Tulsa Airports Improvement Trust OKs $16.6 Million In Bond Revenue Issues
July 12-- Two airport revenue bond issues totaling $16.6 million to finance runway construction and a financial management system at Tulsa International Airport were approved Thursday by the Tulsa Airports Improvement Trust.
TAIT staff, financial advisers and consultants advised trustees that the issue and sale of the revenue bonds would allow TAIT to compress four years of runway construction into one, while reducing costs, and provide the airport a faster and more efficient financial management system.
"It's about saving time and money -- and not inconveniencing airlines and the public," said Michael Newman, financial adviser with First Southwest Co. in Dallas.
The $70 million to $75 million 10,000-foot main north-south runway reconstruction project began two years ago and was expected to take eight years to complete, TAIT executives said.
The first two phases, at 1,200 feet and about $7 million each, weren't big enough projects to attract major national construction companies or many bidders, officials said.
After months of consultations, TAIT staff and trustees reached agreement with Compass Mortgage Corp. of Claremore for the issue and sale of $14,625,000 in revenue bonds to be repaid with $4.87 million in Federal Aviation Administration airport improvement grants expected in 2013, 2014 and 2015.
The bond proceeds will be paired with $13.67 million in local funds on hand, $3 million in funding from the Oklahoma Air National Guard and local matching money to reconstruct 6,400 feet in Phase 3 of the runway project. Phase 3 is expected to start in January 2013 and be completed in May 2013, said Jeff Hough, deputy airports director of engineering and facilities.
"We're talking about reducing the project from eight phases to five," Hough said. "It could be done in 2015, instead of 2018."
Newman said the size of the project -- $32.9 million versus $7 million on each of the first two phases -- should attract more interest from large construction companies.
"On smaller projects, it's not worth their money to mobilize," Newman said. "In Phase 2 there were only two bidders because there were so many companies involved with highway construction locally. And this way the airport can take advantage of the low interest rate environment and pay it off -- with no penalty."
Trustees approved the issue and sale of $2 million in revenue bonds to Arvest Bank to finance the purchase and installation of a financial management system.
Airports Director Jeff Mulder said staff and consultants agreed that the airport would be better served by having its own system, rather than relying on the city of Tulsa's mainframe system.
Carl Remus, deputy airports director of finance and administration, said a networked system is the right scale for Tulsa International Airport and Jones Riverside Airport at Jenks.
"The speed and reliability of getting data in a networked system is greatly improved over a mainframe system," Remus said. "The auditors have pointed out that this board is the responsible body for the financial reports of TAIT. Without the tools to do that, you're relying on the city's mainframe system.
"This is not an attempt to undermine or supplant data....We're talking about changing processes and procedures, not changing who gets data."
In conjunction with the board's approval of the issue and sale of revenue bonds for the project, trustees approved two professional services agreements.
The board approved a not-to-exceed $360,000 agreement with Crowe Horwath L.L.P. of Dallas and expenses not to exceed $54,000 for the acquisition and installation of the financial management system.
A $166,250 agreement with Magnir Group L.L.C. of Tulsa for consulting and installation also was approved for the project.
Tulsa Airports Improvement Trust actions
--Approved issue and sale of $14.6 million in revenue bonds for runway construction
--Authorized issue and sale of $2 million in revenue bonds for purchase and installation of financial management system
--Approved $526,250 in professional service agreements for purchase and installation of financial management system
Source: Tulsa Airports Improvement Trust
D.R. Stewart 918-581-8451
Copyright 2012 - Tulsa World, Okla.