Funding takes flight

County hesitantly approves MOU with airport for terminal project funding

While both the Sweetwater County Board of County Commissioners and representatives from the Southwest Wyoming Regional Airport expressed frustration about the circumstances surrounding the decision, the county commissioners approved several agreements with the airport to help support and potentially fund plans for the completion of the airport renovation projects that have been delayed.

"The gateway to our community is in disarray," Airport Director Devin Brubaker said, explaining the desire to finish construction on the airport's terminal project.

Brubaker spoke to the commissioners during Tuesday's meeting to explain the agreements being asked for and the circumstances that led to their necessity.

To start off with a brief background, Brubaker explained how the airport hired a construction company as the Construction Manager at Risk (CMAR) in 2020 to complete the commercial terminal modernization project. The CMAR worked with the airport on design plans, which culminated in a guaranteed maximum price (GMP) of just over $15 million being issued and agreed to. The project was bid out to sub-contractors in 2021, and construction began in the fall with a planned completion for the beginning of 2023. After changes in the construction company's leadership at the beginning of 2022, the CMAR renounced the GMP.

"This began an extended conflict between the CMAR and the airport that culminated in the airport filing suit against the CMAR in November of 22," Brubaker explained. "Despite numerous attempts to work with the CMAR to complete the project, it became evident to the airport that change was needed to get the project done in a workman-like manner."

The original CMAR was ultimately terminated in August 2023. The airport began a process to secure a new CMAR to complete the project, and Q&D Construction was selected as the new CMAR in October 2023. The existing subcontracts were determined to not be adequate, and the pricing on them was over two years old on a project that was supposed to be completed 10 months prior, Brubaker explained. Q&D Construction solicited new costs from subcontractors.

The airport still had original grant money left over and wanted to be able to keep the project moving, so they requested a two-phase GMP. The first phase was a temporary terminal and infrastructure, and phase two included all the remaining work to finish the full project. The GMP amounts came out to $2.96 million for phase one and $22.68 million for phase two.

"When coupled with all other project-related costs...the new total project cost is $41,469,110," Brubaker explained.

Brubaker noted that specific calculations have to be followed for what is and isn't eligible to be funded by the Federal Aviation Administration (FAA) based on percentages. The eligible amount is $30.84 million, leaving a remaining ineligible amount of $10.99 million.

The airport has already secured $19,102,132 made up of $13.3 million from the FAA, a little over $1.5 million from the Wyoming Department of Transportation (WYDOT), $3 million from the Wyoming Business Council (WBC), and $1.275 million from the City of Rock Springs and Sweetwater County.

Taking the secured funds into account, there is a gap of $17.1 million that is eligible for federal funding. Brubaker pointed out that the airport is pursuing five different programs to go after this funding.

"There is well north of over a billion different scenarios that can happen in terms of funding on this project," Brubaker said.

He explained that he tried to narrow down some potential best and worst case scenarios and some scenarios in between and determine their likelihood. The current worst-case scenario looks at the possibility of no additional money being secured from FAA, WYDOT and WBC. That scenario leaves a shortfall of about $10.8 million that would need to be covered by local cash or finance coming from the county and city. Brubaker noted that the worst-case scenario is unlikely, and more likely scenarios depends on different funding possibilities from the entities.

Commission Chairman Keaton West asked Brubaker his opinion on the most likely scenario. Brubaker noted that much of it depended on the WBC, but the two scenarios he thought were the most likely involved either a $3.2 million or $5.2 million shortfall needing to be covered by local cash or finance.

Brubaker was able to meet with the investment team staff from the WBC in April and noted that they were supportive of options such as increasing the airport's original grant and securing a low-interest loan. The original deadline for the airport to be part of both of these programs was May 15, but the WBC gave a grace period to extend the deadline until after the May 21 commissioner meeting so the county could approve related resolutions, if the commissioners chose to do so.

Along with those resolutions was a Memorandum of Understanding (MOU) between the airport board, the county, and the City of Rock Springs.

"That MOU is the key component to this project getting done," Brubaker said.

The MOU establishes a framework that allows the airport board to request funding from the county and the City of Rock Springs as needed on the project, Brubaker explained. He pointed out this could be on either an interim basis to cover shortfalls before grants can reimburse the funds, or on a permanent basis to cover costs that can't be covered through grant funding.

He explained that the urgency of needing to get the MOU approved came from multiple factors. One concern was not wanting to miss another construction season for the project, which would increase costs. Another was wanting to address the current appearance of the terminal, which Brubaker said is "despicable" and "embarrassing."

Perhaps the biggest concern with getting approvals quickly was the need to be able to access both future funding and previously secured funding. Brubaker explained that the the WBC staff said they were supportive of the project but weren't confident that the airport had the funds to finish it. The WBC staff explained that unless the airport could prove they would be able to fund the project, they wouldn't make the recommendations for the new funds, and the airport wouldn't be able to access the money left on their original grant, which is a little over $1.2 million. Another possibility is losing the existing $12.5 million in FAA grants that the airport has because the funds have to be used by June 2025.

Chairman West acknowledged the desire to finish the project and the rush to get things approved to meet deadlines, but both he and other commissioners expressed some frustration with the need to make big decisions without much time, especially when it could involve ultimately pledging millions of dollars of county funds.

Commissioner Island Richards noted that the airport board is asking for a $900,000 increase to their budget, and the MOU essentially asks the county to be able to pay roughly $7 million on the project if needed.

"It's put us in a difficult position," West said. "Overall it's a huge lift, but hopefully throughout all the efforts we can reduce the local match as much as possible."

Commissioner Robb Slaughter said the situation "upsets me to no end" and he felt that the county was being "virtually held hostage" for the funding. He and other commissioners pointed out that the county is looking at facing declining revenues and reduced income in the coming fiscal year, making even normal budget considerations difficult. At the same time, he noted the importance of the airport project and the possibility of not having another project more worthy of county funding.

"This is an extremely difficult decision that we have to make today," Slaughter said.

"I know this is a big ask," Brubaker told the commissioners. He noted how much he didn't want to have to ask the county for funding, and reassured them of the airport's intent to go after as much federal funding as possible.

The commissioners ultimately voted unanimously to approve the MOU, the WBC grant resolution, WBC loan resolution, and an FAA grant resolution.

Brubaker expressed his gratitude for the county's support. He noted that the goal is to have final completion of the project by October 2025.

 

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