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Airport would benefit from debt refinancing

March 24, 2011

Pictured above is a sign located along Piper Road to direct traffic to various buildings at the St. Marys Municipal Airport. City Councilman Dan Hepner recently recommended that members of city council consider pursuing options to refinance the airport's debt. Photo by Becky Polaski.

The St. Marys Municipal Airport would benefit from refinancing its debt, according to city councilman Dan Hepner. Hepner was appointed to fill a vacancy on the St. Marys Area Airport Authority in January, a term that will run for five years.
"In looking at redoing the city bonds, it is my recommendation that we seriously consider taking the airport debt and refinancing that was part of the bond refinancing," Hepner said. "In other words, pay off the existing debt and then have them become part of the bond indenture. [They would] continue to pay as they do on a monthly basis."
Representatives from the airport have appeared before city council in recent years to discuss the airport's financial woes.
Hepner indicated that he has spoken at length about the proposal to City Manager Dave Greene, City Finance Director Carol Muhitch, and RBC Wealth Management, which was recently approved to handle the refinancing of select city bonds.
"In fact, RBC's numbers are a little bit better than what I came up with," Hepner said. "I tried to be ultra-conservative. The net effect, I think, in 14 years, will cost the airport probably an additional - going off RBC numbers now, not mine - $6,000 to $7,000."
However, Hepner noted that the move would free up cash for the authority in the short term.
"It would free up cash this year of about $5,000 for the airport, and probably for the next seven or eight years it's going to be anywhere between $7,400 and $7,900 a year," Hepner said.
Hepner also remarked that a few months ago council members had recommended a number of changes to be implemented at the airport in an effort to help keep costs down. According to Hepner, the changes went into effect two months ago.

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