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HomeMy WebLinkAbout _ 4.2(b)--Authorize Loan between City General Fund and Airports Enterprise Funds � � �' � � � � � � ' � �' � � ' � ` CITY OF REDDING REPORT TO THE CITY COUNCIL MEETING DATE: May 20,2025 FROM: Steve Bade, Assistant City ITElVI NO. 4.2(b) Manager ***APPROVED BY*** n � t��� ; s' �r �zrl 31��??:+ rS' �P�it�,C�i ��t t� ��'��,{'2{}?. sbade@cityofredding.org btippin@cityofredding.org SUBJECT: 4.2(b)--Authorize Loan between City of Redding General Fund and Airports Division Ente rise Fund Recommendation Authorize the City Manager, or designee, to issue a loan between the City of Redding General Fund and the Airports Division Enterprise Fund in order to fund the Redding Regional Airport Passenger Terminal Parking Lot Reconstruction Project in an amount not to exceed $1.5 million —the loan will be amortized annually over a 10-year term at the averaged pooled cash rate with annual payments of$145,325 and a projected balloon payment of$355,000. Fiscal Impact If approved, the City Manager would issue a loan to the Airports Division's Enterprise Fund from the General Fund in the amount of$1.5 million. As proposed, the Airports Division would make annual payments of$145,325 for a 10-year term at the average pooled cash rate at the time of the loan with an anticipated balloon payment of$355,000. At the end of the term, the balloon payment wi11 be analyzed based on Airports Division revenues and a refmance of the balloon payment will be presented to City Council(Council) for consideration. Alternative Action Council may choose not to authorize the City Manager to issue the loan and provide staff alternate direction. Background/Analysis The Redding Regional Airport (RDD) Passenger Terminal Parking Lot is in overall poor condition due to wear and tear from increased passenger traffic and its lack of eligibility for preservation or rehabilitation funding from traditional airport grant funding sources. The Airports Division has utilized operating funds to initiate the design for the parking lot reconstruction and is requesting a City of Redding (City) General Fund loan to enable the project to proceed in fall 2025 concurrent with the Runway Rehabilitation project in order to minimize further disruptions Report to Redding City Council May 14,Z025 Re: 4.2(b)--Authorize Loan between City General Fund and Airports Enterprise Funds Page 2 to RDD customers. Parking lots are typically difficult for small and medium airports to maintain because of the overall costs, disruption to services, and lack of eligibility for federal and state grant funding for airports. The Airports Division contracts with a parking management company to operate the paid parking areas which generate a significant portion of airport revenues. Rental car parking and employee parking are not part of this oversight. As part of the City's Master Fee Schedule update, the Airports Division is proposing an increase to the parking lot daily rates from $10 per day to $12 per day which will be used towards the financing costs associated with the proposed loan. In addition, the parking lot concession agreement is due for renegotiation and the Airports Division anticipates receiving more favorable concession rates from the operator which would further increase revenues from paid parking. As part of the design for the reconstruction, the Airports Division has also incorporated infrastructure updates to enable the airport or its parking operator to install and utilize license plate reader technology to enhance the security of the parking lot and ensure the highest effective capture rate of parking revenues. There are no current plans to make changes to short-term parking rate, which is currently free for the �rst four hours in order to facilitate public access to airport concessionaires such as the restaurant operated by a private party. Environmental Review This aetivity, internal loan negotiation and execution, is not a project as defined by the California Environmental Quality Act (CEQA). Tf funded, the parking lot reconstruction project wi11 be reviewed for compliance with CEQA. No further action is required at this time. Council Pr�ioNity/City Manager Goals • Budget and Financial Management — "Achieve balanced and stable 10-year Financial Plans for all funds."