City may terminate airport FBO

COVINGTON - City officials are considering taking over operations of the Covington Municipal Airport for economic development reasons.

At Monday night's City Council meeting, the council authorized City Attorney Ed Crudup to look into an early termination of its contract with fixed base operator Atlanta East Aviation, owned by Dixie Jet Inc.

City Manager Steve Horton said he believes the contract expires in 2019. Early termination would require 90 days notice and the payment of a termination fee.

The council requested Crudup and the attorney for Atlanta East Aviation meet to determine that fee.

Mayor Kim Carter said in addition to the rehabilitation ongoing at the airport, there are plans to pave additional taxiways on the southeast side of the airport, construct a new terminal building and new hangers and move the entrance to the airport to the southeast side near Nisshinbo. The city purchased more than 100 additional acres to bring those plans to fruition.

These projects were identified in the city's Airport Layout Plan and Capital Improvements Plan and will be funded through state and federal funds as well as local dollars, she said.

"We have invested a lot of money and time, and we feel like we would be in a better position to control our growth rather than leaving it up to third party," Carter said on Tuesday.

She added that the airport is an economic development engine for the city and county.

"There's a lot of reasons why you're in the airport business. It's vitally important to economic development. A lot of industries use it to get their executives in and out. The proximity to the industrial park is what makes it so appealing," she said.

Carter said few airports are run on the FBO model the city uses.

"Whether the city will ultimately run the airport, we don't know. We are investigating having some sort of authority run the airport with membership from the city and county," she said.

The FBO leases facilities from the city. The city is already in charge of maintaining the grounds, so there would be little additional cost there, Carter said.

Last month, Steve Horton reported to the council that Atlanta East Aviation insurance had lapsed as of July 24, a violation of the airport operating agreement the operator has with the city.

Horton said he wrote a letter giving Atlanta East, which is owned by Dixie Jet Inc., 10 days to reinstate insurance, a deadline that was not met.

FBO Manager Rusty Anglin said the lapse was the result of an error on the part of an insurance underwriter. Once the error was discovered, he said the policy was reinstated and was made retroactive to July 24. The policy has been paid through January, he said.

The council agreed to terminate the contract contingent upon another review of it by Horton and City Attorney Ed Crudup.

The review found that the contract had not been violated, because Atlanta East's bank had an additional 30 days to correct the problem and the insurance was reinstated during that timeframe.

Based on that finding, Horton and Crudup advised the council it would not be appropriate to terminate the contract for lapse of insurance. But the council agreed to allow the attorney to look into an early termination.

Horton added that he has received calls from aviators with planes housed at the airport concerned about payment of rent. The contract has not been terminated, and for now, business is carrying on as usual, Horton said.

Crystal Tatum can be reached at crystal.tatum@newtoncitizen.com.