Airport management company chief says city of Yakima unclear about proposal

The CEO of a Tampa, Fla.-based aviation management company said the city of Yakima misunderstood its proposal for taking over operations and management of the Yakima Air Terminal. 

Michael Hodges’ claim comes days after the city of Yakima rejected bids from ABS Aviation, as well as the Yakima airport staff, in favor the airport becoming a department within the city of Yakima.

Hodges said he felt that the city’s decision was based on unclear information surrounding a fee mentioned in its proposal.

While ABS’ proposed $540,000 annual fee included payment for its services, most of the funds were to be used to cover labor and personnel costs, Hodges said. The fee was competitive considering that the airport spent upward of $700,000 annually on personnel in the past, Hodges said in a phone interview Friday.

Hodges sent a follow-up letter to city officials to provide additional information on the fee, but he ultimately felt his company was not given a sufficient chance to flesh out its proposal. He said he was surprised the decision was made without any in-person interviews and said it caused him to wonder if the airport was to become a city department all along. 

“I’m very suspicious with the way things transpired,” he said. “... I’m not upset about not getting selected. I’m upset that the city wasted our time by having us go through the process.”

Yakima City Manager Tony O’Rourke said he solicited the proposals to see if privatizing airport management and operations was a viable option. 

The selection committee that reviewed the proposals — which includes O’Rourke, officials from the city, Yakima County and the airport — asked for additional information from ABS Aviation to clarify a few points. Other than the follow-up letter elaborating on the fee, the company did not send any other information, O’Rourke said. 

More important, O’Rourke said, was that ABS was not willing to take responsibility for both the profit and losses of the airport. He cited a point in ABS Aviation’s proposal stating that the city would be responsible for any financial shortfall. 

ABS Aviation “failed the initial test — (it) would not take any ownership of the profit and losses of the facility. Period,” O’Rourke said. 

Hodges took issue with that claim. 

While the proposed monthly fee would provide the company with some income, the lion’s share of its revenue would come from a proposed incentive payment tied to reaching mutually agreed benchmarks on items such as increasing revenues and reducing expenses. Such incentives were briefly outlined in a cover letter introducing the company’s proposal.

“We had an incentive in that situation to maximize revenue and control expenses,” Hodges said.

Still, O’Rourke believes making the airport a city department is the right choice. “If we’re going to be exposed to losses, then we’re going to run it,” he said.

Rob Peterson, interim airport manager, said he believe the bid process was fair, and the decision to become a city department was also ideal as most of the staff would likely remain in their current positions. 

“I believe it will be more efficient to streamline the requests for maintenance and operations (to the city),” Peterson said. 

Before the airport becomes a city department, however, the city of Yakima still needs to complete efforts to secure sole ownership of the 825-acre facility. The city is working out an agreement with Yakima County, a co-owner. 

But O’Rourke knows what he would like to see. Under his plan, Peterson would focus on day-to-day operations while he would oversee strategic goals such as air service development and completion of an airport master plan update. 

O’Rourke said he would work on cutting expenses to stay within budget until revenue-generating opportunities come along.

“I’m more than happy to accept responsibility for the profits and losses of the airport,” he said.

Source:   http://www.yakimaherald.com