Ord. 20640 - Laserfiche WebLink

Home Browse Search

IMPLEMENTATION AND FINANCING PLAN 5.4.4.2 Public Private Partnerships APublic Private Partnership (P3) is an arrangement between the public and private sectors whereby services traditionally provided by the public sector are provided by the private sector. These agreements target setting a clear understanding of shared objectives for delivery of public infrastructure and/or public services. A P3 can take many forms, but in relation to airport development, it is simply another funding strategy to be considered in the development, implementation and operation of facilities and infrastructure projects. Issuance of Public (Municipal) Debt Proceeds from the issuance of General Airport Revenue Bonds (GARB) and other types of municipal bonds are a common source of funding for airport sponsors in the United States. To obtain the funds, airports seek access to the capital markets on reasonable terms for short-, mid-, and long-term financing needs. The most commonly used financing instruments to fund major airport capital development programs are tax-exempt General Obligation Bonds and General Airport Revenue Bonds. Other long-term funding sources include the issuance of bonds that are generally not secured by general airport revenues but by specific revenue sources including Industrial Development Bonds and Special Facility Bonds. At the time of this writing, Eugene Airport has not carried any form of bond debt since FY 2008. The following is a brief summary of these primary types of municipal funding instruments. Not all of these instruments may be suitable for Eugene Airport in the short-term, but may be viable funding alternatives in the future. 5.4.5.1 General Obligation Bonds General Obligation (GO) Bonds are among the first municipal financing instruments used for airport development. GO Bonds are a debt of the issuing agency and are supported by its taxing power. Since these bonds are backed by the full faith and credit of the issuing agency, they often require voter approval. As a rule, GO Bonds generally have the lowest interest rates when compared with other municipal financing instruments and typically do not require the establishment of backup reserve funds or coverage to enhance their creditworthiness. GO Bonds used for airport financing increases the issuing finance other community needs. GO Bonds could be available for the funding of large scale projects at EUG (exceeding a minimum of $10 million) with high levels of community support. 5.4.5.2 General Airport Revenue Bonds General Airport Revenue Bonds (GARBs) are one of the most common long-term funding sources used by airports. GARBs are tax-exempt bond debt issued by the municipality and secured through a pledge of general revenues from the airport. GARBs are somewhat riskier than GO Bonds as they are backed by airport revenues (as opposed to municipal tax revenues). This makes them more susceptible to unanticipated drops in airport revenue. General Airport Revenue Bonds would be a financially responsible funding option at EUG, carrying minimal risk for the city and the Airport. Issuance of long-term debt is generally recommended for large-scale projects where AIP and PFC funding is limited by eligibility requirements or has already been committed to other higher priority projects. 5.4.5.3 Industrial Development Bonds and Special Facility Bonds Industrial Development Bonds (IDBs) are used by governmental entities for projects eligible under the Internal Revenue Code in conjunction with other incentives such as local and state tax abatement and/or tax credits to create a package that will attract businesses to these zones and provide employment EUGENE AIRPORT MASTER PLAN 5-11