Letter: Making sense of Cottonwood Airport leases
I wanted to respond to Bob Richards' letter to the editor regarding his comments about the airport leases and the city's involvement with the FAA.
The facts are that we did receive a letter about this time last year from the FAA concerned about some of the land leases the city holds at and around the airport and whether the city was charging market rates for those leases.
The goal for the FAA and the city is to ensure that the airport is financed through lease fees, gas and oil sales, and any other revenue generated at the airport.
The airport funds are then used to leverage FAA grants for major capital projects at the airport. The city makes every effort to minimize the use of General Fund monies to support the airport.
It should also be noted that without the help of FAA grants the city could not afford the cost of maintaining an airport and this is true with a large majority of airports across the country.
Mr. Richards states that nothing has been done since the FAA letter and the fact is that the city has worked with experts in the field of airports, conducted market comparisons of the lease rates, worked with the FAA and leaseholders, and developed an action plan and response to the FAA's letter.
That document was submitted to the FAA last fall and we are still awaiting a formal response. However, based on our conversations with the FAA, the city and our airport have been responsive and is coming into compliance with the FAA's findings and recommendations.
The issue regarding individual hangar site leases at the airport is largely separate from the issues expressed by the FAA.
This issue involves individual owners who lease land on the airport and who have built hangars on that leased land.
They wish to extent those leases beyond the 25 year terms of those leases, after which the land and any improvements on that land revert to the city, which is a very common practice at airports and with many other types of commercial leases.
The issue regarding the extensions has to do with the amount of compensation the city should and will receive during any renewal periods and whether such an extension without compensation is a smart business decision for the city and all of its citizens (as opposed to just the lessees); whether it is good public policy; and most importantly, whether it is allowable under our state constitution, which prohibits the gifting of money, property, and other valuable rights without fair compensation, as determined by the market.
The City Council directed that a representative committee be assigned to review the issue and develop a proposed policy that can be applied uniformly for the Council's consideration.
We are in the process of putting that committee together.
City of Cottonwood