LAX Director Urges City to Keep Airport, Use Its Revenue : Government: He says landing fees should be spent citywide and recommends that the facility pay a fee for increases in traffic.

Los Angeles officials should drop proposals to sell or lease the city’s international airport and concentrate on diverting more money from the financially robust facility to the strapped city treasury, the airport’s executive director recommended Monday.

Clifton A. Moore called for continued public ownership of Los Angeles International Airport, along with increases in airline landing fees and changes in law that would permit the proceeds to be spent citywide, rather than just at the airport.

Moore recommended that the city’s Airport Commission support changes in federal law, the City Charter and airport construction bond covenants that restrict the use of airport funds.

The recommendations reinforce a consultant’s report last month that said the city would gain more by maintaining ownership of LAX than by selling or leasing it to a private firm.

The City Council already is considering whether to place a City Charter amendment on the November ballot that would clear the way for city officials to spend airport money throughout the city.

The Airport Commission is expected next month to take up the question of how the airport should be operated, as well as other recommendations by Moore: That the airport pay for street improvements when it expands and creates additional traffic, and that the city take over and develop unused property on the north side of LAX to bring in additional funds.

Commission President Robert Chick praised the recommendation that the city maintain control of the airport.

“One of the advantages of continued city ownership is that it is sensitive to the community that lives around the airport,” Chick said, “and it can continue to be sensitive to the community around the airport.”

City Councilwoman Ruth Galanter, who represents the airport area, called the recommendations as “a great start. Let’s keep it going.”

Critical in the city’s effort to extract more money from the airport will be the upcoming renegotiation of landing fees levied on the airlines. The fees, currently the lowest of any major airport in the country, are to be revised Jan. 1.

Moore’s report echoed findings by the city’s consultant, John F. Brown Co., which recommended that airlines pay fees derived directly from the cost of providing them service.

Currently, LAX landing fees are kept low because of the substantial revenue the airport makes from other sources--particularly concessions and parking.

“There is no justification for this city and this airport to, in a sense, continue the subsidy of the carriers,” Chick said. “We have every right to increase the charges in a responsible way.”

Airport officials said it is too early to say how much more airlines would have to pay to land at LAX under the new formula.

But the city’s consultants advised a conservative approach to setting new fees.

Michael J. Brown said the city--which narrowly escaped budget-influenced reductions in police and fire service in the coming fiscal year--must weigh several factors in setting landing fees. The fees should bring additional revenue without putting an excessive burden on airlines and passengers that could “kill the golden goose,” Brown said.

Brown’s firm last month reported that the city could divert to general purposes as much as $3.4 billion over 30 years by maintaining control of the airport. The city would net $3.2 billion by leasing it to a private firm and about $2.6 billion by selling it, the report said.

The city should not expect to profit from any of those arrangements in the “near future,” the Brown Co. study says, because of the difficulty in removing restrictions on spending airport revenue away from the airport.

Lawyers hired by the Department of Airports have advised that leasing or selling the airport would be easier than diverting its revenues.

President Bush cleared the way for the lease or sale of public facilities such as airports earlier this year by signing an executive order that requires all federal agencies to cooperate in such “privatization” initiatives.

“A lease or sale would have been OK within existing law,” said John Giraudo, one of the lawyers advising the city. But it would be “very difficult” to obtain the changes in federal law to allow Los Angeles to spend airport money for other city purposes, Giraudo said.

“I guess I was surprised that our legal discussion was not factored into the equation” during the commission’s brief discussion of Moore’s recommendations on Monday, Giraudo said. “But it doesn’t surprise me that the city wants to keep the airport.”

Regardless of who owns LAX, another recommendation by Moore could bolster the city’s budget. The airport has been exempted from a city ordinance that forces developers to pay for street improvements in the congested corridor between El Segundo and Santa Monica.

Moore recommended that this exemption be eliminated and the airport forced to pay for each additional car that its expanded operation puts on the street. The ordinance, currently being amended, is expected to raise millions of dollars by levying a fee of about $6,000 for each new auto trip in the peak afternoon commute hour.

“To have Cliff Moore recommend that is a very important development,” Galanter said.

The airport is expected to expand from its current level of service, 46 million passengers a year, to 60 million passengers a year early in the next century.