May 1, 2013
After a meeting that lasted more than four hours on April 30, the Santa Monica City Council voted unanimously for a proposed 250-percent increase in landing fees at the city’s general aviation airport, Santa Monica Municipal Airport (SMO).
In public comments, NBAA argued the increase is unreasonable, and is considering administrative measures to halt the proposal, scheduled to become effective on Aug. 1.
NBAA Chief Operating Officer Steve Brown urged against the increase at the meeting, alongside dozens of members of the local aviation community, including pilots, flight instructors, maintenance specialists and FBO representatives.
“We’re clearly disappointed the Council rushed ahead with this plan, with very limited transparency into the financial assumptions used to justify it,” said Brown. “NBAA is considering filing a formal complaint with the FAA, for a review of whether the proposal complies with federal guidelines.”
In Brown’s comments at the meeting and in documents filed with the council, NBAA argued the increase raises several significant concerns related to compliance with FAA provisions.
First, said Brown, the fee increase may create a budget surplus at the airport through excessive fees. “Essentially, the economic system of the airport becomes a ‘closed loop,’” said Brown. “All revenue from activity on the airport has to be spent for current airport purposes, and cannot be moved ‘downtown’ to the city’s general coffers.”
NBAA’s preliminary analysis indicates that Santa Monica Municipal Airport is already operating with a balanced budget. In the airport’s budget submitted on Feb. 25, it reported $4.4 million in revenue and $4.3 million in expenses. The fee increase would raise revenues by $1.4 million without any clear explanation as to why the increase is required.
Need for Transparency
City officials have shared a limited number of documents with the aviation community. Those the city has made public are inconsistent, and exclude revenue from businesses on the airport and parking lots, while charging the airport for unspecified “professional services” by the city.
Those inconsistencies in the financial assumptions for the fee increase – and the limited time to review them – also could violate FAA provisions, NBAA’s statement argued.
“In our view, the process so far has been very opaque,” said Brown. “The City of Santa Monica released paperwork related to the fee increase a few weeks ago. They then met with airport tenants about the proposal on April 18, and they voted on it 12 days later. FAA guidelines indicate that airports need to be open and transparent with their users, and provide adequate time for review and consultation.”
NBAA and Santa Monica tenants also argued the proposal would discriminate against based aircraft, essentially charging them twice for airport infrastructure through fuel flowage and hangar or tie-down fees, by charging them the same landing fees as transient aircraft.
NBAA is coordinating its response to the fee increase through the Association’s Access Committee, and with NBAA Western Regional Representative Stacy Howard. Brown encouraged all operators who regularly use Santa Monica Airport to review the documents released by the city before the fee increase becomes effective on Aug. 1, and urged them to contact Howard to get involved.
“When people review the financial justification for this,” Brown said,” I don’t think anyone is going to believe a 250-percent landing fee increase is reasonable.”