City council will support the municipal airport authority’s pursuit of a $1-million line of credit (LOC) for its construction project, with the LOC to come from a multi-million-dollar cattle company.
Council voted unanimously during its executive committee meeting on March 8 to provide the Moose Jaw Municipal Airport Authority (MJMAA) with a guarantee for a line of credit — from Jameson Gilroy and B&L Livestock Limited (JGL) —to use as cashflow during the extension and rehabilitation project of the runway and taxiway.
Council also authorized city administration to bring forward a guarantee bylaw for approval.
Background
The MJMAA has secured financing for this $3.2-million project from the federal government ($2.1 million), the City of Moose Jaw ($500,000) and a stakeholder loan ($500,000), a council report explained. The authority has also applied for another grant that, if successful, would see the province give $275,000 and the authority provide $275,000.
The project commenced last fall and should finish this year.
The MJMAA needs cash flow of $1 million until April 30, 2022, to give interim financing until its partners provide reimbursements, the report continued. However, JGL wants a guarantee from the city before the authority can access the LOC.
The airport authority will be responsible for covering interest payments, the report added. Meanwhile, the LOC will count toward the city’s $95-million debt limit; $70.2 million is already used.
Presentation
It’s been seven years since the airport authority developed a vision to become an asset for the area, board chair Greg Simpson said during the meeting. To see that vision come true — especially during a pandemic — is a good news story.
“It gives us all hope for a better future,” he said.
Once the project is complete, the board will focus more on its social media presence and attracting charter planes, added Simpson. Charter aviation is happening more often throughout North America due to the benefits; almost 90 per cent of landings and takeoffs in Moose Jaw are business-related.
The MJMAA would use the money as bridge funding for no more than 60 days as it completes the project, said board vice-chair Jarrett Johnson. Cashflow projections show the authority would approach $900,000 in spending during a couple of months, which is why it approached JGL about securing an LOC.
The private company agreed, promising to provide prime-plus-one-per-cent if the city secured the LOC; interest costs will likely be $3,000. Going to JGL was better than going to a bank, Johnson noted, which wanted security on the land, “other complicating parts” with funding and would not give favourable rates.
Council reaction
The MJMAA has spoken with 15 Wing Air Base about the latter using the airport, but the base would not commit or pledge to anything since it’s a federal entity, Johnson told Coun. Doug Blanc. The base could fly planes to the airport from Regina and leave them there overnight before transferring them to the base, but again, no firm commitments were made.
“I had the opportunity to visit the airport last spring … and it was awesome to be there … ,” said Coun. Heather Eby. “I’m excited for the potential of this. I think it will be a great thing for Moose Jaw.”
Coun. Crystal Froese expressed concern about the board not providing a financial report or cashflow analysis with the presentation, which would have helped her better understand how much progress the project has made.
“My intent here is to continue to build a strong relationship, so we ensure you are being successful … should there be any red flags,” she added. “Having a municipal airport was a bit of a contentious issue for a few years.”
Simpson agreed that he could provide a financial document by the next council meeting.
Not only are highways and rail lines gateways into the community, but so is the airport, said Mayor Fraser Tolmie. These upgrades ensure air ambulance can do its job well, while the runways can provide additional safety for airbase pilots should an emergency arise.
The next executive committee meeting is Monday, March 22.
