COVINGTON -- The city of Covington will pay airport FBO Dixie Jet Service Inc. a $600,000 settlement to terminate its contract early.
The settlement was approved by the City Council following an executive session Monday night. In exchange, Dixie Jet will leave behind business records and some equipment and office supplies, said City Manager Steve Horton. The settlement is in addition to a $367,389 early termination payout required by contract, bringing the total pay out amount to nearly $1 million.
Dixie Jet owner Bob Riddell threatened litigation after the council voted to terminate his contract, which is not set to expire until 2019, and requested an attempt at settlement through a professional mediator.
Horton said the city could take over operations as early as Tuesday. He said he'll urge the council to move forward with turning over operations to an airport authority. Legislation creating the authority is already in place, but city officials have yet to appoint members.
"I think an airport is a good economic development tool for a community, but I think it's better suited to be run by an authority," Horton said.
Riddell said Wednesday he's ready to move on, though the experience has left a bitter taste in his mouth.
"Everything has not been signed, but there has been a resolution," Riddell said. "Am I happy with the settlement? No. Am I happy to be out of here? Yeah."
The council's vote to terminate came on the heels of a recent fuel shortage at the airport. City officials were notified that one of the airport's customers, Standridge Color Corporation of Social Circle, had been unable to get JetA fuel at Covington Municipal Airport and had to fly to another airport to fuel up. Fuel was delivered the following afternoon. There have been ongoing complaints regarding the service of the FBO, according to city officials.
But Riddell said he thinks some officials were looking for a reason to shut him down in order to take over operations, and said the airport hasn't been running as it should.
"They let the tail wag the dog all the time. They let the people who are hobbyists run the airport. The people who have made a real commitment to the airport, they don't listen to them," Riddell said.
Riddell has started a charter flight school and aircraft management service in Lawrenceville.
"I'm pretty resilient. We will pick up the pieces," he said.
Riddell expects to sign the settlement agreement with the city any day and said he's required to be off premises within three days of that happening.
The council has also approved a request by airport engineer Vincent Passariello to amend the airport budget from $7,162,956 to $7,620,606 in preparation of taking over operations.
Fuel costs are budgeted at $118,750, but sales are budgeted at $174,750, meaning a profit of about $56,000 is anticipated.
"This is a money-making business we're getting into," Passariello said.
Expenditures were also increased by more than $163,000 for salaries of three part-time staff members and a supervisor, along with around $25,000 for one-time purchases such as a courtesy vehicle for use by pilots, computer equipment and a golf cart.
In other airport news, the council approved the purchase of a new rotating beacon that will sit atop a water tower located next to General Mills. The initial cost estimate for a new beacon was $150,000, but by locating the beacon on the city-owned tower, that cost has been reduced to $18,000. Pilots have complained about visibility of the current beacon.