MnDOT to foot larger share of airport

MnDOT typically pays for the first $200,000 of construction and splits remaining construction on a 60-40 basis. Since the bids were so competitive and since MnDOT allocated money based on the higher cost estimates, they agreed to pay the first $200,000 towards construction and engineering plus 80 percent of the construction and engineering costs beyond that.

Construction and engineering should cost $603,000 for the new airport. This means that MnDOT will pay for $522,400 while the city pays for $80,600.

"Paynesville was fortunate to obtain favorable bids, and as funding had been reserved based on... (cost) estimates, MnDOT aeronautics staff have opted to use the higher rate," wrote Kathy Vesely of the MnDOT Office of Aeronautics to the city.

A row of equipment stands ready at the new airport site west of town. Construction of the new city airport should begin in April and finish this summer. A grand opening is being planned for August.

The city council approved a grant agreement with MnDOT with these levels of contributions last week.

The engineer's estimate for construction was $950,000 while the actual bids for construction were just under $550,000. "We didn't ask for this," said city administrator Steve Helget. "We were grateful to get this."

The city also reduced the engineering fees for the project by sharing an inspector with the Lake Avenue project. Both city projects are scheduled to start this spring. The main remaining cost is for the land, which is still being decided in court. The city has already received title to the necessary property but the price has not been determined yet.

MnDOT will contribute 60 percent towards the cost of land, with the city responsible for the remaining 40 percent. Last August, when the court awarded title to the land to the city of Paynesville, the city deposited a check for $332,000 with the court. This amount was based on the city's appraised value for the nearly 200 acres needed for the airport at $1,600 per acre.

MnDOT has already reimbursed the city for nearly $200,000 for land acquisition, said Helget.

Construction on the new airport is expected to begin in April and take 90 working days to complete. A grand opening for the new airport is being planned for August.

The new airport was originally thought to require a $400,000 local share (originally to be shared by the city and township but now the sole responsiblity of the city, which has decided to undertake the project without the township).

With some of the savings from the low bids and now MnDOT's willingness to contribute a higher share towards construction, the city could opt to build new hangars for the airport. MnDOT has a loan program for building hangars (with 80 percent of the loan interest free), but this program has a waiting list. Right now, the city would not get a loan for hangars from this program until 2006.

Under the terms of the grant agreement with MnDOT, the city commits to running the airport for at least 20 years.