think of to avoid a tax,” Freeman said.
“I don’t feel like this is a permanent fix, but it gives us enough time to help them through this tough time and then we can try to find a long-term solution.”
Judge-Executive Van Newberry said he will ask the board to prepare information to help commissioners evaluate whether the program would indeed save money.
“If you can borrow money cheaper than you have debt you’re paying interest on, a lot of times it’s wise to refinance it and pay at a lower interest rate,” Newberry said.
“If it ends up that money can be used to lower their interest rate, and therefore their payments are lower … I don’t have a problem with it at all. I think it’s smart.”
Newberry said he is interested in the program but wants to make sure the court has enough information to make a sensible decision.
Archer said the programs seem promising.
“For our debt, it’s a great option because it saves us money,” he said, adding that the fiscal court will have to decide whether to participate.
The county would borrow the money on the airport’s behalf, exercising whatever degree of financial oversight commissioners and board members negotiate, Lacer said.
“Because the program is designed specifically to allow counties and special taxing districts to borrow money at a significantly discounted interest rate, I just can’t see the negative of them coming to a program such as this, which was really set up and designed with their best interest in mind,” he said.
Lacer said other counties and taxing districts, including the Henderson City-County Airport, have used the program, which customizes loan terms for each project.
Since April, the city and county have been covering the deficit with a $25,000 monthly subsidy.
In July, the board asked the county to create a taxing district whose revenue would cover operating expenses, pay debt and enable the airport to offer a $500,000 revenue guarantee if a second airline wanted to serve Paducah.
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