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1 RiversideCA.gov
1 RiversideCA.gov
INTERFUND LOAN FROM THE GENERAL FUND
INFRASTRUCTURE RESERVE FUND
TO THE AIRPORT FUND
City Council Meeting
April 16, 2024
Finance Department
RiversideCA.gov
2 • As an enterprise fund, the Airport receives no
contributions from the City General Fund
• The Airport generates operating revenues through
hanger rents, ground leases and concessions.
• The Airport expends operating funds for staff wages,
supplies and equipment used in monitoring the safety
and security of the airfield and airport buildings.
AIRPORT ENTERPRISE FUND
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2 RiversideCA.gov
3 • The Airport budget is designed as an operating
budget with some funds available for emergency
repairs to existing buildings and infrastructure.
• The Airport budget has little available for capital
needs, including significant deferred maintenance
needs.
AIRPORT BUDGET
RiversideCA.gov
4 • Although the Airport Improvement Program (AIP)
grant program, administered by the Federal Aviation
Administration (FAA) is available for airports with
capital development needs, the movement area
(runways and taxiways) are generally prioritized.
• As Riverside Municipal Airport’s movement area
capital development needs exceed available FAA
funding, using FAA funding for deferred building
maintenance is not sufficient.
FAA FUNDING SOURCES
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5 • The Airport contracted with a roofing company to
conduct assessments of all airport roofs, including
numerous hangers and the main terminal building.
• The total cost estimate for roof replacements and
rehabilitation airport-wide was approximately $3.3-
$3.7 million. This includes replacement of roofs on 17
airport buildings. Additionally, the Airport intends to replace hanger doors on each of the two original
hangs, with a cost estimate of $170,000.
ROOF ASSESSMENTS
RiversideCA.gov
6 • CalTRANS Loan
– Total borrowing costs of $3,015,771
• Interfund Loan
– Total borrowing costs of $2,511,200
Fiscal Savings of ~$504,571
FINANCING OPTIONS
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7 • Interfund Loan from the General Fund Infrastructure Reserve Fund to the Airport Fund
• Principal Not-to-Exceed $2,000,000
• 12 Year Maturity, with annual payments
• Annual principal payments will equal ~$170,000
• Without early paydown, total interest will equal
$511,200, with a total fiscal impact of $2,511,200
PROPOSED TRANSACTION
RiversideCA.gov
8 • The City has historically used interfund loans to fund certain projects when it was more cost effective than
borrowing via a traditional method (bond offering or
bank loan).
• These borrowings were mostly structured with 3-5 year repayment terms, with exceptions approved by City
Management for longer repayment schedules for
various reasons.
CITY’S HISTORY OF USING INTERFUND LOANS
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9 • The City has approved over 82 interfund loans over a period of 37 years, totaling more than $162.3 million
loaned.
• The most recent interfund loan being for the Utilities Plaza for $4.47 million issued in 2012 with a final
maturity date of 2027.
• The City’s interfund loan program has supported
numerous department’s capital improvement
projects, including the Airport.
CITY’S HISTORY OF USING INTERFUND LOANS
RiversideCA.gov
10 • The following Airport projects were financed by
interfund loans:
– 1991 for Building Repairs and Improvements
– 1999 for Tarmac Rehabilitation
– 2007 Terminal Remodel Capital Project and Fire Rescue Truck Purchase
• All the above borrowings have been paid back in full.
AIRPORT’S HISTORY OF INTERFUND LOANS
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11 This item contributes to Strategic Priority No. 5- High Performing Government and Goal No. 5.4 Achieve and
maintain financial health by addressing gaps between
revenues and expenditures and aligning resources with
strategic priorities to yield the greatest impact.
Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
RiversideCA.gov
12 That the City Council:
1. Authorize a loan of $2,000,000 from General Fund Infrastructure Reserves to the Airport Fund for airport capital improvements;
2. With at least five affirmative votes, authorize the Chief Financial Officer, or designee, to record a supplemental appropriation and interfund transfer from General Fund Infrastructure Reserves to the Airport Fund in the amount of $2,000,000;
3. With at least five affirmative votes, authorize the Chief Financial Officer, or designee, to record a supplemental appropriation in the amount of $2,000,000 in the Airport Fund, Capital project accounts; and
4. Authorize the City Manager, or his designee, to execute the necessary interfund loan documents.
RECOMMENDATIONS
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