Minot International Airport and its long-time parking operator intend to part ways at the end of the year.
ARM Parking, an operation of Dakota Territory Air Museum and the Railroad Museum of Minot, declined to accept the terms of a five-year management contract that was placed up for bids recently.
"There was no way we could comply so we basically backed out," said Rich Larcombe, board member for ARM Parking.
Andrea Johnson/MDN • ARM Parking, which manages parking operations for the airport, has decided not to renew its contract with the city.
Currently, ARM Parking has charge of the airport's parking, providing the city with 50 percent of revenue. Larcombe explained that under the new contract, the city would assume ownership of the parking operation and pay a company a management fee to operate it.
The city has received one proposal from Republic Parking System in Chattanooga, Tenn. The Airport Committee will act on the proposal Monday to make a recommendation to the Minot City Council.
Larcombe said ARM Parking cannot sustain operations on the management fee offered by the city, despite operating in a manner that it considers inexpensive.
The city declined ARM Parking's offer to extend its existing contract, which expires at the end of the year, until new parking facilities are completed in the fall of 2015, Larcombe said.
ARM Parking then submitted a bid in which it agreed to operate under the existing terms of its contract, which does not meet the city's bid requirements.
Andrew Solsvig, airport director, said he was surprised by ARM Parking's decision, but the airport cannot continue to operate parking as it has been.
"We are operationally at a point where that's unacceptable," he said. "We need to have higher standards. We are busier than we have ever been in the past. We need an operation that fully understands parking management. We hate to see a 20-year operation go, but if they feel like they are unable to provide the service that we are needing, it's understandable that they made the decision that they did."
The airport will reimburse ARM Parking for recent investments made in the parking system infrastructure, he said.
Pulling out of the airport will mean a loss of revenue for the two non-profit museums. Income after expenses has been running at about $50,000 a year for each museum, Larcombe said. Total revenue through September this year came to $1.5 million, of which the city received about $570,000, he said.
Until the uptick in activity in the past few years, though, the museums were netting less than $4,000 each. ARM Parking has invested some of the recent windfall into operational improvements as directed by the airport. It also has banked a sizable sum rather than paying it all out in dividends because of uncertainty over future expenses, Larcombe said.
The bankroll now will be seed money as ARM Inc. looks for a new venture, he said.
"The airport museum and railroad museum have decided as a group that we are going to go into some other business together," he said. "ARM Parking may disappear as a company, but ARM Inc. may be into something else.
"Minot airport has been very good to us," he added. "We have done the best we can. We have done our part."
Solsvig said the change in parking system is necessary with the airport's increase in activity.
"The operation will bring more revenue to the airport, which is needed to help fund general airport operations and other programs and projects," he said.
Under the new contract, the management company must provide $350,000 up-front to help get the new system established. The airport will be collecting revenues and paying the management company a fee plus reimbursement for supplies and other eligible costs that the company incurs. The airport will provide snow removal.
Solsvig said Republic Parking System has shown interest in hiring current employees. They plan to hire a full-time manager, a part- or full-time supervisor, full-time cashiers and provide employee benefits, he said.