05/21/2025

Meeting Minutes for:
Finance Committee Meeting
Yuma International Airport, Conference Room
Wednesday, May 21, 2025 at 02:30 PM

    Call to Order:
    The Yuma County Airport Authority, Inc. (YCAA) Finance Committee Meeting of the Board of Directors was called to order at 2:30PM on May 21, 2025, in the Yuma International Airport Conference Room, 2191 E. 32nd Street, Suite 218, Yuma, Arizona 85365. The Presiding officer was Stanley Gourley, Chairman.

    YCAA FINANCE COMMITTEE MEMBERS PRESENT WERE:
    Stanley Gourley, Chairman and YCAA Treasurer
    Dean Hager, 1st Vice President
    Eric Saltzer, Director

    YCAA FINANCE COMMITTEE MEMBERS ABSENT WERE:
    None

    ALSO PRESENT WERE:
    Bill Craft, President
    Ken Scott, Director
    Gladys Brown, Airport Director
    Gerald Hinkle, Jr., Chief Financial Officer
    Silvia Gunderman, 1st Bank Yuma

    CALL TO THE PUBLIC
    There were no Public Comments.


    REGULAR AGENDA
    1) Finance Committee discussion and overview of the YCAA’s Capital Reserves.

    Mr. Hinkle, YCAA CFO provided a summary of the YCAA’s capital reserves including the nature of its use and recent activity. After a brief discussion on how the available balance in capital reserves had risen since Ms. Brown’s tenure as Airport Director, Mr. Hinkle projected the balance of capital reserves that may be available on July 20, 2025, at $1.6 Million. The significance of available reserves in July of 2025 is due considerations by the Committee of reducing the balance due on long term debt ahead of a scheduled interest rate reset to be discussed in Agenda Item #2.

    Mr. Hinkle concluded his presentation by listing additional operational uses of the YCAA’s capital reserves scheduled subsequent to July of 2025 which is projected to reduce the balance to less than $1 Million.

    2) Finance Committee discussion and possible recommendations related to YCAA long-term debt.

    Mr. Hinkle provided an overview of the YCAA’s only remaining long-term note payable (Note #1713) and described the decisions that needed to be made ahead of the note’s scheduled interest rate reset to market rates on July 21, 2025.

    Mr. Hinkle described the two different decisions that needed to be made by the YCAA Board of Directors at the upcoming June 10, 2025, regular meeting regarding this matter including:

    Inform 1st Bank Yuma, in writing, of the YCAA’s election regarding the applicable interest rate options available:
    -Variable Rate of Interest. Adjusts daily based on the Prime Rate of Interest less 0.25%, with the opportunity to move to a five year fixed rate at any time.
    -Fixed Rate of Interest. Fixed rate of interest set at the 87.5% of the Prime Rate of Interest through July 20, 2030.
    -Decide whether to use available capital reserves to reduce the balance due on Note #1713 before July 21, 2025 which would reduce the balance effected by the interest rate adjustment and reduce the monthly debt service required.

    During the discussion that followed, the Committee came to a consensus to recommend that the Board of Directors authorize the Airport Director to inform 1st Bank Yuma of its decision to elect the Variable Rate of Interest option effective on July 21, 2025.

    Mr. Hinkle then provided amortization schedules to the Committee that estimated the financial effects of forgoing any principal reduction vs the benefits of making a significant payment on the debt prior to July 21, 2025, including reducing the principal amount due on July 20, 2025, by $100,000, $250,000, $500,000 or $1,000,000.

    An important element considered by the Committee in addition to the interest savings by reducing the principal balance was the effect of the principal reduction on the debt service payments into the future. Mr. Hinkle informed the Committee that unless a minimum of $100,000 of principal reduction on Note #1713 was accomplished prior to July 21, 2025, the monthly debt service payments would increase to $15,577 monthly, an $830 increase compared to the previous five years. Mr. Hinkle recommended that the Committee consider investing $100,000 of capital reserves into principal reduction which would result in monthly debt service requirements in the amount of $14,389, an amount that is substantially similar to the payments required for the past five years. Mr. Hinkle also stated that this amount of principal reduction would leave the bulk of the YCAA’s capital reserves available while also reducing the balance due on Note #1713 to $1 Million in February of 2027, when the YCAA’s $2 Million certificate of deposit matures making the retirement of Note #1713 possible without affecting available capital reserves.

    After a detailed discussion by the Committee of the different options available the Committee came to a consensus to recommend the Board of Directors authorize the Airport Director to use $312,000 of the YCAA’s capital reserves to make a principal payment on Note #1713 on or before July 20, 2025.

    The recommended amount of principal reduction ($312,000) would reduce the balance due on Note #1713 to $999,299, marking the first time the YCAA has had less than $1 Million in long-term debt since 1999; An important milestone.

    During this discussion the Committee recognized the reduced capital reserves available for operational purposes but encouraged YCAA Staff to utilize its $1.5 Million line of credit to cover short-term financing needs, without hesitation. The Committee also directed Staff to include debt service installments for Note #1713 in the proposed FY26 operational budget matching the $14,747 due monthly for the previous five years, regardless of the projected $11,871 monthly payment required as a result of the recommended principal reduction.

    CALL TO THE PUBLIC
    There were no Public Comments.

    ADJOURNMENT

    There being no further business before the Committee the meeting adjourned at 3:32PM.



    // Approved //
    Stanley Gourley
    Treasurer, Yuma County Airport Authority; Finance Committee Chairman
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