Title
RESOLUTION AUTHORIZING THE CITY TO PROVIDE A $4,000,000 LINE OF CREDIT TO THE DULUTH AIRPORT AUTHORITY TO ASSIST WITH CASH FLOW MANAGEMENT
Body
CITY PROPOSAL:
RESOLVED, that the city shall make available a line of credit to the Duluth Airport Authority of up to $4,000,000 to be drawn as needed to assist in the management of cash flow for capital improvement projects and operations to be repaid in full periodically upon receipt by the Duluth Airport Authority of project funding sources from the Federal Aviation Administration, State of Minnesota and other grant or bonding sources that are provided on a cost reimbursement basis. The line of credit shall expire on December 31, 2020. Interest at a rate of 2.50 percent per annum shall be charged on drawn funds.
Statement of Purpose
STATEMENT OF PURPOSE: The Airport Authority has had a $4 million line of credit with the City since 2009 to assist with cash flow requirements during the construction of its new terminal project and the Lake Superior College hanger renovation project. This resolution extends the line of credit on an ongoing basis as needed for future projects through December 31, 2020. The Duluth Airport Authority receives grant funds on an annual basis for projects. However, grant funds are provided on a reimbursement basis which creates a cash flow issue until the grant funds are released. The Duluth Airport Authority has requested a line of credit to assist with these cash flow issues. The Duluth Airport Authority’s previous line of credit ended upon completion of the hanger renovation project and has been repaid in full.