Saturday, May 19, 2018

Fremont Municipal Airport (KFET) council talks about lease agreement, grant funds

Although the Fremont City Council approved an aircraft hangar lease agreement in April, the Airport Advisory Council continued to field questions on the topic at its Friday morning meeting.

The advisory council also voted to relinquish some grant funds for this year with plans to receive funding in 2019 and talked about painting over markings on a runway-turned-taxiway.

Tenants leasing city-owned aircraft hangars were sent a five-year lease agreement, the term of which starts June 1.

The agreement retains an insurance stipulation that caused concern during the advisory council’s meeting in April — and which was again discussed on Friday.

Under the agreement, hangar lessees must buy and maintain aircraft liability insurance to insure them and the city against claims for injuries or deaths of people ($100,000 for a person and $500,000 for a group) and damage to property of not less than $250,000).

In addition, lessees need insurance to cover not less than $25,000 per accident to cover the leased hangar and its contents.

Longtime hangar tenant Kirk Diers, who spoke with an insurance representative, said at the April meeting that the city also has insurance, but that City Administrator Brian Newton wants to have its $25,000 deductible covered.

Newton, who was at Friday’s meeting, said the $25,000 wasn’t about the city’s deductible.

This issue was discussed at Friday’s meeting after advisory council member Tom Randall passed on a question he’d received. He said the person had understood that the city’s deductible is $10,000 and — if that is the case — the individual wondered why tenants had to have $25,000 in coverage.

“Of all the policies that we looked into, the minimum coverage for leased hangars is $25,000; you can’t buy anything less than that,” Newton said. “It has nothing to do with our deductible.”

Newton spoke further of the coverage.

“If my negligence causes damage to either the hangar or somebody else’s equipment, it goes up to $250,000,” Newton said. “Now, if I run into that leased hangar or if I cause damage to the leased hangar, they cover $25,000.

“What we’re asking is that the tenant at least have coverage for $25,000 of our city’s leased hangar for liability coverage,” Newton continued. “I think it’s a fair request. Anybody in business forces their tenants to have insurance coverage. We went to the lowest limits possible. Most cities that have insurance requirements are much higher than this. … We tried to keep the cost as low as possible.”

During the April meeting, advisory council member Robert Steenblock, in conversation with an insurance representative, said the cost would run somewhere between $500 and $750 for each tenant each year for each hangar to cover that $25,000 requirement.

One man asked if he sold the aircraft if he could be released from the lease — instead of having to pay for hangar rental for five years — and Newton said he could.

At the end of five years, the lease automatically renews for the tenant and a sub-lessee, but the city may increase the rent. Sub-lessees have a separate agreement and also must have insurance.

Dave Goedeken, director of public works, also said a sentence was removed from the lease agreement that would have made the lessee responsible for the loss of any hangar door damaged due to wind while it was left open.

That sentence had been a point of concern expressed during the April advisory council meeting when Diers said the hangar doors had not been maintained. Goedeken said some maintenance has been done in the last couple of years.

Original article ➤ https://fremonttribune.com

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