14 - Airport Management-Fixed Based Operator Full-Time Employee

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Item No. 14 TO: Mayor, Mayor Pro Tem & City Council FROM: Grayson Path, City Manager SUBJECT: AIRPORT MANAGEMENT / FIXED BASED OPERATOR FULL-TIME CITY EMPLOYEE DATE: June 14, 2021 BACKGROUND: Jerry Richey of JR Aviation, Inc. has informed the City Manager that he would like to retire and thereby terminate both his Fixed Based Operator Management Lease Agreement as well as the Agreement for Airport Management of the City of Paris Municipal Cox Field Airport. Mr. Richey has served as the City's third party Manager/FBO for many years. His existing contracts are not set to expire until March 31, 2024. As Manager / FBO, Mr. Richey oversees all Airport operations in coordination with City Staff, including enforcement of FAA/TxDOT-Aviation Regulations, property maintenance, aviation activities, tenant and patron customer service, enforcing tenant leases, etc. Mr. Richey also provides the Fueling Operation as part of his FBO. STATUS OF ISSUE: The Airport Management Agreement upon termination would simply revert back to the City for overall management. The same is not true of the FBO Agreement. Mr. Richey has asked if the City would like first right to purchase his FBO Agreement. Under the terms of the agreement, Mr. Richey has the ability to assign this agreement to another entity, thereby selling his fueling operation to another third party, but he has willingly come to us first to see if we would like to purchase it. The City does not pay Mr. Richey for his FBO Agreement, but we do for the Management Agreement. Mr. Richey has given us an asking price of $89,000.00. With this, we will obtain ownership of two fueling trucks, some small equipment (ex: air compressor, tools, office supplies, etc.), and would buy his company out of the remaining contract. Given the annual listed net profit of JR Aviation as supplied by Mr. Richey through his tax returns as well as our estimated value of the