Port settles with airport contractor over missing fuel

By Vicki Hillhouse, June 26, 2015, Walla Walla Union Bulletin

 

An out-of-court settlement over missing aviation fuel at the Walla Walla Regional Airport has been made.

 

The Port of Walla Walla has reached an agreement with Blue Ridge Aircraft Services Inc. and its owners, who late last year were accused of removing fuel from storage tanks they managed without accounting to the Port or paying for it.

 

The settlement, approved Thursday in a 2-1 vote by Port commissioners, guarantees the Port $75,000 from Blue Ridge Aircraft Services and owners Robert Stanley Holm and Janie Holm. Commissioner Ron Dunning cast the dissenting vote at the meeting.

 

Port Executive Director Jim Kuntz said a primary factor in the settlement was the collectability of the funds.

 

Under terms of the agreement, the money will be guaranteed through a promissory note and a second deed on the Holms’ residence.

 

Kuntz said this morning the case could have gone through the court system, but even if it had gone in the Port’s favor the money might not have been collectible.

 

The value of the unaccounted-for fuel is also subject to interpretation based on varying rates.

 

An investigation by the state Auditor’s Office after the discovery valued the loss around $185,000. But that agency — along with the state Attorney General’s Office and county prosecutor — approved of the settlement at the $75,000 mark, Kuntz said.

 

According to the lawsuit, between 2009 and Dec. 31, 2013, a total of 31,389 gallons of Jet A fuel and 12,379 gallons of aviation gasoline were pumped out of two aboveground storage tanks without payment. The tanks are inside the airport’s perimeter fence and are not accessible by the general public. Blue Ridge Aircraft Services had operated the airport’s fueling system.

 

The airport buys fuel wholesale and resells it at retail prices. Since the investigation and filing, new internal controls have been taken for management.

 

Under terms of the settlement, the Holms will be paid through terms of a promissory note due to the Port by July 1, 2016. Secured by a deed on the Holm’s residence, the note will have a 5.75 percent annual interest rate with monthly payments of $500.

 

With the execution of the note and deed, the Port will then take steps to release the security interest it took in the Holms’ 1968 Piper Arrow airplane.

 

The Port has also agreed, under the settlement, to grant Blue Ridge a new one-year lease at its current hangar spot, where it conducts aircraft repair. That agreement includes four one-year extensions.

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