Fuel to the fire
by Jon Mendelson / Tracy Press
Oct 14, 2011 | 2825 views | 0 0 comments | 7 7 recommendations | email to a friend | print
The fuel station at Tracy Municipal Airport awaits a new operator.  Press file photo
The fuel station at Tracy Municipal Airport awaits a new operator. Press file photo
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Controversy about a fuel contract at Tracy Municipal Area prompted the City Council to put off the vote last week.

City staff recommended allowing Turlock Air Center and its owner, Steve Stuhmer, to run the fuel concession services at the airport. But after several pilots objected at the Oct. 4 meeting, the City Council voted to hold off on a decision until after a Tuesday meeting that will delve into various problems and possibilities at the airport.

A motion by Councilman Mike Maciel to approve the contract Oct. 4 died for lack of a second.

According to the city’s proposal, in exchange for nonexclusive fuel-selling rights — meaning another provider could set up shop and compete — Stuhmer would take responsibility for the aging fuel infrastructure and ensure the city received at least $50,000 from fuel sales in each year of a proposed 35-year lease.

By comparison, the airport generated about $51,000 for the city during the most recent fiscal year, when the city was in charge of fuel sales.

Parks and Community Services Director Rod Buchanan, who helped negotiate the deal, said it’s a way for the city to unload the costs of managing the fuel sales while maintaining an important source of revenue.

“This will do both,” he said. “This has the potential to raise the revenue and also cut our expenditures dramatically.”

But several pilots at the airport — including Kim Hunter and John Favors, president of the Tracy Airport Association — expressed doubts about Stuhmer, and especially worried about what might happen to fuel prices under his leadership.

Hunter said Stuhmer’s proposal to operate Mariposa County’s airport services was roundly rejected, something he said raised red flags.

Hunter also worried about problems Stuhmer has had with an airport in Montrose County, Colo. Stuhmer filed a lawsuit there alleging that changes to that flypad irreparably harmed a significant investment he made in a high-tech hangar.

Though a Tuesday afternoon e-mail to Stuhmer seeking comment was not returned by press time Thursday, he defended his aviation business acumen and track record at the council meeting, and pledged he was committed to improving the Tracy airport.

Buchanan added that Tracy had performed its due diligence. He said the references for Stuhmer have been good, and the Colorado lawsuit is a matter entirely unrelated to the contract presented to the City Council.

And in Mariposa County, according to a report in the Sierra Sun Times, Stuhmer’s outfit from Turlock was the public works department’s first choice when it came to administering fuel supplies there. But Mariposa County supervisors instead selected KMPI Airport and Rent-A-Car LLC, the report said, possibly in part because KMPI’s owner has business ties to the area.

Mariposa County’s interim director of public works said the airport advisory committee didn’t see Stuhmer’s project as fitting the scope of the airport.

Buchanan added that, in his research, Turlock gave Stuhmer a solid grade.

“The Turlock airport manager said he was cooperative to work with and that he made improvements, some improvements that he didn’t even have to do.”

Maryn Pitt, the city of Turlock’s interim airport manager the past two months, said the city is in the process of rewriting its contracts with Stuhmer, because the earlier agreements don’t square with Federal Aviation Administration policy. She said there were items in the contract the city shouldn’t have agreed to, and the FAA cares only about the grantee — in this case, Turlock.

“There’s culpability all the way around,” Pitt said, though Stuhmer has been cooperative through the process.

“So far, Mr. Stuhmer’s been understanding with our need to rewrite our agreements,” she said.

When it comes to fuel prices in Tracy, Buchanan said local pilots shouldn’t be worried.

“(Stuhmer has) the same philosophy as the city has had: Reduce fuel prices, sell more fuel,” said Buchanan, adding that the city grew its fuel sales over the past few years by offering prices that were lower than at airports on the other side of the Altamont Hills.

That, in turn, attracted more traffic.

If Stuhmer offers competitive fuel prices and add to the amenities at Tracy Municipal Airport, Buchanan said, it will benefit the city, its pilots and businesses such as Skyview.

“It’s a win-win if you can generate more traffic for all the businesses that are or will be at the airport.”

But Hunter and Favors also wondered why Skyview — which runs an aviation school as well as manufacturing, exporting and maintenance ventures at the Tracy Municipal Airport — wasn’t awarded the fuel contract.

Buchanan said the city had negotiated with Skyview for months, but when they couldn’t reach an agreement, the city put the contract out to bid.

Richard Ortenheim, Skyview’s director, confirmed that his outfit and the city couldn’t agree on terms that would allow his company to make a sustainable profit on fuel.

Ortenheim, who has 25 years’ experience in the aviation business and employs 12 people at the airport, said he doesn’t see how Stuhmer can make money in the short term under the agreement with the city, which caps what can be charged for fuel relative to other airports within a certain radius. But Ortenheim added it’s likely Stuhmer has a long-range profit time line.

The two have scheduled a meeting this weekend to see if their businesses can help one another be more profitable, Ortenheim said.

“As long as he sticks by what he says, it’s very good for both of us and for Tracy,” he added.

Despite significant interest, Buchanan said, Stuhmer’s was the only bid the city received to operate the fuel concession. Ortenheim said he was advised by legal counsel not to submit a bid.

Stuhmer also plans to open and run a restaurant and construct more hangars to improve the airport’s profile.



Airport meeting Tuesday

At 6 p.m. Tuesday, Oct. 18, the City Council will discuss a number of issues regarding the Tracy Municipal Airport, including the implications of flight patterns and safety zones for possible future development.

The meeting, which will be in the council chambers, will likely touch on matters including the condition of the runway’s pavement, the orientation of the main runway and the Ellis residential development — on hold but still in consideration — which would be under the main takeoff-and-landing pattern.

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