Redmond faces lawsuits over airport

Published 12:00 am Thursday, February 19, 2015

The companies providing services such as fueling to the Redmond Airport have filed separate multimillion dollar lawsuits against the city following nine months of disagreements over the airport’s minimum operating standards.

Butler Aircraft Services, which provides aviation services at the airport through a sublease with KC Aero, filed a complaint in Deschutes County Circuit Court on Feb. 6. Its allegations include breach of contract, intentional interference with economic relations and fraud. Butler is seeking at least $9 million in damages.

KC Aero followed with its own complaint Feb. 11 with many of the same accusations and is asking for at least $12.6 million in damages.

“We take this whole situation seriously,” Redmond City Manager Keith Witcosky said Wednesday afternoon. “And we take our role as stewards of taxpayers’ dollars seriously. We’d never walk into any situation such as this irresponsibly.”

Dan Gragg, a Portland attorney from Seifer, Yeats, Zwierzynski & Gragg who represents KC Aero, said his client still hopes to work out an agreement with the city.

“We’re prepared to work with the city and airport with whatever issues remain outstanding,” Gragg said.

Representatives for Butler could not be reached.

The dispute, which unsuccessfully went to mediation in January, stems from a list of minimum standards for service providers adopted by the Redmond City Council in May 2014. A 2013 report from a consultant hired by the city showed private airport users had concerns about the airport’s fixed-base operators, which provide aeronautical services such as fueling, flight lessons, charter services and mechanical support.

Those interviewed by the consultant complained of fuel delays, mechanic shortages and the lack of equipment to move disabled aircrafts, according to Bulletin archives. The City Council responded by updating its minimum standards for fixed-base operators for the first time since the 1970s.

For example, before the minimum standards were updated, service operators at the Redmond Airport were required to provide fuel 18 hours a day, seven days a week. Under the new standards, fuel is expected to be dispensed 14 hours a day and to be available on-call at all other times. Also, mechanics are expected to be available 24 hours a day, seven days a week under the new standards, where before they had to be available eight hours a day, five days a week.

KC Aero, which in 2003 signed a 55-year lease with the city, and Butler initially opposed some of the new minimum standards, but all three parties met this past July to try to iron out their differences.

What emerged from that meeting was a nine-page handwritten “Memorandum of Understanding,” copies of which were included in both KC Aero and Butler’s complaints filed in the Deschutes County Circuit Court. A tentative agreement seemed to be reached, but by November, city officials were publicly fretting about what they perceived as a lack of effort on Butler’s part to hit the minimum standards agreed to in the memorandum. The three parties spent nine hours in mediation Jan. 24 but did not reach an agreement.

According to Redmond officials, one of the primary sticking points in negotiations has been the city’s insistence to keep the right to conduct its own fixed-base operations at any time. If the city did not keep this right it would make the airport ineligible for FAA grants, which have contributed tens of millions of dollars to the airport over the past few years, Witcosky said.

“City-owned and operated fueling and other services are not something the City Council or city staff has ever wanted to pursue,” said Witcosky, the city manager. “Yet, we are obligated by our grant agreements with the Federal Aviation Association to maintain the right to provide aviation services directly, without condition.”

—Reporter: 541-617-7829,

beastes@bendbulletin.com