Council breaks off airport fuel contract

by Sam Matthews  02.07.14 – 10:00 am

After receiving what they considered inadequate responses to three demands that Steve Stuhmer of Turlock Air Center live up to his contractual obligations for operating fuel service at Tracy Municipal Airport, members of the City Council pulled the plug Tuesday on Stuhmer’s contract.

The council, on a unanimous vote, terminated the contract and returned operation of the fuel service at the city-owned airport to the city staff.  Stuhmer had done business at the local airport since January 2012 as Tracy Air Center.

Ed Lovell, a public works management analysis who oversees airport operations, told the council that the city should be able to begin operating the fuel service within weeks. Pilots will be notified by the Federal Aviation Administration that, in the meantime, fuel will not be available at the local airport.

Before the council took its action, several members wondered if the city should give Stuhmer several more weeks to complete provisions of the contract. But Lovell, citing inadequate responses to three city default notifications, recommended that the termination be immediate.

He noted that the city had notified Stuhmer that he was in default July 18 — within a month of approving an amended 25-year contract in June. Additional default notifications, listing details of noncompliance with a number of issues, were sent Sept. 19 and Oct. 31, the city staff reported.

Many of the issues dealt with an absence of attendants to help fuel customers, requirements for developing spill-safety plans, incomplete insurance coverage and lack of fuel sales reports to the city.

In addition to the fuel-service problems themselves, the council noted that Turlock Air Center’s standing as a limited liability company with the state Secretary of State had been listed since March as “suspended.” That rating raised the question whether Stuhmer was legally qualified to enter a contract with the city.

Stuhmer was not at Tuesday’s City Council meeting, reporting that he was traveling on business, but he sent an email to the Tracy Press on Wednesday reiterating that the suspension had been made in error.

Noting that Councilman Charles Manne had seen the “suspended” listing on the Secretary of State’s website, Stuhmer said, “It was game over at that point. He (Manne) made a motion to terminate our contract and rest is history.”Stuhmer added:

“I am hopeful City Council members will reconsider their decision to terminate TAC’s agreement and instruct staff to discuss resolution with me before taking away my business,” he said.

City staff reported that Turlock Air Center’s status with the Secretary of State was checked Tuesday and was still listed as “suspended.”

Before the council meeting, City Attorney Dan Sodergren received a letter from Denver attorney Thomas Byrne, representing Stuhmer.

Claiming that Stuhmer had adequately responded to the city’s third default-notification letter of Oct. 31, Byrne said the staff report recommending termination was “an unreasonable and unfair action which violates the provisions of the fuel service agreement and the obligations of the city to deal in good faith with Tracy Air Center.”

He asked for time to give Stuhmer a chance to be heard before any council action was taken. He also warned that if the council acted to terminate the contract, “TAC will be forced to proceed with pursuing all its available remedies through litigation.”

Sodergren said the city staff had tried to meet with Stuhmer “on at least three occasions over several months.”

“The agreement has a separate section dealing with termination and giving 30 days’ notice of default before terminating, and clearly we’ve done that in this case,” Sodergren said. “I don’t think terminating the agreement is in any way unreasonable.”

• Contact Sam Matthews at 830-4234 or shm@tracypress.com.


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