Management Audit of the Airports
Division
Airport Division
Audit
12/11/99
Introduction
The Board of Supervisors of the County of Santa Clara
directed its management audit staff to conduct a management audit of
the County Roads & Airports Department in 1999. The Board asked
that the audit be divided into two reports; one covering the Airports
Division and the Airport Enterprise Fund and one covering the Roads
Division. This report is the first of the two reports, covering the
Airports Division and Airport Enterprise Fund.
The purpose of this audit was to examine the operations,
practices, and finances of the Airports Division and determine if opportunities
exist for improving the efficiency, effectiveness, and economy of the
Division. The scope of the audit included all aspects of the Airports
Division: finances; staffing; organization structure; business practices;
planning and decision making; and, use of equipment and resources.
Field work for the audit was conducted between April
and September, 1999 simultaneous with the management audit of the full
Roads & Airports Department. The audit of the Roads Division is
still underway at the time of the release of this Airports Division
management audit report.
Methods employed for this audit included interviews
with Airports Division management staff and Airport Operations Supervisors,
a detailed review of the financial records of the Airport Enterprise
Fund from FY 1995-96 through FY 1998-99, a review of Federal Aviation
Administration and County regulations governing the County’s airport
operations, interviews with selected member of the Airports Commission
(all commissioners were offered the opportunity to be interviewed but
only those who responded to the offer were interviewed), a review of
the last completed County Airport Master Plan (prepared in 1982), a
review of all leases between the County and fixed base operator tenants
(FBOs), an analysis of aircraft storage rental rates and all other airport
charges and revenues, review of the capital improvement plan for the
three airports, a review of the agreement between the County and City
of Palo Alto regarding operation of the Palo Alto Airport, an analysis
of staff utilization and workload, interviews with selected FBOs, and
administration of a survey of 26 other airports in California.
The Board had requested that an evaluation of the
cost and feasibility of an impact management program for the airports
be conducted as part of this audit. Currently, the Department maintains
a noise complaint telephone number for each of the airports, logs and
compiles all complaints made, and calls complainants back who leave
messages when staff are not available. Staff then takes appropriate
action to remedy identified systematic noise problems. This practice
appears to be an adequate means of responding to complaints and keeping
track of patterns over time, both in terms of recurring problems and
recurring complainants.
The Department is currently planning to perform a
Federal Aviation Regulation (FAR) Part 150 Noise Compatibility Planning
Study, which will examine in great detail the current noise problems
and impacts at the airports and potential solutions. Any examination
of an impact management program should await the results of that study.
Overview of Airports Division
The Airports Division of the Roads and Airports Department
is comprised of three general aviation airports. A profile of each airport
is presented in Table I.1.
Table I.1
Annual Operations at County Airports
|
Airport
|
Location
|
# Operations 1998*
|
#Runways
|
Acres
|
|
Reid-Hillview
|
San Jose
|
214,021
|
2
|
179
|
|
Palo Alto
|
Palo Alto
|
189,626
|
1
|
182
|
|
South County
|
San Martin
|
58,500
|
1
|
179
|
|
TOTAL
|
|
462,138
|
|
|
* Each operation is a take-off or landing
Altogether the three airports have the
capacity to store 1,462 aircraft in a combination of hangars, tie-downs,
and shelters. These aircraft storage facilities are operated by a combination
of the Roads & Airports Department’s Airports Division and
their tenants, known as fixed base operators (FBOs), at the three airports.
As shown in Table I.2, 886 of the aircraft storage rental sites at the
three airports, or 61 percent, are County operated and the remaining
576 storage sites are operated by FBO tenants. Of the 1,462 spaces available,
1,040 are tie-downs, 370 are hangars, and 52 are shelters.
Table I.2
Aircraft Storage Capacity at County Airports
by Airport and Type of Storage
|
|
PAO
|
RHV
|
SC
|
TOTAL
|
|
|
FBO
|
County
|
Total
|
FBO
|
County
|
Total
|
FBO
|
County
|
Total
|
FBO
|
County
|
Total
|
|
Shelter
|
0
|
0
|
0
|
0
|
52
|
52
|
0
|
0
|
0
|
0
|
52
|
52
|
|
Tie-downs
|
100
|
371
|
471
|
253
|
209
|
462
|
37
|
70
|
107
|
390
|
650
|
1,040
|
|
Hangars
|
82
|
0
|
82
|
49
|
184
|
233
|
55
|
0
|
55
|
186
|
184
|
370
|
|
TOTAL
|
182
|
371
|
553
|
302
|
445
|
747
|
92
|
70
|
162
|
576
|
886
|
1,462
|
PAO= Palo Alto Airport
RHV= Reid-Hillview Airport
SC= South County Airport
Actual rental space occupancy at the three airports is
discussed in Section 1.
Authority
The County Airport Ordinances, Rules,
and Regulations, adopted by the Board of Supervisors in 1979 establishes
the allowable uses of the County airports, charges for various uses,
approvals required for businesses located on airport property, insurance
requirements and liability assumptions, procedures governing use of
runways, fire safety requirements, and other regulations. The Airport
Rules and Regulations state that, "All persons using the airport
shall be subject to and governed by these rules and regulations, all
county ordinances, state and federal laws and FAA (Federal Aviation
Administration) rules and regulations" (Airport Rules and Regulations
Section I.2).
Airports that have received grants for
land acquisition or improvements or have been conveyed property from
the FAA are required to comply with the FAA’s Airport Compliance
Requirements. These Requirements cover areas such as uses of airport
property, maintenance, approach protection, compatible land uses, and
lease terms. Because Santa Clara County has received FAA grants for
its airport properties, it is subject to these Airport Compliance Requirements.
It should be noted though that managing the daily operations of the
three County airports is entirely the responsibility of the County.
FAA review and oversight of management is limited to instances such
as a change in the airport layout or land use at the facilities, or
to respond to complaints of violations of the Airport Compliance Requirements.
History
Both Reid-Hillview and South County
Airports are on County land. Reid-Hillview was at one time a private
facility and was sold to the County in 1961. The County opened the South
County Airport on County land, purchased with Caltrans Aeronautic Department
grants, in San Martin in 1972. The Palo Alto Airport was operated by
the City of Palo Alto prior to 1964 when the City and the County of
Santa Clara entered into a lease agreement under which the County assumed
management responsibility for the airport. Under the terms of the agreement,
the City agreed to lease the airport facility to the County for a nominal
fee in exchange for the County improving, maintaining and operating
the facility. This lease was amended and renewed for a fifty-year term
in 1967.
The Airports Division of the Roads &
Airports Department, responsible for managing the three County airports,
was originally part of the County’s Transportation Agency. When
the Transportation Agency was restructured in 1994 and the Valley Transportation
Authority created, its Airports division was spun off from the Agency
and combined with the Agency’s Roads Division to create the new
County Roads and Airports Department.
Structure of the Airports
Division
The FY 1998-99 budget for the Airports
Division of the Roads and Airports Department authorizes 14 permanent
positions, organized as follows. The Director of the Department is not
a member of the Division’s staff but oversees the Division and
allocates a portion of his time to airport matters. The budget also
provides funding used by the Department for extra help positions.
Airports Division
Organization Structure
The Director of County Airports Operations
reports to the Director of the Roads & Airports Department and oversees
all three of the County airport facilities. Besides the Director, centralized
administrative staff consists of a Business Manager, a Secretary I,
and an as yet unfilled Assistant Director position first authorized
in the FY 1998-99 budget. The remaining staff, comprised of two Airport
Operations Supervisors and eight Airport Operations Workers, is assigned
to Reid-Hillview and the Palo Alto Airports. The Palo Alto supervisor
splits his time between the Palo Alto and South County Airports though
there are no other full-time dedicated staff at South County. Extra
help staff is used at that facility for special projects and seasonal
work. The Airports Division receives support services on a reimbursable
basis from the Roads & Airports Department’s administrative
staff including the finance and human resources divisions.
Airports Division
Finances
The Airports Division’s FY 1999-00
budget authorizes $2,034,003 in expenditures and $3,845,996 in revenue,
which results in an apparent surplus of $1,811,993. However, the revenues
include $1,665,000 in FAA funding for unbudgeted capital project expenditures.
Removing this revenue and making other adjustments to exclude unusual
or one-time revenues and expenditures results in a net operating deficit
of $16,196, as shown in Table I.3.
Table I.3
Authorized and Adjusted Airports Division Budget
FY 1999-00
| |
Authorized
|
Adjusted* Operating
|
|
Revenues
|
$3,845,966
|
$1,854,706
|
|
Expenditures
|
2,034,003
|
1,870,902
|
|
Surplus (Deficit)
|
1,811,993
|
($16,196)
|
* Removes one-time FAA funding of $1,665,000 from
revenues and a $262,156 adjustment to county overhead from expenditures.
Adds County depreciation to expenditures and other minor adjustments
to arrive at an operating budget that excludes unusual one time occurrences
and includes normal ongoing costs and revenues.
The Airports Division’s financial
position, including an analysis of its actual expenditures and revenues,
fund balance, and retained earnings from the last four fiscal years,
is discussed in detail in Section 1. That analysis shows that, unlike
the results presented in Table I.3, actual revenues have exceeded expenditures
each of the last four fiscal years for the Airport Enterprise Fund as
a whole. However, the Palo Alto Airport has incurred deficits for two
of the four years and South County Airport has incurred deficits for
all of the four years. Only Reid-Hillview has sustained surpluses which
have more than made up for the losses at the other two airports.
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updated on
3/26/02
