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Balanced Budget Proving Elusive at Van Nuys Airport

The proposed budget for the Van Nuys Airport would cut police officer positions and staffing of a vehicle that responds to aircraft emergencies among other cost reductions designed to make the San Fernando Valley airfield more self-sufficient. Still, despite the goal to make the airport not dependent on subsidies from Los Angeles World Airports, the city agency that owns and operates the airport, the fiscal year 2009-10 budget still has a deficit of more than $2 million. The Airport Board of Commissioners is scheduled to vote on the budget on June 22. While a presentation to the commissioners at a special meeting June 10 focused on cost reductions it does not rule out future fee increases to make up the budget shortfall. “This is an ongoing process,” said Van Nuys Airport Manager Selena Birk. “We are looking at and prioritizing other opportunities for additional savings.” The proposed budget estimates savings of $6 million through not filling vacant administration positions; redeploying other positions to Los Angeles International Airport; moving maintenance costs at the Flyaway bus terminal to the LAX budget; and making cuts to police and fire positions. Those reductions specifically would lower the number of police officers to 18 from 28 that would still provide visible and effective presence at the airport; and have the Los Angeles Fire Department staff just one aircraft rescue and fire fighting vehicle rather than two vehicles. The firefighting cuts did draw comments from union representatives, Birk said. Total operating revenues were estimated at $15.6 million with expenses estimated at $15.8 million, making for a deficit of just more than $200,000. With the addition of depreciation and amortization of capital assets at the airport infrastructure, buildings, etc. the deficit climbs to nearly $2.8 million. For years, budget shortfalls at Van Nuys have been made up with infusions of money from the LAX budget. For the current budget year, the LAX contribution amounted to $9.7 million. Sources of money The airport’s operations and administration is funded through lease payments from the variety of aviation-related companies based there and from a fuel flowage fee. But that money no longer meets the needs of the world’s busiest general aviation airport, sending officials in different directions to bring in more revenue. A study commissioned by the City Controller’s office released last year laid out ways for Van Nuys to attain financial self-sufficiency that included increasing fees levied against leaseholders and users of the airport. In March, the airport commissioners stepped in that direction by raising the fuel flowage fee to $0.11 per gallon from $0.03 per gallon. The increase, which went into effect May 1, was forecast to raise an additional $1.8 million based on the average volume of fuel sold over the past five years. The airport agency has also floated to consistently collect a landing fee for aircraft using Van Nuys; and instituting the Airport Deficit Recovery Program to recover charges from use of common areas such as runways, taxiways and service roads. Talk of higher or new fees is never popular among the airport tenants but the steps taken by airport staff to curb spending did not go unappreciated. “This is very constructive that they looked at expenses as they did,” said Robert Rodine, a consultant with aviation clients and co-chairman of the Valley Industry & Commerce Association Aviation Committee. “They have certainly gone in the right direction.” Another area the airport is looking at to bring in more money is the land parcels not currently under lease. With each passing year, millions of dollars are lost because the land is not productive. A 5.8 acre parcel on Valjean Avenue, for instance, has long been empty and much coveted by existing leaseholders while the former Jet Center property has also long been unused although the subject of current lease negotiations.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.
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