City commissioners unanimously approved phase one of the airport terminal expansion at the Manhattan Regional Airport Tuesday. The $9.8 million project will be contingent on receipt of a $7.9 million Federal Aviation Administration FAA grant with the remaining amount to be funded locally by passenger facility charges and economic development funds.
City manager Ron Fehr said the FAA grant is still being approved, but the city needed to approve the bid before Sept. 14 because that’s when the FAA finalized its budget. He said city officials should know by the end of the month whether the grant has been approved and the city can move forward with construction. Once all the financing is finalized, construction could begin as early as December.
The $15.8 million contract, which encompasses both the first and second phases, was awarded to The Weitz Company, LLC, of Lenexa. The second phase bid is good until September 2014.
Airport director Peter Van Kuren said phase one construction will be completed by August 2014. At that time, the city will know whether it will also receive another grant from the FAA to finish the terminal expansion, phase two, for $5.4 million. The total cost of phase two is $6.7 million with the city covering the remaining $1.3 million. Commissioners will have to approve the second phase of the construction after city officials know whether the FAA approved the second phase grant.
When both phases are complete, the airport will be able to handle about 300 passengers per hour. Currently, during peak times, the airport handles about 230 passengers per hour.
The expansion will also allow for two planes to board at the same time without exposing passengers to the elements.
Van Kuren said should the FAA initially deny phase two funding, the old terminal will be able to function with the new phase until that funding is secured. However, the city may need to send phase two out for bid again if phase two funding is not approved by September 2014, when The Weitz Company bid expires.
Commissioners also wanted to address the expansion of the parking lot and how he city would pay for that. Van Kuren said the intent was to address parking during phase two and begin charging for parking after renovations were complete.
In addition to the special session, city commissioners also gave guidance on how to finance several temporary notes that are close to maturation on the south end redevelopment. The temporary notes on the conference center, parking garage and Flint Hills Discovery Center will mature in December and June.
At that time, city officials must convert those temporary notes into General Obligation bonds for 10, 15 or 20 years.
Commissioners agreed with Fehr’s suggestion to extend the temporary notes on the conference center and parking garage until December 2014, but to convert the Discovery Center’s temporary notes to 10-year G.O. bonds in November. By extending the temporary notes on the conference center and parking garage, city officials will have more flexibility in financing the notes because they will have the ability to incorporate those debt payments into the 2015 budget. Fehr said the Discovery Center notes did not have that option to extend.
Commissioners also agreed with keeping the bonds at a 10-year term because it helped with the credit rating of the city, and the city paid less interest overall during the life of the bond.
Commissioners did not hold a formal vote because it was a work session.