Members of an airport development board are seeking approval from the city of Poplar Bluff to construct two new hangars in an approximately $570,000 no-bid project.
The council is expected to vote Friday on an amended lease agreement with the Municipal Airport Development Corporation.
The regular July 3 meeting has been rescheduled to Friday. A complete agenda appears on page 6A.
The MAD board would use hangar rental income to pay for the new hangars and outstanding debt of $530,000 on a 2011 project.
The new project would construct hangars for large aircraft, said Matt Richardson, MAD board president, who presented the project to the city council Monday.
The contract for the project would be given to R.L. Persons of Poplar Bluff, Richardson said Wednesday.
"Since we're not a city or government organization, we're not required to bid it," he said. "We went with a contractor that is already familiar with the specs and all of the requirements."
Persons was the low bidder on a similar project in 2011, Richardson said.
By not putting this project out for bid, it will move forward more quickly, he said.
The board expects construction to begin this summer, if approved, and be completed by the fall.
The MAD board is a private, non-for-profit corporation which works directly with local banks to fund projects. It has nine members and leases property from the city for its projects. The hangars revert to the city when the debt is repaid.
No loan documents are available to review for this project because they are still being processed by Southern Bank, said Richardson.
It has been given tentative approval for a 25-year loan, with a fixed interest of 5 percent for five years and variable interest after.
Payments for the MAD board's total debt would be approximately $6,500 per month, if the project moves forward, Richardson said.
Rental income from 33 existing hangars and the two new hangars would be used as collateral for the loan. The MAD board expects this to generate about $8,000 per month.
They are currently getting $5,650 for the rental of 32 hangars.
One large hangar has reverted to the city and the MAD board has asked that the $600 it generates per month also be allocated toward the debt.
The MAD board would need to request rental payments of $875 each for the two new large hangars, to reach the anticipated total rent.
The MAD board's request comes at the same time airport manager Lance Donze is seeking council approval for a grant application to replace 4,000 feet of runway. This project could shut the airport down for six months or more.
The board has a reserve of about $40,000, according to members, which could help with any lost rental income.
It is also in the process of securing 1-year leases from the individuals that rent hangars, said leasing agent Mike Smith, the former airport manager.
New rules from the FAA require that hangars have lease agreements in place by July 1.
Any potential shut down would not affect rental incomes because lease payments would still be required to be made during that time, Smith and Richardson said.
The grant application was discussed Monday but is not a voting item Friday.
It requests almost $3.8 million in state funds and a contribution of just under $420,000 from the city.
The airport has done several expensive projects to patch the runway, said Donze.
The runway is at least 30 years old and had a significant amount of low and medium severity cracking during a 2011 inspection, the Missouri Department of Transportation aviations division found.
Since repair work completed in 2014, the cracking was rated as low-severity, MoDOT reported.
MoDOT recommended the city maximize the reconstruction work before doing a full replacement of the pavement, and determine how many more years the repair work is likely to serve the airport.
Core samples show the pavement is very thin and the bottom layer has crumbled, Donze said.
While shutting the airport down for a time period is an inconvenience, he believes the city will benefit from a new concrete, low maintenance runway.
The slurry seal work costs about $500,000 and can to be done every 4-6 years, said Dominic Thompson, a project manager with Smith and Company Engineers, which is working with the airport on the grant application.
The airport has received FAA rankings on the runway condition that are close to where replacement is advised, he said.