U.S. Department 

of Transportation 

Federal Aviation 

Administration 

August 8, 2016 

Via Federal Express 

Konrad Kuczak 

Office of the Associate Administrator 

for Airports 

130 West Second Street, Suite 1010 

Dayton, OH 45402 

Rachel Owlsey 

Bethany A. Breetz 

Stites & Harbison, PLLC 

400 West Market Street, Suite 1800 

Louisville, KY 40202 

Re: FAA Docket No. 16-13-02 

Dear Mr. Kuczak, Ms. Owlsey, and Ms. Breetz: 

800 Independence Ave., SW. 

Washington, DC 20591 

Enclosed is a copy of the final decision and order of the Federal Aviation Administration 

(FAA) with respect to the above-referenced matter. 

In arriving at a final decision on this Appeal, the FAA has reexamined the record, including the 

Director's Determination, the administrative record supporting the Director's Determination, 

the Complainants' Appeal, and the Respondent's Reply for consistency with applicable law and 

policy. Based on this reexamination, the FAA Associate Administrator for Airports affirms the 

Director's Determination. The Associate Administrator concludes that the Director's analysis 

and conclusions are supported by a preponderance of reliable, probative, and substantial 

evidence, and is consistent with applicable law, precedent, and FAA policy. The Complainants' 

Appeal does not have persuasive arguments sufficient to reverse any portion of the Director's 

Determination. 

The reasons for upholding the Director's Determination are set forth in the enclosed final 

agency decision. 

Sincerely, 

/<:~(k_ r f/~~- 6Vxevin C. Willis, Acting Director 

Office of Airport Compliance 

and Management Analysis 

Enclosure 
UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, DC 

SPA Rental, LLC 

DBA MSI Aviation, 

v. 

Complainant/ Appellant 

Somerset - Pulaski County Airport Board, 

Respondent/ Appellee 

FINAL AGENCY DECISION 

I. INTRODUCTION 

FAA Docket No. 16-13-02 

This matter is before the Federal Aviation Administration (FAA) Associate Administrator 

for Airports on appeal filed by SPA Rental, LLC, d/b/a MSI Aviation (Complainant, SPA, 

MSI, or Appellant) from the Director's Determination of September 1, 2015, issued by the 

Director of the FAA Office of Airport Compliance and Management Analysis, pursuant to 

the Rules of Practice for F edera!ly Assisted Airport Enforcement Proceedings found in Title 

14 CFR part I 6 (Rules of Practice). 

Complainant argues in its appeal and brief dated October 27, 2015, to the Associate 

Administrator for Airports that the Director's Determination contains errors in that: 

A. It fails to recognize that the Board, by amending the lease to Somerset Regional 

Aviation, LLC., (Somerset) Somerset's Limited Fixed Base Operator (LFB0) 1 

Agreement, and by amending the Airport Minimum Standards the Board 

unjustly discriminated in favor of Somerset to the detriment of SPA. FAA 

Exhibit I, Item 24, p. 1. 

1 The term "Limited Fixed Base Operator" is not defined by the FAA; it is analogous with the term 

"Specialized Aviation Service Operations" (SASO). SASOs are sometimes known as single service providers 

or special FBOs performing less than full services. These types of companies differ from a full service FBO in 

that they typically offer only a specialized aeronautical service such as aircraft sales, flight training, aircraft 

maintenance, or avionics services for example. Advisory Circular (AC) 150/5190·7, Appendix 1 par. l.l(n). 
B. It concludes that Minimwn Standards of Operation comply with grant 

assurances as long as the Minimwn Standards are uniformly, but 

indiscriminately applied to operators engaged in dissimilar businesses. FAA 

Exhibit 1, Item 24, p. 2. 

Somerset - Pulaski County Airport Board (Respondent, Board, Sponsor, or Appellee) filed 

a Response dated December 18, 2015, to the Complainant's Appeal stating that it developed 

Minimwn Standards after consulting with the FAA Airport District Office that established 

an Incentive Program which provided incentives to aircraft maintenance LFBOs. 

Respondent further states that SPA mischaracterizes the Incentive Program to obtain 

preferential treatment. Respondent argues because SPA is not similarly situated with the 

targeted aircraft maintenance LFBOs it cannot claim that Respondent unjustly discriminated 

against it in violation of the grant assurances. Respondent states that it offered to make the 

Airport available to SPA on reasonable terms and did not unjustly discriminate against SPA. 

Respondent requests that the Associate Administrator issue a Final Agency Decision 

affirming the Director's Determination. FAA Exhibit 1, Item 29, p. 13. 

Upon an appeal of a Part 16 Director's Determination, the Associate Administrator will use 

the following analysis: 

(1) Are the findings of fact each supported by a preponderance of reliable, probative, 

and substantial evidence contained in the record? 

(2) Are conclusions made in accordance with law, precedent, and policy? 

(3) Are questions on appeal substantial? 

(4) Have any prejudicial errors occurred? 

14 CFR § 16.33( e); see also, e.g., Ricks v Millington Municipal Airport, FAA Docket No. 

16-98-19, December 30, 1999, Final Decision and Order, p. 21. 

In arriving at a final decision on this Appeal, the FAA has reexamined the record, including 

the Director's Determination, the administrative record supporting the Director's 

Determination, the Complainant's Appeal, and Respondent's Reply in light of applicable 

law and policy. Based on this reexamination, the FAA affirms the Director's Detennination. 

The Associate Administrator concludes that the Director's Determination is supported by a 

preponderance of reliable, probative, and substantial evidence, and is consistent with 

applicable law, precedent, and FAA policy. The Complainant's Appeal does not contain 

persuasive argwnents sufficient to reverse any portion of the Director's Determination. 

This decision constitutes the final decision of the Associate Administrator for Airports 

pursuant to 14 CFR § 16.33(b ). 

II. SUMMARY OF THE DIRECTOR'S DETERMINATION 

In its Complaint and Reply, SPA alleged Respondent violated Grant Assurance 22, 

Economic Nondiscrimination; Grant Assurance 23, Exclusive Rights; and Grant Assurance 

24, Fee and Rental Structure. The Complainant claimed that Respondent engaged in 

2 
economic discrimination by demanding SPA enter into tbe new proposed LFBO lease with 

objectionable conditions. SPA further alleged that Respondent demanded that SPA perform 

a minimum often (1 0) tbird party annual aircraft inspections per annum. SPA alleges tbat 

Respondent is forcing SPA to alter its fundamental business by engaging in a business 

which it has not heretofore engaged. Finally, SPA alleged that Respondent was failing to 

credit the number of annual inspections performed by SPA's managing member, Walter 

Iversen,2 on aircraft owned by himself, his spouse or SPA against the 10 third party 

minimum. FAA Exhibit 1, Item 20, p. I. 

The Director determined tbat tbe following issues required analysis to provide a complete 

review of Respondent's compliance witb applicable Federal law and policy: 

1. Whether Respondent is in violation of Grant Assurance 22, Economic 

Nondiscrimination, by requiring tbat Complainant (SPA) agree to a set of new 

Minimum Standards for Fixed Base Operation that would require changes to SPA's 

business model. 

2. Whether Respondent is in violation of Grant Assurance 23, Exclusive Rights, by 

requiring that Complainant meet tbe terms of revised Minimum Standards in order 

to receive incentives and subsidies. 

3. Whether Respondent is in violation of Grant Assurance 24, Fee and Rental 

Structure, by offering a financial incentive program to increase business at tbe 

airport. 

FAA Exhibit I, Item 20, pp. 16-17. 

Witb respect to tbe first issue, the Director found that Respondent had justified changes to 

the minimum standards, when Respondent explained that attracting, developing, and 

sustaining meaningful tbird party maintenance services would facilitate growth at Lake 

Cumberland Regional Airport by attracting more users and allowing the Airport to generate 

additional revenue streams. 

Regarding the second issue, the Director concluded tbat SPA itself was neither a certificated 

aircraft repair station nor had the ability to conduct annual inspections. Thus, it could not 

hold itself out to tbe public to conduct annual inspections. It was reasonable to conclude that 

SPA was not a traditional Fixed Base Operator (FBO? but an aircraft refurbisher and 

2 The FAA Record contains references to Mr. Walter P. Iversen with his name being spelled "Iversen" and 

"Iverson." It appears that Mr. W. Thomas Halbleib, Jr., used the spelling "Iverson" in his letter dated February 

13,2013, addressed to "Wally Iverson." FAA Exhibit 6, Item L. He further uses that spelling in bis e-mail 

dated January 27,2013, to Ms. Winter R. Huff. FAA Exhibit 6, Item N. The Director uses the spelling 

"Iverson" thirteen times in non-quoted references in the Director's Determination. Numerous citations 

omitted. The Associate Administrator accepts "Iversen" as the correct spelling because that is the spelling 

contained in Mr. Iversen's Affidavit. FAA Exhibit 1, Item 24, Exhibit A. 3 A fixed-base operator (FBO) is a commercial entity providing multiple aeronautical services such as fueling, 

maintenance, storage, ground and flight instruction, etc., to the public. FAA Order 5 I 90.68, Appendix Z, p. 

314. 

3 
reseller. The Director explained that Grant Assurance 23, Exclusive Rights, does not 

preclude a sponsor from modifYing minimum standards to reflect changing needs and to 

protect the public interest. The Director compared this analysis to that in the analysis of 

Issue 1, and concluded that the grant assurances do not require sponsors to develop and 

implement minimum standards. However, FAA policy specifies that sponsors choosing to 

establish minimum standards should apply them objectively and uniformly to all similarly 

situated on-airport aeronautical service providers. FAA Exhibit 1, Item 20, pp. 24-25. 

Regarding the third issue, the Complainant argued that the incentives the Airport Board 

provided to Somerset were dramatically disproportionate to those offered to SPA. The 

Director found that SPA was not similarly situated to Somerset. He further found no 

evidence that Respondent had required SPA to change its business model. He found no 

sufficient evidence to support Complainant's claim that Respondent offered incentives to 

Somerset that were dramatically disproportionate or different to those offered to the 

Complainant to sustain a Grant Assurance 24 violation. FAA Exhibit 1, Item 20, p. 27. 

The Director found that Respondent was currently not in violation of its Federal obligations 

with respect to Grant Assurance 22, Economic Nondiscrimination; Grant Assurance 23, 

Exclusive Rights; and Grant Assurance 24, Fee and Rental Structure. FAA Exhibit 1, Item 

20, p. 2. 

III. PARTIES 

A. The Airport 

The Lake Cumberland Regional Airport (KSME or Airport) is a federally-funded, public 

use, general aviation airport owned and operated by Somerset-Pulaski County, Kentucky. 

The 288-acre facility is located three miles south of Somerset, Kentucky. As of March 31, 

2016, it had 29 based aircraft. The Airport had 36,628 operations for the 12-month period 

ending July 24, 2013. The airport has one paved runway approximately 5,800 feet long. 

FAA Exhibit 1, Item 32. The development of the Airport has been financed, in part, with 

funds provided to the County as the Airport sponsor under the Airport Improvement 

Program (AlP), authorized by the Airport and Airway Improvement Act of 1982, as 

amended, 49 U.S.C. 47101, et seq. As a result, the County is obligated to comply with the 

FAA sponsor assurances and related Federal law, 49 U.S.C. 47101. The most recent grants 

awarded include $82,875 in 2012 and $99,423 in 2014, both for obstruction removal. FAA 

Exhibit 1, Item 19. 

B. Complainant/Appellant 

The Complainant, SPA Rental, LLC, d/b/a/ MSI Aviation, was a Limited Fixed Base 

Operator (LFBO) under a prior agreement with the Airport. The company has been engaged 

in purchasing, refurbishing and reselling aircraft from two privately built hangars that have 

since reverted to the Airport. FAA Exhibit 1, Item 1, page 1. Operating from KSME since 

1986, the Complainant is currently classified as a holdover tenant under the hangar leases 

that expired on December 31, 2011. FAA Exhibit 1, Item 6, Exhibits C and E. 

4 
IV. BACKGROUND AND PROCEDURAL HISTORY 

A. Background 

SPA describes itself as "engaged in the business of purchasing, refurbishing, and re-selling 

aircraft" from two leased hangars, Hanger B-3 and Hanger B-4, at the Lake Cumberland 

Regional Airport. FAA Exhibit I, Item I, p. I. SPA constructed both hangars, sharing one 

common wall, at its own expense. Hanger B-3 is a 2,400 square foot structure completed in 

1988. Hanger B-4, completed in 1992, is 3,200 square feet. The hangars became the 

property of the Airport Board on January I, 2009, upon expiration of the ground leases 

between SPA and the Airport Board. FAA Exhibit I, Item 5, pp. 4-5. 

Walter Iversen is an FAA aircraft maintenance technician holding an Airframe and/or 

Powerplant (A & P) certificate accredited with an Inspection Authorization. He has 

provided mechanical repairs, including airworthiness inspections, to aircraft owned by SPA, 

himself, and his spouse, from the leased hangars. Three aircraft, owned Mr. Iversen, the 

managing director of SPA, and his spouse, are stored in the two hangars. During its history 

at KSME, SPA mechanics have never performed, in any 12-month period, more than three 

I 00-hour or annual inspections for aircraft being refurbished and held for resale. SPA did 

not provide details of the number of aircraft it has purchased, refurbished and then sold 

from its hangar facilities at KSME. SPA has not conducted airworthiness inspections of 

aircraft to the general public. FAA Exhibit I, Items I and 5. 

SPA's last "Limited Fixed Base Operator" (LFBO) agreement became effective on June 30, 

2009. As stated in the LFBO Agreement, automatic renewal required that SPA continue to 

meet all of the required qualifications contained in the Agreement. The Agreement states 

that SPA "shall operate a limited fixed base operation (aircraft, engine and accessories 

maintenance) in a 40 x 142 foot airplane hangar know as Hangar B3 and Hangar B4."4 The 

Agreement also specifies that SPA "may also store two (2) non-owned aircrafts and manage 

said aircraft[s] for another by providing pilots, light maintenance and upkeep." In addition, 

the Agreement states that SPA "shall comply with all of the Minimum Standards for Fixed 

Base Operations at the Lake Cumberland Regional Airport as they are amended from time 

to time." FAA Exhibit I, Item I, Exhibit A. 

By letter dated November 29, 2012, Respondent provided SPA notice that all three 

agreements (LFBO and two hangar lease agreements) terminated on December 31, 2012, 

and that SPA must vacate the hangars by that date. FAA Exhibit I, Item 6, Exhibit E. Since 

January 1, 2013, SPA has continued to occupy Hangar B-3 and Hangar B-4 at the Lake 

Cumberland Regional Airport as a holdover tenant. FAA Exhibit 1, Item 5, p. 9. 

Effective March 24,2012, the Board approved Somerset Regional Aviation, LLC, 

(Somerset) to establish an LFBO at the airport, operating from a 4,800 square foot hangar 

(Hangar I 0), for the purposes of performing aircraft repairs, maintenance, and airworthiness 

4 The LFBO Agreement lists the total square footage of the Hangars B-3 and B-4 as 5,680 square feet. FAA 

Exhibit 1, Item 1, Exhibits A and C. 

5 
inspections of aircraft. FAA Exhibit 1, Item 1, pp. 2-3. The one-year LFBO and Hangar 10 

lease agreements both include a provision allowing Somerset to extend the LFBO 

Agreement and Hangar Lease for two successive periods of one year each. The fee for each 

year of the LFBO Agreement was one dollar. For the Hangar 10 Lease, the Airport Board 

waived rental fees in consideration for the on-site maintenance services that Somerset 

agreed to provide to the public under the terms of the LFBO Agreement. In addition, the 

Airport Board agreed to reimburse Somerset for the lease-mandated public liability 

insurance premiums in an amount not to exceed $8,000 per twelve month period. FAA 

Exhibit 1, Item 5, p. 5 and FAA Exhibit 1, Item 6, Exhibit F. 

On April4, 2012, Mr. James H. Williams, FAA Memphis ADO, wrote to Ms. Kellie Baker, 

Airport Manager, Somerset-Pulaski County Airport, seeking clarification regarding the new 

LFBO Agreement with Somerset. Specifically, Mr. Williams sought clarification of the 

following: 

• Has an existing FBO at the airport expressed a desire to exercise a contract 

continuation clause? If not, specify the reasons for not renewing the contract. 

• Why did the newspaper advertisement seeking an FBO not mention the availability 

of a less than market rate incentive package? 

• Given that the Airport Board received two proposals in response to the ad, explain 

why the continued presence of SPA in conjunction with the interest of two potential 

FBO's did not negate the need for incentives? 

Mr. Williams cautioned Ms. Baker that "fees and hangar rental well below fair market value 

violates the grant assurances and could be considered as 'Revenue Diversion."' Mr. 

Williams further explained that "these terms would make it unreasonably costly or 

impractical for the airport to have more than one fixed-based operator because they would 

be subject to the same rates, fees, rentals as the other tenants making same or similar uses of 

the airport." FAA Exhibit 1, Item 6, Exhibit G. 

On April 19, 2012, SPA filed an informal complaint in the form of a letter from Winter 

Huff, an attorney representing Complainant, to James H. Williams, FAA, citing refusal of 

the Board to renew the LFBO agreement with SPA while providing incentives to Somerset. 

In its informal complaint, SPA alleges that: ( 1) the Sponsor had refused to renew the LFBO 

Agreement with SPA; and (2) the Sponsor had offered "discriminatory incentives to 

Somerset to the detriment of SPA." FAA Exhibit 1, Item 1, p. 3; and Item 1, Exhibit E. 

On April23, 2012, John T. Mandt, an attorney representing the Somerset-Pulaski County 

Airport Board, replied to Mr. Williams' letter of April4, 2012, answering the questions 

posed in the April 4 letter, detailing the rationale for the new LFBO Agreement, and 

providing background on the incentive plan. In reply to Mr. Williams' first question, Mr. 

Mandt explained that the Airport Board notified SPA that it's LFBO Agreement and Hangar 

Lease, set to expire on December 31, 2011, "would expire as written." Mr. Mandt also 

maintained that SPA "has no maintenance customers and has not for many years." 

6 
Responding to the second question, Mr. Mandt stated that the requirement for incentives 

originated with the bidders, rather than the Airport Board. Addressing the third question, 

Mr. Mandt reiterated that the need for incentives originated with the bidders. He also 

clarified that SPA "did not submit a bid and to the Board's knowledge none of the present 

users of the Airport do business with him." FAA Exhibit I, Item 6, Exhibit G. 

On May 9, 2012, the FAA Southern Region Memphis Airports District Office (Memphis 

ADO) issued a finding addressing the allegations raised in the informal complaint The 

Memphis ADO determined that "this lease agreement fails to meet the Terms and 

Conditions of Accepting AlP Grants as stated in Grant Assurances 24." FAA Exhibit I, 

Item I, Exhibit D. The Memphis ADO further wrote that "in its opinion, the incentives 

included in the lease agreement make it unreasonably costly or impractical for the airport to 

have more than one fixed based operator. Therefore, we request that you terminate this lease 

agreement or modified (sic) it to show compensation based on fair market value." FAA 

Exhibit l, Item I, Exhibit D. 

The FAA specified that the Airport Board should respond with a course of conective action 

to the Memphis ADO no later than May 31,2012. FAA Exhibit 1, Item 1, Exhibit D. 

On May 18, 2012, Mr. Tom Halbleib, counsel for the Airport Board, replied to FAA's 

conespondence from May 9, 2012, and agreed to respond with a plan of conective action. 

FAA Exhibit I, Item 6, Exhibit H. 

On July 23,2012, Mr. Richard Van Hook, Chairman of the Airport Board's Maintenance 

Committee wrote to FAA's Mr. James Williams, outlining a conective action plan to 

address FAA concerns. The letter explained the proposed incentive program was developed 

to ensure availability of maintenance services at the Airport, and describing the source of 

funding from the local occupational license fee. Mr. Van Hook described the subsidy 

incentive as consisting of "the deferral of rent for no more than one hangar leased from the 

Airport Board and the reimbursement of certain insurance costs (up to $8,000 toward the 

cost of a general commercial liability policy that names the Airport Board as an additional 

insured with limits in an amount not less than $1,000,000)." The funding source of the 

incentive program Mr. Van Hook advised was via Pulaski County assessing an occupational 

license fee on all people working in the county. He confmned that the fee is not related to 

the use of the Airport, nor would it be subject to FAA's Revenue Use Policy. FAA Exhibit 

I, Item 6, Exhibit B. 

Additionally, Mr. Van Hook explained that given the Airport Board's interest in 

establishing and maintaining a meaningful volume of third party paid maintenance on the 

Airport, the Board would armually confirm that any recipient of incentives had completed 

no fewer than ten (1 0) third party armual inspections. He further advised that any incentive 

recipient failing to meet the inspection volume threshold, would be required to pay the rent 

as well as reimburse the Airport Board for the insurance. FAA Exhibit 1, Item 6, Exhibit B. 

Mr. Van Hook also stated that if the proposed corrective action plan satisfactorily addressed 

FAA concerns then, pending Airport Board approval, amendments to the Hangar 10 Lease, 

7 
the LFBO Agreement, and Minimum Standards would be forwarded to Somerset for 

execution. Mr. Van Hook clarified that SPA and any other maintenance service provider on 

the Airport would be offered the same arrangement. Finally, Mr. Van Hook noted that the 

Airport Board would truncate the LFBO Agreement to one year, allowing the Airport Board 

to solicit bids, including the incentive package, for a maintenance provider at the end of one 

year. FAA Exhibit 1, Item 6, Exhibit B. 

On August 7, 2012, Tom Halbleib forwarded to FAA's James Williams justification of the 

proposed threshold of completing ten annual aircraft inspections in order to qualify for the 

incentive. Mr. Halbleib explained that the development of meaningful third party 

maintenance services would facilitate growth and development at Lake Cumberland 

Regional Airport by attracting more users and allowing the Airport to generate additional 

revenue streams. FAA Exhibit 1, Item 6, Exhibit I. 

Mr. Halbleib emphasized that based on the Airport Board's Maintenance Committee 

analysis setting the threshold below ten annual inspections would risk the incentive 

exceeding the revenues generated by the incentive. FAA Exhibit 1, Item 6, Exhibit I. 

On August 21, 2012, Mr. Phillip J. Braden, FAA Manager, Memphis ADO, in a letter to 

Mr. Van Hook, Chairman Somerset-Pulaski County Airport Board Maintenance Committee, 

concurred with the Airport Board's "concept of providing incentives to promote additional 

commercial activities leading to additional airport revenue ... provided that these incentives 

are not funded with airport revenue." Mr. Braden advised that FAA does not object to the 

Airport Board using non-airport revenue as the source of funding for the incentives. Finally, 

Mr. Braden stressed that the incentive program would have to "be applied on an equal basis 

to all involved parties." FAA Exhibit 1, Item 6, Exhibit A. 

On September 21,2012, the Airport Board and Somerset agreed to an amendment ofthe 

LFBO Agreement, as well as corresponding Minimum Standards, and the Hangar Lease 

Agreement. Modifications to the LFBO Agreement include: 

• a provision that the Airport Board would advance payment to Somerset for the 

cost of public liability insurance "in an amount not to exceed $8,000." 

• a reporting requirement that Somerset report to the Airport Board "the number of 

FAA Annual Inspection the Second Party [Somerset] performed at the Airport, 

and for which the Second Party collected a reasonable fee, for urrrelated third 

parties ('Paid Third Party Annuals') during the immediately preceding year." 

• a confirmed report indicating that Somerset performed ten (1 0) or more Paid 

Third Party Annuals during the preceding year will result in the Airport Board 

forgiving Somerset's obligation to repay the insurance advance. 

• failure to meet or exceed the armual inspection threshold will require Somerset 

to immediately repay the insurance advance within ten days of notice. 

8 
FAA Exhibit 1, Item 6, Exhibit F. 

The Amendment to the accompanying Minimum Standards detailed the new reporting 

requirements in addition to a new section describing the incentive as follows: 

• "Section 10. MAINTENANCE SUBSIDY INCENTIVE. The Airport Board in 

its sole discretion may from time to time determine that there exists insufficient 

availability of aircraft maintenance services at the Airport and, to incentivize the 

provision of such services, grant subsidy incentives on the terms and subject to 

the conditions set forth in the attached July 23, 2012, letter from the Chairman of 

the Airport Board's Maintenance Committee to the Federal Aviation 

Administration." 

• "During any period when such subsidy incentives are offered, they will be 

offered to all similarly situated providers of maintenance services at the airport." 

• "The corresponding amendment to the Hangar Lease at Section 7 addresses the 

insurance premium provisions covered in the amended LFBO Agreement." 

• "In addition, Section 2 of the amended Hangar Lease is modified to include the 

provision of rent abatement in the amount of $400 each month provided that 

Somerset is able to meet or exceed the ten Third Party Annual thresholds 

detailed above." 

FAA Exhibit 1, Item 6, Exhibit F. 

On October 2, 2012, Mr. Halbleib sent to Winter Huff a form of hangar lease (for Hangar 

B-3 only) and a form of LFBO agreement including proposed modifications to minimum 

standards. Mr. Halbleib confirmed that the forwarded agreements "are substantially 

identical to those under which Somerset Regional Aviation will operate, upon completion of 

amendments to its Lease and FBO Agreement to conform to the Airport Board's recent 

actions." Mr. Halbleib further stipulates "[I]f other maintenance providers come onto the 

Airport before the Board modifies its actions, they too will be operating pursuant to Leases 

and FBO Agreements substantially the same as these." FAA Exhibit 1, Item 6, Exhibit M. 

On November 29, 2012, Mr. Halbleib, via email to Winter Huff, stated that this letter 

constitutes notice of the Airport Board's intent to not renew the LFBO Agreement, the 

Hangar B-3 Lease and the Hangar B-4 Lease. Mr. Halbleib clarified "[T]o the extent any of 

the Agreements have not previously been effectively terminated, all three will terminate on 

December 31, 20 12." FAA Exhibit 1, Item 6, Exhibit E. Mr. Halbleib reiterates "I have 

submitted to you proposed amendments for SPA Rental, LLC' s consideration. I understand 

that you continue to assist SPA Rental, LLC, with its consideration of these documents. 

Although the Board remains willing to discuss those amendments until December 31, 2012, 

if SPA Rental, LLC, has not reached an agreement with the Board by that date, the Board 

will expect it to vacate Hangars B-3 and B-4 in accordance with the terms of the leases and 

9 
to discontinue any operations as a fixed base operator at the Airport." FAA Exhibit I, Item 

6, Exhibit E. 

On January 27, 2013, a number of email communications occurred between Winter Huff 

and Tom Halbleib. Ms. Huff claims "Since SPA has no ownership interest in any airplanes, 

and since the Board is apparently unwilling to include Hangar B-3 in the LFBO 

arrangement otherwise, our request to change the identification of the Lessee is appropriate 

and reasonable, and would have no substantive effect on your client." FAA Exhibit I, Item 

6, Exhibit N. 

Mr. Halbleib replied that he had not been aware that MSI (SPA) had no interest in aircraft, 

emphasizing "The pre-existing B-3 lease already limits the use of the space to the housing 

of aircraft owned or leased by MSI. Should I infer that MSI has been housing the Iverson's 

[sic, Iversen's] aircraft in violation of the pre-existing leases?" Mr. Halbleib clarifies "The 

Iverson's [sic, Iversen's] can then request that the Airport Board lease B-3 to them in the 

ordinary course of business, but I'm in no position to provide any assurance that it would be 

offered to them or upon what terms it might be offered. If MSI wants to continue 

negotiating other arrangements, it will first need to vacate the premises it currently 

occupies." FAA Exhibit I, Item 6, Exhibit N. 

Ms. Huff countered in a responding email, "It is my understanding that the prior usages of 

the B-3 hangar were in accordance with the terms and provisions of the 2009lease[s], the 

last one offered by your client." Ms. Huff stressed "that the B-3 and B-4 hangars were both 

built by my client at great expense, and we advised you early on that any new arrangement 

had to encompass both hangars." Ms. Huff concludes "It is not our fault that these issues 

concerning B-3 have arisen this month- we didn't get a timely lease proposal for B-3 at all, 

and when we finally did it was neither consistent with the old terms or the new, nor, as I 

understand it, consistent with the square footage of hangar space being made available to 

the other LFBO." FAA Exhibit l, Item 6, Exhibit N. 

On February 7, 2013, Mr. Walter Iversen submitted to Kellie Baker, Airport Manager, an 

open record request, seeking copies of specific current and expired hangar leases, as well as 

Somerset's LFBO Agreement. FAA Exhibit l, Item 6, Exhibit L. 

On February 13,2013, Mr. Halbleib replied to Mr. Iversen confirming the Airport Board 

would provide to Mr. Iversen, by February 14,2013, its public records that are responsive 

to his request under Kentucky's Open Records Act, KRS 61.870-84. FAA Exhibit I, Item 6, 

Exhibit L. 

On April25, 2013, Mr. Iversen submitted to Somerset-Pulaski County Airport Board a 

proposal to enter into an LFBO agreement. SPA proposed to continue to occupy Hangars 

B3 and B4 for an initial lease term of three years with an option to renew for seven 

additional one year terms. SPA would pay $400 per month in rent for the facilities if the 

Airport Board would provide "incentives consisting of rental abatement and forgivable 

advance up to $8,000 as indicated in invitation for proposals published on April20, 2013." 

FAA Exhibit I, Item 9, Exhibit I. 

10 
On June 18,2013, Mr. Halbleib replied to Komad Kuczak, counsel for the Complainant, 

explaining that protracted discussions and negotiations with the Complainant ended when 

MSI "advised the Airport Board that it would proceed only if the Airport Board allowed Mr. 

Iverson [sic, Iversen], individually, to lease one of the two hangars previously leased to 

MSI." Mr. Halbleib added, "[T]he Complaint MSI filed with the FAA indicates that MSI 

intends to use Hangars B-3 and B-4 for maintenance and restoration of aircraft it owns. MSI 

has shown no willingness to remedy it's [sic] past failures or comply with generally 

applicable Airport Board policies. Under the totality of the circumstances, the Airport Board 

declines MSI's proposal." FAA Exhibit 1, Item 9, Exhibit 2. 

B. Procedural History 

The Complainant filed a Part 16 Formal Complaint dated March 27,2013, alleging 

Respondent violated 49 U.S. C. 40101 et seq., 47101 et seq., and Grant Assurance 24. FAA 

Exhibit 1, Item 1. 

On September 1, 2015, the Director issued the Director's Determination. FAA Exhibit 1, 

Item 20. 

On September 15, 2015, SPA filed a Motion for Extension to File Notice of Appeal and 

Brief. FAA Exhibit 1, Item 21. 

On September 28, 2015, the FAA issued an Order extending time for filing Appeal to 

November 2, 2015. FAA Exhibit 1, Item 22. 

On October 27, 2015, SPA filed its Notice of Appeal and Brief in support of its Appeal. 

FAA Exhibit 1, Item 23 and 24. 

On November 6, 2015, Respondent filed a Motion for Additional Time to Respond to 

Appeal. FAA Exhibit 1, Item 25. 

On November 23, 2015, the FAA issued an Order extending time for Respondent's 

Response. FAA Exhibit 1, Item 26. 

On December 18,2015, Respondent filed its Response to SPA's Appeal of the Director's 

Determination. FAA Exhibit 1, Item 27. 

On December 23,2015, SPA filed a Motion for Leave to File Reply to Respondent's Brief 

dated. FAA Exhibit 1, Item 28. 

On January 8, 2016, the FAA issued an Order denying SPA's Motion. FAA Exhibit 1, Item 

29. 

On March 4, 2016, the FAA issued a Notice of Extension of Time until May 31,2016. FAA 

Exhibit 1, Item 30. 

11 
On June 8, 2016, the FAA issued a Notice of Extension of Time until July 31, 2016. FAA 

Exhibit I, Item 31. 

V. APPLICABLE LAW AND POLICY 

The following is a discussion pertaining to (A) the Airport Improvement Program; (B) the 

FAA compliance program; (C) statutes, sponsor assurances, and relevant policies; (D) 

minimum standards; and (E) the complaint and appeal process. 

A. The Airport Improvement Program 

Section 47101, et seq., of Title 49 U.S.C. provides for Federal airport financial assistance 

for the development of public-use airports under the Airport Improvement Program (AIP) 

established by the Airport and Airway Improvement Act of 1982, (AAIA) as amended. 

Section 4 7107 sets forth assurances to which an airport sponsor agrees as a condition of 

receiving Federal financial assistance. Upon acceptance of an AIP grant, the assurances 

become a binding obligation between the airport sponsor and the Federal Government. The 

assurances made by airport sponsors in AIP grant agreements are important factors in 

maintaining a viable national airport system. 

B. FAA Airport Compliance Program 

The FAA discharges its responsibility for ensuring that airport sponsors comply with their 

federal obligations through its Airport Compliance Program. The airport owner accepts 

these obligations when receiving federal grant funds or when accepting the transfer of 

federal property for airport purposes. The FAA incorporates these obligations in grant 

agreements and instruments of conveyance to protect the public's interest in civil aviation 

and to ensure compliance with federal laws. 

The FAA designed the Airport Compliance Program to ensure the availability of a national 

system of safe and properly maintained public-use airports which airport sponsors operate 

in a manner consistent with their federal obligations and the public's interest in civil 

aviation. The Airport Compliance Program does not control or direct the operation of 

airports. Rather, it monitors the administration of valuable rights, which airport sponsors 

pledge to the people of the United States in exchange for monetary grants and donations of 

federal property, to ensure that airport sponsors serve the public interest. 

FAA Order 5190.6B, FAA Airport Compliance Manual, September 30, 2009, (hereinafter 

Order) sets forth policies and procedures for the FAA Airport Compliance Program. The 

Order is not regulatory and is not controlling with regard to airport sponsor conduct; rather, 

it establishes the policies and procedures for FAA personnel to follow in carrying out the 

FAA's responsibilities for ensuring airport compliance. The Order, inter alia, analyzes the 

various obligations set forth in the standard airport sponsor assurances, addresses the 

application of the assurances in the operation of public-use airports, and facilitates 

interpretation of the assurances by FAA personnel. 

12 
In addressing allegations of noncompliance, the FAA will make a determination as to 

whether an airport sponsor is currently in compliance with the applicable federal 

obligations. Consequently, the FAA will consider the successful action by the airport to 

cure any alleged or potential past violation of applicable federal obligation to be grounds for 

dismissal of such allegations. See e.g. Wilson Air Center v. Memphis and Shelby County 

Airport Authority. FAA Docket No. 16-99-10, August 30, 2001, Final Decision and Order, 

p. 5. Affirmed, Wilson Air Center. LLC v FAA, 372 F.3d 807, 6th Cir. 2004. 

C. Statutes, Sponsor Assurances, and Relevant Policies 

As a condition precedent to providing airport development assistance under AIP, the 

Secretary of Transportation, and by extension, the FAA receives certain assurances from the 

airport sponsor, including the statutory sponsorship requirements under 49 U.S.C. 47107(a). 

The FAA has a statutory mandate to ensure that airport owners comply with these sponsor 

assurances. 5 

Three grant assurances apply to the specific circumstances of this complaint: Grant 

Assurance 22, Economic Nondiscrimination; Grant Assurance 23, Exclusive Rights; and 

Grant Assurance 24, Fee and Rental Structure. 

1. Grant Assurance 22, Economic Nondiscriminarion. 

Grant Assurance 22, Economic Nondiscrimination, requires the owner of any airport 

developed with Federal grant assistance to operate the airport for the use and benefit of the 

public and to make it available to all types, kinds, and classes of aeronautical activity on fair 

and reasonable terms, and without unjust discrimination. Grant Assurance 22 deals with 

both the reasonableness of airport access and the prohibition of adopting unjustly 

discriminatory conditions as a potential for limiting access. Grant Assurance 22 implements 

the provisions of 49 U.S.C. 47107(a)(l)-(6), and requires, in pertinent part, that the sponsor 

of a federally obligated airport: 

(a) will make its airport available as an airport for public use on reasonable terms, 

and without unjust discrimination, to all types, kinds, and classes of aeronautical 

activities, including commercial aeronautical activities offering services to the 

public at the airport. 

(h) may establish such fair, equal, and not unjustly discriminatory conditions to be 

met by all users of the airport as may be necessary for the safe and efficient 

operation of the airport. 

5 See, e.g., Federal Aviation Act of1958, as amended and recodified, 49 U.S.C. 40101, 40113, 40114, 46101, 

46104, 46105, 46106, 46110; Airport and Airway Improvement Act of 1982, as amended and recodified, 49 

u.s.c. 47105(d), 47106(d), 47107(k), 47107(1), 471ll(d), 47122. 

13 
(i) may ... limit any given type, kind, or class of aeronautical use of the airport if 

such action is necessary for the safe operation of the airport or necessary to serve 

the civil aviation needs of the public. 

Subsection (h) qualifies subsection (a), and subsection (i) represents an exception to 

subsection (a) to permit the sponsor to exercise control of the airport sufficient to preclude 

unsafe and inefficient conditions that would be detrimental to the civil aviation needs of the 

public. 

FAA Order 5190.6B describes the responsibilities under Grant Assurance 22 assumed by 

the owners or sponsor of public use airports developed with Federal assistance. Among 

these is the obligation to treat in a uniform manner those users making the same or similar 

use of the airport and to make all airport facilities and services available on reasonable 

terms without unjust discrimination. See FAA Order 5190.6B, Chapter 9. 

2. Grant Assurance 23, Exclusive Rights. 

Grant Assurance 23, Exclusive Rights, implements the provisions of 49 U.S.C. 401 03( e) and 

47107(a)( 4), and requires, in pertinent part, that the owner or sponsor of a federally 

obligated airport: 

will permit no exclusive right for the use of the airport by any persons 

providing, or intending to provide, aeronautical services to the public. 

will not, either directly or indirectly, grant or permit any person, firm, or 

corporation, the exclusive right at the airport to conduct any aeronautical 

activities ... 

In Chapter 8 of FAA Order 5190.6B, the FAA discusses its exclusive rights policy and 

broadly identifies aeronautical activities as subject to the statutory prohibition against 

exclusive rights. While public-use airports may impose qualifications and minimum 

standards upon those who engage in aeronautical activities, FAA has taken the position that 

the application of any unreasonable requirement or any standard that is applied in an 

unjustly discriminatory manner may constitute the constructive grant of an exclusive right. 

Courts have found the grant of an exclusive right where a significant burden has been 

placed on one competitor that is not placed on another. See, e.g., Pompano Beach v FAA, 

774 F2d 1529 (11th Cir., 1985). 

3. Grant Assurance 24, Fee and Rental Structure 

Grant Assurance 24, Fee and Rental Structure, implements 49 U.S.C. 47107(a)(13) and 

reqmres: 

[The airport owner or sponsor} will maintain a foe and rental structure for 

the facilities and services at the airport that will make the airport as selfsustaining as possible under the circumstances existing at the particular 

14 
airport, taking into account such factors as the volume of traffic and 

economy of collection. 

The owner or sponsor's obligation to make an airport available for public use does not 

preclude the owner or sponsor from recovering the cost of providing the facility. The owner 

or sponsor is expected to recover its costs through the establishment of fair, reasonable, and 

not unjustly discriminatory fees, rentals, or other user charges that will make the airport as 

self-sustaining as possible under the circumstances existing at the particular airport. See 

FAA Order 5190.6B, FAA Airport Compliance Manual, Chapter 17, Self-sustainability. 

In addition, Section 9.6.e of FAA Order 5190.6B states: 

To aid in establishing uniform rates and charges applied to aeronautical activities 

on the airport, the sponsor should establish minimum standards to be met as a 

condition for the right to conduct an aeronautical activity on the airport. 

D. Minimum Standards 

Advisory Circular AC 150/5190-7, Minimum Standards for Commercial Aeronautical 

Activities, provides basic information pertaining to the FAA's recommendations on 

commercial minimum standards and related policies. Although minimum standards are 

optional, the FAA highly recommends their adoption as a means of minimizing the potential 

for violations of Federal obligations at Federally obligated airports. 

The FAA's policy recommending minimum standards stems from the airport sponsor's 

grant assurances to make the airport available for public use on reasonable conditions and 

without unjust discrimination. The FAA objective in recommending the development of 

minimum standards serves to promote safety in all airport activities, protect airport users 

from unlicensed and unauthorized products and services, maintain and enhance the 

availability of adequate services for all airport users, promote the orderly development of 

airport land, and ensure efficiency of operations. Once the airport sponsor has established 

minimum standards, it should apply them objectively and uniformly to all similarly situated 

on-airport aeronautical service providers. The failure to do so may result in a violation of 

the prohibition against exclusive rights and/or a fmding of unjust economic discrimination 

for imposing unreasonable terms and conditions for airport use. 

Minimum standards can be amended periodically over time; however, a constant juggling of 

minimum standards is not encouraged. The FAA expects airport sponsors to apply their 

minimum standards consistently through their interactions with aeronautical users and 

service providers. With that said, the standard of compliance does not require that airport 

sponsors enforce minimum standards so rigidly as to require identical tone and posture 

toward all airport users that have different records and history with the sponsor. Aircraft 

Management Services. Inc. v. Santa Rosa County. Florida, FAA Docket No. 16-12-02, 

March 27,2015, Director's Determination, p. 15; citing Rick Aviation. Inc. v. Peninsula 

Airport Commission, FAA Docket No. 16-05-18, May 8, 2007, Director's Determination, p. 

15 
16; Rick Aviation Inc. v. Peninsula Airport Commission, FAA Docket No. 16-05-18, 

November 6, 2007, Final Decision and Order, p. 9; and Springfield Flight Academy v. City 

of Springfield, FAA Docket No. 16-10-03, August 25, 2011, Director's Determination, p. 

15. Also see FAA Advisory Circular 150/5190-7, Minimum Standards for Commercial 

Aeronautical Activities, p. 4. 

E. The Complaint and Appeal Process 

1. Filing a Formal Complaint 

Pursuant to 14 CFR § 16.23, a person directly and substantially affected by any alleged 

noncompliance may file a complaint with the FAA. The complainant shall provide a 

concise but complete statement of the facts relied upon to substantiate each allegation. The 

complaint shall also describe how the complainant was directly and substantially affected 

by the things done or omitted by the respondents. 14 CFR § 16.23(b )(3)-( 4). 

If, based on the pleadings, there appears to be a reasonable basis for further investigation, 

the FAA will investigate the subject matter of the complaint. In rendering its initial 

determination, the FAA may rely entirely on the complaint and the responsive pleadings 

provided. Each party shall file documents that it considers sufficient to present all relevant 

facts and arguments necessary for the FAA to determine whether the sponsor is in 

compliance. 14 CFR, § 16.29(b)(l). 

Part 16 further provides that the burden of proof is on the complainant to show 

noncompliance with a statute, regulation, order, agreement, or document of conveyance. 14 

CFR § 16.23(k)(l ). The proponent of a motion (including a motion to dismiss, or for 

summary judgment), request, or order has the burden of proof. 14 CFR § 16.23(k)(2). 

Additionally, a party who has asserted an affirmative defense has the burden of proving the 

affirmative defense. 14 CFR § 16.23(k)(3). 

2. Appealing the Director's Determination 

A party adversely affected by the Director's Determination may file an appeal with the 

Associate Administrator within 30 days after the date of service of the initial determination. 

14 CFR § 16.33(c). 

The Associate Administrator does not consider new allegations or issues on appeal unless 

finding good cause to do so. 14 CFR § 16.33(£). Review by the Associate Administrator is 

limited to an examination of the Director's Determination and the administrative record 

upon which such determination was based. Failure to raise issues and allegations in the 

original complaint documents may be cause for such issues and allegations to be deemed 

waived and not reviewable upon appeaL 

16 
3. FAA's Responsibility with Regard to an Appeal 

Pursuant to 14 CFR § 16.33(b )(I), the Associate Administrator will issue a fmal decision on 

appeal from the Director's Determination, without a hearing, where the complaint is 

dismissed after investigation. 

In such cases, the Associate Administrator will use the following analysis: 

(I) Are the findings of fact each supported by a preponderance of reliable, probative, 

and substantial evidence contained in the record? 

(2) Are conclusions made in accordance with law, precedent, and policy? 

(3) Are questions on appeal substantial? 

( 4) Have any prejudicial errors occurred? 

14 CFR § 16.33( e); see also, e.g., Ricks v Millington Municipal Aimort, FAA Docket No. 

16-98-19, December 30, 1999, Final Decision and Order, p. 21. 

VI. ISSUES ON APPEAL 

Upon consideration of the Complaint from the Complainant, filed with the FAA on March 

27, 2013, the FAA Office of Airport Compliance and Management Analysis previously 

determined Respondent is not currently in violation of its federal obligations regarding the 

issues argued in the Complaint. The specifics of these findings are detailed in the above 

Section II, Summary of the Director's Determination. 

On appeal, Complainant alleged the Director made errors in interpreting the evidence and 

making conclusions from the evidence. Specifically, Complainant argues on appeal the 

Director: 

A. Failed to recognize that the Board, by amending the lease to Somerset Regional 

Aviation, LLC., (Somerset) Somerset's Limited Fixed Base Operator (LFBO) 

Agreement, and by amending the Airport Minimum Standards the Board 

unjustly discriminated in favor of Somerset to the detriment of SPA. FAA 

Exhibit I, Item 24, page I. 

B. Concluded that Minimum Standards of Operation comply with grant 

assurances as long as the Minimum Standards are uniformly, but 

indiscriminately applied to operators engaged in dissimilar businesses. FAA 

Exhibit I, Item 24, page 2. 

Developing these two issues, Complainant argues six points in its appeal: 

1. Viewing the massive disparity between the rental structure charged to Somerset 

with that offered to SPA based upon the Board's requirement that every operator 

perform the required ten (10) paid third party annual inspections per annum reveals a 

violation of Grant Assurance 22, Economic Nondiscrimination. FAA Exhibit 1, Item 24, 

p. 9. 

17 

' 
SPA states that while the Director's Determination correctly concluded that SPA and 

Somerset were not similarly situated prior to the amendment of the Airport's Minimum 

Standards, the Director's Determination ignores the obvious fact that the new Minimum 

Standards were applicable to all operators on the airport and would have rendered all 

operators "similarly situated" by requiring them to go into the "annual inspection" business. 

Notwithstanding that SPA admits it is not similarly situation with Somerset, it goes on to 

compare the "massive disparity between the rental rates charged to Somerset and those 

charged to SPA." SPA concluded that the two tenants' rental structure was $29,199 per 

annum less favorable to SPA. FAA Exhibit 1, Item 24, p. I 0. 

SPA went on to argue that by cutting SPA's hanger space to 2,400 square feet, SPA was 

immediately in violation of the Minimum Standards. FAA Exhibit 1, Item 24, p. 10. 

2. The Director's Determination was based upon the improper assumption that SPA 

was required to prove that it offered services similar to Somerset. FAA Exhibit 1, Item 

24, p. 12. 

SPA argues that Respondent was required to make the airport available to SPA on 

reasonable terms. SPA argues that, contrary to the Director's Determination, it was not 

required to prove that it was similarly situated to any other operator to require the Board to 

offer to renew the lease on reasonable terms and negotiate in good faith. FAA Exhibit I, 

Item 24, p. 12. 

SPA states that the Board's amended Minimum Standards require operators who repaired or 

maintained aircraft or aircraft accessories to prove that they performed ten (I 0) third party 

annual inspections in order to do business on the airport or be ousted from the airport 

property. SPA argues that Respondent applied this standard to all operators at KSME and 

not just aircraft maintenance LFBOs. SPA concludes that the appropriate inquiry is not 

whether the Board properly enacted the same minimum standards for similar operations, but 

whether the Board unreasonably applied the same minimum standards to dissimilar 

operations. FAA Exhibit 1, Item 24, p. 12. 

3. The Board unlawfully manipulated the amendment to the airport's Minimum 

Standards to favor Somerset over SPA. FAA Exhibit 1, Item 24, p. 15. 

SPA argues that Respondent entered into a lease and LFBO Agreement with Somerset, 

without any requirement that Somerset perform any annual inspections. In responding to the 

Informal Complaint Respondent modified the airport's minimum standards to include the 

performance of ten (I 0) paid third party annual inspections, knowing that SPA was not in 

the business of performing annual inspections of non-owned aircraft. SPA argues that 

consequently, the Board made it impossible for SPA to continue doing its refurbishment and 

resale business on the field. SPA argues that amending the minimum standards for one 

tenant is illegal. It states that it cannot change its business model to include offering annual 

inspections to the public because it is not a certified FAA repair station. SPA concludes that 

by amending its Minimum Standards to include performance of a maintenance requirement 

18 
Respondent gave exclusive rights to Somerset and discriminated against SPA. FAA Exhibit 

1, Item 24, pp. 15-16. 

4. The "ten annuals" requirement is unreasonable. FAA Exhibit 1, Item 24, p. 16. 

SPA argues that it was not reasonable for the Board to cut SPA's hangar space and to 

expect SPA to change its business model to engage in a facet of aeronautical activities 

which it had never done in its history in that shrunken space while Somerset had 4,800 sq. 

ft. of hangar space in which to complete its ten (I 0) paid third party annual inspections. 

SPA argues that it does not hold a certificate qualifying it to perform annual inspections. 

SPA concludes that it was unreasonable for Board to require Somerset to perform annual 

inspections in order to obtain the incentives and remain a tenant on the airport property 

while imposing the same requirement on SPA. SPA concluded that proof of the 

"unreasonableness" of the I 0-annual requirement is that Somerset went out of business. 

FAA Exhibit I, Item 24, pp. 16-17. 

5. The Minimum Standard, as applied, unjustly discriminated against SPA. FAA 

Exhibit I, Item 24, p. 17. 

SPA states that the Amended Lease and the Amended LFBO Agreements require Somerset 

to report the ten (I 0) paid third party annuals if it is to receive the rent subsidy and the 

insurance subsidy. SPA argues that failing to produce any of the mandatory reports which 

Somerset was required to file confirmed that Somerset failed to satisfy the conditions for the 

rent and insurance subsidies. The lists of "Annual Inspections" that the Board did produce 

are highly suspect. SPA concludes that without evidence that the Board actually enforced 

the "ten annuals" Minimum Standard in Somerset's case, it is clear that the Board unjustly 

discriminated against SPA by demanding that it adhere to a minimum standard which it 

disregarded as to Somerset. FAA Exhibit I, Item 24, pp. 17-18. 

6. The Director's Determination repudiates the Agency's own interpretation of its 

rules. FAA Exhibit I, Item 24, p. 18. 

SPA states that FAA guidance6 contains a listing of about three dozen acceptable subjects of 

inquiry for the drafting of minimum standards applicable to specific types of operators. SPA 

finds that "volume of the service provided" is not one of the appropriate enumerated 

considerations. It then draws the conclusion that the Agency did not consider a minimum 

volume of service to be provided by any operator to be an appropriate topic for minimum 

standards. FAA Exhibit 1, Item 24, pp. 18-19. 

The Appellant concludes its Appeal by saying that Walter Iversen had become personally 

unpopular with the Board because of a personality conflict with some of the frequenters of 

the airport, and his actions personally irritated the powers who operate the airport. SPA 

concludes that the Board retaliated against SPA by amending the airport's minimum 

standards in order to rationalize the intended ouster of SPA. SPA closes with, "Whether or 

not the Board actually enforced the minimum standards in Somerset's case remains 

6 § 2.1 (e) of AppendixC to FAA Order 5190.6B. 

19 
problematical. The plain fact is that nobody appears to be beating down the door for the 

opportunity to do business under such patently unreasonable conditions." FAA Exhibit 1, 

Item 24, pp. 19-20. 

For an appeal to be successful, the appellant must demonstrate with evidence that the 

Director (a) made- or failed to make- fmdings of fact supported by a preponderance of 

reliable, probative, and substantial evidence; or (b) made conclusions of law that were not in 

accordance with applicable law, precedent, and public policy. 14 CFR §16.33(e)(l)-(2). The 

appeal is not an opportunity to reargue the same issues from the initial complaint or to bring 

new issues forward that were not presented in the initial complaint. 

The arguments contained in SPA's Appeal are the same to those in its Complaint and Reply 

(Complainant's Memorandum Opposing Dismissal. FAA Exhibit 1, Item 9). The arguments 

are cast in different verbiage stating that the Minimum Standards were indiscriminately 

applied in a non-uniform manner to dissimilarly situated tenants (FAA Exhibit 1, Items 9, p. 

10, and 24, p. 2), the requirement compelling operators to perform 10 annual inspections 

was a violation of Grant Assurance 22 (FAA Exhibit 1, Items 9, p. 7, and 24, pp. 16-17), it 

was a violation of the grant assurances to make SPA prove that it offered services similar to 

that of Somerset (FAA Exhibit 1, Items 9, p. 7, and 24, p. 17), the Minimum Standards 

favored Somerset over SPA (FAA Exhibit 1, Items 9, p. 11, and 24, p. 19), and that the 

requirement to perform 1 0 annual inspections was discriminatory against SPA (FAA 

Exhibit 1 Items 9, p. 8, and 24, p. 18). 

Issue A: Determine whether the Director erred in failing to recognize that the 

Board, by amending the lease to Somerset, by amending Somerset's 

Limited Fixed Base Operator (LFBO) Agreement, and by amending 

the Airport Minimum Standards, unjustly discriminated in favor of 

Somerset to the detriment of SPA. FAA Exhibit 1, Item 24, p. 1. 

SPA argues that Respondent's amending Somerset's lease, Somerset's LFBO Agreement, 

and the Airport Minimum Standards resulted in unjust discrimination to SPA. FAA Exhibit 

1, Item 24, page 1. Specifically SPA states: 

When confronted with its violations, the Board suddenly found it "necessary" to 

modifY the airport's minimum standards to include the performance often (10) paid 

third party annual inspections, knowing full well that SPA was not in the business of 

performing annual inspections of non-owned aircraft. By this transparent artifice, 

the Board made it impossible for SPA to continue doing its refUrbishment and resale 

business on the field. FAA Exhibit 1, Item 24, p. 15. 

SPA argues that by changing the Minimum Standards to now require operators to conduct at 

least 10 annual aircraft inspections, Respondent was effectively requiring SPA to change its 

business model to now become a maintenance service provider. FAA Exhibit 1, Item 24, p. 

15. 

20 
Respondent argues that it was justified in amending the Airport Minimum Standards. It 

explained that attracting, developing, and sustaining meaningful third party maintenance 

services would facilitate growth at the Airport by attracting more users and allowing the 

Airport to generate additional revenue streams. FAA Exhibit 1, Item 29, p. 6. 

Respondent states further that the minimum standards regarding the subsidies also applies 

only when "there exists insufficient availability of aircraft maintenance services at the 

Airport and, to incentivize the provision of such services, grant subsidy incentives" as set 

forth in correspondence with the FAA. Standards. [The Minimum Standards] state the 

incentives "will be offered to all similarly situated providers of maintenance services at the 

airport." FAA Exhibit 1, Item 29, p. 9. 

While SPA acknowledges it is not a maintenance service provider, it claims entitlement to 

the incentives available under the Incentive Program. FAA Exhibit I, Item 24, p. 13. 

Effectively, SPA wants Respondent to offer the incentives to SPA without SPA's 

compliance with the Incentive Program requirements. The Incentive Program requires, 

among other actions, that maintenance service providers conduct at least 10 annual 

inspections a year; it was developed in cooperation with the FAA, the purpose of which is 

to enhance the availability of maintenance services to the public at the Airport. Respondent 

argues, again, that the ten annual inspection requirement and the incentives apply to 

maintenance service providers and not to SPA. Respondent further argues that these terms 

of the Minimum Standards are not meant to apply to all operators at the Airport and that a 

different section ofthe minimum standards applies to those businesses selling aircraft from 

the Airport. FAA Exhibit 1, Item 5, Exhibit M. 

Conclusion on Issue A 

The Director is correct when he concludes: 

Contrary to SPA's assessment, this sample question section serves merely as a reference 

guide to assist an airport sponsor in formulating effective minimum standards that 

address some of the types of commercial aeronautical services or activities frequently 

offered to the public. The A C explains that the sample questions are provided to address 

some of the various types of specific services or activities frequently offered to the 

public, and is not a limitation on what can be covered in the minimum standards. 

Accordingly, consistent with the ADO's August 21, 2012 letter, an airport sponsor may 

establish a minimum standard provision based on the volume of a particular service if 

justified. 

FAA Exhibit 1, Item 20, p. 25. 

Adopting minimum standards is a valid action on the part of the airport sponsor. A review 

of the minimum standards indicates that they cover many aeronautical activities and 

services including FBO services, aircraft maintenance, aircraft sales, aircraft rental, charter 

operations, and flight training. A review of the minimum standards concerning aircraft 

maintenance shows that, as written, they are not contrary to Respondent's federal 

21 
obligations. The standards outlined by Respondent are generally consistent with FAA's 

guidance on the matter. The provisions that implement a sound and economic-based 

approach in managing incentives and competition are in line with FAA recommendations 

and guidance. 

Moreover, in light ofthe economic issues documented in the record, Respondent's actions 

relating to establishing, updating, and enforcing minimum standards are not only justified, 

but necessary. As provided in Grant Assurance 22, Respondent must retain the ability to 

impose such additional reasonable restrictions or conditions on operations from time to time 

it may deem to be necessary in order to ensure the efficient operation of the Airport. See 

Skydive Mvrtle Beach, Inc., v. Horry County Department of Aimorts, South Carolina, FAA 

Docket No. 16-14-05, October 7, 2015, Director's Determination, p. 41. 

The FAA recognizes that both minimum standards and lease terms may change over time. 

Leases are legal documents that exist in time and are rarely identical between users because 

of differing circumstances such as sites , users, negotiations, business plans, economic 

circumstances, minimum investment requirements, demand, location, venture risk, 

ownership of facilities, time remaining on contract terms, condition of facilities, and market 

conditions. Aircraft Management Services, Inc. v. Santa Rosa County, Florida, FAA Docket 

No. 16-12-02, March 27,2015, Director's Determination, p. 22. Also see FAA Order 

5190.6, section 9.5(d). 

Here Somerset and SPA are users with differing circumstances; Somerset was a 

maintenance service provider, and SPA is an aircraft sales dealer. FAA Exhibit I, Item 24, 

p.13. It is, therefore, permissible for Respondent to have different leases with the two 

entities, and to have developed minimum standards that address the different concerns of 

the two entities. 

The Associate Administrator concludes that Director did not err in his finding; that he 

correctly found it permissible for the Board to amend the lease to Somerset for the reasons 

stated herein; and in amending the Airport Minimum Standards, the Board did not 

discriminate in favor of Somerset to the detriment of SPA. 

Issue B: Determine whether the Director erred in concluding that 

Minimum Standards of Operation comply with grant assurances 

as long as the Minimum Standards are uniformly, but 

indiscriminately applied to operators engaged in dissimilar 

businesses. FAA Exhibit 1, Item 24, page 2. 

In the appeal, Complainant argues that applying Minimum Standards in a non-uniform 

manner to dissimilar businesses is a violation of the grant assurances. FAA Exhibit l, Item 

24, page 2. The Director was clear in his Director's Determination that the businesses must 

be similar when looking to apply the nondiscriminatory requirement of Grant Assurance 22. 

22 
The Director quoted from Chapter 9 ofF AA Order 5190.6B that describes the 

responsibilities under Grant Assurance 22 assumed by the owners or sponsor of public use 

airports developed with Federal assistance. The Order states that among these is the 

obligation to treat in a uniform manner those users making the same or similar use of the 

airport and to make all airport facilities and services available on reasonable terms Without 

unjust discrimination. FAA Exhibit 1, Item 20, p. 11. FAA policy specifies that sponsors 

choosing to establish minimum standards should apply them objectively and uniformly to 

all similarly situated on-airport aeronautical service providers. FAA Exhibit 1, Item 20, p. 

25. 

The Director found that the incentives contained in the Minimum Standards and the Airport 

Leases were offered to all similarly situated operators at KSME; that is, they were offered to 

all maintenance service providers at KSME. FAA Exhibit 1, Item 20, p. 22. 

The Director stated that Complainant did not provide evidence demonstrating that the 

Sponsor had not universally applied uniform Minimum Standards to similarly situated 

commercial aeronautical tenants on the airport. Furthermore, Complainant did not articulate 

how modification to the Minimum Standards created an exclusive right for Somerset or how 

the new Minimum Standards would preclude SPA from continuing to engage in its business 

of purchasing, refurbishing, and re-selling aircraft from facilities leased to it at the Lake 

Cumberland Regional Airport. FAA Exhibit 1, Item 20, p. 25. 

Contrary to Complainant's assertions, Respondent is not "forcing" SPA to become a 

maintenance service provider so that SPA can receive the incentive. The incentive was 

offered to all maintenance service providers under certain conditions (among others, to 

perform 10 aircraft armual inspections a year) in order to encourage business at KSME. 

Respondent did not offer the incentive to aircraft sales businesses to, for example, achieve a 

certain number of aircraft sales, or to aircraft charter businesses to conduct a certain number 

of charter flights. Respondent concluded that servicing aircraft by performing armual 

inspection would bring more business to the airport. It was within the business prerogative 

of Respondent to make this decision and such a decision, if applied in a uniform marmer to 

maintenance service providers, is not discriminatory as analyzed in this issue. 

Conclusion on Issue B: 

The Associate Administrator concludes that the Director did not err in concluding that 

Minimum Standards of Operation comply with grant assurances and that the Minimum 

Standards were uniformly applied to all operators similarly situated. The Minimum 

Standards were not indiscriminately applied to operators similarly situated at KSME. The 

Respondent is not required by the Grant Assurances and current applicable rules, 

regulations and statutes to apply the Minimum Standards to businesses that are dissimilarly 

situated. 

The Complainant has misapplied the standard required to determine if a violation of Grant 

Assurance 22 has occurred in this matter, which causes the Complainant's argument to fail. 

23 
It is not discriminatory for Respondent to non-uniformly apply the Minimum Standards 

incentives to dissimilar tenants. 

New Evidence. 

Complainant offers new evidence in its Appeal stating that subsequent to the issuance of the 

Directors Determination Somerset Aviation has gone out of business. Complainant argues 

that this supports its argument that Respondent's application of its Minimum Standards is 

discriminatory. However. SPA does not argue that this new evidence moots any extant 

issues. SPA surmises that Somerset Aviation went out of business because it was not 

profitable trying to satisfy the Minimum Standards. FAA Exhibit 1, Item 24, p. 16. 

Respondent offers evidence showing that Somerset closed business dne to personal reasons, 

that is, retirement of the business principals. FAA Exhibit 1, Item 27, Exhibit A-3. While 

the Associate Administrator allows the introduction of the new evidence demonstrating that 

Somerset closed its business, he fmds that it does not alter any fmdings in the Director's 

Determination. The Director finds that the Respondent's counter argument is more reliable. 

SPA also offered new evidence, to wit, Respondent's records obtained under the Kentucky 

Open Records Act, purporting to show that the Airport Board failed to apply the Incentive 

Program requirements to Somerset. FAA Exhibit 1, Item 24, pp. 17-18. SPA argues that the 

list of annual inspections performed by Somerset and kept by Respondent contained 

identical lists of aircraft type which are highly suspect. SPA argues that common sense 

teaches that it is virtually impossible for any FBO to have performed annual inspections on 

the same 12 planes in any two successive calendar years. Respondent replies that the list of 

annual inspections are the very same un-redacted lists that Somerset provided to 

Respondent each year to comply with the Minimum Standards. FAA Exhibit 1, Item 27, p. 

8. The Associate Administrator is unpersuaded by Complainant's speculative arguments 

since the evidence presented demonstrates Respondent reasonably applied its criteria for 

incentives. The Associate Administrator allows introduction of this evidence, but he does 

not find it alters any findings in the Director's Determination. 

When SPA asserted in its Appeal that the absence of insurance records proved that 

Somerset failed to comply with the Minimum Standards, Respondent produced records to 

prove Somerset had the required insurance. FAA Exhibit 1, Item 27, Exhibits A-1 and A-2. 

While the Associate Administrator will allow the introduction of the new evidence 

regarding the possession ofthe requisite insurance, the evidence does not alter any findings 

in the Director's Determination. The Respondent's evidence and counter-argument are more 

reliable. 

The Associate Administrator concludes that the new evidence produced by SPA to show 

that Somerset had not complied with the Minimum Standards by failing to perform 1 0 

annual inspections per year and failing to carry the requisite insurance is not persuasive in 

reversing the conclusions in the Director's Determination. 

24 
SPA's Motion to Respond. 

SPA filed a motion to respond to Respondent's Response to SPA's Appeal. FAA Exhibit 1, 

Item 28. The Associate Administrator denied the motion in an Order dated January 8, 2016. 

FAA Exhibit 1, Item 29. The reasoning for the denial is contained in said Order and will not 

be reiterated here. 

VII. FINDINGS AND CONCLUSION 

Upon an appeal of a Part 16 Director's Determination, the Associate Administrator will use 

the following analysis: 

(1) Are the fmdings of fact each supported by a preponderance of reliable, probative, 

and substantial evidence contained in the record? 

(2) Are conclusions made in accordance with law, precedent, and policy? 

(3) Are questions on appeal substantial? 

( 4) Have any prejudicial errors occurred? 

14 CPR § 16.33( e); see also, e.g., Ricks v Millington Municipal Airport, FAA Docket No. 

16-98-19, December 30, 1999, Final Decision and Order, p. 21. 

In arriving at a final decision on this appeal, the FAA has reexamined the record, including 

the Director's Determination, the administrative record supporting the Director's 

Determination, the appeal submitted by the Complainant, the Response submitted by 

Respondent, and applicable law and policy. Based on this reexamination, this decision 

concludes that the Director's Determination is supported by a preponderance of reliable, 

probative, and substantial evidence, and his conclusions are consistent with applicable law, 

precedent, and public policy. 

The Appeal does not contain persuasive arguments sufficient to reverse any portion of the 

Director's Determination. The Director's Determination is affirmed. This decision 

constitutes the final decision of the Associate Administrator for Airports pursuant to 14 

CPR § 16.33(b ). 

ORDER 

ACCORDINGLY, it is hereby ORDERED that (I) the Director's Determination is 

affirmed, and (2) the appeal is dismissed, pursuant to 14 CPR§ 16.33. 

RIGHT TO APPEAL 

A party to this decision disclosing a substantial interest in the final decision and order of the 

Federal Aviation Administration may file a petition for review pursuant to 49 U.S.C. 46110, 

in the United States Court of Appeals for the District of Columbia Circuit or in the court of 

appeals of the United States for the Circuit in which the person resides or has its principal 

25 
in the United States Court of Appeals for the District of Columbia Circuit or in the court of 

appeals of the United States for the Circuit in which the person resides or has its principal 

place of business. The petition must be filed not later than 60 days after a Final Agency 

Decision has been served on the party. 14 CFR, § 16.247(a). 

~----~-1)) 

Efd::~~4J Associate Administrator 

for Airports 

26 
SPA Rental, LLC, d/b/a MSI Aviation 

v. 

Somerset-Pulaski County Airport 

FAA Docket No. 16-13-02 

INDEX OF ADMINISTRATIVE RECORD 

Item 1- Part 16 Complaint dated March 27,2013, alleging Respondent violated Grant 

Assurance 24 and including Exhibits A-F. 

Exhibit A- Limited Fixed Based Operator Agreement dated June 30, 2009, between 

the Somerset-Pulaski County Airport Board and SPA Rental, LLC d/b/a MSI 

Aviation. 

Exhibit B- Somerset-Pulaski Comity Airport Board Hangar Lease dated January I, 

2013, between the Somerset-Pulaski County Airport Board and SPA Rental, LLC 

d/b/a MSI Aviation, unsigned. 

Exhibit C -Limited Fixed Base Operator Agreement, including Exhibit AMinimum Standards, undated and unsigned. 

Exhibit D- Correspondence dated May 9, 2012, from Phillip J. Braden, FAA 

Manager, Memphis ADO to Don Bandy, Chairman Somerset-Pulaski County 

Airport Board. 

Exhibit E- Informal Complaint Correspondence, dated Aprill9, 2012, from Winter 

R. Huff, Attorney for SPA Rental, LLC, to James H. Williams, FAA Program 

Manager, Memphis ADO, including Exhibits A-K. 

Exhibit F- Sworn Affidavit of Winter R. Huff dated March 21,2013, detailing 

events prior to the filing of a formal complaint. 

Item 2- Notice of Docketing, dated April 8, 2013. 

Item 3- Agreed Motion for Additional Time to Respond to Complaint, dated April29, 

2013. 

Item 4- FAA letter granting the request for an extension of time to file Respondent's 

Answer, dated May 30, 2013. 

Item 5- Motion to Dismiss and Answer, dated May 30, 2013. 

Item 6- Supporting Memorandum of Points and Authorities for the Airport Board's Motion 

to Dismiss, dated May 30, 2013, and including Exhibits A-N. 

Exhibit A- Correspondence dated August 21,2012, from Phillip J. Braden, FAA 

Manager, Memphis ADO to Richard Van Hook, Chairman Somerset-Pulaski County 

Airport Board Maintenance Committee. 

Exhibit B- Correspondence dated July 23, 2012, from Richard Van Hook to James 

H. Williams. 

27 
Exhibit C- Somerset-Pulaski County Airport Board Hangar Lease signed and dated 

June 30,2009, between the Somerset-Pulaski County Airport Board and SPA 

Rental, LLC d/b/a MSI Aviation for Hangar Number B-3 for a one year term 

commencing January 1, 2009 and terminating on December 31, 2009. 

Exhibit D - Somerset-Pulaski County Airport Board Hangar Lease unsigned and 

incomplete, between the Somerset-Pulaski County Airport Board and SPA Rental, 

LLC d/b/a MSI Aviation for Hangar Number B-4 for a one year term commencing 

January 1, 2009 and terminating on December 31,2009. 

Exhibit E - Correspondence from Tom Halbleib, Stites & Harbison, PLLC, via 

email dated November 29, 2012, to Winter R. Huff. 

Exhibit F - Limited Fixed Base Operator Agreement and separate lease for Hangar 

10, both signed and dated March 24,2012, for a one year term, renewable for two 

successive one year terms, between the Somerset-Pulaski County Airport Board and 

Somerset Regional Aviation, LLC, including associated amendment( s) and 

Minimum Standards for Fixed Base Operation. 

Exhibit G- Correspondence dated April4, 2012, from James H. Williams, 

Memphis ADO, to Kellie Baker, Airport Manager, Somerset-Pulaski County 

Airport, and reply dated April23, 2012, from John T. Mandt, Attorney representing 

Somerset-Pulaski County Airport Board to James H. Williams. 

Exhibit H- Correspondence dated May 18,2012, from Tom Halbleib, Stites & 

Harbison, PLLC, to Phillip Braden (FAA). 

Exhibit I- Correspondence dated August 7, 2012, from Tom Halbleib, Stites & 

Harbison, PLLC, to James Williams (FAA). 

Exhibit J- Pulaski County Fiscal Court Ordinance No: 220.30, amendment to 

Section 1.08 Collection of Tax-Records, adopted June 8, 2010, and published June 

13,2010. 

Exhibit K- Somerset-Pulaski County Airport Board Minutes from Special Called 

Meeting, September 10, 2012, and correspondence dated July 23, 2012 from 

Richard Van Hook, Chairman, Somerset-Pulaski County Airport Board to James H. 

Williams, explaining the subsidy incentive and amendment to minimum standards 

for fixed based operation. 

Exhibit L- Correspondence from Walter Iversen to Kellie Baker, dated February 7, 

2013, regarding a request for public record, and a response from Tom Halbleib to 

Walter Iversen dated February 13, 2013. 

Exhibit M- Correspondence dated October 2, 2012, from Tom Halbleib, Stites & 

Harbison, PLLC, to Winter Huff, including proposed modifications to the Hangar 

Lease and LFBO Agreement, and Minimum Standards. 

Exhibit N- A series of email correspondence, dated January 27, 2013, between 

Tom Halbleib and Winter Huff. 

Item 7- Joint Application to Establish a Responsive Pleading Schedule, dated June 5, 2013. 

Item 8- FAA letter granting the request of a Responsive Pleading Schedule, dated June 7, 

2013. 

28 
Item 9- Complainant's Memorandum Opposing Dismissal, dated July, I, 2013, and 

includes Exhibits 1 and 2. 

Exhibit 1- Correspondence, dated April25, 2013, unsigned from Walter P. Iversen 

to Somerset-Pulaski County Board proposing to enter into an LFBO agreement in 

which SPA Rental, LLC, d/b/a MSI Aviation, would continue to rent Hangars B3 

and B4 and qualify for incentives. 

Exhibit 2- Reply from Tom Halbleib to Komad Kuczak, dated June 18,2013, in 

which the Somerset-Pulaski County Airport Board declines MSI Aviation's 

proposal. 

Item 10 -Rebuttal and Reply in Support of the Airport Board's Motion to Dismiss, dated 

July 18,2013. 

Item 11- Notice of Extension of Time, dated January 16,2013 (sic- 2014). 

Item 12- Notice of Extension of Time, dated April 17,2014. 

Item 13- Notice of Extension of Time, dated September 5, 2014. 

Item 14- Notice of Extension of Time, dated December 8, 2014. 

Item 15- Notice of Extension of Time, dated March 10,2015. 

Item 16- Notice of Extension of Time, dated April 17,2015. 

Item 17 -Notice of Extension of Time dated May 12,2015, to June 30,2015. 

Item 18 -Notice of Extension of Time dated June 25,2015, to August 28,2015. 

Item 19- Grant History Report for Somerset, KY dated 08/26/2015. 

Item 20- Director's Determination, dated September 1, 2015. 

Item 21- SPA's Motion for Extension to File Notice of Appeal and Brief, dated September 

15,2015. 

Item 22- FAA Order granting extension of time to November 2, 2015, dated September 

28, 2015. 

Item 23- SPA's Notice of Appeal, dated October 27,2015. 

Item 24- Brief of SPA in support of its appeal, dated October 27,2015. 

Exhibit A- Affidavit of Walter P. Iversen, dated September 26, 2015. 

29 
Exhibit B- Affidavit of Konrad Kuczak, dated October 27,2015. 

Exhibit B-1- Correspondence, dated September 15, 2015, from Konrad 

Kuczak to Somerset-Polaski County Airport Board. 

Exhibit B-2- Correspondence, dated September 24, 2015, from SomersetPulaski County Airport Board to Konrad Kuczak. 

Exhibit B-3- Somerset Regional Aviation Inc. 2013 Annual Inspections. 

Exhibit B-4 - Somerset Regional Aviation Inc. 2014 Annual Inspections. 

Exhibit B-5 - Somerset Regional Aviation Inc. 2015 Annual Inspections. 

Item 25- Respondent's Motion for Additional Time to Respond to Appeal dated 

November 6, 2015. 

Item 26- FAA Order granting extension of time to December 18,2015, dated November 

23, 2015. 

Item 27- Respondent's Response to SPA's Appeal of the Director's Determination dated 

December 18,2015. 

Exhibit A- Affidavit ofKellie Baker dated December 18,2015. 

Exhibit A-1- Certificate of Liability Insurance, Somerset Regional Aviation 

Inc. 

Exhibit A-2 -Certificate of Liability Insurance, Somerset Regional Aviation 

Inc. 

Exhibit A-3- Correspondence, dated May 15, 2015, from Somerset 

Regional Aviation Inc. to Lake Cumberland Airport Board. 

Exhibit A-4- Newspaper Public Notice, Request for Proposal, Airport 

Limited Fixed Based Operator 

Exhibit A-5- Newspaper Classified Advertisement, Somerset-Pulaski 

County Airport Board Request for Proposals, First October Issue 2015. 

Item 28- SPA's Motion for Leave to File Reply to Respondent's Brief, dated December 

23, 2015. 

Item 29- FAA's Order denying SPA's Motion, dated January 8, 2016. 

Item 30- FAA's Notice of Extension of Time to issue the Final Agency Decision to May 

31, 2016, dated March 4, 2016. 

Item 31- FAA's Notice of Extension of Time to Issue the Final Agency Decision to July 

31, 2016, dated June 8, 2016. 

Item 32- FAA Form 5010 -KSME. 

30 
CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on August 8, 2016 I caused to be placed in the United 

States mail (first class mail, postage paid) a true copy of the Final Agency Decision for FAA 

Docket No. 16-!3-02 addressed to: 

Counsel for Complainant: 

Konrad Kuczak 

!30 West Second Street, Suite 1010 

Dayton, OH 45402 

Counsel for Respondent: 

Rachel Owsley 

Bethany A. Breetz 

Stites & Harbison, PLLC 

400 West Market Street, Suite 1800 

Louisville, KY 40202 

Hand delivered to: 

FAA Part 16 Airport Proceedings Docket 

FAA Airport Compliance and Management Analysis, A CO-l 00