New fees at Torrance–Are they legal?

I rent a hangar from the City of Torrance at their airport. On May 13 of this year, the City Council voted to charge $50-$500 for inspections by the Fire Department. The money derived will go into the general fund. Prior to May 13, 2003, the Hangar Fire Department Inspection, (required by our Hangar Leases), was provided by the Torrance Fire Department without charge. As you know, Article XIII D of the Constitution of the State of California was adopted at the general election of November 5, 1996, as part of an initiative measure known as Proposition 218. This measure restricts local governments’ ability to charge new or increased “property-related” fees. Specifically, the measure states that all local property-related fees must comply by July 1, 1997 with the following restrictions:

? No fee may be more than the cost to provide service.

? No fee may be charged for fire, police, ambulance, library service, or any other service widely available to the public.

? No fee revenue may be used for any purpose other than providing the property-related service

The Torrance Fire Department inspector, in performing this inspection of my hangar 2763E, was in my hangar on 10 October for a total of 3 minutes and 12 seconds. The City of Torrance invoice dated 11/17/03 charges $50 for this previously ?free service.?

I believe that Airport Hangar Fire Inspection Fee is illegal under Proposition 218.

What is CPA’s experience on such airport “fees?”

Jim Gates

ANSWER: Jim, I don’t know that the issue has come up before in that exact setting. You could start by asking the city manger to show you the code/ordinance/law that authorizes such a charge.

Jay White
President CPA

Update
Doug Rice, CPA V.P., continues to maintain a dialogue with Mr. Gates. Mr. Gates received a response from the city manager advising him that proper legal procedures to create the fee were not followed. Torrance Airport is a unique and unfortunate situation. The airport has not applied for or accepted any federal funds or grants for over 20 years and therefore is not operating under the FAA’s Federal Grant Assurances. This has allowed the city to take advantage of the users as they have limited recourse. In this case, the city leased the local fire department a plot of airport land for free, the users pay the fire department an annual fee out of the enterprise fund to defer the cost of operating the fire station; they pay property taxes on the airfield, and pay a possessory interest tax (property tax) on their non-commercial use hangars. In short, they are taxed four times and the city wants more revenue from the users. If you want an example of how important a federal grant is to an airport in non-financial terms, this is it.

In addition, the city leased airfield land for commercial development with the understanding and agreement with the FAA that revenue would be used for airport improvements, but instead it has diverted the revenue to the city general fund. This violates the letter of agreement, but thus far the FAA has been unwilling to challenge the city in court for this breach. It is currently in the hands of the FAA Western Region lawyers and we hope that they will take action soon.

It should also be noted that Mr. Gates, at our suggestion, recently made a request to the airport commission for an investigation into the fire departments response to a mid-air collision between two helicopters. Evidently, it took about 15 minutes for the first fire engine to reach the scene (it was not from the airport based fire station but from one some distance away and had a problem gaining access to the airfield) and the airport fire station reached the scene after an unexplained delay. We will keep you informed of the findings.

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