Victoria Regional Airport commissioners on Tuesday discussed an airport system in need of replacing and efforts to address noncompliant property leases in order to bring the airport into good standing with the Federal Aviation Administration.
Jack Lill, the air traffic manager at the airport, told the commission the airport’s secondary wind indicator is an “obsolete system” that needs to be replaced.
A replacement would cost between $90,000 and $100,000, said Lenny Llerena, the airport manager. He added it was one of the projects the airport proposed to county commissioners for possible repair using the recoverable depreciation funds from Hurricane Harvey, but it didn’t make the list.
In August, Victoria County commissioners heard from Brett Anderson, a property program supervisor from the Texas Association of Counties’ risk management pool, about the insurance claims process and how the county is eligible for almost $800,000 in recoverable depreciation.
The actual cost value of the Harvey-damaged buildings, different from the replacement cost value, is calculated by factoring in the depreciation of the “damaged materials based off their age and obsolescence,” Anderson told the commissioners.
The county is eligible to recover that depreciation after it submitted an extension to the association, which included its plans for using the money.
Airport Commissioner Dennis Patillo on Tuesday acknowledged the county’s ongoing effort to go through Harvey expenditures and examine what work is left to be done throughout the county and asked Llerena if funds related to the recoverable depreciation are available to be used at the airport.
County Commissioner Gary Burns said the list that the county turned in had few projects listed for the airport, even though “most of the depreciation money was airport money.” The list included about $500,000 for the county’s health department and Justice of the Peace, Precinct 3, parking lots; $206,000 for the Emergency Operations Center stair enclosure; $133,000 for demolition of the airport maintenance building; and six other projects, bringing the total to almost $1.3 million.
Airport commissioners asked if money related to depreciation at the airport must go back into the airport. Airport Commission Chairman Trey Ruschhaupt said if the depreciation funds are diverted, it could be “a violation of federal law.”
Anderson said in August the county would be able to use the depreciation money for any capital improvement projects as long as they were both unplanned at the time of Harvey and on county property.
Regardless, Burns said Tuesday he feels the county should “recompensate” the airport for the depreciation money, even if the county must pull from the reserve fund to do so.
“We need to reimburse you all once Kevin (Janak) gets through with his numbers,” Burns said.
“So will that be in this lifetime or the promised lifetime to come?” Patillo joked.
Also Tuesday, the airport commission heard an update from Llerena about airport leases. After a three-day audit by the FAA in July, the airport was found in “conditional compliance” because of multiple noncompliant building leases. Llerena said he has been working to address each lease and ensure the airport can get, and stay, in good standings.
The FAA has different requirements for leases, including having a “paper trail” of what’s been agreed upon, he said. Llerena gave commissioners a memorandum of understanding for each lease.
Llerena created the leases to last for 10 years, and because the FAA requires leases to have an escalation fee, after a lease is first established at a fair market rate, the cost will increase by 3% each year.
It is important for the airport to be compliant with federal regulations, Llerena said, but he said the airport is “not half done with this.” He said some FAA officials are still questioning if the airport is short between $150,000 and $200,000 because of the rates determined to be fair market values on some leases.
“The FAA will have, from my perspective, a microscope on us for at least a year until we get all of this worked out,” he said.
Ruschhaupt said this is a great opportunity for the airport to “get to the next level,” adding that he understands the FAA’s reasons for making sure things are in place.
“Scrutiny doesn’t bother me a bit – we’re an open book,” Patillo said.