City of Alamogordo eliminates co-op at airport

In a 4 to 3 vote after about 90 minutes of spirited discussion, the Alamogordo City Commission decided to prohibit cooperatives at the municipal airport during the regular meeting Tuesday night.

The item -- regarding establishing minimum standards of use at Alamogordo-White Sands Regional Airport -- was on the agenda for the Sept. 13 meeting, but the city was served a temporary restraining order by Kevin Dunshee, who operates a refueling co-op at the airport. The TRO blocked the city from taking any action on the item, but by Tuesday, city attorney Stephen Thies said the TRO had expired and the commission was free to act.

City manager Mark Roath said the Airport Advisory Board recommended changes to rules about refueling at the airport. He said the board recommends Option A, prohibiting co-op fueling at the airport. Option B would put conditions on co-op fueling but would still allow it.

Kevin Dunshee, who operates the co-op, said he got the temporary restraining order because he felt the resolution was targeting a specific activity, and the city was not giving him and co-op members input regarding the rule making.

Dunshee said in 2008 he asked the Airport Advisory Board, after consulting with then-city attorney Bill Brogan, to consider self-service fuel options at the airport. He asked because a co-op needs to meet the same minimum standards as a self-service operation, tank inspections and all.

"Pretty much it's the same amount of rigor as an FBO would have," Dunshee said.

Dunshee said the resolution doesn't set minimum standards at the airport. He said he felt the standards in the resolution were taken from old guidelines, and the resolution was put together without objective consideration for what the standards should be.

Dunshee said all fuel purchases from the co-op were from co-op members, and one has to be a member to purchase fuel from the co-op. He said the fuel tank was built by Dunshee Limited, and co-op members pay a fee to help maintain the co-op's equipment and services.

Dunshee said in February that Thies brought up the question of whether co-op activity was on Dungee's commercial permit. Dunshee said he submitted a request to put it on his commercial permit but never had a response -- the first thing he heard was the Friday before the Sept. 13 meeting when he found the city wanted to do away with co-ops altogether.

"This sounds very suspicious," Dunshee said. "I don't know what's going on with the city. ... It just seems coincidental, with the approval of other businesses out there, that all of the sudden we have to get rid of the co-op. It doesn't sound right and many of the co-op members are concerned."

Dunshee said he doesn't agree with the city defining a co-op because co-ops are defined by the Public Regulation Commission. He said New Mexico does not specify co-ops have to be profit, nonprofit or not-for-profit.

Dunshee said a co-op is a collection of individuals who come together for a common purpose -- in this case, to store fuel. He said the co-op is a better and safer option for self-fueling than having people passing around 5-gallon cans and spilling fuel over the ramp.

Dunshee said he has provided reports, plans and all other requested information to the airport manager, Parker Bradley. He said the airport manager should have the authority to write permits and enforce standards, but Bradley doesn't currently have that authority.

Dunshee said the Federal Aviation Administration requires the city to have a reason for prohibiting co-ops at the airport.

Dunshee said he was willing to help set up minimum standards for the airport, but he disagreed with the minimum standards in the resolution's Option B. He added that he didn't think the city has had a fixed base operator, or FBO, inspection in years.

Co-op or not?

Commissioner Josh Rardin said Dungee's company bought the fuel tank, so he didn't see how that made it a co-op.

Dunshee explained co-op members rent a portion of the tank to store their fuel.

"I still don't see how that's a co-op," Rardin said.

Mayor Ron Griggs said it would be simplest for the city to eliminate co-ops, then they won't have to have a definition.

Commissioner Aaron Rance said he and Commissioner Joe Ferguson brought the airport co-op question before the commission for the Sept. 13.

"The issue for me and the citizens of Alamogordo is: Does your lease allow you to operate a co-op?" Rance asked. "That's the only question I have in this whole deal."

Dunshee said he asked for the co-op to be put on his airport lease, but it never was.

"Whose responsibility was it to put it on the lease?" Dunshee asked. "I asked for it."

Thies said the lease must identify the activities the lessee does at the airport.

Rance said the city did not act on Dungee's request to put the co-op on the lease, and was answered with a chorus of "Why not?" from Dunshee and the audience, which included several co-op members.

"Just because you ask for something doesn't mean the commission must act upon it," Rance said.

Rance said the nut of the problem is that Dunshee is working outside the scope of his current lease with the city airport. Dunshee replied that he is doing activities he requested be put on the lease.

Ferguson said the FAA requires airports to allow self-fueling, and the FAA says that the co-op is considered a commercial operation. He said the city doesn't have to allow co-ops at the airport. Dunshee replied the city needs to give the FAA a reason if it doesn't want to allow co-ops.

"No, we don't need a reason," Ferguson said, and the audience gasped "Oh!" in unison.

Griggs warned the audience to behave like professionals and not indulge in another outburst. He said the city and Dunshee have a difference of opinion.

Dunshee recommended the city contact the FAA for the definition of a co-op.

Griggs responded that if the city allows co-ops at the airport, it is within the city's rights to define a co-op. He said there aren't many co-ops in New Mexico. He said there are differing opinions as to what constitutes a co-op.

Griggs said Dunshee established a venture at the airport and there is no governing terminology for the city on what his venture is and the services it performs. He said the city needed to address that Tuesday night -- to decide if they will allow co-ops, and if so, define the scope of a co-op.

Dunshee said in 2008 he requested a co-op, and he has had the fuel tank at the airport for 2 1/2 years. He said he started the process in 2006 and was told by the city attorney at the time he couldn't sell fuel to the public at large.

"The general commission believes you sell to the public," Commissioner Robert Rentschler said. "Anybody with a credit card can be a co-op member."

Dunshee said his co-op has brought competition to the airport and now fuel prices out there are down, but it won't last if he has to stop selling fuel.

No paperwork

Dave Pearce, chairman of the Airport Advisory Board, told the commission he couldn't find any documentation for requests for a co-op at the airport, just requests for self-fueling.

"Still, as of this morning, nobody's requested a co-op," Pearce said.

Pearce said the board recommended not having a co-op because it turns into a business. He said the airport needs to be self-sufficient, and one thing they must do to support that is establish minimum standards.

Pearce explained the objective is to keep a viable FBO at the airport so there will be someone to respond if a pilot gets a flat tire or needs other help. He said he didn't think the co-op enhanced services at the airport, but rather eroded services. He said the co-op just siphons off the profit of fuel sold at the airport, which is the most valuable commodity the FBOs sell, and allowing the co-op wasn't fair to the FBOs.

Pearce said the City Commission just approved a new FBO to set up shop at the airport, and that person went through every item and met every requirement. He said for the city to make a change now after the FBO made a significant investment to set up under the old rules will cause problems.

Commissioner Marion Ledford said he didn't remember anyone telling Dunshee he couldn't do a co-op at the airport. He said there was such a conflict of stories between Pearce and Dunshee that the city wouldn't get to the bottom of it without a lie detector.

"I'm not interested in putting somebody out of business," Ledford said.

Ledford said the city would have made everything work out if they wouldn't have tried to get rid of the co-op. He said there was a need for a fuel co-op at the airport and the city allowed it to happen.

"The co-op served a purpose," Ledford said. "It made people out there very happy."

Ledford said the city needs to do the right thing and establish minimum standards for use at the airport. The audience applauded him.

Thies said he wasn't in Alamogordo when Dunshee first approached the city and there may have been some discussion about a co-op, but city meeting minutes do not reflect that the city ever approved allowing co-ops at the airport.

A question

of fairness

Ferguson said the reason not to allow a co-op is that it makes money. He said fuel is the highest profit thing at the airport, and the co-op cuts into the fuel profits of the FBOs, which also provided other needed services.

"I don't think it's fair," Ferguson said. "If Mr. Dunshee wants to be a fixed base operator, that's fine -- but not a co-op taking the cream of the crop."

Rance said he wanted people to be accountable to their lease, and no co-op was ever approved for Dungee's lease.

"I see Kevin's point, but he has worked outside of the scope of his current lease," Rance said.

Ledford told a story of how he had an unannounced visit from code enforcement officers at his place of business. He said officers found that he needed a fire extinguisher in one part of the building that wasn't there.

"They let me fix the problem," Ledford said. "I'm glad they didn't put me out of business over it."

Mayor Pro Tem Ed Cole said he felt there was free enterprise going on at the airport. He said he was in support of what Ledford said about not putting someone out of business. Cole said he remembered the meeting when Dungee's venture was discussed, although no one at the time brought up the term "co-op."

"We did approve what he's doing," Cole said. "We did not address a 'co-op' that evening, but we approved it."

Cole said no one thought of calling it a co-op that night; however, Dunshee had asked to have a business and the commission approved his venture. Cole suggested the city work with Dunshee and not just shut down his venture outright.

Rardin asked if Dunshee could come before the commission at a later time with a formal plan for a co-op if the commission decided to not allow co-ops for now. Griggs said he thought so, and added that his preference would be to pass the resolution with Option B allowing co-ops with the caveat that co-ops must be further defined.

Rardin motioned to approve the resolution with Option A prohibiting co-ops, with an amendment to give Dunshee 30 days to set things in order. The resolution after further discussion -- some heated -- ultimately passed 4 to 3, with Griggs, Cole and Ledford voting against it.

Eric Jessup, a co-op member, addressed the commission.

"I am shocked at the contempt for personal liberty being shown by the city commission," Jessup said.

Jessup said Dunshee brought his co-op to the airport when things were barren out there -- at the time, many of the pilots were buying their fuel in Ruidoso because fuel was much higher priced then.

As for competition with FBOs, Dunshee said his co-op has distributed about 33,000 gallons of fuel over the past two years. He said the FBOs dispense about 30,000 gallons a month.

"I don't think that will put the FBOs out of business," Jessup said.

Jim Hooter, another co-op member, introduced himself as a military veteran.

"I'm sorry I fought for this if this is what I fought for," he said.

Hooter said he has 300 to 400 gallons of fuel in Dungee's tank now, and he can't use it in a reasonable amount of time -- certainly not 30 days. He said it took a year to use the first 500 gallons he purchased.

Another man attested the co-op is helpful because he can buy fuel in advance, and it is there for him to gas up before his night flights.

Before the commission took the vote, Dunshee advised them the Airport Advisory Board recommended not allowing co-ops. However, the only two people who voted to not allow them are Pearce and Jeff Rabon, who has an interest in an FBO.

"Three people were present at that meeting," Dunshee said. "One abstained because they take fuel from the co-op. Dave Pearce did not abstain, although he does ... take fuel from the co-op.

"Two people have recommended to you not to have a co-op from the Airport Advisory Board."

Contact Laura London at [email protected]