AIR­PORT

The Covington News - - Front page -

ac­tual pre­sen­ta­tion. It was at this point, that Carter said Oakes could save time and not change the pro­posal. She said the city was ex­pand­ing the air­port, plan­ning to open up a new en­trance and plan­ning to con­struct a new ter­mi­nal build­ing.

“In light of all of that, we feel like it’s in the best in­ter­est, and we were go­ing to no­tify you, and I will ask for a vote for this tonight, for early ter­mi­na­tion of the con­tract,” she said. “That’s where we’re headed. I don’t know how th­ese folks are go­ing to vote, but I will en­ter­tain some dis­cus­sion.”

When Oakes asked if early ter­mi­na­tion was on the agenda, the mayor re­sponded it was un­der the FBO pro­posal item, but if that wasn’t clear enough, an agenda item would be added.

“I’m glad we’re here, I didn’t know this was go­ing to come up,” Oakes said as he went to take his seat.

Dur­ing the ac­tual coun­cil meet­ing, Oakes said he felt am­bushed and said it was the first he had heard of early ter­mi­na­tion. When the added item came up at the end of the meet­ing, City and Air­port Man­ager Steve Horton jumped in.

“I guess I’m the mid­dle of the road kind of here … We haven’t heard ev­ery­thing Bob and Craig have to say. My cu­rios­ity al­ways gets the best of me. I’d like to hear what Bob has to say. He may have some­thing not in that let­ter (pro­posal) that you need to know about,” Horton said.

The FBO’s op­er­a­tional pro­posal con­tained nine bul­let points. Many of the points dealt with re­vised fuel prices and op­er­a­tion. How­ever, one key point asked the city to drop its abil­ity to ter­mi­nate the con­tract early.

“The city would aban­don any ef­forts to buy-out the ex­ist­ing FBO by re­mov­ing the pro­vi­sion for early ter­mi­na­tion buy­out and al­low Dixie Jet to keep its ex­ist­ing eq­uity po­si­tion in its ex­ist­ing hangar and of­fice build­ing. This would en­cour­age Dixie Jet and its share­holder(s) to fur­ther in­vest in the air­port fa­cil­i­ties at Cov­ing­ton Mu­nic­i­pal Air­port,” the pro­posal said.

The pro­posal also asked for a 30-year lease, which it said would help mit­i­gate the dev­as­tat­ing loss of $1.5 mil­lion in rev­enue dur­ing the past nine months due to clo­sure and an­tic­i­pated clo­sure of the air­port. It said that de­spite the loss in rev­enue, Dixie Jet con­tin­ued to pay rent.

Carter said she would be OK with tabling the mat­ter and al­low­ing Oakes, Rid­dell, Horton and City At­tor­ney Ed Crudup to meet to dis­cuss the pro­posal and ad­di­tional in­for­ma­tion. How­ever, she said early ter­mi­na­tion has been dis­cussed for the past two years and it would con­tinue to be dis­cussed.

“The spending ac­tions we’ve taken so far are to move the FBO op­er­a­tions to an­other lo­ca­tion and change the man­age­ment thereof,” she said.

Oakes asked why there couldn’t be two air­port man­agers, but Carter said she wasn’t go­ing to de­bate those is­sues at the coun­cil meet­ing.

In an e-mail on Tues­day, Carter said the de­ci­sion to pur­sue early ter­mi­na­tion is strate­gic. She said the city feels the cur­rent op­er­at­ing agree­ment with Dixie Jet would not be the best way to max­i­mize cus­tomers and in­crease the tax base.

“Be­yond the strate­gic as­pects, we have had many com­plaints about the day-to-day op­er­a­tions at the air­port. Pro­vided the coun­cil agrees, the city will take over the op­er­a­tions and will use Mr. Horton's fa­cil­ity main­te­nance staff to run the air­port. We feel we will have a greater fi­nan­cial ca­pac­ity to keep an abun­dant fuel sup­ply and other nec­es­sary nav­i­ga­tional aids,” she said.

If early ter­mi­na­tion is ap­proved, there would be a 90-day no­tice pe­riod.

“If we had given no­tice to­day, the ter­mi­na­tion would have been July 5 and the buy­out would have been $353,109.77. There also would be a 10 per­cent early ter­mi­na­tion fee. This fee is 10 per­cent of the pay­off amount or $35,310.98. Each month that passes makes the buy­out amount in­crease,” she said.

The op­er­a­tion of the air­port has been a con­tentious is­sue over the past cou­ple of years be­tween Rid­dell and the coun­cil and Carter. Rid­dell and Dixie Jet Man­ager Rusty Anglin are up­set that construction has been de­layed so long, while city of­fi­cials have com­plained about late rent and stormwa­ter pay­ments, and in­sur­ance cov­er­age that lapsed.

Lighting at the air­port fi­nally was fixed late last week, and the air­port is now open for night land­ing and tak­ing off as of Fri­day.

The fuel farm should be up and run­ning in about two weeks. A cou­ple of in­spec­tions still need to be com­pleted, but the state fire mar­shal said it was fit to use. Anglin em­pha­sized that Dixie Jet does have fuel in its fuel trucks in the in­terim, but the fuel farm will al­low it to store much larger sup­plies.

Fi­nally, Dixie Jet’s stormwa­ter pay­ment is still out­stand­ing, but Anglin said his com­pany had planned to pay it as part of the pro­posal, but the early ter­mi­na­tion talk has de­layed that pay­ment un­til the lawyers and of­fi­cials can meet.

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