The Grand Jury
reviewed airport operations at San Mateo County’s two airports—San
Carlos and Half Moon Bay—and concluded that they do not operate
in a manner that maximizes revenue. County General Fund support of the
airports has exceeded $2,000,000, and the County General Fund has not
been reimbursed.
The Grand Jury proposes creation of a County Airport Advisory Commission
broadly representative of county residents, the aviation industry, and
airport users to assist in long-term airport planning.
Issue: Does San Mateo County operate its airports to financially
benefit the county?
San Mateo County
owns and operates two airports: San Carlos Airport and Half Moon Bay Airport.
The airports serve commercial, corporate, and recreational owners and operators.
The San Mateo County Board of Supervisors makes decisions regarding airport
planning, policy, and expenditures. The Director of Public Works, reporting
to the County Manager, oversees and supervises the county airport operations
through the Airports Division.
The airports collect user fees and charges for hangar rentals, tie-down
fees, fuel service charges, concession charges and rents, storage of aircraft
and other property, and well water usage. Landing fees are not imposed.
Fees and charges are set at least once every three years by the Board of
Supervisors based upon recommendations from airport management. Airport
management surveys airports in other counties for comparable rates to develop
recommendations regarding fees and charges.
Airport revenue and expenses from operations are segregated from the county’s
General Fund in an “Enterprise Fund.” An Enterprise Fund accumulates revenue
and expenses from any operation intended to be self-supporting and which
neither contributes to, nor is subsidized by the County General Fund.
The airports apply for grants from the Federal Aviation Administration (FAA)
to make capital improvements related to aeronautical operations (e.g. landing
and taxiway installations, lighting, navigational systems, fencing, safety
aids and other operational related infrastructure). As a condition of these
grants, the county has entered into federal contracts that require:
The FAA contract requirements do not apply to hangars, tie-downs, leases,
or concession agreements for non-federally funded facilities, or to improvements
other than aircraft operations.
The Grand Jury interviewed Airport Division and Public Works personnel,
inspected facilities at both the San Carlos and Half Moon Bay airports,
and reviewed master plans and financial records provided by the Public Works
Department and the Internal Audit Division of the Controller’s Office.
The Grand Jury also performed a limited review of Santa Clara County airports;
Reid-Hillview, a major regional airport comparable to San Carlos in size,
installations, and scope of operations; San Martin a smaller airport, in
some respects comparable to Half Moon Bay; and Palo Alto Airport, jointly
owned with the City of Palo Alto.
In
2000 the San Mateo County Controller found the airports had an accumulated
deficit in excess of $2,000,000 from un-reimbursed past support from the
County General Fund. More recently, the Controller reported that the Airport
Division increased its operating cash balance from $644,000 to $1,229,000
for the year ending June 30, 2002. These funds have not been used to repay
the accumulated deficit.
Most airports in Bay Area have long waiting lists for hangar space. Rental
rates for off-site private hangars adjacent to the San Carlos airport are
higher than those at the airport.
In 2000, the County Controller made recommendations for revenue enhancements
of $198,000 that included increases in non-aviation storage fees, well water
charges at Half Moon Bay, fees for governmental uses, general increases
in hangar and tie-down fees, and rental increases. The Public Works Department
agreed to implement these recommendations over time to avoid abrupt negative
impact on airport users.
In 1999, the Santa Clara County Board of Supervisors ordered a management
audit of its Airports Division. The independent auditor, Harvey M. Rose
Accountancy Corporation, made a number of major
recommendations. The following is a comparison of that audit’s recommendations
with San Mateo County’s current practices (in italics):
County airports
have historically been operated for the benefit of the flying public
at the expense of the county.
San Mateo County has not examined its airport management to the extent
of the independent audit performed for Santa Clara County.
The Santa Clara County audit report furnishes a useful analytical tool
to consider revenue enhancement and oversight opportunities for the
San Mateo County airports. The value of the overall financial analysis
and detailed recommendations in the Santa Clara audit suggest it would
be prudent for San Mateo County to reexamine its present policy regarding
airport repayment with interest of contributions from the County’s General
Fund.