New KCI proposal frequently asked questions (FAQ)
The City of Kansas City, Missouri is considering an innovative proposal to privately finance a new, single terminal at Kansas City International Airport. The following Q&A is intended to answer questions about how the proposal would work. This FAQ will be updated with additional information during the public discussion of this proposal.
Q: Will Kansas City taxpayers have to pay to finance a new single terminal airport?
No. The proposal put forward by Burns & McDonnell, a Kansas City-based, employee-owned engineering, architecture and construction company, would design and construct a new single terminal and finance it using private investment from by Burns & McDonnell and other financial partners. The financing would be paid back by the use agreement with the airlines (what the airlines pay to operate at KCI) and usage revenues at the airport (what travelers or users pay at the airport for services such as parking fees, concession revenue, etc.).
Q: Will the City use general fund dollars to fund a single terminal?
Q: Will a new tax be levied, or, Is there going to be a special taxing district established at the new terminal?
Only for goods purchased at the airport. The developer may be allowed to expand the Community Improvement District (CID) to include the terminal, which would add a one-cent sales tax on retail sales at the airport.
Q: Will existing bond authority be used?
Q: What does “privately financed” mean?
Instead of the Aviation Department issuing bonds to finance a new single terminal airport, the money will come from Burns & McDonnell and the investment group they assemble.
Q: Is that the same thing as “privatizing” the airport?
No. The City is not selling the airport to Burns & McDonnell.
Q: Will Kansas City have to give up ownership of the new airport?
No. KCI will remain wholly owned and operated by the City of Kansas City. Nothing changes for Aviation Department employees who currently operate the airport.
Q: Are incentives like TIF, Super TIF, or abatement being used?
No. The financing proposed would be through the private investment group, and the City will not be providing any incentives for the design or construction of the project.
Q: How much does the proposal say it will cost?
The proposal would be similar to the plan agreed to by the airlines and presented to the City Council 2 years ago. That plan was $964 million in 2015 dollars.
Q: How can Kansas Citians be sure costs will stay under control?
The proposal has stipulations that require Burns & McDonnell agree to a guaranteed maximum price, and if that amount is exceeded for any reason, Burns & McDonnell will assume those costs at no risk to the City or taxpayers.
Q: Who is responsible for any shortfall in revenue?
The lease agreement means the payment is between the airlines and Burns & McDonnell. If there is any shortfall of revenue to pay back the private financing, it’s up to the airlines to make up the difference. If an airline goes out of business, it’s up to the other airlines to make up the difference.
Q: What does it mean that City Council has to adopt the “MOU”?
The proposal put forward asks for a “memorandum of understanding” or MOU. That document stipulates that Burns & McDonnell would have exclusive rights to proceed with due diligence toward assembling private financing, meeting requirements put forward by the City, estimating construction costs and in turn, would be afforded the design and construction contracts if approved by voters. In order for Burns & McDonnell to receive those exclusive rights, the City Council would need to adopt the MOU by majority vote, allowing the proposal to proceed. The MOU will be introduced to City Council on May 18, and it is expected the City Council will debate and vote on the MOU in the following weeks.
Q: Does this announcement mean this is a final decision?
No. Adoption of the MOU by City Council only permits Burns & McDonnell exclusive rights to proceed with planning and due diligence. Once Burns & McDonnell completes that analysis and comes back to the City with a “not to exceed” amount, the City Council would then have to adopt ballot language for a citywide election in November. Only when voters approve the proposal is it final. Ballot language would be required to be adopted by City Council by late summer in order to be placed on the November ballot.
Q: How will a new terminal design be convenient?
KCMO residents have made it clear that the airport terminal’s current convenience must be maintained or improved. Curbside drop-off and pick-up will be covered from the elements, and less congested because the arrival and departure lanes will be on separate levels. Keeping the walk from drop-off to gate short and easy will be a priority. Other convenience factors would include more close-in parking spaces, moving walkways and more amenities (restrooms, restaurants, seating, etc.) in the post-security passenger waiting area.
Q: Will residents get to a chance to provide public comment on the proposal?
Yes. The City Council wants to hear public comments on the proposed Memorandum of Understanding (MOU) during meetings of the Airport and Transportation & Infrastructure Joint Committee. Residents can also provide feedback 24/7 at the city’s online town hall, KCMOmentum. After committee approval, the MOU would go to the full City Council for a vote. When Burns & McDonnell comes back later this summer with a final plan, that plan would go through the same process to gather public input and approval by the committee and the full City Council.
Q: Will the public still get to weigh in on what they want in a new airport terminal?
Yes. The Department of Aviation is continuing its listening tour among community and neighborhood groups. Those sessions will continue to hear from constituents what they like about the airport, and what they don’t like. Aviation Department officials can also answer questions from residents. In addition, the City Council’s Airport Committee will debate the proposal during public meetings the week of the May 22. Finally, residents are always welcome to provide input and feedback at KCMOmentum.
Q: Will the public be able to provide feedback on the terminal design?
Yes. When the MOU is approved, Burns & McDonnell will be able to proceed with developing the single-terminal design concept. The public would see the design and have opportunities for public comment prior to the public vote on the final design.
Q: Would the private investors have to abide by any City standards on the project?
Yes, the proposal requires that Burns & McDonnell would have to meet all requirements typically expected of City aviation projects, including paying prevailing wages and meeting MBE/WBE/DBE and workforce goals.
Q: Will residents get to vote on this proposal?
Yes. If the MOU is adopted by City Council, and then ballot language is approved by the City Council and the proposal is placed on the November ballot.
Q: If there is no taxpayer money used, why would the public vote on it?
In 2014, City Council adopted an ordinance that said a citywide vote would be held for any decision regarding a new terminal. Even though this proposal does not use taxpayer dollars, the City intends to keep its promise and let residents decide.
Q: When would a vote take place?
Registered voters in Kansas City, Missouri would be able to vote on the proposal on Nov. 7, 2017.
Q: How does Burns & McDonnell make money from this deal?
The amount of money Burns & McDonnell makes is dependent on how efficient they can build a new terminal. They are required to provide a guaranteed maximum price under the agreement, and the City is not at risk for any cost overruns.
Burns and McDonnell will serve as the General Contractor of this design-build project, which will earn the company money as a result of that role. Burns & McDonnell estimates it can build the project quicker and thus save some costs inherent to the design-build model.
Typically, the City would anticipate construction fees amounting to 6-10% of construction costs, and in this case, only people who use the airport would contribute to this revenue through fees associated with parking, ticketing, concessions and other retail.
Q: Will other Kansas City firms get an opportunity to work on this project?
Yes. Burns and McDonnell has already begun the process of talking to other local firms that can provide essential project elements. Burns and McDonnell views this as a Kansas City solution to a Kansas City challenge and therefore wants most or all the work done by Kansas City companies and workers.
Q: Why does the MOU suggest that that City would lease the terminal to the developer during construction?
The City maintains ownership of the terminal and will continue to be responsible for operation and maintenance of the facility. The City must maintain ownership according to FAA rules, but the developer needs to acquire an interest in the property sufficient to construct a new terminal. This lease structure allows that to happen, with the understanding it will end the day the debt is paid.