Airport lease agreement closer to completion

No final decision reached

By Pamela Cote Staff Writer pamela Published: Thursday, November 3, 2011 10:42 AM CDT

The rewritten lease between fixed base operator Region Air and the Upper Cumberland Regional Airport was the main topic of discussion at the airport board meeting on Nov. 1. The board and FBO have been in the process of rewriting the lease for over 18 months and it is now in the final stages of altering. The board hopes to have the final document complete by the next board meeting scheduled for Dec. 6.

The four local governments-Putnam County, White County, Sparta and Cookeville-contract with the FBO to provide all the services at the airport. Region Air purchased the previous fixed base operator’s interest at the airport and inherited a six-document lease with the purchase. The airport board hopes to simplify the lease into a single document.

Pilot representative Will Roberson explained to the board the changes that have been recently made to the lease agreement, such as the 2028 lease expiration date with an option for two 5-year renewals. Region Air is also requesting that they be allowed to subcontract certain tasks, such as maintenance or flight school training, which has been incorporated into the new lease.

While the board and FBO agreed to all other changes, one element of the lease was up for debate between the two. The board has the right to update their minimum standards whenever the need arises, however, Region Air requests that certain items not be considered eligible for modification because it could potentially significantly alter the terms of the lease. Eric Walker, manager of Region Air, explained, “The lease is an asset to us. Us planning ahead and deciding what to do all revolves around knowing where we stand with the airport and that’s why we feel it’s important to protect those items.”

Some of the items that the FBO requests to be non-modifiable are the term of the lease, the leased premises, the required and authorized services, maintenance and repairs, fees and payments and hours of operation.

Roberson drew the attention of the board to the issue of the hours of operation, currently set at 7 a.m. to 7 p.m. He stated, “If that were to go into the category of not modifiable, we can’t require the FBO, absent of another agreement with them, to stay open until midnight. That may not be such a big deal in 2011, but in 2021 we don’t know.” Roberson continued, “Sincerely, I’m not speaking for it or against it, I just want the board to make an informed decision about whether this is in the best interest of the relationship between the two.”

Walker countered, “If that business is there, then common sense prevails that the FOB is going to extend its hours and include those people. And as of right now we have call-out service 24 hours for just a little extra fee and you’re letting the free business enterprise regulate the hours of operation to an extent. If there’s no demand from the hours of 7 to 12, then why should the FBO be required to be open? And that’s just a couple more hours a day, but that’s a considerable difference in our operating expense. Payroll is our highest expense and when you talk about extending just one hour a day, that affects us in the thousands.”

While Walker found the lease acceptable and was prepared to sign it as written, the members of the board decided not to vote on accepting the lease at this time, preferring to have more time to consider the stipulation of the non-modifiable items. Roberson concluded, “We are dramatically changing the FBO landscape here at the Upper Cumberland Regional Airport and I think it would be important for each board member to read this and understand it before we go on to the next step. And we go to the next step.”

The board plans to readdress the hours of operation clause at the Dec. 6 meeting of the Airport Board and hopes to vote on the lease at that time.

Other items discussed were:

•The airport has still not received all sponsor funds from the air show held in September. There are $2,500 in funds that are still owed. All bills have also not been received.

• The air show operated at a loss of $1200 this year. While the airport board received $10,000 more in sponsor funds than last year, the cost of performers and fuel were higher.

• The pilot representative position, currently held by Will Roberson, will be up for election in December. Roberson’s first term ends with the next meeting of the airport board on December 6. The board is currently accepting nominations for the position until November 14. A letter containing the names of the nominees will be sent to all hangar tenants on November 15. The voting deadline is November 30. At the December board meeting, the new pilot representative will be approved.

•Engineer Richard Brink reported that the renovation on hangar one is progressing as expected. He recommends the purchase of a spare runway light regulator. While the purchase of the regulator would cost approximately $20,000, should the current regulator blow, it would reduce the amount of time of the airport would be out of service from 4-6 weeks to just one hour. The board hopes to receive grant money to purchase this spare. Motions were made to take bids for the regulator with the stipulation that grant money could be used for the purchase.

• The board voted to change the minimum standards of insurance liability from $5 million in coverage to $2 million.

Copyright © 2011 – The Expositor

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