At this month’s April work session, City Finance Director Jim Piper spoke to the Creswell City Council, requesting that an interfund loan be made for $52,800 to construct or purchase a hangar for Creswell Hobby Field Airport. This loan could help generate more revenue, Piper said, stating that operating income for the Creswell Airport is currently not yielding a positive result.
”The current hangar rentals, land leases and maintenance fees are not sufficient,” Piper said. ”Any attempt to raise revenues are considered by 30-year agreements. Fuel sales, without an expanding customer base, are not sufficient to sustain the airport operations. Additional hangers could mean more fuel sales to new tenants.”
In reviewing the City of Creswell Capital Improvement Plan Proposed Projects and Capital Improvements for Fiscal Year 2017-18, additional hangars are to be constructed at Hobby Field during Fiscal Year 2018-19, Piper stated.
He said that new hangars are imperative to developing a sustainable revenue stream for the airport.
”Those hangars will have the potential to bring in nearly $30,000 in annual rent,” Piper said.
The Budget Committee approved and the City Council adopted the Fiscal Year 2017-18 budget, which includes an interfund loan to the Airport. The loan requires the city council to adopt a resolution that an interfund loan be made to the Airport Fund from the General Fund.
”The interfund loan must be paid off within 10 years,” Piper said, and provided a proposed repayment schedule through 2028.
”I am proposing a 2.5-percent interest rate on the loan based on the interest rate currently yielded by the General Fund from the local Government Investment Pool at 2.2 percent.”
He said that Airport Manager Shelley Humble is requesting the interfund loan from the General Fund to the Airport Fund to purchase a box hangar.
The box hangar is large enough to be converted into a classroom if the city decides to start a STEM program on aviation, which is an aviation curriculum for high schools. At the time the hangar is converted into a classroom, the remainder of the loan could be paid by grant funds, rents from the Creswell School District, or treated as a transfer from the General Fund, Piper said.
”In the meantime, rents will be sufficient to pay back the interfund loan on a semi-annual basis and not further burden the operating income of the Airport Fund,” Piper said.
City Council directed staff to bring this item to the Monday, May 7 city council meeting for approval, which will be held at 7 p.m. at City Hall and is open to the public.