Airport Fuel Concession Needs Another Look



Airport fuel concessionaire Robert Oswald's recent tirade against Mayor Brewer, the Roundup and my daughter, who wrote a story entitled "Fuel conflict chokes rescue efforts," appears to be an exercise in obfuscation. Anyone reading the original article and then his acerbic letter must puzzle at the way he shucks responsibility and dumps it on his employees.

Whether quick fuel delivery may have saved lives is far from clear, but it is quite clear that Mr. Oswald made the decision to not respond. It was his call -- period -- and he should take responsibility for it.

This fuel concession problem highlights a bad decision made last April 8 by the previous town council under Mayor Ken Murphy: Following an executive session, the council voted 4-3 to act against the recommendations of its staff to purchase and run the fuel concession.

At issue were the following considerations:

  • Had the prior owner allowed the 10-year lease (which expired in December 2003) to lapse, without exercising the first of two, five-year options 90 days in advance, as required in the original agreement? Staff said, "yes," but was overruled. On a motion by Councilman Robert Henley, the prior agreement was extended to July 1, 2004, to permit negotiations with the new buyer, Mr. Oswald and his CAVU Aviation, to be finalized.
  • Could the town run the concession profitably or would it generate a loss? The staff projections showed profitability before debt service on a $100,000 loan to make the purchase. However, Henley gave the council his own projections, purporting to demonstrate that a loss of almost $3,600 per year would be sustained before debt service. Only later was it discovered that Henley's spreadsheet calculations included critical errors. When corrected for those errors, his calculations actually produced a $24,000 per year profit before debt service and even allowed a modest profit after debt service on an aggressive five-year payoff.

That decision was based on false premises. The latest emergency matter shows the problem of out-sourcing an essential service, and the potential for the town to incur unexpected liability for problems it has no control over.

Now, well passed the July 1 deadline for negotiating the new agreement, the new town council should consider re-opening this matter, terminating the existing agreement (it only requires 90 days notice), and reverting to Plan No. 1 -- operating the fuel franchise itself.

Don Crowley, Co-chair, Citizens for Better Payson Government

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