SR-07-23-2013-3GCity Council Meeting: July 23, 2013
Agenda Item: 3-0,
To: Mayor and City Council
From: Martin Pastucha, Director of Public Works
Subject: Amend Resolution 10744 (CCS) to Exempt Charitable Organizations that
Provide Free Transportation to Patients of Modest Means with Medical
Needs from Airport Landing Fees
Recommended Action
Staff recommends that the City Council amend Resolution No. 10744 (CCS) to exempt
from the Santa Monica Airport's landing fee program aircraft operations for or by
charitable organizations that provide free transportation to patients of modest means
with medical needs.
Executive Summary
On April 30, 2013, Council adopted Resolution No. 10744 (CCS) setting fees for landing
at the Santa Monica Airport (Airport). Council requested additional information related
to the number of emergency and charitable flights that operate at the Airport and asked
staff to return prior to August 1, 2013 with a recommendation to exempt charitable
flights from the Airport landing fee program. For the purposes of the proposed landing
fee exemption, charitable flights are flights by non - profit organizations that qualify under
Section 501(c) (3) of the Internal Revenue Code as charitable organizations and provide
free air transportation for medical - related needs.
Staff found a small number of the total aircraft operations are associated with charitable
non - profit organizations. Charitable flights play a vital role in the lives of underprivileged
patients by transporting them free of charge to necessary medical facilities, therefore
staff recommends amending Resolution No. 10744 (CCS) to exempt charitable flights
from the added costs of landing fees.
Background
On April 30 2013, Council adopted Resolution No. 10744 (CCS) (Resolution) to change
the landing fee program from the current $2.07 per thousand pounds of certificated
maximum gross landing weight to $5.48 and apply the fee to itinerant and based aircraft
at the Airport, effective August 1, 2013. Additionally, Council directed staff to research
the number of emergency and /or charitable flights that operate at the Airport and return
1
to Council, prior to August 1, 2013, with a recommendation to amend the Resolution to
exempt these types of flights from the landing fee program.
Discussion
In 2012, less than 1% of the Airport's total operations were attributed to medical
emergency or charitable organizations, of which 179 were charitable flights operated by
Angel Flight. The difference between medical emergency flights and charitable flights is
that most medical emergency flights are for profit and they often do charge the medical
institution for their services whereby charitable flights do not.
Angel Flight is a charitable organization and its mission is to arrange free air
transportation for people who are financially distressed, or are in a time - critical, non -
emergency situation due to their medical condition. The pilots that fly Angel Flight
missions donate their time, aircraft, and operating expenses. Angel Flight is the most
frequent non - profit operator at the Airport and is currently based there.
Staff outreached to several general aviation airports with established landing fees to find
if they exempt similar operations from their landing fee program. Most airports do
exempt operations of charitable non - profit organizations, but they do not exempt for
profit medical emergency flights. Staff recommends that all non - profit organizations that
qualify under Section 501(c) (3) of the Internal Revenue Code as charitable
organizations and provide air transportation services for medical - related needs are
exempt from landing fees, provided that no person directly or indirectly receives a profit
from those air transportation services. Internal Revenue Code section 501(C) (3)
identifies corporations, funds or foundations that operate for religious, charitable,
scientific, literary or educational purposes.
The average weight of the aircraft used during these missions was 3,300 pounds.
Taking into consideration the new landing fee rate of $5.48 per thousand pounds, there
would be an approximate $3,000 annual revenue loss to the Airport Fund.
Furthermore, the revenue loss from this exemption would not be charged to the public -
use airfield areas of the Airport when the landing fee rate is recalculated, but rather it
2
would be charged to the landside operations ensuring that airport users do not
subsidize the exemption.
Financial Impacts & Budget Actions
The proposed rate change in the Santa Monica Airport landing fees will decrease
annual revenues by $3,000 at account 33431.402170. This requires a budget action to
decrease revenues at account 33431.402170 by $3,000 in fiscal years 2013 -14 and
2014 -15.
Prepared by: Stelios Makrides, Airport Operations Administrator
Approved:
Martin Pastucha
Director of Public Works
Attachment: Resolution
3
Forwarded to Council:
Rod Gould
City Manager
Reference:
Resolution No. 10759
(CCS)