, Corbin, KY

Local News

July 15, 2014

W’burg Council tables co-signing on airport loan


Staff Writer

A motion, in which the Williamsburg City Council would co-sign an agreement for the Williamsburg-Whitley County Airport Board to refinance loans owed by the airport, was tabled Monday at the council’s regular meeting.

In a unanimous vote, Council members Patty Faulkner, Richard Foley, Erica Harris, Troy Sharp, Mary Ann Stanfill and Laurel West agreed to table the motion, which contained three conditions.

One, the City Council would co-sign for the airport only if the Whitley County Fiscal Court approves to co-sign for the loan as well. Second, the agreement’s contingent that the airport cannot borrow more money without City Council’s and Fiscal Court’s approval. And third, the contingencies would be written in both the City Council’s and Fiscal Court’s contracts.

Last month, the Fiscal Court tabled the resolution until the financial committee could meet, which was earlier Monday.

The City Council learned during their session that the financial committee recommended the Fiscal Court not to co-sign.

The subject is expected to be brought up at the Fiscal Court’s regular meeting Tuesday at 6 p.m. at the Whitley County Courthouse.

Harrison said the refinancing of the airport’s loan was for about $447,888.47, which would combine the airport’s individual loans into one large loan with Forcht Bank in Williamsburg with an interest rate of 5 per cent fixed for 60 months. Then it drops to a prime-plus rate afterwards of about 3.5 percent.

In a June 18 Times-Tribune story, it was noted the refinancing would mean the airport would pay $3,108 a month in interest, compared to the $4,130 a month they’re now paying.

“The new loan would give them (the airport) the ability to pay on the principal, and have some extra cash. It would give them an extra $900 a month to do what they need to do. The biggest factor is that it does not increase what we’re giving them annually, and it goes to the bank, which gives assurance the money goes there,” Harrison said after the meeting.

Two-thirds of the airport is owned by the county, with the remaining one-third owned by the city.

Harrison noted the city’s obligated to “roughly $130,000-$140,000” in their current agreement, in which they pay $32,000 a year by ordinance, or about six percent of the city’s occupational tax. If approval is given to the airport refinancing their loan, he added the amount the city would be paying was “roughly a little less than the current amount.”

Harrison mentioned the airport currently has four loans in which they’re presently paying interest on only. Two of the loans are with Peoples Bank in Tennessee, the other two with First State Financial Bank, which has branches in Williamsburg.

“Right now, the airport is not in any dire straits. …They’re doing better. It’s just a fiscal decision they’ve asked us to be involved with. … I think they’ve got a really good handle on it. They’re saying, ‘Let’s refinance, go with one bank, pay the principal and get on with it,’” he said.

Harrison told the council it came down to them doing one of three things at the meeting.

“We can table this until Fiscal Court does (decide), or we can take a vote and agree to the one-third, contingent on what the county does. Or we can vote against doing it. It’s contingent on both the city and county,” he said.

But there were those who wondered if the city could be obligated down the road, should something happen.

“The question is, do we want to be financially obligated for 15 years?” Harrison asked.

“Right now, it looks good on paper. But I want to know how much is this, and how much is that? added Sharp.

At first, a motion was made by West to approve the co-signing on the conditions contingent on the city and county, but that motion died due to a lack of being seconded.

Later, another motion to table the agreement was made by West, seconded by Sharp, and unanimously approved.

Harrison told council members they could either hold a special meeting on the issue later this month, or wait until their regular meeting scheduled for Monday, Aug. 11.

In other actions at the session, the council approved a resolution, adopting and approving the Municipal Aid Co-op Program Contract between the city and Kentucky Transportation Cabinet’s Department of Rural and Municipal Aid for the current fiscal year.

Williamsburg will get an estimated $123,000 from the state to be used to pave, patch and fix streets and sidewalks. The money comes from the state’s motor vehicle tax. The amount city will get is higher than the $120,000 they had budgeted for in the FY 2014-15 budget.

In addition, approval was given of the minutes of the June 3 regular council meeting, and the June 5 special council meeting.

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