OCEAN CITY – More than $643,000 in forward funding for design projects at the municipal airport is expected to help the resort secure a portion of a $1 billion federal grant.
On Monday, the Ocean City Mayor and Council had before them a recommendation to forward fund grant-eligible design projects currently underway at the Ocean City Municipal Airport in the amount of $643,663.
Public Works Director Hal Adkins said accelerating design efforts for three infrastructure projects at the airport would allow the town to compete for a portion of $1 billion in supplemental funding available to non-hub airports.
“If you were successful in attaining a portion of the $1 billion grant, you will have no local match,” he said.
While both deadlines to apply for the supplemental funding had already passed, Adkins said he and Airport Manager Jaime Giandomenico had applied for a portion of the funds on behalf of the Mayor and Council. At that time, roughly $794 million remained available for allocation.
He said the town had requested $22 million to cover the anticipated construction costs of the three projects, which included changes to a mandatory runway safety area, the reconstruction of an aging runway and the relocation of existing taxiways.
Adkins said if design work for the three projects was not completed in fiscal year 2019, the town would no longer be eligible to receive the $22 million in requested supplemental funding and construction of the three projects would likely be spread out over a period of years due to Federal Aviation Administration (FAA) funding limitations.
“The bottom line is they are just not in a position to fund their portions of the second and third projects …,” he said. “They just don’t have the money right now.”
By using money from the town’s fund balance to complete the design of all three projects in fiscal year 2019, Adkins said the town would forgo any additional time and expense and could begin to address critical infrastructure issues, including pavement failures, at the airport.
“It makes no sense whatsoever to design this project in multi stages and building over multi years,” he said, pointing to the additional surveys and coordination efforts that would be needed to expand the timeline of the projects. “It is totally inefficient.”
If the council were to forward fund the $643,663, Adkins said the money would be reimbursed by FAA and Maryland Aviation Administration grant funding at a later date.
“The last thing we have to complete is finishing the design …,” he said. “At that point, we have met all of the criteria necessary to hopefully obtain approval for 100 percent of the money.”
Adkins said pursuing the $22 million in supplemental funding would also save the town $1.1 million, or 5 percent, in matching funds for the construction of the projects. In total, the town would be obligated to provide a 5-percent match, or roughly $53,000, for the design and engineering of the projects.
“If everything works out as I’m intending, and we get a portion of the $1 billion and 100 percent of the money for construction, your end on this whole thing is 5 percent of the contract for the three design projects …,” he said. “The FAA has not funded all three design projects but you all have. Our local match is already there. We aren’t even asking you for the $53,000.”
Councilman Mark Paddack questioned when the town would be reimbursed for forward funding the design projects.
“When do you suspect that money would come back to our coffers?” he asked.
Resort officials noted the town could expect a reimbursement by fiscal year 2024. Giandomenico, however, pointed to the merits of forward funding the design projects.
“There is no downside,” he said. “If we slide this FY20 work to FY19, we have the design in the can to take a crack at the $1 billion appropriation. Even if we get a fraction of that or if we get zero, we now have a design in the can for 2020… It better positions us to do this in fewer steps across the whole spectrum.”
Paddack told resort officials he would support the measure, but offered some words of caution.
“I just want my constituency base to know that we have to be careful with an enterprise that is not making money,” he said. “It’s not making money. It’s losing money, respectfully.”
Mayor Rick Meehan pointed out that completing infrastructure projects at the airport was not a question of if, but when.
“The bottom line is one way or another the project will get completed,” he said.
Budget Manager Jennie Knapp added forward funding the $643,663 could impact other potential capital improvement projects.
“This is going to be $643,000 less in the general fund to do other capital projects or to consider other capital projects …,” she said.
The council voted 6-0, with Council President Lloyd Martin absent, to approve $643,663 in forward funding for the grant-eligible design projects.
Giandomineco said he expected to receive a short list of grant recipients after the new year.