SR012886-6IG~
AD:HED
Council Meeting: 01/28/86
JAN2g1986
Santa Monica, California
i~ ~r
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Applications for Loan from the California Aid to
Airports Program (CAAP)
Introduction
This report requests that City Council authorize the City Manager
to file applications and execute necessary agreements with the
division of Aeronautics of the California Department of
Transportation for a loan of $450,000 to finance the local share
of $4,000,000 in FAA grants for Airport improvements.
Background
In November 1983, the City Council adopted a Layout Plan and
Noise Mitigation Program for the Santa Monica Municipal Airport.
The plan called for the implementation of a performance-based
noise mitigation program, the relocation of airport facilities to
the north side of the runway, as well as the improvement of
airport infrastructure, including runway, taxiways, drainage and
support facilities. Last fall, the City Council authorized City
staff to file and execute agreement with Federal Aviation
Administration (FAA) for federal funding for improvements to the
Santa Monica Airport. Three seperate grants totalling $5 million
have been awarded to date by the FAA. As the FAA contributes 90%
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J ~; ~ ?, 8 1996
of the project cost it is necessary for the City to contribute
the remaining 10~. The Caltrans Division of Aeronautics has
established a low-interest long term loan program to assist local
entities with the financing of the local share of federal capital
projects. Loan funding of this project will allow the City to
reserve Airport Fund Revuenes for other immediate uses, such as
the purchase of noise monitoring equipment. The loans are repaid
on a 25 year schedule with a fixed rate of interest set at the
rate of interest the State is receiving from invested cash
(currently 7.4~). Applications for the loan program may be filed
with the State upon receipt of a Federal project number from the
FAA. Thereafter the Division of Aeronautics would issue a loan
agreement to the City for execution. In August, the Council
approved a loan application of $110,000 to finance the local
share of the first grant of $1,000,000. The two subsequent grant
awards of $4 million require a similar action. Terms and
conditions of the loan agreement are as follows: the City must
obligate the Airport fund for repayment of the loan subject to an
annual appropriation by the City Council. Sufficient funds are
available from current Airport revenues to meet the annual
payment obligation.
Budc~etary1Fiscal Impact
The project is programmed in the Capital Improvement Program for
the City as project number 33-710-631-000-903. No appropriation
is necessary at this time. Loan funds will be deposited in
Airport Fund revenue account 33-911-631-000-247.
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Recommendation
City staff respectfully recommends that the City Council
authorize the City Manager to file an application and execute a
loan agreement with the Caltrans Division of Aeronautics for a
loan of $450,000 to finance the local match of the City's FAA
grant.
PREPARED BY: Hank Dittmar
Airport Director
(cc012886)
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Reference Contract
No. 4629 (CCS).