Airport’s tax request reduced; action on business loan relocation tabled

    Imperial city council members had questions on a couple of items on Monday’s agenda.
    After requesting a 16% property tax increase in the Airport Authority’s 2021-22 budget, the council, after some discussion, voted 4-0 to budget the same dollars as last year.
    In other action, the council had questions on a subordination agreement with Gigabit and Waypoint Bank, so tabled action. The council is involved because of the city’s lien position with Gigabit’s current financial institution.
    The Airport Authority’s ‘21-22 property tax request of $17,500 was dropped to the current level of $15,000 in Monday’s council vote.
    As they reviewed the AA’s budget, council members theorized what the increase might be for.
    Council President Charlesa Kline said, “A little bit of explanation would have been nice.”
    No one from the AA was at the meeting.
    City Clerk/Administrator Jo Leyland said the bulk of the Airport Authority funds come from user fees. She noted there was no proposal to raise any fees in the budget.
    The budget does show more funds requested for repairs and maintenance, Leyland said, largely due to hail damage on buildings.
    Council member Doug Gaswick brought up the airport’s fuel sales, suggesting those fees be raised.
    “They are losing money on fuel sales,” he said. “They need to raise fuel prices. They should show a profit or break even.”
    Documents show, he said, they are losing money on fuel sales this year. He pointed to budget documents that showed the airport is selling $40,000 in fuel, and the expense is $55,000. They were uncertain whether the airport received a recent full tank of fuel that will carry over into the ‘21-22 budget year.
    Leyland thought the airport “does okay” on the fuel.
    Due to deadlines, the council had to take action Monday on the AA request.
Gigabit, Waypoint
agenda item
    Chris Lee, Branch Manager of Imperial’s Waypoint Bank, was at the meeting to explain the request for city officials’ signatures on a subordination agreement between Gigabit and Waypoint.
    He said they are in the final stages of refinancing Gigabit’s note and, in the city’s loan agreement with the company, a section reads the city is “junior” to the major financer.
    Because of the change in the lender, that subordination agreement is needed for their files, Lee said. The city’s lien position on the documents does not change, only the primary lender, Lee said.
    City Attorney Josh Wendell , however, did not agree.
    “It doesn’t necessarily spell that out in the agreement,” Wendell said.
    However, he felt it could be dealt with “pretty straightforwardly.”
    He also cited section 2 in the Waypoint document that he said would change the city’s current rights.
    “Basically, you can’t undertake any collection activities unless Waypoint gives you permission,” he said. “That’s how I interpret that.”
    Jan Elliott was also present. She serves on the Citizens Advisory Committee, which makes recommendations on use of LB 840 sales tax funds, which Gigabit received.
    She asked why the agreement shouldn’t go back to the Loan Review Committee and CAC if there are changes.
    Wendell said he didn’t interpret what’s being asked as a “change” because the specific creditor wasn’t named or the maximum amount of subordination.
    Kline, who  conducted the meeting in the mayor’s absence, said she recalled in the discussion with the CAC that Gigabit would provide full phone and internet services to the city, as part of the city’s loan agreement.
    “Has that been fulfilled?” Kline asked.
    Leyland said it has not.             “When it came down to the actual agreement we were told that they couldn’t include that in the written agreement because of some sort of regulation,” she said.
    She said the free service was included in the recommendations to the council from both the Loan Review Committee and Citizens Advisory Committee.
    “They are providing it to us as a lesser cost but not without charges,” she said.
    She said the mayor talked with someone from Gigabit, and they agreed to reduce the  charges.
    She said Wednesday she has been told by Allo personnel, which is managing the services, that the city is getting a 50% discount.
    “That’s where we run into complications with Citizens Advisory because the recommendation we put forward was changed and never sent back to CAC for approval,” Elliott said.
    Kline said it was frustrating to her, as well.
    “I have no problems with Waypoint taking over,” Kline said, but felt a visit with the mayor was in order to see what he found out when speaking to Gigabit owners, who include Bill Brophy, Ben Brophy, Russ Pankonin and John Paisley.
    The council voted 4-0 to table action on the subordination agreement.
    The city awarded Gigabit a no-interest $700,000 loan in August 2019 from LB 840 city sales tax funds. The no-interest loan will be paid back five years after the first loan payment is made at $35,000 per year until the note is paid off in 2045.
    Gigabit continues to install a network of fiber in the city that provides phone, internet and TV  service. ALLO was hired to run the network.
Other business
    Hairball, who will perform Aug. 13 at the Chase County Fair, earned a special permit to discharge fireworks and/or pyrotechnic devices during their show.
    The council voted 4-0 on a resolution giving that approval, which is required since the city only allows fireworks during a period before and on July 4.
    The council gave its approval 4-0 to amend the city’s ‘20-21 budget after bond refinancing took place as new bonds were sold for the city street projects this summer.
    Angela Lewis was approved as manager regarding the liquor license renewal for Broadway Steakhouse.
    Lynne West also gained approved as a firefighter with the Imperial Volunteer Fire Dept.