Tuesday, February 26, 2008

What goes up must come down

My apologies for not posting the last couple of days but i am trying to finish up an appellate brief which is due. Thanks for being patient and reading this blog.

A bunch of bills owed to the city and more money owed to its students many of whom took out student loans to pay for flight school or air traffic control school. The loan repayments still have to be paid back by the students despite the fact that the schools closed. I've heard that some ATC schools are picking up the students to help them out. Thank you for that, as for the others good luck. perhaps some change needs to be made to the Bankruptcy Act to aid folks stuck in these kinds of situations.

City calculates loss of $140K in unpaid bills
By Gerard MacCrossan: Herald Zeitung

Silver State Helicopter’s bankruptcy could cost the city of New Braunfels $138,000 in unpaid fuel bills and utilities, air traffic control tower operators’ fees and equipment replacement.

City of New Braunfels Finance Director Deborah Korinchock told the city council Tuesday that in a best-case scenario, the U.S. Bankruptcy Court in Las Vegas would release the air traffic control tower and hangar contracts so that the city could lease the facilities to other clients. The city anticipates losing $44,120 in unpaid leases on the Silver State contract during that time.

A budget document shown to the council Monday evening showed that on Feb. 4, when Silver State’s operations ceased, the city had billed $73,604 for fuel and oil. The wholesale cost of the fuel and oil is $52,599.Lease payments totaling $27,070, utilities estimated at $7,840 and commercial activities fees totaling $82,48 also are owed. The total outstanding debt of services billed to Silver State is $116,762.

If the city is unable to lease the facilities before the end of the fiscal year, the airport fund could end the year $251,613 over budget. That projection would have been higher, except for $82,000 in unbudgeted revenue, including $63,534 from a recent legal settlement with NB Aero.Mayor Bruce Boyer said council’s direction is for city staff to work toward getting the bankruptcy court to release its hold on the city’s two buildings. “We need the hangar release so we can put a tenant in there,” Korinchock said.

A Las Vegas law firm was hired Monday evening by unanimous council vote, using funds already budgeted for contract attorney fees, to represent the city in the bankruptcy court.

Even if the leases aren’t released promptly, the city will continue to operate the tower, Boyer said.“The cost of operating the tower is not minimal (approximately $4,000 per week) but it’s important to keep the tower operating,” he said.Boyer said the city’s hands are tied until the bankruptcy court addresses the leasing issue. There is no guarantee the city will recover any of the $116,000 in unpaid Silver State bills.“There are over 3,500 unsecured creditors,” he said.

Regaining the ability to lease the Silver State hangar to another customer is a big factor in getting the airport fund back on track.“The we can get other customers we can sell fuel to,” Boyer said. “We can do pretty well as it relates to the cost.”

The city’s unpaid final bill to Silver State for $73,000 for fuel and oil that the city paid $52,000 at wholesale cost. That included the discount granted to Silver State and other high volume customers.Boyer said some changes will be made for future airport operations.

“The extending of credit beyond a month or so is obviously something we won’t be doing any more,” he said.