Steve Stuhmer, operator of Turlock Air Center, may have lost his contract to operate the aircraft-fueling operation at Tracy Municipal Airport, but he has come away with a public-perception victory in one of a number of issues involved in this strange, ongoing episode.
Among the comments that were made in writing and verbally at the Feb. 4 City Council meeting was that the California Secretary of State’s office in Sacramento had listed on its website that Turlock Air Center’s status as a limited liability company with the Franchise Tax Board was “suspended.”
That was indeed the listing on the Secretary of State’s website that same day — it was checked by the city attorney — but Stuhmer, although not at the meeting, maintained repeatedly that the “suspension” listing was a clerical error and that he was indeed in good standing with the state Franchise Tax Board. That explanation prompted a lot of rolled eyes.
But alas, it turned out Stuhmer was correct.
A letter sent to him by the Franchise Tax Board a day after the Feb. 4 meeting showed four boxes of his possible status, with an “X” marked in the one that reads: “The entity (Turlock Air Center) is in good standing with the Franchise Tax Board.”
On receiving the letter, Stuhmer was elated. He emailed me:
“…The fact remains that I was telling the truth and LLC is in good standing, despite the suspended status on the state website. When my credibility is being questioned, my integrity is being challenged as well, so I could not let that stand.”
Besides Stuhmer’s feeling of vindication, was his status with the Franchise Tax Board important in terminating his contract with the city? The city staff said it was not among the long laundry list of non-compliance factors that were grounds for the contract termination.
The staff did, however, mention the listing in its Feb. 4 agenda report to the Council. The report notes that Turlock Air Center’s “suspended” status with the Franchise Tax Board, which collects sales and petroleum taxes, was in effect in June when Stuhmer entered into an amended agreement with the city. “Therefore, TAC did not have the legal authority to enter into the amendment, and at the City Council’s discretion, it could be voided,” the staff report states.
But the city staff added a disclaimer, stating, “TAC’s current suspended status is not relevant to staff’s recommendation that the city terminate the entire agreement for noncompliance, including the amendment.”
What the status was on the day the amended contract was ratified in June is still unknown.
If you’re smelling lawsuit, you’re on the right track. Anyone at the Feb. 4 meeting had a whiff of that likelihood, especially after hearing wording in a letter from Stuhmer’s attorney, Thomas Byrne of Denver, to City Attorney Dan Sodergren.
In arguing that the city had no legal basis to terminate the contract, Byrne said that if the City Council did end it, “TAC will be forced to proceed with pursuing all its available remedies through litigation.”
It should be noted that the city had no control over the prices Turlock Air Center was charging for aviation fuel at the airport, but that has been an important underlying factor in all of this. The sky-high prices charged by Turlock Air Center at Tracy Municipal Airport were driving away potential fuel customers, including local pilots. And according to the president of Skyview Aviation, the airport’s major tenant, the fuel prices were costing him money and jeopardizing his firm’s continued presence at the airport.
If all of this sounds a bit convoluted and somewhat puzzling, you and I agree. The upshot is, though, that the city will soon resume operating the fuel service at the airport. That means prices will once again be competitive. And that’s a positive development for the airport.
But the puzzling airport antics continue. After all, so far we have seen disputes over the length of the main runway, the $50,000 payment by The Surland Cos. for Stuhmer’s annual 2013 fee to the city, the 25-year-plus fuel-service contract with three 10-year options, the city’s termination of Turlock Air Center’s contract and now Stuhmer’s revised status with the Franchise Tax Board.
Stay tuned. I can already visualize attorneys starting to scribble arguments on their yellow notepads.