Sitta built two large fuel tanks that are not currently in use. Sitta stopped selling fuel in 2008 when his largest customer, Mesa Air, pulled out of Farmington.
Meanwhile, the airport's sole fuel vendor, Atlantic Aviation, faces a July 1, 2013 deadline to meet environmental regulations for its fuel tanks.
"Their (the city's) solution to the problem is just to take mine (tanks)," Sitta said. "Mine are compliant."
Sitta's negotiations with city officials have gone nowhere, and the city, which owns the airport, changed his lease from a 30-year term to a month-to-month arrangement.
Sitta, 61, said his tanks have a replacement value of about $350,000, and he's not willing to relinquish them for nothing.
"They've talked about buying mine, purchasing mine, but no offers have been forthcoming," he said.
Assistant City Manager Bob Campbell said he has offered to discuss buying the tanks. Campbell said he wants to make sure Sitta is "fairly compensated" for the fuel tanks.
The city's goal is to increase fuel storage at the airport and provide a self-service fueling station for pilots of small planes, Campbell said. The hope is more fueling options would generate more flights into the airport.
"We think an overall approach to trying to reduce the cost of fuel at the airport is to allow someone to construct a self-service fueling station, and secondly, to be able to provide that person or that group adequate storage so they can buy volume fuel and sell it," he said.
"A self-service station is highly desired by the city and, we think, users of the airport," Campbell added.
Sitta said he has repeatedly tried to negotiate with the city to expand his operations and establish a self-service aircraft fueling service.
Airport Manager Todd Gressick said Sitta hasn't held up his obligations.
"He has failed to meet the minimum standards to sell fuel," he said.
Sitta said he is unwilling to make additional investments at the airport since his lease terms were changed to a monthly basis. He said it is "patently untrue" that he hasn't fulfilled his obligations.
A group of 60 small business owners and pilots at the airport is closely watching the dispute.
"Our concern as a group is if this sort of thing can be done to one member, then no one is safe from similar tactics," said Donal Key, chairman of the Farmington Airport Citizens Association. "This is a matter we feel like the public needs to know."
Fueling is an important part of the airport's operations. In 2011, the airport sold 686,566 gallons of fuel, mostly Jet A fuel. The jet fuel cost $7.65 per gallon on Tuesday.
Hanging over the airport's fueling situation is a July 1, 2013 deadline for Atlantic to improve its containment safeguards. The New Mexico Environment Department is requiring all above-ground fuel storage tanks to have a secondary containment barrier to prevent spills. The deadline has been pushed back since 2011.
Atlantic's tanks at the airport do not meet the upcoming secondary containment rules, state officials said.
"The Atlantic Aviation tanks are not in compliance," said Dana Bahar, chief of the Environment Department's Petroleum Storage Bureau. "They haven't come into compliance yet, but they are working with our inspectors to come into compliance."
But an Atlantic Aviation manager said the company faces no deadlines related to its Farmington tanks.
"There is no deadline," said Jeff Morse, a regional manager. "Our plans are some time in 2013 to put in a new fuel farm but that is something we want to do, not something we have to do."
To Sitta, a Farmington native, it appears the city is trying to put him out of business.
"It's pretty plain," he said.