Albert Einstein is reputed to have stated that “the definition of insanity is to do the same thing over and over, while expecting different results.” Santa Monica appears to have violated Einstein’s maxim.
Almost 35 years ago, the city attempted to close the airport. After years of expensive litigation, it signed an agreement that assured that the runway remain open until 2015 with certain limited restrictions. In 2008 the city again tried to limit flights at this critical Los Angeles basin airport and was rebuked in court.
Having failed at least twice in their efforts to close or unreasonably restrict the facility, the city is now trying another approach. This time the gambit is to try to to increase the landing fees so as to deter traffic. The insanity here is that Santa Monica’s financial basis for the proposed hike flunks the FAA’s explicit tests for rate changes. As AOPA’s Airport Expert Bill Dunn says:
“The city is not including income from ground leases, fixed-base operator fees, tie-down, or hangar fees as airport income against costs of airport operation. And since Santa Monica has decided to not accept future federal grants, all runway, taxiway, and airport developments are now self-funded.”
As the city must know, the FAA’s policy (which applies for 20 years after the last time that federal funds were accepted) requires that their charges be based on historic costs allocable to the airfield area as defined in Section 18.4.a in the FAA’s Chapter 18 Airport Rates and Charges. Specifically, its cost recovery must meet prescribed principles; and the rate established must be fair and equitable across all users.
In an abstract assessment unrelated to SMA, General Aviation airports are complex business units. The balancing of the facilities’ costs with revenues is not just a goal of the Grant Assurance, but constitutes the right public policy. Airports need to be self-sustaining; because, if they become a burden on the municipality and its taxpayers, it is likely that the elected officials will question the value of the airport.
What is truly bizarre about the current Santa Monica proposal is that the applicable statute (49 USC §47107 (b)) mandate that the City spend all of the revenues earned at the airport be expended there. In an effort to kill the airport, the City is proposing to increase the funds that it must spend there. Which brings us back to Einstein’s maxim!Share this article: