SANTA MONICA—On January 6, the Federal Aviation Administration (FAA) ruled that the city of Santa Monica violated grant assurances as it stockpiled surplus revenues produced by the Santa Monica Municipal Airport, which is scheduled to close on December 31, 2028.
The city of Santa Monica believed it could use a non-aeronautical surplus of nearly $19 million to cover municipal expenditures.
Michael Helvey, the director of the Federal Aviation Administration, ruled that the city of Santa Monica violated a federal law that requires all airport revenues collected from both aeronautical and non-aeronautical activities to be spent on airport operations or improvements to the airport.
The ruling is in response to a 2024 complaint filed by a pilot and a repair station at the Santa Monica Airport, which claimed that the city did not use all of the airport’s surplus revenue to lower the rates it charged aviators. The National Business Aviation Association supported the complaint.
In his ruling, Helvey, the director of the Federal Aviation Administration, stated that, since the Santa Monica Airport is federally obligated and requires the FAA’s approval, as part of the process, the FAA can determine how the surplus can be used upon the airport’s closure.
The FAA ordered the city of Santa Monica to review its non-aeronautical budget to ensure compliance with its federal obligations and to adjust it if necessary. It also ordered the city to adjust its aeronautical rates annually until the airport closes in 2028.
The city of Santa Monica has 30 days to appeal the ruling.
By Danie Diquinzio