AUGUSTA — City councilors approved a new agreement with the state in which the city will run the Augusta State Airport, for $550,000 a year, which is the same annual amount the city has received for doing so the last three years.

For the last 15 years, the city has leased the state-owned airport and was paid an annual fee to run it.

City officials said the new management and operating agreement more accurately reflects the city’s role at the airport, compared to the previous lease arrangement.

“It’s a different kind of agreement that doesn’t change, substantially, the relationship” between the city and state, City Attorney Stephen Langsdorf said.

The city will continue to manage the airport and receive $550,000 a year — the same amount it has received from the state each of the last three years.

City officials have said that’s not enough to cover all the true, and increasing, costs of running the airport. However, they said they recognize the city’s role in supporting the airport and the importance to the city and surrounding area of having a full-service airport, with commercial passenger service.

“The airport is a very vital part of the city. It brings commerce into it,” Councilor Jeffrey Bilodeau said.

While the city does not pay directly for day-to-day airport operations with local money, City Manager William Bridgeo has said Finance Director Ralph St. Pierre spends time doing the finances for the airport, other city officials also spend time on airport issues, and sometimes workers from the city’s public works crew lend a hand at the airport, for none of which the city receives state funding.

The agreement calls for the payment from the state to the city to be “adjusted biennially” in future years but doesn’t specify by how much the funding could increase.

If costs exceed state funding and the state won’t provide more money to run the airport, the city would be able to pull out of the agreement.

Rick Dubois, director of multi-modal operations for the state Department of Transportation, said earlier this week the state is satisfied with how the city has run the airport.

Dubois said the $550,000 is already in the state budget for next year and funded by a dedicated revenue stream from aviation fuel taxes and car rental fees, instead of the state’s general fund.

Dubois did not attend Thursday’s Augusta City Council meeting, at which councilors unanimously approved the agreement.

No members of the public spoke about the issue.

It took about a year of negotiations for the city and state to reach agreement. Bridgeo said a major holdup was the issue of who would be legally responsible should someone be injured or environmental damage were to occur at the airport. Eventually, the indemnification language originally sought by the state was modified enough to satisfy St. Pierre, the city’s insurance carrier, and Langsdorf.

“I had a fair number of things I had to address with that contract,” Langsdorf said. “There were all kinds of insurance and indemnification things the state was trying to do to us. We were able to work it out.”

Keith Edwards — 621-5647

[email protected]

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