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Posted: July 28, 2010 12:00 a.m.

City keeps contract with airport operator

Will watch operation closely

Once again, the Covington City Council decided it would continue to contract with current operator Dixie Jet Services to run Covington Municipal Airport — for now.

Months of discussion about either revising the contract or terminating it culminated in a Tuesday work session, where the council ultimately decided to give Dixie Jet Owner Bob Riddell another chance.

Mayor Kim Carter repeated her concerns Tuesday that the current model is antiquated, not operationally, but from an investment standpoint. She said previously the city and Dixie Jet would both invest in the airport, constructing new buildings and infrastructure. Riddell has repeatedly mentioned his desire to recoup the $2.5 million he’s invested in the airport.

However, Carter said she believes the city can now fully fund most infrastructure improvements itself, using city funds and a variety of federal and state grants.

In addition, Carter and City Manager Steve Horton said they’ve had multiple complaints from customers, and Riddell has been late paying rent in the past and still has an $8,000 stormwater bill due. Carter said in light of that, she didn’t believe Dixie Jet had the financial wherewithal to properly expand the airport.

She said the airport is a key aspect to both the county’s economic development and 2050 Build Out plans. She said Dixie Jet’s employees are the first faces visiting industry executives see, and she wants to ensure they present the best front possible.

However, Riddell said the financial problems are the result of his company effectively being shut down for 20 of the last 48 months because of two separate major runway construction projects. During that time, Dixie Jet was essentially making no money, and he had to take personal loans in order to cover costs. He estimated the most recent round of construction had cut his earnings by 40 percent, while the economy dealt him an equal 40 percent blow.

He said his company is willing to work with the council any way it can, but the council members have to realize he really hasn’t been given a continuous time period where he’s been free to operate. Since Dixie Jet took over airport operation in 2001, he said the airport has also had to deal with lawsuits with the city of Oxford, and most recently threat of early termination from the city.

Under the current contract, the city is able to cancel its contract with Dixie Jet for any reason but does have to reimburse the company. However, the city and Dixie Jet have disagreed with how much the reimbursement should be. In addition, without knowing whether he’ll recoup his investment over the remaining 10 years of the contract, Riddell said he has little incentive to continue to invest significant dollars.

Riddell recently sent a revised purchase agreement, hoping to get the early termination clause removed. He offered to give the city 5 cents to 10 cents per every gallon of gas pumped in exchange for removing the clause, but city officials balked.

However, councilmen Chris Smith and Mike Whatley both said they believed Riddell deserved a second chance, now that the latest runway project is complete, and the runway is longer and the airport better equipped than ever before. However, they both expressed concern about customer service and said they would likely terminate the contract if further problems were discovered.

Carter and Horton said they both believed that Riddell and Dixie Jet Manager Rusty Anglin provided a great amount of aviation experience, expertise and local knowledge.

The original contract was signed 10 years ago and has another 10 years remaining. Horton said he’s seen both sides, including complaints and how Riddell’s business has been damaged.

At the work session, he said was planning to hire a city employee to work at the airport, to both provide support for Dixie Jet and ensure that the company is holding up its end of the contract. However, the council moved into executive session to discuss specific names for the position.

Horton said he would not support removing the early termination clause because it provides the city with the most options to protect taxpayer money.

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