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Airport mediation settled at $600,000
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A mediation agreement calls for the city of Covington to pay $600,000 to airport operator Dixie Jet Services for the company's business records and equipment.

The Covington City Council approved the agreement Monday, and it is expected to be signed by both parties any day, according to City Attorney Ed Crudup. Once signed, Dixie Jet will have up to three days to remove any equipment it owns, and the city will assume operation of the airport, most likely by Wednesday.

The council voted to terminate its contract with Dixie Jet in September, nine years before the contract was set to end. The early termination clause called for Dixie Jet to receive more than $367,000 for its office building and large hangar.

Dixie Jet Owner Bob Riddell threatened litigation because he said he had invested millions in the airport. He asked the city to enter into mediation to come to a compromise. The city will pay Dixie Jet both the $600,000 and $367,389, Crudup said. The city paid the mediator $740.

"I'm very disappointed, really, overall with how it was handled from the get-go. I don't want to whip a dead horse. I am glad that we came to a mediation agreement everybody can agree to. It's still a tremendous loss to me personally, but I'm thankful for the fact I can pay off at least some of my bills and get out with what I have," Riddell said Thursday.

City Airport Engineer Vincent Passariello said the city will hire five contract employees, including a supervisor, three full-time and one part-time worker. The employees will be hired through a third-party firm and will be likely kept on as needed, Passariello said. At least some of the employees are expected to be holdovers from Dixie Jet.

The city will either continue to operate the airport, hire another third-party operator or turn over control to the airport authority. The authority route seems to be most likely, but the council must first appoint members.

The council also approved a revised airport budget Wednesday that calls for the city to lose about $200,000 by operating the airport this fiscal year. Expenses are projected at $507,840, with revenues at $300,000.

The budget includes some one-time purchases, and if the city can rent out some offices at the airport, it could bring in an additional $48,000, Passariello said. His salary and expenses are included in the operating budget, despite the fact he was originally hired to develop the airport, not necessarily run it. Finance Director Leigh-Anne Knight said the city was being conservative with its budget numbers.

Passariello expects the airport to eventually make a profit. One key will be to build more hangars at the southeast end of the airport, where a new entrance and terminal building are planned. The hangars will bring in more lease revenue, and the city will sell more fuel as the airport adds customers.