Before cars whiz around the track during an event at the Virginia International Raceway in Alton, there’s lots of action at the other transportation hub in the area: the Danville Regional Airport.
During a race weekend in August, the small airport hosted 29 private aircraft. The airport also sold more than 10,000 gallons of aviation fuel at about $6 per gallon.
The city of Danville owns the airport. But Averett University is its fixed-base operator. Under the name AU Aviation Services, the fixed-base operator, or FBO, provides services to private aircraft such as fuel refills, maintenance and repairs, and a lounge for pilots.
Averett, which offers an undergraduate degree in aerospace management, has operated the FBO in Danville since 2021. Its contract is up for renewal this month.
The city appears ready to renew Averett’s contract, despite several late rent payments and years’ worth of unpaid sales taxes and business license fees. Officials said that they are confident in the university’s ability to continue to manage the FBO because it is now back in compliance.
Emails obtained through the Virginia Freedom of Information Act, however, illustrate previous confusion around Averett’s past-due payments and its ability to staff the FBO during summer furloughs on campus, a result of mismanaged funds discovered in the spring.
Other information obtained through FOIA reveals that neither the city nor the university abided by certain terms of the original FBO contract.
And some members of the city’s Airport Commission have expressed concern about Averett’s FBO management going forward, especially as the growing region increasingly relies on the Danville airport.
With the closest commercial airport to Danville 50 minutes away in Greensboro, North Carolina, the city counts on its general aviation airport to bring visitors into town.
The coming Caesars Virginia casino resort alone is expected to increase airport traffic by 30%, former FBO manager John Earl said in a 2022 TV interview. The raceway and continued economic development efforts such as the Berry Hill megasite announcement also drive airport traffic.
“It was just an oversight,” said Ken Larking, Danville city manager, of Averett’s overdue payments to the city. Larking said the city never planned to look for another FBO operator as Averett approached the end of its contract.
Cassie Jones, associate vice president of university marketing and communications, said that the university’s financial issues “have not, in any way, hindered our ability to operate the FBO.”
Still, Danville’s fixed-base operator has little experience and faces diverse demands on its attention.
“They’re in the business to keep the college going, which is having a difficult time right now,” said Bob Jiranek, a member of the city’s airport commission.
The city council will vote on whether to renew Averett’s FBO contract at its Tuesday meeting.
The following account of events details the relationship between the city, the university and the airport as financial concerns were raised and, according to city officials, resolved, beginning months before the council’s vote. 
Spring 2024: City discovers Averett wasn’t paying rent, other fees
The process of renewing Averett’s FBO lease should have begun a full year ago.
The airport lease began in January 2020 under the previous FBO, General Aviation, with the understanding that it would be transferred to Averett in July 2021. It specifies that Averett and the city must provide written notice to the other no fewer than 12 months prior to the lease expiration at the end of December 2024, expressing intent to renew the lease.
Neither party submitted that notice within the required time frame.
Averett did not notify the city of its intent to renew, Jones confirmed.
In late February 2024, Danville’s director of transportation, Marc Adelman, emailed Don Aungst, who was then the CFO of Averett. Adelman shared a copy of the lease prior to the airport commission’s anticipated review of it, but the email did not explicitly state that the city intended to move forward with renewal. When asked by Cardinal News when the city had notified the university that it wanted to renew the lease, Adelman pointed to the Feb. 29 email.
The university also failed to return a contract renewal for the flight center building it leases for its aviation training program, according to an email from Adelman to Averett President Tiffany Franks and Earl on May 8.
“It would be appreciated if the Flight Center building lease that expired last October could be finalized for execution,” Adelman wrote ahead of the May airport commission meeting that was expected to include a closed session to discuss the FBO lease renewal.
Jones said Averett has been operating under a month-to-month lease that “has allowed us to maintain continuity of operations” at the flight center while finalizing a long-term lease.
Though the city seemed content to move forward with an eventual renewal of Averett’s FBO lease even without a formal acknowledgement that the process was beginning, Danville officials realized in late spring that the university had fallen behind on rent for its FBO space at the airport.
Averett’s lease specifies that it pays $1,500 per month to rent the FBO space from the city. It must also pay the city for a portion of fuel sales and a portion of utilities, both of which can vary month to month. Recent invoices obtained from the city show monthly totals of between around $3,200 and $3,900, with the majority of the non-rent amount owed coming from fuel flow fees.
In early May 2024, it became apparent that Averett had fallen behind on those payments.
Adelman obtained a financial statement for the FBO at the request of Philip Hall, who was chair of the airport commission at the time. “In summary, the FBO is currently past due a couple of months with providing their lease fee,” Adelman wrote to Hall. “The delinquent due amount is $8,834.02 as identified in the billing statement below.”
Adelman also told Hall it was “common for the former FBO to be past due” on lease payments “when the city and the Airport Commission were negotiating new FBO lease fee arrangements.”
Emails from a four-month period in 2024 show that Averett was not paying sales tax for services rendered at the FBO or business license fees. While the delinquent amounts have now been paid, it’s unclear what the university owed the city; the city’s revenue commissioner, James Gillie, said that data is private.
Though the university is tax-exempt as a nonprofit organization, the FBO operation is required to maintain a local business license and pay sales tax on business activities such as fuel sales and repairs. For companies with gross revenues of more than $100,000 annually, license fees depend on the type of business.
During an airport commission meeting April 19, the eight-member unpaid board overseeing the airport and its policies raised questions about Averett operating the FBO within the university, rather than as a separate business entity.
“The liability is a worry for the Commission and Airport management should something unfortunate occur,” the minutes from that meeting noted. “Averett University is our largest customer and an icon for the community.”
Minutes from that same meeting also noted that “a taxes paid question also came up.”
An email discussion ensued between Adelman, finance director Michael Adkins and Gillie about whether Averett had paid any sales tax or business license fees for the FBO.
Earl, FBO manager at the time, told Adelman on April 25 that the FBO charged sales tax when selling fuel and oil, and completing maintenance repairs, according to emails from Adelman to Hall, Gillie and Adkins.
“We had a discussion when they obtained the FBO about a license,” Gillie replied the next day. “I’m trying to find out what happened on that.”
On May 3, Gillie said in an email that his team had been working with Averett and was “on the right path” to “getting all we need to get into compliance.” He added, “Apparently, there has been changes in the CFO office and it all fell through the cracks.”
Summer 2024: Confusion over furloughs, unpaid vendor amplify concerns
Concerns about late payments to the city were replaced by a bigger problem when Earl asked to meet with Adelman on May 31.
Earl wanted to talk about Averett’s widespread financial issues that had recently been shared with Averett staff. The university has not quantified how much was misappropriated over the course of about a year. When asked about the amount in July, Jones would only say that Averett was hoping to recoup about $6 million by cutting costs.
Earl told Adelman and Hall that staff furloughs at Averett would mean the FBO would not be able to cover the hours its lease with the city required it to be open over the summer. In addition, a testing computer lab that generated up to $2,000 revenue per month wouldn’t be fully staffed due to the furloughs, and the full-time mechanic at the FBO might not be available in the event of an aircraft mechanical issue on the runway.
Details of that conversation are available via emails between Adelman, Larking, Hall and deputy city manager Earl Reynolds.
Earl also shared that a vendor, Triad Aviation, had “cut the FBO off.” Earl’s only option for purchasing parts for aircraft repairs was a credit card with a $10,000 balance, according to Adelman’s email after the meeting.
“I hope you can communicate with Tiffany [Franks] who imposed the blanket [furlough] policy for all employees and was probably not aware of the implications the policy will cause with respect to violating the FBO lease,” Adelman told Larking by email that evening. He shared concerns that the FBO staff would not be able to manage the airport traffic for major races at Virginia International Raceway in July and August working abridged hours.
By the end of that weekend, Franks had clarified by email that Earl had been mistaken: The “short-term cost savings efforts” at the university wouldn’t affect FBO operations. “Please be assured, no FBO staffing hours are changing and there’s been no reduction of any kind,” she wrote to Larking.
Franks wrote that interim CFO Gary McCombs, who took over for a brief period after Aungst left the university abruptly in late March 2024, was working on a payment schedule for the outstanding bill with Triad Aviation. She also noted that Earl had completed the application for a business license about a week prior, and McCombs was working on remedying the sales tax bills.
“As I’ve shared with you, we have been hit with a number of surprises following the transition with our former CFO and we are steadily putting pieces back together as we have worked to have accurate information and needed clarity,” she wrote.
FBO operations appear to have continued without issue over the summer. Minutes from airport commission meetings include praise of FBO staff for its service to airport visitors. No public discussion took place at those meetings about the upcoming renewal of the FBO lease.
A sudden announcement that Earl was leaving the FBO resurfaced Averett’s overdue tax and business license fees.
Late summer: FBO manager departs suddenly
On Aug. 4, city staffers learned that Earl would be resigning from Averett’s FBO operation with a week’s notice. According to emails among city staffers, Earl left to become an owner or part owner of an FBO in the Dallas-Fort Worth, Texas, area. Earl could not be located for comment for this article.
“I hope before John departs he updates you concerning the information previously shared with the Commissioner of Revenue’s Office” regarding the requirements for tax and license fee payments to the city, Adelman said in an email Aug. 5 to Franks and Travis Williams, Averett’s chief flight instructor.
Earl responded to say he had submitted “years 21 and 22” and “I am roughly 80% complete on year 2023.” He assured Gillie would complete the filings that week.
In a separate email the same day, Adelman told Hall that Averett still had not finalized the expired lease renewal from the previous October.
Nearly four weeks after Earl said the matter was nearly complete, Gillie emailed Larking on Aug. 30 to say that Averett was “in good standings with my office.”
Jones, the Averett spokesperson, said by email Dec. 6 that “city leadership” notified Franks about the tax and fees issues in early summer and “The university immediately went to work to remedy this.” Jones confirmed that the FBO obtained a business license in August.
She blamed the overdue lease and utility payments on a new invoicing system. “Rent and utility invoices were not entered into the new invoicing system which resulted in the past due status,” Jones said. She said the overdue payments were completed and “have been kept current since that time.” She did not specify when the delinquent amounts were remedied.
Jones also said that the interim CFO discovered sales tax reports with the commonwealth had not been filed. “They are aware, and we are in the process of filing the late forms and making proper registration,” she said.
In an interview on Nov. 14, Gillie said the issues go back to 2021 when Averett took over the FBO. “Quite honestly, the ball just got dropped. We didn’t pursue Averett,” he said, adding: “For some reason or another it fell through the cracks, which is not something we usually have, but once in a 500 or something like that, we’ll have something happen.”
Despite the discovery and the time it took to resolve the issues, Gillie said he was “absolutely” confident the university would remain in compliance in the future.
“I feel like it’s a pretty solid partnership,” Larking said in November. “Nobody wants to see an institution struggle, and I don’t believe it’s helpful for the city of Danville to hit the panic button and make things worse when we’re supposed to be part of helping make things work.”
Fall 2024: Airport commission recommends renewal, city’s decision imminent
In October, the airport commission recommended that the city renew Averett’s FBO lease for five years.
Fred Shanks, who took over as chair of the airport commission in July, said by email on Nov. 24 the commission is “cautiously optimistic” in Averett’s ability to operate the FBO. “We met with Averette’s leadership and FBO Leadership monthly since hearing of the financial issues,” he wrote. “Those conversations have resulted in more detailed and updated reporting on staff, workhours, vacancies, and continued operations involving the first-class services our customers and vendors have grown to expect,” Shanks said.
Cardinal News asked all eight airport commission members for an interview; William “Sid” Allgood, Eugene Jackson and past chair Hall declined. Hampton Wilkins also declined, citing concerns about conflict of interest as he is also a member of Averett’s board of trustees.
Stephen Daniel and Douglas Appleton did not respond.
Commission member Bob Jiranek expressed concerns about Averett’s longevity.
“If Averett was to go out of business, it’ll probably happen pretty fast. If that’s the case, we’re stuck without a fixed-base operator, which is very important for our airport,” because of private aircraft visiting the new casino and for Virginia International Raceway events, Jiranek said.
In 2017, prior to his appointment to the airport commission, Jiranek expressed reservations about Averett taking on the FBO business. “They’re not in the business of providing service for profit,” he said, quoted in the Danville Register & Bee about a June 2017 meeting of a special committee set up by the city council to review the proposals.
“I don’t have any personal unhappiness with Averett being a nonprofit running the FBO,” he said in an interview on Nov. 21. “The concern I have, personally, is that we have a fixed-base operator that’s not really in the business to make money. They’re in the business to keep the college going, which is having a difficult time right now.”
Despite the challenges Averett is facing financially, it may be Danville’s best option for a fixed-base operator that understands how important the airport is to the city, beyond its own aviation program, according to Jason Bonham, airport manager at the Central Kentucky Regional Airport. Bonham said it can be hard for smaller FBOs and airports to be profitable unless there’s a charter service available. “If you have a private person that comes in and sets up a business as the FBO, or even if the [airport] board runs the FBO, there’s the same risk involved.”
Eastern Kentucky University has run the FBO at Central Kentucky since 2011. Bonham said that when the university sought the contact for the FBO, it hoped to energize the growth of its aviation program, which is the only four-year option in the state. Its goals were better aligned with local goals for the airport and economic development than its competitor, Bonham said.
The first few years running the FBO were hard, Bonham said. It helped that the university anticipated that the enterprise would lose money in the first couple years. “Now [the airport board is] afraid we’ll ever leave.”
The Danville FBO has not yet become a significant revenue generator for Averett, though it has turned a profit. In fiscal 2023, the FBO had about $1.7 million in revenue and about $1.4 million in expenses, according to an audit submitted to the IRS. The university spent about $40 million annually across university operations that same year.
At an airport commission meeting Nov. 12, Franks reported that the university was working with a consultant who would conduct focus group conversations with users of the airport and with the airport commission to help guide growth and marketing strategies. She said the consultant would also help in the search for the next FBO manager, and potentially would set up AU Aviation Services as its own limited liability corporation.
When she was asked by a commissioner what the timeline was for filling the FBO manager position, Franks said she had recently asked the consultant to review the job description for the role. “His advice to us is, you don’t need to be rushing,” she said.
Jones said on Dec. 6 the university would post the position for a full-time FBO manager in December.
Averett has kept the details of its financial issues quiet. Along with not commenting on the specific amount that was misappropriated, the university has not explained how the mismanagement went on unchecked for so long. When it instituted summer furlough days for many of its full-time employees, Averett also cut its match for employee retirement savings from 6% to 4%; as of Sept. 1, it cut the match altogether.
In early November, the Danville Register & Bee reported that Averett will phase out five bachelor degree majors: art, chemistry, math, modern languages and religion. The criminal justice master’s degree will also be phased out, and the Averett Symphonic Band will be cut after this academic year.
Franks announced Dec. 11 that she will retire in early January.
The university had an endowment of about $24.7 million as of June 2023, according to the school’s last tax filing. All but $637,000 of that endowment was restricted, meaning the funds are limited to a particular use such as scholarships.
The median endowment for private nonprofit four-year colleges is about $43 million, according to the American Council on Education, a higher education advocacy organization.
Averett would not comment on the current size of its endowment, citing confidentiality.
Averett’s debt has also reached a high point, totaling nearly $21 million in fiscal 2023. The year prior, the college had debts totaling $17.5 million.
The debts included loans on six aircraft totaling just over $900,000.
Despite the university’s financial issues, the city appears to be pleased with its performance at the airport.
City staff recommended a five-year lease renewal to the city council for vote on Tuesday. In the first two years of the lease, Averett’s monthly rent for the FBO will remain at its current rate of $1,500 a month. For the following three years, Averett will pay $2,500 a month.
“Having their presence at the airport has been good for us, and it’s also good for the university and for Danville,” Larking said.
