Atlanta OKs Reserve Fund Hike for Airport Expansion

ATLANTA - The Atlanta City Council on Monday approved a measure that increases the reserve fund for the city's capital plan to expand the international terminal at Hartsfield-Jackson International Airport.

Given growing costs of funding the project, city officials wanted to make sure that a reserve was in place to tap in case of cost overruns. As part of the $1.2 billion spending plan for the international terminal, the reserve fund was increased to $168 million.

Atlanta owns and operates the airport and issues debt for it. The international terminal project is part of Hartsfield-Jackson's roughly $6 billion capital improvement plan.

The airport's largest carrier, Delta Air Lines, was critical of the increase in the reserve fund. Delta officials argued that a reserve of about $60 million was needed.

Hartsfield-Jackson general manager Ben DeCosta cheered after the council's unanimous approval. He agreed to specific terms related to the expansion project. For example, council members want the airport to deliver a quarterly report stating the status of the project. It would have to be delivered to all of the airlines operating out the airport to keep them informed about how funds were being spent.

Council member C.T. Martin said he was happy with the agreement.

"One billion is a lot to spend, but DeCosta and his team have given me the confidence to support this project," she said. "And I'm confident and sure that with proper reporting, we will have an eye on anything that needs to be caught before there is a [funding] problem."

Herschel Grangent, a spokesman for the airport, said that the council's approval of the increased reserve fund was critical. Growth in international passenger traffic led to the expansion effort. Delta has supported the project because it wants to increase its international passenger load.

It's estimated that nine million international passengers passed through Hartsfield-Jackson last year. By 2014, that number could exceed 13 million. The expanded terminal is expected to be complete by 2011.

Grangent also said that the recent talk of mergers between Delta and other airlines will not put the project in jeopardy. He pointed out that even when the airline went into bankruptcy in 2006, the expansion plans did not change.

The airport has $1.9 billion of general revenue bonds and $1 billion of subordinate bonds outstanding.

Hartsfield-Jackson is the world's busiest airport, serving more than 88 million passengers annually, with the help of 34 passenger and 16 cargo airlines. In addition to the 12-gate international terminal, the capital improvement plan entails a new car rental facility, people movers, and parking services.

Atlanta finance officials were not immediately available for comment.

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