DALLAS -- A senior project official yesterday rebutted a published report that as much as $281 million in costs have been omitted from bond documents for Denver International Airport.
Genniger P. Sussman, the project's finance director, said a copyrighted article in the Rocky Mountain News wrongly implies that the city had tried to conceal costs equal to about 10% of the $3.1 billion bond financed airport.
"That's absolutely erroneous," Ms. Sussman said. "I think that costs are very traceable through the documents.
The newspaper reported Sunday that the city failed to disclose the $190 million cost of a state-of-the-art automated baggage system and the $91 million needed for extended concourse basements essential to the system until after bonds were sold. City planners knew of the costs at least a year before making them public, the news story says.
Ms. Sussman said city officials have always disclosed anticipated costs and have discussed the advanced, high-speed baggage system with bondholders during the past year. Since April, the city has sold $1.1 billion of debt.
The Rocky Mountain News, a daily newspaper in Denver, reported that the automated baggage system was not budgeted for until it was included in documents for a $100 million variable-rate debt sale in June.
Further, the paper said, the concourse basement's costs were not included until the April bond sale. But even then, the estimated $60 million was $31 million below current cost projects for the basement.
"It is an incredible amount of verbiage about something that the reporter apparently misunderstands," Ms. Sussman said of the story.
She said the city determined only earlier this month that using the new baggage system was technically feasible. However, she said such costs would not affect the project's $2.7 billion construction budget.
The published report quotes Dick Veazy, a city planner who wrote the original 1986 master plan for the airport, as saying the city planned to build the automated system from the beginning. He also said the basements were originally planned. Ms. Sussman said yesterday that published reports should not affect relations with investors or the city's plans to sell up to $300 million of new fixed-rate debt in February.
Also, the report is unlikely to affect an ongoing review of the project's rating prompted by the recent agreement between the city and United Airlines for a 30-year commitment to the new airport. Standard & Poor's Corp., which rates the $2.1 billion of outstanding debt BBB-minus, has placed the rating on CreditWatch with positive implications. Fitch Investors service rates the bonds BBB, while Moody's Investor Service has assigned a conditional rating of Baal to the airport revenue bonds.