“As everyone knows, the (interest) rates are extremely low now,” acting TCRA Executive Director David Jones told commissioners. “Somewhere along the way they will start going back up, so the timing is favorable at this point in time.”
Much of the debt was created a decade ago when bonds were issued by Sullivan County for TCRA improvements under its old Airport Commission governing structure and through an intergovernmental agreement with airport owners.
Authority commissioners decided to “call,” or repay $1.1 million in bonds with revenue from passenger facility charges — $4.50 fees paid by air travelers — stashed into accounts with the Sullivan County Trustee.
Authority commissioners were advised that covering this piece of airport debt would save about $75,000 worth of two-year interest payments.
Annual revenue from customer facility charges — fees tacked on to rental car contracts and deposited with Sullivan County — will cover the refinanced debt.
The refinancing, authority commissioners were told, should save another half-million dollars.
“This is going to create more cash flow for the (TCRA) Authority,” TCRA legal counsel Bill Bovender said of the move.
Financing duties were transferred from the old Airport Commission to the new Authority governing structure last year, but the Authority doesn’t yet have a credit history. Sullivan County, commissioners were advised, has a high quality Aa2 bond rating.
The Nashville office of Stephens, Inc. acts as Sullivan County’s financial advisor and expects to present the refinancing issue to county commissioners next month.
For more about TCRA, go to www.triflight.com.