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"Residents: Colorado FBO should be privatized"



Tuesday, July 19, 2005

Residents: Airport FBO should be privatized
By Katharhynn Heidelberg
The Montrose (CO) Daily Press 


MONTROSE - Residents to county: Privatize the fixed-base operator (FBO)
services at Montrose Regional Airport. 
 
Eleven people, from FBO candidates to pilots, said the FBO review committee
had erred in its recommendation last week that the county retain control of
FBO business. Still, because of a packed July schedule and the number of
issues raised during Monday's county commission meeting, commissioners
deferred saying yea or nay to privatization until Aug. 15.

"I think the FBO in this town is a disgrace and an embarrassment and I can't
believe it's been this long we decided something has to be done," said
Montrose resident Patricia Vitela. "I'd like to see privatization take
place. I don't care who does it. I think we need someone who knows what an
FBO should be."

The county had sought proposals from private FBO businesses to provide
general aviation services including fuel, catering, mechanical repairs,
tie-down options and more. It received proposals from locally owned JetAway
Aviation and Albuquerque-based Jet Center Partners, each of which promised
larger, better facilities with more amenities. In return, they said they
would require 30 to 40 year leases in order to make their capital
investments worthwhile. July 12, however, the FBO Request for Proposal
Review committee recommended the county pass on both and instead improve the
existing facility (through debt extension on the new terminal's financing)
in order to save millions in net revenue. An alternative recommendation was
to award the FBO contract to JCP for a five-year period.

"We spent a lot of timeŠweighing options," Montrose Airport Manager Scott
Brownlee, who was also a review committee member, said. He later clarified
that he did not chair the committee. "It wasn't a recommendation that was
entered into lightly."

Brownlee read from the FBO RFPR's memo, which cited fears that both
proposals would cost the county money and lock it into lengthy lease
agreements.

JCP's Kevin Scott said those fears were unfounded.

"We question the analysis that determined through privatization there would
be a substantial loss of revenue for the county," he said.

JCP substituted the actual dollars it would pay in place of figures provided
in a consultant's comparison of cash flow between a county-operated and a
private FBO operated by JCP.

"The net result of that is a net gain to the county of $193,000," over a
six-year period, Scott said, adding that the consultant's analysis didn't
take into account increases in property tax revenues and potential land
rates. "This is by any measure the most conservative possible set of numbers
we could give in this projection."

JCP also wanted the county to justify its report that the current FBO, MTJ
Services, generated $600,000 per year, claiming the county hadn't factored
depreciation and numerous other costs into the figure.

"It's the equivalent of owning a car, putting gas in the tank and saying:
'All it costs me to operate this is gas,' and then one day you need brakes
and tires. I think what's right for your constituents is that you accept or
reject this proposal based on what we are offering," Scott said.

JetAway owner Steve Stuhmer also said the county would gain, rather than
lose revenue by privatizing the FBO.

"The memoŠincluded no substantiation whatsoever for the assertion (that)
privatization of the FBO would cost the county millions of dollars," he
said, reading from a prepared letter. "JetAway clearly demonstrated the
county's net revenue would increase from FBO-related operations by
privatizing, not decrease by millions of dollars as suggested."

Stuhmer also said the committee had misrepresented JetAway's proposal by not
referring to "material facts that negate any perceived violation of the
TABOR amendment."

The committee had said JetAway's proposal to deed its ground to the airport
and lease it back would create a multiple fiscal year in violation of the
Taxpayers Bill of Rights legislation.

Stuhmer said both his and JCP's proposals would provide services the county
could not, which would in turn attract more business; a belief echoed later
by Montrose County Economic Development Corp. Director Sandy Head and
restauranteer Don Wagner.

He criticized the committee's memo statement that continued county operation
of the FBO was the best financial alternative. "That's paramount (sic) to
leaving all the county roads dirt if you don't mind the dust," Stuhmer said.

Head pointed to several letters from business and civic organizations that
supported a private FBO. "They (JCP or JetAway) are going to market to a
bigger picture," Head said. "Montrose is on the direct flight path to areas
such as Los Angeles. If you privatize the FBO, these entities are going to
be marketing the facility so we have much greater air traffic coming into
the community."

Wagner agreed, imploring the commissioners to consider the "trickle down
effect."

"If you support privatization, you support free enterprise," he said.

At least two pilots, Tom Cheney and Pat Blackwelder, also spoke in favor of
privatization.

As to the committee's lease-length concerns, Stuhmer said it wasn't
unreasonable to seek a 40-year agreement with the county. "There's not an
FBO business in the country that would invest the capital required for a
lease period of only five years," he said.

Real estate agent Dave Kienholz later said leases usually come with
performance clauses that would protect the county if the FBO didn't keep its
promises.

Audience members also criticized of the makeup of the review board, which
included seven county or airport employees. "It seems to me that many of
them are employees of the airport, so I'm wondering how objective they could
be in their reports," Vitella said.

No committee members other than Brownlee spoke at the Monday meeting.
Commissioner Bill Patterson serves the committee in only an advisory
capacity.

After hearing more than an hour of discussion, the commission moved to slate
its vote Aug. 15. "We want to take time to consider all the information,"
Commissioner Dave Ubell said. "We need to come to a decision."


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