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Airport Panel: Budget Format 'Useless'

With operations running a deficit, Santa Monica Airport Commissioners want a more specific 'user-friendly,' budget, with solid economic information to help to determine what's in store for the airport's future.

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."

Richard B March 22, 2012 at 06:49 PM
Agree the airport is Green with DOLLARS ! What about the negative impact from the airport? The health and safety and peace and quiet for the residents-Seems like the neighbors don't count. It's all business as usual- Santa Monica is not a green city they want everyone to think it is-No leaf blowers, no smoking, no plastic BUT AIRPORT TOXIC FUMES -SURE why not
PB March 22, 2012 at 07:52 PM
The residents' complaints aren't ignored by the flying pilots - they go to Van Nuys or Hawthorne, enriching their fuel sellers, maintenance workers, restaurants, hotels, rental car agencies. Why not study how, instead of shaking one's fist in the air at a plane every two minutes at peak, you can benefit - make it better. Improve the business base at the airport, perhaps? Make it attractive for planes to come and spend money? The museum is open again - that's a good thing. Why not promote the airport and try to enliven the economic base instead of constantly slamming it? I remember in 1974 when I attended airport meetings over the city wanting to approve the areas at both ends of the runway for residential development - at the City Council hearing I distinctly remember the mayor saying that "The people who would buy the homes know that there is an airport there and that they cannot complain!" Well, now you are complaining, so who is at fault here? The pilots? The residents who came later? I'll leave that for you to decide. Regardless, consider my suggestion to keep the open space and the minimal annoyance of the airport by making it better and more hospitable, rather than pressing the government for usage that is definitely not in harmony with the beautiful residential area of West Los Angeles.
Brian R. Bland March 23, 2012 at 05:27 AM
Deborah: The unpaid five-member Airport Commission acts as an advisory body to the City Council, which appoints members to four-year terms. Commission members are Santa Monica residents and cannot work for the city or hold a paid city office. As advisors, the panel has no legal power to, for example, increase or decrease SMO’s budget or change its format. The commission itself is briefed on airport policy by the airport staff and the city attorney’s office. The commission can recommend that the City Council change a policy, but cannot order the airport staff to do so. (SMO is part of the city’s Public Works Dept.). Although the FAA controls SMO’s flight operations, the commission’s input can have an indirect effect. In 2010, the commission recommended the city deny permits for two additional flight schools. The airport staff had recommended approval, but the city manager agreed with the commission and denied the permits. Thanks for posting, Deborah. Brian R. Bland, for Patch
Lorraine Sanchez March 29, 2012 at 07:29 PM
Yes, and let's continue to allow 12-14 passenger jets that are too large for the runway to continue operating to make more money for the city and build out the runway over 23rd st. because the people who live around the airport" know it's there."...an airport that for many yrs has been recreational and not commercial like Atlantic Aviation is
Lorraine Sanchez March 29, 2012 at 07:30 PM
How I feel is expressed in my submission above.

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