Commissioners Cite FAA Regs
MONTROSE – Unless new information – or new options – come to light, the Montrose County Commissioners will approve a contract with Majestic Skies as a second Fixed Base Operator at Montrose Regional Airport next Monday, April 21, after a public hearing.
With that approval, Majestic Skies will have an initial term of 20 years.
The FBO agreement was up for review at a heated public hearing Monday, April, 14, but the commissioners, in response to constituent requests, agreed to wait a week before making the final decision.
And while they agreed to postpone that approval for one week, the commissioners said that essentially, Federal Aviation Administration Grant Assurance regulations have already made the decision for them, because per FAA regulations 22 and 23, they must either sign the agreement with Majestic Skies or face significant penalties for not doing so.
“Unless somebody can bring me some information, signed in blood and notarized by the FAA, that there are other options, I will not change my mind,” Commissioner Gary Ellis said at the conclusion of Monday’s hearing.
Monday’s public hearing at Friendship Hall kicked off with a presentation from attorney Daniel Reimer, from the Denver-based law firm Kaplan, Kirsch & Rockwell, hired by the county for his expertise in dealing with FAA regulations. Reimer read FAA Grant Assurance regulations 22 and 23 aloud and then explained how they affect the county’s decision making.
Regulation 22 stipulates that the county, as the airport sponsor, must make the airport available for public use, on “reasonable terms” and “without unjust discrimination,” to all types of aeronautical activities. Regulation 23 says the county cannot permit exclusive rights for use of the airport, and that if a single FBO provides services on airport property, according to regulation 23, that FBO does not have an “exclusive” right to exist.
Given the space to grow at Montrose Regional Airport, Reimer said, the commissioners are effectively required to approve an agreement for a second FBO, if that FBO meets the county’s minimum requirements. The county, he emphasized, cannot base a decision on market demand. “It is not a valid consideration for an airport sponsor to look at market demand for an aeronautical product or service,” Reimer said, adding that the FAA ruled similarly while in litigation in Texas back in 2012.
“The FAA said it is not appropriate for a sponsor to consider market demand. These are grant assurance obligations and the consequences of violating them are severe and include a loss of eligibility and the withholding of grant payments that are open and outstanding.”
So far, little is known about Majestic Skies’ proposal to the county in the Request for Proposal process; according to the agreement expected to be signed April 21, Majestic Skies will pay a minimum annual guarantee of $350,000 a year. The agreement will also stipulate that Majestic Skies will receive a credit during the 20-year term of the agreement to develop any ramp and fuel farm infrastructure, up to $5 million.
That $5 million credit in the agreement was cause for concern by attendees at the hearing, although, Ellis explained, the $5 million credit over the 20-year period is similar to what the county paid for Jet Center Partners’ new ramp.
“They are going to put up the initial investment,” Ellis said, of Majestic Skies’ contribution to the cost of the ramp and fuel farm, “and we will give it back,” Ellis said. “It’s apples to apples. At the end of the day, we will get reimbursed for both projects,” he said, by the FAA.
Monday’s hearing included sharp back-and-forth comments between area residents and the commissioners. Some in attendance said they understood why the commissioners have to consider a second FBO at the airport, but contended that the process has not been transparent regarding RFPs that sparked the current process. The county’s 75-page agreement with Majestic Skies, some county residents complained, was not made available for public consumption until Sunday, leaving little time to digest the details.
When county resident John Cossick suggested a lack of transparency on the part of the commissioners, Commissioner David White erupted.
“We have gone through a public process since August of last year,” White said angrily. “We are going to treat each other with respect and decency. If you can’t do that, you will be asked to leave, so please do not disrespect us.” White then looked at Sheriff Rick Dunlap. “Sheriff, if you could please keep an eye on the audience, I would appreciate it,” White said.
Cossick suggested that a Sunday editorial in the Montrose Daily Press, arguing the commissioners lacked “transparency,” upped the ante, which he tried to mitigate, by saying that he understood the county’s “need” to comply with the FAA Grant Assurance regulations, but didn’t understand why the commissioners “refused” to disclose documents related to the RFP process.
Commissioner Ron Henderson responded that the county followed procurement policy during the RFP process, although “that may not have provided you information you would have liked to have had.”
Henderson suggested that had the Black Canyon Jet Center, the current FBO, done a better job, people wouldn’t be so fearful of competition at the airport.
“It is sort of suspect that so much is being made about being so fearful about the competition,” Henderson said.
But then he asked, “Or is there a serious flaw in their model? Perhaps there is. I have stayed out of this entire process, but one thing that comes to mind is, people were asking me, earlier on, was this thing solicited by the county?
“I most assuredly can say, by my standpoint, no.”
Henderson said he was told that the entire RFP process originated from a negative impression about how Black Canyon Jet Center has treated its customers.
“People know that Black Canyon didn’t take care of their customers in each and every instance,” Henderson said.
“Evidently that was true.”
At that point in the meeting, Henderson referred to the editorial in the Sunday Montrose Daily Press and then held up the paper’s plastic wrapping, which contained an ad for the Black Canyon Jet Center.
“There is a clear alliance of the two entities,” Henderson said, while standing. “It has really colored things unnecessarily. Our whole intention of the running airport is running a world class operation. There is no other intent.”
The commissioners agreed to hold off on a decision for one week, even though they are unlikely to or unable to change their minds about approving a second FBO agreement.
“I understand the concerns here, but factually speaking, the law is the law,” White said.
He reiterated, “We are at a point where the law is the law.”
The next public meeting is scheduled for Monday, April 21, at 6 p.m. in Friendship Hall.