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

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equipment vs. having to replace it on our own, and given the FBO contract has another three years remaining, City Staff believe this $89k to be a fair asking price and would recommend approval. In addition, the City will need to purchase an approximate 10,000 gallons of fuel for a price of approximately $25,000 - $30,000. Mr. Richey has agreed to sell us the fuel for the price he paid. We would then turn around and begin selling it ourselves, thus recouping this upfront fuel expense. The actual number of gallons and price will be determined based on the day we set in the agreement as fuel is continuously being purchased and sold at the airport. If the City were to purchase the FBO and equipment, it could assume control of the Airport through a Full -Time employee. This will provide the City with direct oversight and control of the Airport instead of through a contracted third party. The City Manager would immediately set out to advertise and hire a new FT employee to take on this role, working with Jerry Richey to carry us over to this point and then transition with the new employee. We would estimate approximately three months from start to finish, assuming we can find a FT employee to hire. If we cannot find a FT employee, we may have to revisit hiring another third party contractor. BUDGET: After examining the expenditures and revenues of both JR Aviation and the City of Paris, making assumptions for employment and other expenses, we estimate reducing the deficit for the City of Paris by as much as $40k/year. The City would take on full ownership of fuel sales through this transaction. There is much work to be done to create an efficient process, but we believe that the potential rewards — though not without risk — are worth pursuing. OPTIONS: 1. Approve termination of the Airport Management Agreement and FBO Agreement, purchasing the FBO Agreement from JR Aviation for a total of $89,000.00 plus the cost for the fuel of about $30,000.00 (TBD), hire a full-time employee to become the next Airport Manager and FBO, and authorize the City Manager and City Attorney to prepare a Bill of Sale to be brought back at the next City Council meeting. 2. Disapprove, edit, and/or request additional information on any of the above. RECOMMENDATION: 1. Approve termination of the Airport Management Agreement and FBO Agreement, purchasing the FBO Agreement from JR Aviation for a total of $89,000.00 plus the cost for the fuel of about $30,000.00 (TBD), hire a full-time employee to become the next Airport Manager and FBO, and authorize the City Manager and City Attorney to prepare a Bill of Sale to be brought back at the next City Council meeting.