BEAUFORT — It still needs final sign off from the Local Government Commission, but county commissioners have approved a cash flow arrangement with the Carteret County-Beaufort Airport Authority that will allow the airport to proceed with constructing 28 airplane hangars at the Michael J. Smith Field in Beaufort.
The airport is in the middle of a grant-funded project to rebuild hangars that were damaged or destroyed in recent storms, including Hurricane Florence in 2018 and Hurricane Dorian in 2019. Last July, the U.S. Department of Commerce’s Economic Development Administration announced it would award the airport authority nearly $3.3 million for the effort, with the county providing matching funds totaling around $820,000.
However, with rising raw material costs, the project is now about $350,000 over budget, meaning the airport will have to dip into its reserves to pay for the difference. The airport authority met Aug. 5 and approved, contingent on working out a financing arrangement with the county, award of the construction contract to low bidder Trader Construction Co. of New Bern for just over $4 million.
At the meeting earlier this month, chairperson Pat Joyce informed authority members the airport has a “cash flow issue” due to the way the EDA grant is structured. As he explained, the airport must first expend the funds out of its own pockets and submit proof to the EDA, which will reimburse costs up to the $3.3 million awarded for the grant. With around a 30- to 60-day lag time for the EDA to send reimbursements, the airport may have times when it has to spend more money than it has immediately available.
Mr. Joyce, along with airport manager Jesse Vinson, attended the Carteret County Board of Commissioners meeting Monday evening in Beaufort to request a financing arrangement that will ensure the airport has enough funds for spending needs arise. The matter wasn’t originally included on the meeting agenda, but commissioners amended the agenda to give airport officials an opportunity to make their pitch.
“The issue before us is not that we don’t have the money to do the project, we have the money,” Mr. Vinson said Monday. “The issue is from the way the EDA reimburses you for your expenses puts us in a cash flow situation.”
Mr. Vinson essentially asked the county to provide the airport authority with a bridge loan that would be repaid as soon as the airport receives its reimbursements from the EDA. After some discussion, commissioners agreed to the airport’s request, voting 6-0, with Commissioner Chuck Shinn absent, to approve a loan.
“I understand what you’re asking for and it’d probably be a smart move to help you get those things built so you can get the rent starting to come in,” Commissioner Robin Comer noted.
County attorney Rob Wheatly explained since the airport is a county-owned asset, the arrangement must receive approval from the LGC before it is final, a process that will take around 60 to 90 days.
County manager Tommy Burns questioned how the airport has spent a nearly $1 million settlement the county received from its insurance company for damage to the hangars. Mr. Vinson said that money went toward the roughly $820,000 local match for the grant, and the remaining funds have been used to pay engineer’s fees, which aren’t covered by the grant award package.
Mr. Burns added there is an application fee of about $12,000 to submit the request to the LGC for consideration.
Contact Elise Clouser at email@example.com; by phone at 252-726-7081 ext. 229; or follow on Twitter @eliseccnt.