COVINGTON - City officials are still pondering termination of the contract with Covington Municipal Airport Fixed Base Operator Dixie Jet Service Inc. and the possibility of forming an airport authority to handle future development and operations.
The City Council held a work session Thursday afternoon to discuss those options.
Council members appear to be at a consensus that formation of an authority to manage the airport would be beneficial.
City Attorney Ed Crudup said a majority of airports in communities the size of Covington are run by authorities, which act as a separate entity from the local government with their own bylaws and have the ability to sell bonds and generate revenue for capital improvements.
The city would still retain ownership of the property and assets and may have representation on the authority, he said. Formation of an authority would require an act of the General Assembly, he said.
Part of the authority's duties would be to carry out plans for future development of the airport that have been proposed in the Airport Layout Plan and the city's
Capital Improvements Plan.
Mayor Kim Carter has repeatedly said city officials want to be in control of growth at the airport.
Bob Riddell, president of Dixie Jet, said he has no objection to an authority. What Riddell said he doesn't understand is why an authority and his business can't co-exist.
"The city's ability to grow the airport is not diminished by having us as FBO," he said.
Carter said termination of the FBO contract is only one option the city is exploring, and acknowledged that there is nothing to prevent the FBO from continuing operations should an authority be formed.
But termination of the contract with Dixie Jet is not off the table, she said. When Dixie Jet became FBO in 1994, the city didn't have funds to build out the airport. But now things have changed, she said. The city has purchased 100 additional acres to perpetuate new growth, and, "We want to be in control of our own destiny," she said.
"I have nothing to do with airport growth. Nothing," Riddell said. "We provide service to customers. The city does not need to be in the business of running the airport."
"That's for us to decide," Carter responded.
Riddell questioned whether the city has had problems with Dixie Jet's service and claimed the majority of his customers are satisfied. Those who are not are running illegal operations at the airport, he said, including flight schools, charter services and commercial maintenance shops, activities he claims he's tried to stop over the years. Riddell said he's taken his complaints to the city in the past but no action has been taken.
City Manager Steve Horton said there is a disagreement over what constitutes illegal activity.
"Bob feels he has exclusive rights," to certain activities, but there is nothing in FAA regulations to back that up, Horton said.
Councilman John Howard said it's Dixie Jet's responsibility to handle violations of lease agreements with customers, not the city's.
Horton previously told the Citizen that he has received sporadic complaints regarding Dixie Jet pertaining to fuel prices and rental fees for tie-downs and hangars and problems with maintenance.
Lance Flynn, chairman of the Airport Advisory Committee, a city-appointed group that acts as a liaison between the city and FBO, said that there have been numerous problems with Dixie Jet over the years. The Airport Advisory Committee was formed due to conflicts with the FBO, he said.
A major issue is that fuel costs are higher at the Covington Airport than other comparable size airports, he said.
"It keeps transient business away. A lot of people with planes based at the airport will make a trip to another airport to get fuel," Flynn said.
Flynn said a majority of committee members would support an authority or city-run airport.
"The concept of a city-run airport and an FBO at an airport are not contradictory," he said, noting that DeKalb-Peachtree Airport has six FBOs and is managed by an authority. "A majority of airports this size operate in that way, with one or more FBOs."
If the city opts to terminate the contract, which expires in 2019, it will be required to pay a termination fee. According to Crudup, the fee should be based on an amortization schedule set out in the contract, calculated based on a $527,200 initial investment by Dixie Jet.
However, Riddell claims he's invested $2.8 million in infrastructure and improvements at the airport since he took over Dixie Jet in 2001, and that should be taken into consideration when deciding the fee. Dixie Jet's attorney and Crudup have yet to reach a consensus on that issue.
Howard is one council member who believes it's time for the city to take the reigns.
"I think in the long run it would be economically feasible for the city to run (the airport)," he said.
Horton said the city is not in discussions with other FBOs at this time. He also emphasized that nothing has been terminated yet.
"Everything is just as it was a month ago at the airport. It's business as usual, and we would appreciate people operating in that mindset," he said. "The only thing that's not usual is that (the airport) is shut down (for rehabilitation). Hopefully, that doesn't prove to be a long-lasting problem."
The council agreed to discuss the issue again at its Monday night work session, scheduled for 5:30 p.m. at City Hall.