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HomeMy WebLinkAbout01-10-1993 Regular Meeting61 The Airport Board of the City of Fairhope met Monday, January 10, 1993 at 8:OOAM at the City Administration Builsing, 161 N. Section Street. Present: Chairman Sue Mason; members Khim Vera, Bill Payne, Mike Baugh, Robert Colling, Andy Huggins, City Atty. Tut Wynne and Secretary Betty Rivenbark The minutes of the December meeting were duly approved as written and a financial statement was given. The topic of discussion today was the situation with our FBO, Mr. Clark. Andy Huggins was going to check from the last meeting and see if our rent was in line and what going on at other airports. Andy said he had called several and that there was no standard being followed on any of them. He did say that nothing he talked to compared to what we have in the way of facilities. He said there were all different kinds of arrangements going on, all combinations. And that all were crying a sad song because of the economy. He said Troy gave the best report, they just got an Army contract from Fort Rucker and Fort Payne, because of the group "Alabama" and being a textile town was doing okey. That the figures they quoted were .03 to .13 ft. on a monthly basis. Ours is running about .11 ft. He did say he had not compiled a report but would be glad to write down his findings to put with the city records. Sue said that would be fine. He did say that the T-hangars were comparable to everyone else. Sue said the Mayor was in and said we need to start making our debt service. That we cannot accept Clark's offer of $2,000 a month. A discussion followed on what we found when the auditor's check was made, there were no journals or ledgers to check. Sue read from a statement made regarding Mr. Clark's bookkeeping from the auditor we sent to check. Mr. Clark came in at this time and Sue shared with him the auditor's report. He was asked if he could give us an update on the sale of the Bay Minette property and he said no. The paper reported that it is still a go thing but he could not verify that. Joe said he now feels that he has enough employees and tenants on airport that he can break even. He feels that he has bottomed out and now on the rise. He said he is open to suggestions from the board. Sue said we have worked hard with him, but we need to know what he plans to do to reduce the arrearage he now has and pay his rent. That we are to the point now we will have to renegotiate the lease. Mr. Clark said if the economy stays as it is it will be 1 year before the airport starts paying for itself, that he has lost 200,000 the 1st year and 300,000 the 2nd year. He said if we can find another operator who can make a go of it he will be happy to help, but if is not what he wants to do. Tut asked him what he could pay for future rent if we renegotiate. Mr. Clark said $2,000. Tut pointed out that he is in arrears now $67,000 and will be $90,000 before the month is out. Can he do anything now. Mr. Clark said no. Tut asked him if he would be willing to give us a note on the arrearage? Mr. Clark said he had no problem with this. Tut asked what type of collateral did he have to secure note with. He said there is equipment at the airport now worth $3,000,000.00. He said he, would like to keep Bay Minette out of everything. Mr. Clark asked for a breakdown of what he owes and in turn we asked about using equipment, airplanes to secure the note. Mike Baugh, Bill Payne offered to go out and check equipment to determine what we wished to put on note. Tut was asked how long would it take to get the note going. He said as soon as we let him know what collateral would be he could get it going, probably have something by end of the week. Joe was asked more specifics about the equipment he has and about his airplanes. He said he has 3 and they are free and clea 62 Tut said he saw that we needed 2 things - a completed itemized statement what owed and we need to know specifics of equipment we will take as collateral. Sue told him that we are trying to secure the city's interest, not have the world's largest garage sale. Mr. Clark was asked again if land sells in Bay Minette what portion could he give City to reduce debt. He said he would give the city half which he would expect to be $75,000. Tut said all we need is enough collateral to secure note, 3-4 pieces of equipment of value to cover us. Mr. Clark said he is optimistic about things. Tut asked him if any of the equipment was pledged, he said no, that he only owes the city. He was asked how many aircraft he has and he replied 3, a Cessna 188, Cessna 152, Cessna 182. Sue said to make the note we need to give Mr. Clark a breakdown of finances get from him an inventory of parts we plan to use as security and then Tut will prepare the note. Tut said it would be a promissory note, guaranteed by Mr. Clark for particular items of value, structured to begin - Sue said we would have to talk about that. Joe said he could not pay anything for at least a month. Mr. Clark was excused from the meeting. Sue said the next step is get going on the inventory. Sue said the determination of value on what equipment we use as collateral will be a tough call, get Mike, Bill to help, maybe have something by the end of the week. A meeting was set for 2 weeks from today, on January 25, 1994. It was further noted that at some point in the future we will renegotiate the lease. Sue made a motion that thru the offices of the city attorney the board shall take a security interest in as much equipment as it takes from FBO to secure our indebtedness and that the note will be due 50o the Ist year and 50% the second year at an interest rate to be set. Mike Baugh seconded and motion carried unanimously. There being no further business, meeting was duly adjourned.