Prince Rupert City Council approves of extension to agreement between City and Prince Rupert Airport Authority
The current state of Airport loan repayments was a topic of note from Monday's City Council session
The City will be stepping up to lend a hand to the Prince Rupert Airport Authority, approving a proposal from Chief Financial Officer Corinne Bomben to extend an agreement in place by an additional three years to allow for the Airport to recover from some of the challenging impacts they have faced as a result of COVID-19.
Ms. Bomben outlined the details of a report she had prepared for Council that provided some background to the current situation that the airport authority finds itself in after a year of suspended air service to the community.
"In 2013 the City entered into a partnering agreement to provide a loan, obtained in 2014 to the Airport to upgrade their terminal, principal repayments of that loan to the city are made annually and are funded through fees the airport charges commercial and charter air traffic.
Given that the pandemic shut air travel down in Spring 2020 and it hasn't returned to normal since that time, the Airport needed relief in meeting its debt obligations under the agreement. The airport intends to repay the loan in full so an extension to the partnering agreement is being sought to provide the additional time that the airport will need."
Ms Bomben further observed for Council how the extension of three years would provide the additional time for the airport to meet those obligations, with resumption of repayments on the loan from the airport to come in 2023.
"The City took the loan from the Municipal Finance Authority, meaning the city is responsible to make the payments as scheduled. As such, although the airport didn't pay in 2020, the City did make its payment with no impact to the taxpayers by using the Safe Restart grant provided by the provincial government last year. It is proposed in 2021 and 2022 that this grant continue to fund the payments the city must make in the interim" -- CFO Corrine Bomben on how the city plans to approach airport loan repayment
Towards discussion, Councillor Mirau asked what the balance of the restart grant would look like after the extension was complete, with Ms. Bomben noting that the amount would then be just shy of one million dollars.
In a follow up question he asked about projections on revenue for the airport ferry and asked if there is a need for a new projection following recent funding announcements from the Federal government, Ms. Bomben said she was pretty confident their projections were pretty close
Councillor Niesh offered his support for the move observing how it was a recommendation which he supported completely.
"Up until this COVID, the Airport was always running in the black, and they were maybe not making lots of money but they were sustaining themselves and we need to support this airport and make sure that we don't lose it. So I think it's a great idea ... essentially we're just moving it along for three more years and we're helping them out and I support this completely."
Councillor Cunningham also supported the motion and asked if the City had received any of the recent funding provided through the Air Canada bailout. Ms. Bomben advised that the city would not be receiving any of that funding, adding she believed that the airport authority is using it for Operational expenses.
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