Agency Says City Also Mishandled Landing Fees And Leases

The FAA last month released a decision from a 2016 complaint filed by tenants of Santa Monica Airport which found that the city mishandled loans to its airport and discrepancies in leases.

The Santa Monica Lookout reports that the FAA uncovered information showing that the city charged below-market rents to non-aviation tenants, and refused to offer long-term leases to aeronautical tenants.

The primary complaint held that the city charged interest rates of up to eight percent on loans to the airport, resulting in an overcharge in interest payments of up to $2.78 million for fiscal years 2008-2009 and 2013-2014. Kevin C. Willis, the FAA's director of airport compliance, said the loans were "insufficiently and improperly documented as such and fail to satisfy the requirements of loans" under FAA policies.

Willis has ordered the city to "adjust the outstanding allowable loan balances to reflect the payment, in full, of the November, 2004 advance of $2,839,729." The adjustment is subject to FAA approval. He further ordered the city to "credit the improper interest payments charged to the airport fund totaling $743,665 and $515,672 and the principal overpayment of $188,873, plus interest from the date of each improper payment."

The city also has 60 days to "update its methodology and fees to reflect current and actual costs in the use of the Airport."

Santa Monica Airport supporters call the decision a "morsel of good news." City officials say they are "considering their options" concerning the decision.

(Image from file)

FMI: Source report