Airport, county take steps to work out lease agreement

Tuesday, November 20, 2012

BERRYVILLE -- Carroll County officials took steps Monday to bring the county airport into compliance with Federal Aviation Administration mandates and avoid having to refund over $1 million in federal grants.

It came to light last month that the occupation of an airport facility by the county Office of Emergency Management put the airport in violation of FAA grant obligations stretching back 20 years.

Airport officials have said the noncompliance, if not addressed, could jeopardize more than $1 million worth of federal grants received by the airport.

According to the FAA, County Judge Sam Barr is ultimately responsible for ensuring airport compliance. Former Carroll County Office of Emergency Management coordinator Jason Morris said he and the judge had been aware of the problem since at least last summer, and Airport Commission Chair Dave Teigen said he had attempted to speak with the judge about the issue on two separate occasions.

However, until recently, nothing had been accomplished.

That began to change Monday, when Barr met with airport commissioners to discuss the matter. Joining them were current Carroll County OEM coordinator Nick Samac and Justices of the Peace Ronald Flake, John Reeves, and Don McNeely.

The officials tentatively agreed to allow the OEM to continue occupying the facility -- at least for the next year. In return, the county would provide $6,600 of road work to the airport. The commissioners voted to work this agreement into a contract, which then must be approved by Barr and -- crucially -- by the FAA.

At the beginning of the meeting, Teigen explained that the airport had three general sources of revenue.

The county provides some money, he said, which is used to pay the salary of Airport Manager Sheila Evans and for other operating expenses. The airport also generates its own revenue -- through hangar rentals, fuel sales, and the like.

This money is, in turn, used to obtain matching grants from the state and federal governments, and these grants are the largest source of revenue for the airport. All those dollar signs carry certain obligations, however.

For one, the FAA requires the airport to be as self-sufficient as possible. This, Teigen said, meant the airport could not allow the OEM, or any other county office, to occupy their facilities without some kind of compensation. To do so would deprive the airport of the revenue they could receive by leasing that same facility to another tenant.

Additionally, Teigen said the FAA requires airport facilities to be used only for aviation-related purposes. The OEM does not meet either of these criteria.

That said, Teigen added that the airport could request the FAA make an exception to the last rule. To do so, Teigen said they would have to develop a contract showing the county was compensating the airport for the lease.

"My opinion is that the Office of Emergency Management should be housed at the airport," he said, "because, if all other access areas are shut down, it's going to be helicopters or airplanes that's going to bring in necessary emergency equipment."

"We're not trying to kick you out," he continued, addressing Samac. "All we're trying to do is get in compliance."

Toward this goal, Teigen noted two problems with the OEM's occupation of the facility. There was, first, the lost rent revenue. However, beyond this, he said the airport had also been paying the electrical bills for the facility since 2009, when the OEM moved in.

As for the lost rent, the officials agreed tentatively to a lease of $450 per month. This, Teigen said, was the amount paid by the previous tenant -- though Airport Treasurer Lonnie Clark said this figure was low.

Then there was the electric costs. Just since November 2010, Teigen said, these bills amounted to $1,442.98. This might not sound like much, he added, but the airport budget is "very, very tight." County officials tentatively agreed to provide another $100 per month for these costs -- bringing the total compensation to $550 per month, or $6,600 annually.

JP John Reeve asked whether the FAA would require the airport to collect back rent from the county, or whether it would be enough to simply begin paying rent from here on out.

Teigen responded that he was not sure how the FAA would view the situation, though he would like to at least recoup the costs of the electricity.

Dan Clinton, an engineering consultant for the airport with extensive knowledge of FAA requirements, said he thought the FAA would be more concerned with bringing the airport into compliance moving forward than with collecting back pay.

JP Ronald Flake then asked whether the county could provide payment in the form of some kind of in-kind labor.

"I would suspect that the county can provide services to the airport cheaper than the airport can get them," he said.

"The money that we pay you can easily be swallowed in the budget," he continued -- addressing the commissioners, "and doesn't really mean anything, but it seems to me if we could work out some kind of in-kind services to the airport, whether its some mowing or road work ... that might be of more value to the airport and to the county."

Airport Manager Sheila Evans responded that cash payment differed from in-kind compensation, because the cash could be used to obtain those crucial matching grants.

"Ideally the commission general fund is what we use ... to procure matching grants," Teigen explained. He added that these grants are typically awarded in either 90-10 or 80-20 ratios, with the airport paying the lesser amount.

"If we have to pay $1 out from our commission general fund," he said, "that's costing us $9 of additional income that we could use to expand this airport."

The commission ultimately agreed, however, to accept payment in the form of in-kind labor.

During the meeting, Teigen suggested that one of the airport's biggest needs was for the back entrance to the airport to be paved.

Evans said she had been unable to complete the project to date because she could not obtain any federal or state grants for road work on airport property.

The road was needed, she said, because the airport's principle growth was on that side of the runway, which is inaccessible from the front entrance.

Evans said there was another road on the airport that badly needed work, as well.

Teigen said the airport attorney would draft a contract, which he estimated would be ready by January.

With an agreement in sight, Barr said he was satisfied.

"I'm willing to do anything I can to put everybody in compliance," he said.

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