AUGUSTA — A 15-year lease agreement between the city and the state-owned airport allowing the city to run the airport is likely to be dropped in favor of a new deal that officials say better reflects how the operation is managed.

Local officials say the $550,000 a year payment isn’t enough to cover the increasing cost of running the Augusta State Airport.

“Even though this amount is lower than it should be, it’s about the best, I suppose, we can expect,” City Manager William Bridgeo said. “The city of Augusta does benefit from having a full-service airport in Augusta. The city does play a major supporting role in the operation of the state airport. But to be able to have that service in Augusta, and the benefits it brings… the council has always felt that’s a reasonable contribution.”

The airport serves private planes and features Cape Air, which has daily flights between Augusta and Boston and connections to Jet Blue. Maine Instrument Flight services aircraft provides flying lessons and charter flights.

The lease agreement expires at the end of the month. The City Council is scheduled to vote on the new management and operating agreement at its regular meeting 7 p.m., Thursday, at Augusta City Center.

While the city does not directly pay for day-to-day airport operations, Bridgeo said Finance Director Ralph St. Pierre spends time managing the finances for the airport. Other city officials also spend time on airport issues, and workers from the city’s public works crew lend a hand at the airport — none of which is paid for by the state.

The new agreement calls for the payment from the state to the city to be adjusted biennially, but doesn’t specify by how much the funding could increase. The payment has been the same for the past three years.

If costs exceed state funding, or the state believes the city hasn’t lived up to its contracted obligations, either the city or state could terminate the agreement, leaving the airport without anyone to run it.

“If it’s not adjusted (to reflect the annual cost in future years) we can get out of the contract,” St. Pierre said.

Rick Dubois, director of multi-model operations for the state Department of Transportation, said Augusta is one of two owned by the state, and the only full-service one. The other is a rarely used unstaffed seasonal airport in the Washington County town of Deblois.

Dubois aid the state is very satisfied with how the city has run the Augusta State Airport. He called Airport Manager John Guimond, a city employee paid with the money provided by the state, a competent and knowledgeable manager. Guimond has managed the airport in Augusta for seven years.

Dubois said the $550,000 earmarked for the airport is already in the state budget for next year and funded by a dedicated revenue stream from aviation fuel taxes and car rental fees, instead of the state’s general fund.

If the city says the $550,000 isn’t paying for all expenses, Dubois said the state will examine at the cost of running the airport, its revenue, and decide whether to adjust the budget or suspend operations at the airport.

Bridgeo said in recent years transportation department officials have worked with the city to pay for unanticipated expenses at the airport.

The airport has also recently received federal funding for major projects and expenses, including $1 million awarded in July to buy snow removal equipment. Earlier this year, the airport completed a $7.5 million, federally funded safety improvement project that closed the main runway for about two months.

City officials said the new agreement more accurately reflects the city’s role at the airport.

“The new document truly reflects what we’ve been doing at the airport, which is manage it,” Guimond said. “My role and duties remain unchanged under this.”

It took about a year of negotiations for the city and state to reach agreement. Bridgeo said a major holdup was the issue of who would be legally responsible should someone be injured or environmental damage were to occur at the airport.

Eventually, the agreement language originally sought by the state was modified enough to satisfy St. Pierre, the city’s insurance carrier, and the city attorney that the agreement “doesn’t expose us unduly” to liability, according to Bridgeo.

Keith Edwards — 621-5647
kedwards@centralmaine.com