City approves bond sale for airport improvements
On Sept. 19, City Commissioners approved a resolution on the sale of $645,000 of bonds for the Great Falls International Airport.
They’re tax increment industrial infrastructure development revenue bonds against the Great Falls International Airport Tax Increment Financing Industrial District.
A tax increment financing district is created for specific purposes under state law. Property owners in those districts pay their base taxes to the city and the increment, or taxes on the improvements generated in the district during its lifetime go into the district to be used for public improvements.
The city has five TIF districts.
The average coupon rate of the bonds is currently 5 percent, below the 6 percent estimated in an earlier resolution and the bonds will mature in 14 years, or 2037, with the option to call remaining bonds after seven years in 2030, according to the city.
Commissioners approved the airport’s request for TIF funds in 2021 for infrastructure improvements.
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The request was in coordination with a project to construction improvements including water service lines, sewer service lines, storm sewer improvements, electric/data service lines and two roadway access points.
Those improvements have been completed, accepted by the city and will be used to serve the industrial warehouse bays now being constructed, according to the city.
The initial request was for $762,510, but after approval, the airport requested additional TIF reimbursement to cover the higher than estimated construction costs.
The revised request was for a total of $1,091,238 in TIF reimbursement.
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Commissioners approved the change in December 2022 and agreed to reimburse the airport for $400,000 with TIF funds on hand and bonds payable from the TIF district in a principal amount to pay or reimburse the airport for up to $691,238.
The city has already reimbursed the city with $400,000 in TIF funds on hand.
The amount the city will reimburse the airport in issuing the bonds will be $521,183.80 for a total reimbursement of $921,183.
The Series 2023 Bonds were sold in a public offering with D.A. Davidson and Co. serving as underwriter.
The purchase price, redemption features, and interest rate on the bonds were subjected to the following conditions and limitations, according to the city:
- the aggregate principal amount of the Series 2023 Bonds shall not exceed $850,000
- the average coupon rate on the Series 2023 Bonds shall not exceed 6 percent
- the purchase price of the Series 2023 Bonds shall not be less than 98.5 percent of the principal amount thereof;
- and the final maturity of the Series 2023 Bonds shall not be later than 17 years from their date of issuance.
The fiscal impact of issuing $645,000 of revenue bonds is estimated to have an annual debt service of $65,579.97 through fiscal year 2038 in the airport TIF fund for a total debt service of $902,635.42.