07-F Cox Field Fuel Truck - Laserfiche WebLink

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The next reference to the fuel truck is similarly found in an update of the Fixed Base Operator Lease Agreement approved by adoption of City Council Resolution No. 93-012 on February 4, 1993. In that agreement, again in Article VIII B., the previous arrangement is apparently preserved in substance, but the dollar values of the truck (and from all appearances it is the same truck) have been changed to reflect that the City would now be obligated to pay what is recognized as the truck's final salvage value of $6,000 if the truck was obtained by the City in the event of Richey's default on or after March 12, 1997. The clause again provides for Mr. Richey to deliver the title to the City or to show the City as a lienholder thereon. Finally, the City approved another new Lease Agreement with Mr. Richey by adoption of Resolution No. 98-153 on November 9, 1998. In this Lease Agreement there is no direct reference to the fuel truck, either as a security interest or as a retained interest by the City. The only reference to a fuel truck is found under Article II, paragraph 2, on page three (3) of the Lease Agreement, which provides that Mr. Richey as Lessee would be obligated to maintain at least one truck with aviation or jet fuel dispensing equipment meeting all applicable local, state, and federal regulations. No reference is made to the City retaining title to the truck as security under the lease. However, the mere fact the new lease does not reference the City's continuing to retain the title does not necessarily resolve the issue. If the intent had been to release Mr. Richey from any obligation to continue to provide some measure of security for his performance, the current contract is silent either way. As a consequence, the only entity authorized to exercise the prerogative to release the City's security or retained interest in the truck, upon a finding that the intent of the City was to do so as a result of the new Lease Agreement, is the City Council. In addition, the issue of whether or not some sort of continued security to assure performance by the F.B.O. is necessary is likewise an issue which requires City Council action or implementation. To that end, enclosed with this agenda information sheet is a copy of an invoice previously forwarded to the F.B.O. in June for costs incurred by the City in cleaning up a fuel spill at the airport. The cause of the fuel spill was clearly the negligence of an employee of the F.B.O. who apparently was using the same fuel truck to fuel an aircraft, and subsequently caused a fuel spill. There appears to be some dispute as to the amount of fuel actually spilled; information from the F.B.O. is that the amount was twenty-five gallons or less, but the Fire Marshall has indicated the amount of fuel spilled was in the neighborhood of seventy-five to eighty gallons. Nevertheless, the cleanup required the normal environmental measures to complete, including the removal of contaminated soil, etc. To date, the City has not been paid for these invoiced costs, even though the negligence and cost is clearly the responsibility of the F.B.O. Obviously, some sort of security or performance bond which is customary in a business arrangement such as that between the City and the F.B.O. would be the City's ultimate protection against this kind of issue. Unfortunately, no such bond is now required under the current F.B.O. contract; however, in order for the Council to be aware of all the facts related to this issue, a copy of the invoice forwarded to the F.B.O. is attached along with the other materials included with this agenda information sheet.