Airport Panel: Budget Format 'Useless'

The chair and co-chair of the city's Airport Commission believe the budget format foris "useless" in helping them determine which activities make money and which increase the red ink.

Richard Brown and David Goddard say if the city's so-called "visioning process" for the airport is to mean anything, a much clearer picture of the finances are needed.

City officials , when its current operational agreement with the Federal Aviation Admistration expires. Part of that process includes determining what makes money, and what doesn't.

What is clear to Brown and Goddard is that the airport's projected expenses exceed revenue by more than $272,000.

Goddard said he's been trying to unravel the budget knot since July, when the city provided him copies of some airport ground leases and other documents.

He compared the city's budget summary with his own figures, showing, for example, that the source of 7 percent of the airport's revenue is unexplained.

Goddard said he is knowledgeable, because of his real estate business, about leases that provide a percentage of a tenant's profit to the landlord, including from the tenant's subleases. He points to one airport tenant, Atlantic Aviation. Goddard says its lease entitles the city to 25 percent of its profit, and requires annual statements showing company profit.

"Atlantic Aviation makes more than $2.2 million a year off its subleases and is only paying the city about $190,000 a year," or about 8.6 percent, Goddard said.

The leases the city sent him, however, are more than six years old. Goddard says he is waiting for updates, and acknowledged he may not be privy to some material due to competition ethics issues.

He feels his struggle to ascertain whether the city is "doing its duty to push rents and reduce expenses" is an example of how the airport's budget is "not user-friendly.'"

Airport Director Bob Trimborn told Patch his department provides budget projections to the City Manager and Finance Department; they decide how the budget is presented to the City Council.

The budget presented at the Feb. 27 Airport Commission meeting is already approved, Trimborn told Patch, adding that he does not plan to analyze Goddard's numbers.

The latest budget estimates 75 percent of the airport's revenue will be generated from leases and rentals, both aviation- and non-aviation-related. Fees from noise violations provide less than 1 percent, while landing fees account for 10 percent.

Goddard believes those fees could be raised substantially, although that would require FAA approval. Planes based at the airport are exempt; others pay $2.07 per thousand pounds, meaning some light planes pay between about $4-8. Most jets pay $30-$80.

Trimborn said there's no schedule for raising landing fees and that he "wasn't prepared to discuss'' why.

Commission Chair Brown's budget criticisms mirror Goddard's.

The study projected a significant positive impact on Santa Monica's economy because airport workers, business executives and tourists who fly into the airport all create secondary jobs, in hotels and restaurants, for example.

But Brown said the study is not specific on how much revenue various airport business categories generate—charters, flight schools, restaurants—and whether some are essentially being subsidized by others. There should be data that "point to the share of economic impact from these companies," he said.

Regarding flight schools——Brown said he found no evidence of economic benefit. "But we don't really know," he said. "I can't see why the city commissioned a... study that couldn't provide that information. That seems like a waste of money."

Do non-aviation businesses subsidize the airports's aviation side? Trimborn acknowledged the non-aviation side generates more revenue, while bills are paid out of the total revenue pool.

"We don't differentiate one pot from another," he said. "Revenues [from all sources] go into the airport fund and are used to maintain and improve the airport."