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500K in change orders ‘not authorized’ by Airport Authority, operating budget saved by CARES Act

By Bobby Bordelon

Financial concerns from both before and after the COVID-19 pandemic have caused unexpected changes to the Greenbrier Valley Airport budget. Pre-COVID-19 change orders to a fuel farm project cost the airport over half a million dollars, while extra Congressional funding has bolstered the operating budget.

The airport’s savings account was reduced by approximately 20 percent in June after the board was billed for five changes orders it to a project it was not expecting.

“A year ago they built the fuel farm and with [that], they built a fuel truck storage building,” explained Airport Director Brian Belcher. “The storage building was covered under change orders which the board wasn’t made aware of. This is [before I was director]. So the board did their duty and investigated how much the cost of the building actually was.”

Airport Authority Chairman Debbie Phillips explained the board was made aware of the change orders when Titan Fuels approached them, asking for over half a million dollars in payments. According to Phillips, the board did not have any documentation of the change orders.

“There were no documents in our files that indicated a change to the project,” Phillips explained to the Mountain Messenger. “No change orders, no amendments to contracts, and Titan admitted that they did it on a handshake. Was money stolen? No, but it put a hole in the budget of the airport. … It was totally outside of our budget, not authorized, and had no review by our people. We were told by the contractor it was approved and authorized by [former Airport Director Stephen] Snyder. … That was a lot of money we didn’t plan on spending.”

After Titan Fuels approached the board, additional research was conducted into fair pricing for the completed storage change orders. Given the pricing seemed fair and the airport utilized the storage, the board agreed to pay approximately $565,000 out of their reserve fund, reducing the savings total from $2.4 million to $1.9 million.

“They thought they got a fair product and they paid for it,” Belcher said.

Although the board approved the change orders after the fact, Belcher explained this was not the way he would have handled the process.

“Let’s pretend we were going to do that today,” Belcher said. “After they got into the fuel farm, they decided to do a [storage] building. None of that was ever taken to the board. If you’re into a project and you want to make a change, that would change the price of the project. You have to get the contractor to say … ‘this is what your cost would be.’ The proper way to do it would be to take that, before any decisions were made, to my board and say ‘we need to make these changes but it’s going to cost us this amount’ and they would vote to approve those change orders. In [this] case, it wasn’t done like that.”

Belcher noted that if the authorizing party were still employed by the airport, they would likely have trouble with the board as a result.

Despite the hit to reserves, the airport’s operating account was saved by grant funding from Congress in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The funds allowed the airport to continue to function while air travel is massively reduced.

“Our rents and our fuel sales go into an operating accountand it currently has $110,000 in it,” Belcher explained. “We got $1,042,000 from the CARES Act and we’re using that to pay employee benefits so we don’t have to lay anyone off during the COVID-19 pandemic. … Passenger travel fell through the floor. They didn’t want airports laying off all their employees.”

Both fuel and passenger travel account for much of the airport’s operating budget, and without the Congressional funding, the airport would have needed to cut spending and employees.

“That money would have normally come out of the operating budget, so now we’re able to save into the operating budget … which will last us a little over a year,” Belcher said.