City passes airport bond resolution

LACONIA — After about a month of public discussion, Laconia Municipal Airport in Gilford will be getting the funding needed to further a major expansion that could help drive increased aeronautics business to the region.

City councilors unanimously passed a resolution Monday evening to issue a $3.5 million bond in order to fund the development of nine parcels along the abandoned runway at the airport and construction of an access road on the property.

“We’ve kind of settled in on a $3.5 million bond,” Finance Director Glen Smith said. “The airport authority under its charter is not allowed to borrow money so that’s where the city comes in, to borrow on behalf of the airport.”

Pursuant to a letter of understanding signed by Mayor Andrew Hosmer, City Manager Kirk Beattie and airport manager Marv Everson, the Laconia Airport Authority will be held liable for servicing the debt on the bond, leaving the city free from financial risk. 

“The City of Laconia is doing what’s been requested, but we’re not liable for any outstanding balance,” Hosmer said. “The airport authority will make good on any debt owed to a bank in regards to a bond.”

In previous meetings of the city council, Everson told councilors the airport is in need of funds to expand services offered there, and the airport authority is unable to borrow money. But federal grant funding appropriated to airports nationwide in the 2021 Bipartisan Infrastructure Law earmarked about two-thirds of the amount needed to develop the abandoned runway to allow for the construction of hangars. 

The airport, using revenue garnered by the collection of land-lease fees and, to a lesser extent, the sale of fuel at the facility, will make the bond payments on the city’s behalf. Everson has previously noted that all nine parcels are preliminarily committed to ready and willing lessees. 

After passage of the resolution, which saw no commentary from community members during a public hearing earlier in the meeting, councilors learned bids for the bond will be reviewed by the finance committee following their Wednesday deadline for submission. 

“The bond bid request for bids has already gone out, the deadline is Wednesday,” Smith said. “If this does pass, we’ll be ready to move forward and reach out to the finance committee on Wednesday to take the next step.”

The abandoned runway at the airport cannot be reopened and airport officials have seen increased demand for hangar space there. The City of Laconia owns the land where parcels are to be developed, but will not own the hangars. Those will be constructed by private or commercial entities. Property taxes on those parcels will be collected by the Town of Gilford. 

The bond proposal suggested a 20-year term for the $3.5 million and for the airport to make installment payments on the debt service until the federal monies are received, which is anticipated to take place in 2027 or 2028. Direct grants will cover about $2.3 million of the entirety and will be paid to the airport in installments of $300,000 after the first of about $1.3 million is received.

Yearly payments to service the bond are anticipated to be about $100,000, which the airport will pay on the city’s behalf. The first year of lease fees are estimated to be about the same, allowing the airport to break even initially. Lease fees will increase year-by-year, however, pursuant to increases in the Consumer Price Index.