COVINGTON -- The City Council approved a rate change for ground leases at Covington Municipal Airport Monday night.
Fixed Base Operator Dixie Jet Services Inc. has set a flat rate of 5 cents per square foot per month on ground leases, as well as an additional .034 cents per square feet per month to cover stormwater utility costs.
Previously tenants paid 4 to 8 cents per square foot, so for some, the flat rate would mean a decrease. But others who pay the lower rate have raised objections to what would amount to a 25 percent increase.
Lance Flynn, chairman of the Airport Advisory Committee, has been one of the most outspoken opponents. Flynn was not at the Monday meeting but City Manager Steve Horton said he spoke with Flynn and he indicated he was still opposed to the rate change because Dixie Jet is not providing any services to lessees, who own their hangars and are responsible for maintaining them.
The council tabled the rate increase earlier this month to research what other airports charge and services they provide.
According to Horton, the Madison Airport also charges 5 cents per square foot. Water and sewer taps are available but there is only one user who pays a separate fee for usage. No other services are provided.
Similarly, in Milledgeville, hangar ground leases are 5 cents per square foot. The airport handles grass cutting around the hangars and provides no other services.
In Paulding County, a hanger ground lease is 25 cents per square foot with no services provided.
In Barrow County, a hangar ground lease is 35 cents per square foot, with the county providing grass cutting.
Councilman Keith Dalton had previously requested the rate change be tabled until a comparison could be made to other airports. Dalton sad Monday his concerns had been addressed and he was comfortable with the rate change.
Dixie Jet will also assess a fee of .034 cents per square foot per month to tenants to pay the stormwater utility charged by the city of Covington. Dixie Jet Services Inc. President Bob Riddell said Tuesday the calculation was done on a pro rata basis. The charge is based only on hangar space occupied by the tenant.
"We pay our share of it and we have asked our tenants to pay their share as well," Riddell said, adding that stormwater fees to Dixie Jet average $3,000 annually. He said the charge to tenants will change as Dixie Jet's bill goes up or down.
The increase in monthly payments for lessees will range from $1.78 to $22.85.
Dixie Jet has fallen more than $6,000 in arrears on stormwater charges. Riddell said he is making arrangements with the city to pay the fees, adding that Dixie Jet is currently not generating income because the airport has been closed for months due to improvements that are under way. Riddell said it's unreasonable to expect Dixie Jet to be able make those payments when the airport has been closed 20 percent of the time the company has been FBO, due to various construction and improvement projects initiated by the city. He added the city has been working with him on a payment plan.
The council unanimously approved the rate change.
Riddell has also modified a set of rules and regulations he is implementing as conditions of lease agreements.
"There were concerns that we were trying to stand in the way of aircraft owners doing their own maintenance, which we've made clear all along we don't have anything against," he said, adding that new language will make it clear that aircraft owners will not be prohibited from working on or selling their own planes, but are not allowed to do so as a commercial operation.
"We only have 7.5 acres of close to 200 acres out there. That's what we have to make a living on. If anybody else wants to make a living on the FBO business, they need to talk to the city and work out a deal with them," Riddell said. "We have 7.5 acres we lease. For us to turn around and lease it to someone who wants to go into competition with us is just not very wise."
Dr. Jeff Dodson, who is co-owner of a hangar at the airport and recently complained about the rules and regulations, has signed a new lease agreement and said his concerns have been addressed following a meeting with Riddell.
"He readdressed the rules and that helped tremendously," Dodson said.
Dodson had complained that a required five-year lease term was too short, but he has now been allowed a term through 2019, the year the FBO's contract with the city expires. Dodson said he is also not opposed to the rate change.
While the city is responsible for approving rate changes, it is not within the city's jurisdiction to determine the terms of a lease agreement. However, Horton said he wanted it in the minutes that the rules and regulations should be applied equally to all tenants.