County borrows for airport terminal
Commissioners dip heavily into delinquent tax fund to avoid bigger debt
ALPENA — The Alpena County Board of Commissioners voted 7-0 during a special meeting Monday to sell up to $1.47 million in 20-year bonds. Proceeds from the bonds will help pay the county’s required match for a Federal Aviation Administration grant to be used to build a new terminal at Alpena County Regional Airport.
The FAA grant is for $9 million and the Michigan Department of Transportation will also pay $235,650.
The county’s match is about $2.4 million and the remaining $1 million will be taken from the county’s Delinquent Tax Fund, which the county uses to make City of Alpena and townships whole from when property taxes are delinquent.
The county considered issuing bonds for the entire amount, but the annual payment would have been high and commissioners decided to use two different sources for the funding.
The payment for the $1.47 million in bonds is expected to be about $105,000 a year for the next two decades.
Commissioner Bob Adrian, who is chairman of the board’s Airport Committee, said nearly five years of planning went into the project and he’s thrilled now that it is going to be a reality. He said it will put the county into debt for a while, but getting that much money from FAA for the terminal was pretty much a one-time offer that the county couldn’t refuse.
“When we sat down with FAA and Department of Transportation, we were told that FAA doesn’t normally pay to have terminals built or won’t be doing it anymore in the future,” Adrian said. “We need a new terminal badly and this is going to bring better security, more modern amenities and be more efficient.
“If we didn’t get this grant, or be able to come up with the match, it would likly been many years before the county could afford to build one on its own.”
The Delinquent Tax Fund is used to reimburse the city and townships money they lose from unpaid taxes. After three years of unpaid taxes, the county can seize properties and sell them at auction to recoup some of those funds.
According to Treasurer Kim Ludlow, there was about $6.7 million in the fund at the end of March and that will dip to $5.7 million after the withdrawal is made for the terminal. She said county policy requires that fund contain at least 2.2 times the previous year’s settlement to the city and townships. Ludlow said last year’s payout was about $2.04 million, meaning there needs to be at minimum $4.5 million in the account. She said after the $1 million is removed, there is little wiggle room, which concerns her some.
“Our settlements have been going down, so my concern is, we have hit the bottom and they are going to start going up,” Ludlow said. “If that happens, the money in there will go pretty quickly.”
Ludlow said if there isn’t enough money in the fund when settlements are due, the county has to borrow the money, which is something Ludlow said she doesn’t want to do.
“If they take the $1 million, I don’t think there is any more left for them to take,” she said. “I just wouldn’t be comfortable if they were to take more than that.”
The county is expecting a “Notice to Proceed” from the FAA, which will allow the terminal project to begin. That could come as soon as the end of the month. Once ground is broke, construction will end when winter arrives and then resume in the spring.
It is estimated it will take about 13 months to build the terminal.
Steve Schulwitz can be reached at firstname.lastname@example.org or 989-358-5689. Follow Steve on Twitter @ss_alpenanews.