Private plan for airport panned

City, port authority say Treece proposal unworkable, confusing

4/4/2014

Treece

The would-be private operators of Toledo Express Airport released their long-awaited business plan Thursday, but the 28-page document made no converts out of city and Toledo-Lucas County Port Authority officials who rejected the airport proposal as unworkable.

“It takes a whole lot more to run an airport than they would lead one to believe,” said Paul Toth, president and chief executive of the port authority.

Private management of Toledo’s two city-owned airports would lower their operating costs and allow faster response to business-development opportunities, according to the business plan made public by Treece family members.

Dock David Treece, 27, of Springfield Township, listed in the business plan as “managing member” of two limited-liability corporations set up to potentially take over port authority operation of Toledo Express and Toledo Executive airports, said Thursday that people he speaks with had “overwhelmingly negative” reaction to city officials’ announcements on Wednesday that they would not even discuss the privatization concept.

On Wednesday, Rob Ludeman, who chairs City Council’s economic development committee, announced he had canceled plans to hold a hearing on the Treece proposal.

“People seem to recognize that there is a problem with the current system of management,” Mr. Treece said. “If the city is going to elect not to make a change, it should at least understand what is being proposed.”

He said Wednesday that he would release his business plan because he no longer had anything to lose by doing so.

Mr. Treece did not identify his “people.”

Mayor D. Michael Collins said there was nothing in that business plan that made him regret his opposition to privatization.

He called the business plan “a gallant attempt to create a document based on creative wordsmanship” and said its promoters’ failure to consult with the city on the status of airport workers affected by their proposed change in management shows the proposal’s lack of integrity.

“It defines expertise and experience as a principle part of the plan and I have not found anywhere the Treeces have demonstrated any expertise or experience in airport management consistent with what their business plan is,” Mr. Collins said.

The mayor and Mr. Toth both said they found little new in the business plan that Mr. Treece, his brother Benjamin Treece, 25, and father Dock Douglas Treece had not already disclosed in public statements about their idea.

And they both rejected the premise of the plan that the port authority or city would find jobs for airport staff who would be replaced by contractors under the Treece plan.

“The city of Toledo does not have an obligation to the employees and does not have a line-item in its budget for them or the ability to absorb them into its work force,” Mr. Collins said.

Mr. Toth said the Treeces’ assumption that airport workers would become city employees if no longer needed at the airport appeared to be based on the port’s lease with the city signed in 1972.

Such rights applied only to the specific workers at that time because they were city employees before the port took over the airports’ management, he said.

Under the Treece plan, Toledo Airport Operations Co. would assume the $1-per-year lease the port authority now holds with the city. And Toledo Airport Facilities Co. would guarantee the city and port authority “against any future losses” for the 50-year term of the new lease. That would be in exchange for an option to purchase the airports for $20 million plus assumption of any required payback of federal grants and loans for past airport improvements.

The Treece plan calls for its two corporations’ only employees to be their four equity owners — the three Treece men plus Cynthia Manahan Treece, the elder Mr. Treece’s wife. All maintenance, security, and fire-rescue services would be provided by contractors that the plan says would reduce the airports’ monthly operating expenses by about $100,000.

Mr. Toth said the port authority had already cut its airport work force significantly after it provided budget documents to the Treeces.

In late 2012 and early 2013, the port president said, the authority cut maintenance and janitorial staff from 12 to five and the agency’s police department, which also provides fire and rescue response, from nine officers to four — mostly through attrition but with some layoffs. Part-time workers fill in during illnesses or vacations, he said.

“We’ve dramatically reduced our manpower over the years,” Mr. Toth said, noting that as recently as 2000 those two work forces, represented by unions, had a combined 40 employees.

Air passenger service’s 10-year decline at Toledo Express, followed by BAX Global’s 2011 closing of the former Burlington Air Express cargo hub, have reduced the airport’s staffing need, he said, but a minimum level of qualified employees is still needed to meet Federal Aviation Administration and Transportation Security Administration requirements.

“They clearly have no comprehension of what it takes to meet the FAA’s requirements, or keep commitments to tenants,” Mr. Toth said. “They’re putting no management out there, expecting the place to run itself on its own.”

Besides its union workers, Toledo Express employs an airport manager, two operations managers, and two secretaries, one of whom is about to retire and will not be replaced, Mr. Toth said. Its safety force is backed up by the Ohio Air National Guard’s 180th Fighter Wing and mutual aid from nearby fire departments, he said.

The Treeces’ 10-year budget forecast predicts the immediate elimination of airport deficits largely by eliminating employee pay and benefits, which in its first year would be slashed from $1.73 million to $630,000.

The plan also assumes an initial decline in revenue, based on “conservative” parking, rental-car, airline, and air guard revenue, but then predicts growing net income as development plans pan out.

Jerry Chabler, chairman of the port board’s airport committee, said he too could find no material in the business plan that rose to the level of “proprietary information” — trade secrets that, if divulged, could help rival firms develop privatization plans for Toledo’s airports at the Treece companies’ expense.

“I don’t see a lot that they haven’t said in the past,” Mr. Chabler said before quipping that the Treeces’ next step should be to seek a refund from consultants they hired to draft the plan.

Mayor Collins had said Wednesday he was calling off all formal discussion of the Treece plan because it already was creating “confusion and a lack of predictability” that put FAA grant funding and the air guard base’s future in jeopardy.

Both he and U.S. Rep. Marcy Kaptur (D., Toledo) on Thursday noted a section of the Treece plan that describes a dark future for the guard base, under which it alternatively would be closed in favor of Wright-Patterson Air Force Base near Dayton or mechanized, with the use of unmanned aircraft reducing its employment of pilots.

Mr. Collins said that reference “implies knowledge of Air Force and Air National Guard plans” while Miss Kaptur took exception to the Treece plan’s description of the 180th as “a minor Air National Guard Fighter Wing” trying to compete with “a major military installation” near Dayton.

“We have more military flights in and out than they have at Wright-Patterson,” the congressman noted. “...In the eyes of the military, they [the 180th] are not minor.”

Former Toledo Mayor Mike Bell, under whose watch the Treeces first began public discussion of their proposal, could not be reached for comment Thursday.

Contact David Patch at: dpatch@theblade.com or 419-724-6094.

Contact Ignazio Messina at: imessina@theblade.com or 419-724-6171 or on Twitter @IgnazioMessina.