Terminal project
Project Questions
How the terminal addition is financed and what it does and does not put at risk
Who Pays the Bonds
Will the terminal addition bonds be supported by local taxes?
No. The bonds are paid with Authority revenues. Those revenues include passenger facility charges, lease and use charges from airlines and rental car companies, the existing parking facilities, and landing fees.
Does the terminal addition affect future county programs that need bonding?
Grand Traverse County's municipal financial consultant, MFCI, reviewed this. Citing the county's long-term capital plan, identifiable revenue sources, near-term debt amortization and growing revenue base, MFCI said it does not believe the county would risk its bond rating by adding the debt over the next five years.
The MFCI report is on page 110 of the county's full report.
Did we get authorization to issue bonds from the counties?
Yes. We could pursue a bond process to issue our own debt.
Do we need Grand Traverse County's permission to use the county's credit rating?
Yes. We have to return to the Grand Traverse County Board for the county to pledge its full faith and credit for the bond issuance, and we will bring a finalized plan of finance for the county's review before we do.
Interest
The County Pledge
Why do we want the county to back the bonds?
Grand Traverse County has an excellent credit rating, and bonds it backs carry less interest. Our municipal advisor estimated that without the county pledge we would pay about $528,000 more a year on the full $71 million, or more than $16.2 million over the life of the financing.
Why not finance the whole project through TIFIA?
The Transportation Infrastructure Finance and Innovation Act program caps a loan at 49 percent of eligible project costs, so it cannot cover the whole project. If part of the project is financed through TIFIA, the county's full faith and credit would not be needed for the entire $71 million, and the published lifetime interest saving on that option is more than $11.16 million.