Jill Schramm/MDN Vehicles wait for future customers in the car rental lot at Minot International Airport Wednesday.

A Minot car rental company is at odds with Minot city and airport officials over whether its business model violates airport rules.

MMD Rentals insists its delivery of vehicles to customers flying into Minot International Airport does not constitute the operation of its business on airport property. The city disagrees.

Airport Director Rick Feltner told the Minot City Council, meeting as the committee of the whole Tuesday, that MMD is operating without proper licensing. The matter came to the airport administration’s attention following a complaint by an on-site car rental company. Feltner, City Manager Tom Barry and Mayor Chuck Barney have met with MMD’s owner without achieving a resolution.

Feltner explained MMD has been delivering cars for customers to the airport’s short-term parking lot. Customers arriving by plane then retrieve the cars from the lot and pay any due parking fees upon leaving.

The parking lot is public property and no money changes hands or paperwork is completed on airport property, the company states.

“She’s not operating out of the parking lot,” said Charles Herrmann, representing owner Mary Dittus before the committee. “She just can’t understand what the big fuss is about.”

Herrmann said other local car rental companies operate in the same manner, but MMD is the only operation being called into question.

Dittus has contracts with companies that call when they want a car delivered to the airport, he said. The rental time clock begins running when the vehicle leaves the business, located at Harley’s Arrowhead Cenex, so the vehicle is considered in possession of the renter when left at the parking lot, he said.

Minot officials say MMD isn’t just working under corporate contracts but offers the airport service to anyone. They note the company advertises on its website that it offers free customer pick up and/or drop off to airports and free airport shuttle.

Feltner said the airport requires car rental companies to have signed agreements with the airport. Companies bid for the right to a spot at the airport. They pay for the privilege of counter and lot space, as well as collect a $3.50 customer facility fee per rental that goes to the airport. In return, the airport uses the customer fee to maintain and improve car rental infrastructure and is obligated to protect the interests of on-site companies by restricting outside competition.

Through contracts, the airport also is able to guarantee companies meet certain standards in providing safe vehicles in good working order. The airport assures companies carry adequate liability insurance and are subject to audit, Feltner said.

“We don’t have any control of vehicles left in the parking lot,” he said. He added the airport rules are standard in the industry and are necessary to meet Federal Aviation Administration requirements.

Of the $8.15 million in projected revenue to be generated at the airport in 2018, the city expects to collect about $787,000 from car rental agreements and $185,000 from the customer facility charge. It expects to collect $1.6 million in parking fees. Feltner said the airport would need $657,000 from the tax levy to meet its projected budget, which still must go through the council budgeting process.

The airport will be accepting proposals from car rental companies in a new bid round in a couple of weeks, Feltner said. The airport currently contracts with four companies providing five brands.

Feltner said as an option to bidding for a contract, MMD can apply for a shuttle license, which costs $600 a year.

The committee voted to send MMD a cease and desist letter, outlining the penalties if they fail to comply. The maximum penalty is a $500 fine and 30 days in jail for each violation.