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SAA Board approves mill levy increase
Salina, Kan., (August 19, 2009) -The Salina Airport
Authority board of directors approved a resolution to set the Authority's
mill levy at 4.315 mills, at the Aug. 19 meeting.
The increased mill levy is required to make 2010 general obligation debt
service payments. The Authority needs $1.7 million to make the
principle and interest payments. The rare increase of 1.3209 mills,
or $524,406, will provide the Authority sufficient funds to carry Hangar
600 as a speculative hangar until the facility is leased.
"It's a painful short-term decision, but we have an obligation,"
said Jeff Thompson, acting chairman at the meeting.
While the hangar has proven successful in generating interest from large
aviation and aerospace companies, none are ready to move in.
"The difference would be if we had Hangar 600 leased today," said
Tim Rogers, A.A.E., the Authority's executive director. "The lease of
Hangar 600 has to potential of producing $776,000 of revenue
annually."
Once Hangar 600 is leased, the Authority will again evaluate future debt
service obligations and sources of repayment while looking for
opportunities to reduce the mill levy. But until then, according to
state law the Authority "shall" levy the amount necessary to pay
for G.O. bond principle interest payments.
"We can reduce the levy if we have sufficient funds from somewhere
else," Rogers said. "But for 2010 we just don't.
We're still using other operating funds to make debt payments for the next
year."
The Authority is currently awaiting leases on Hangar 600 and Building 412
and neither is short on prospects.
"I expect that next year we'll be able to move back to our customary
3-mill levy," Rogers said.
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