Wednesday, May 30, 2007
County to loan SLO airport $10M; repayment expected
By April Charlton
The Santa Maria (CA) Times
The Board of Supervisors will loan $10 million to the San Luis Obispo County Regional Airport for construction of a $15-million covered parking structure, but how the money will be repaid remains to be seen. With a 5-0 vote during a special meeting Tuesday, the supervisors approved the loan, opting not to “give” the money to the airport, and directed staff to return with a repayment plan. It costs $8 a day to park at the airport, with $2 of that a surcharge approved by the supervisors in 2005 for parking expansion at the facility.
The $2 surcharge generates about $300,000 annually, and staff suggested that the airport parking fees be increased by $1 in 2008 and $1 every five years thereafter to repay the loan over 25 years.
About 400 cars park at the airport every day, which is projected to grow to 846 cars during the next 25 years, according to David Edge, county administrative officer.
“That’s significant growth,” Edge said, adding that the projections were based on “assumptions that people will fly more (in the future) or more people who aren’t flying now will in the future.”
Using Edge’s model, the parking surcharge would increase to $7 by 2028 and generate $1.949 million in revenue that could be used to repay the loan to the county’s general fund, he said.
“This is a middle-of-the-road option … (based on) a purely theoretical model,” he added. “Assuming all the passenger growth is correct, we’d be fine.”
Edge said the supervisors could also opt to dramatically increase the surcharge rate all at once, which he believes wouldn’t deter fliers from using the San Luis Obispo facility instead of the Santa Maria or Paso Robles airports.
The current $2 parking surcharge will generate enough revenue by 2008 to pay back about $5 million of the loan, Edge said, but increases in the surcharge would be required to cover the remaining $9.2 million construction costs.
Some of the supervisors, including 1st District Supervisor Harry Ovitt, said he’d like to see a repayment plan that’s “aggressive” – repayment in 10 to 15 years.
Airport manager Klassje Nairne suggested the airport repay the general fund loan using 10 percent of all parking revenues collected at the growing facility, where most people park for an average of six days.
“It would be easy to administer, and we could pay it back based on the (projected) growth rate,” Nairne said. “Anybody who parks in that lot is going to have to pay, even employees.”
The supervisors also agreed that the county’s general fund, which has about $27 million in unencumbered funds, will back future, planned improvements at the airport such as terminal expansion.
Nairne expects to break ground on the parking structure in spring 2008, with completion the following year. She hopes the new terminal building will be constructed and occupied by summer 2010.
“That’s pretty aggressive, but that’s our goal,” Nairne said about the proposed timetable.
A project to extend the airport’s runway is under construction and is expected to be completed late this summer.