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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 14 findings
F1
Charles Litton's Loma Rica Industrial Park Corporation, subject to certain conditions. The conditions were stated in a signed agreement that specified, among other things, that: "Said property will be maintained in such condition that airplanes and aircraft may use the same with safety on a year round basis." "County agrees to appoint an airport commission to manage and control the operation of the property..." Agree Studies have found that continued operation of the airport has significant economic and
F2
safety value to the county. Agree The airport has operated under temporary operating permits since 1995 because of unsafe
F3
conditions. CalTrans, acting for the FAA, issued a letter of closure of the airport for night operations in 1996 because the county did not solve an obstruction problem. A second letter of closure was issued in 2000 because the county still had not solved the problem. Night landings were restricted in 1996 and then eliminated for a period in 2000, and the airport is still operating under a temporary permit. Disagree with the first sentence. The airport has operated under temporary operating permits since 1995 because of failure to comply with FAA Part 77 regulations pertaining to the safe operations of airports. Agree with the remainder of this section.
F4
In 1997 the county was offered free used light poles to support obstruction warning lights as required by the FAA. Two years later, the poles were sold to another buyer after the county failed to act. Disagree with first sentence; the light poles offered were not free. Agree with second sentence The county now expects the lighting project to cost $245,000, plus the cost of tree trimming
F5
and removal. Partially Disagree. According to information provided to the Commission by the Airport Manger, the lighting project is expected to cost approximately $235,000 plus the cost of tree trimming and removal. Boards of Supervisors did not enforce an existing Public Utility Code and a Nevada County
F6
Ordinance requiring residents to keep their trees from obstructing the runway. Consequently, the county paid for the purchase and installation of lights in 1997 instead of requiring trees to be trimmed. In 2000, the county required trees on private property to be trimmed or removed but paid the $79,000 cost out of taxpayer funds. Agree with the first sentence. Partially Disagree with the second sentence. The original seven-pole obstruction lighting system was approved and constructed as part of Federal AIP project grant 3-06-0095-03 in --- 1994-95. Ninety percent of the cost of the installation was paid for by the Federal Aviation Administration 4.5% was paid by Caltrans and the County of Nevada paid 5.5%. The obstruction lights were approved as one part of a permanent resolution to the obstruction issues. In order for the problem to be completely resolved, numerous trees in approach zones and clears zones off of runway ends identified in airport inspections in the early 1990's also needed to be removed. The trees that were scheduled for cutting were not removed until the year 2000. At the same time a more efficient and effective lighting system was designed that would allow as many trees to remain standing as possible. Eventually over 900 trees were cut or trimmed to bring permanent resolution to the obstruction problem. However, the installation of the lighting has saved more than twice the amount of trees that were cut, thereby mitigating the impact of the airport on neighboring properties. Agree with third sentence; in 2000, the county required trees on private property to be trimmed or removed and paid the costs out of County funds. The county established an Airport Commission in the 1980s. The commission's by-laws
F7
specify that it is an advisory body only, contrary to the Litton agreement. It has no authority over the airport, and no budgetary input. Disagree with first sentence. According to information from the Asst. County Counsel, the current By-laws state that the authority for the formation of the Airport Commission is Nevada County Ordinance 1609, adopted 12/12/89 and operative 1/11/90. However, this statement does not appear to refer to the earliest date of establishment for the Commission. Certainly an Airport Commission was meeting regularly prior to that date and Ordinance No. 635, adopted June 5, 1973, provides for an Airport Commission consisting of 5 members and spells out their powers & duties in language substantially similar to that in the current by-laws. It appears that the first mention of an Airport Commission was in a Resolution creating the Airport Commission passed by the Board of Supervisors on July 1,
F8
enterprise fund is to create its own operating revenue. Agree. The airport's sources of operating revenue are fuel sales, hangar fees, aircraft tie-down fees,
F9
user fees paid by the California Department of Forestry, as well as some tax revenue. The airport manager and the Airport Commission have no decision-making authority about airport revenues. The county has not clearly defined the decision-making authority for airport revenues. Agree with the first and second sentences. Disagree with the last sentence. Fees are developed by the airport staff, reviewed by the Airport Commission and or the User Fee Committee and approved by the Board of Supervisors. Revenue programs and leases or concessions with airport operators or users that may result in airport revenue are subject to review by the Commission and approval by the Board of Supervisors.
F10
The airport has typically operated at a deficit. Nevada County "loans" funds to the airport to cover expenses incurred to comply with FAA and CalTrans regulations. Debt presently owed to the County is nearly $1 million. Neither agree or disagree with first sentence. Although some financial documents show a deficit, they do not show the effects of revenue from the use of airport property by the Transit department and the County DOT that has not been paid in the past to the airport enterprise fund as required by FAA grant assurances. Payment of the amount due yearly from the County to the Airport funds would have an effect on whether or not the airport had a deficit. Agree with the second sentence. As the airport sponsor, the county is required by the FAA grant agreements to provide a small percentage of funds required to comply with FAA and CalTrans regulations. These are being paid back to the county from the enterprise fund. Neither agree or disagree with the third sentence. The Airport Commission does not currently have documentation available that can support or dispute this information and has no knowledge of the documentation or testimony that the Grand Jury used in coming to this conclusion. However, the Commission does not support this number and we do not believe that it is correct. Revenue from the use of airport property by the Transit department and the County DOT have not been paid in the past to the airport enterprise fund as required by FAA grant assurances. This would offset any funds that the airport were to owe the county. These financial issues are currently under review to determine the amount due the airport fund from the County, if any. The net operational deficit (if any) will be better known after review of the amount due to the enterprise fund from the County for the use of airport land.
F11
The Grand Jury has not been able to track airport financial actions from BOS authorizations through to airport spending, despite questioning the Auditor-Controller, reviewing BOS records, interviewing the CAO, examining county financial statements, and examining airport financial records. Neither agree or disagree. The airport commission has no knowledge of the documentation used by the Grand Jury or testimony by the CAO or Auditor-Controller to the Grand Jury. However, two CPAs, one a previous airport commissioner and one a present airport commissioner, have also tried to sort out the finances without success.
F12
The airport's sources of funds for capital improvements are FAA grants, CalTrans grants, and local funds. When the airport underwent a $5,900,000 improvement project in 1995, funding for the project was 90% FAA grant, 4.5% state grant, and 5.5% county funds (by way of a CalTrans-provided loan). The county loaned the funds to the airport, supposedly to be repaid through operating revenue. Agree. The loans are being repaid from the enterprise fund
F13
The county employs an airport manager. The airport manager has reported to various county staff members, always ultimately reporting to the BOS by way of the CAO. A new manager, with extensive airport management experience, was hired effective February 5, 2001. Agree
F14
The BOS has adopted an Airport Master Plan and an Airport Business Development Plan. There is no operating plan. Agree
Recommendations 14
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R1Empower a new Airport Commission, responsible to the Board to manage and control the operation of the Airport. Recommendation requires further analysis. A joint meeting was held with the Board of Supervisors and the Airport Commission in March of 2001. At that time, it was recommended that the Commission make policy recommendations to the Board of Supervisors for better communications and commission roles. The Airport Manager has also been tasked with evaluating other possible governing structures for consideration by the Board of Supervisors.
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R2Assure that an operating plan is produced that identifies and expedites a path to financial independence. Recommendation requires further analysis. The Airport Commission has formed an Airport Commission Fee and Budget Committee to address Airport fiscal issues. A revised Business Plan should be completed by September of 2001, and will address financial independence.
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R3Assure that the $1 million indebtedness is repaid to the County. Recommendation is partially implemented. When the Obstruction illumination and removal project is complete, and a final loan from the General Fund determined, a repayment plan will be brought before the Board of Supervisors for approval. The current loan amount is recorded in the Airport records of the County's accounting system, subsequent loans will be added to this amount.
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R4Develop an effective follow-up process to track progress against the plan and require strict financial accountability. Recommendation requires further analysis. The Airport Manager, County Administration and the Auditor-Controller will develop a plan to hold the Airport accountable for financial independence. This plan will be included in the Airport Business Plan.
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R5Track what happened to funds authorized by the BOS for the airport. Recommendation implemented The Auditor-Controller has recorded the current loan of $250,000 in the Airport records. All subsequent loans will be recorded in the same manner. . . . Page intentionally left blank .
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R6Nevada County Ordinance requiring residents to keep their trees from obstructing the runway. Consequently the County paid for the purchase and installation of lights in 1997 instead of requiring trees to be trimmed. In 2000 the County required trees on private property to be trimmed or removed but paid the $79,000 cost out of taxpayer funds. Response: Partially agree. The first part of the finding is a factual assertion which I assume the Grand Jury researched. The second part of the finding, the logging operation, was done by more than one vendor. I understand the C.A.O. office kept a record of their contracts with those vendors. The County established an Airport Commission in the 1980's. The Commission's
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R7by-laws specify that it is an advisory body only, contrary to the Litton Agreement. It has no authority over the Airport and no budgetary input. Response: Neither agree nor disagree. I have not read the Airport Commission's by- laws. Within Nevada County government structure the Airport is an "Enterprise Fund".
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R8An Enterprise Fund is to create its own operating revenue. Response: Partially Agree. The State Controller, Accounting Standards & Procedures require the Airport to be an enterprise fund. The accounting focus of an enterprise fund is profit or loss, and capital retention. The basis of accounting is full accrual. The General Fund has subsidized Airport revenue shortfalls.
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R9The Airports sources of operating revenue are fuel; sales, hangar fees, aircraft tiedown fees, user fees paid by California Department of Forestry, as well as some tax revenue. The Airport Manager and the Airport Commission have no decision- making authority about Airport revenues. The County has not clearly defined the decision-making authority for Airport revenues. Response: Partially agree. With the inclusion of the General Fund support, the various sources of airport revenue are correct. The Airport commission is an advisory committee of the Board of Supervisors. The Board of Supervisors has airport decision making authority. The Airport has typically operated at a deficit, Nevada County "loans" funds to the
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R10Airport to cover expenses incurred to comply with FAA and CalTrans regulations. Debt presently owed to the County is nearly $1 million. Response: Partially agree. The airport enterprise fund typically has a net loss. The June 30, 2000 financial statement shows long term debt to be $596,722. The Grand Jury has not been able to track Airport financial actions from Board of
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R11Supervisors authorizations through to Airport spending, despite questioning the Auditor-Controller, reviewing BOS records, interviewing the CAO, examining County financial statements and examining Airport financial records. Response: Neither agree nor disagree. I am sure the Grand Jury has been provided all available information. Board authorized spending is tracked by the financial accounting system. Revenue and expenditures compared to budget, i.e. Board authorization, is available on-line, and can be viewed anytime using a standard P.C. Monthly hard copy reports are available at the push of a button. However, the Grand Jury must realize that the Board may have authorized an expenditure in the budget, i.e. light poles, that management decided not to buy. The Airport sources of funds for capital improvement are FAA grants, CalTrans
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R12grants and local funds. When the Airport underwent a $5,900,000 improvement project in 1995, funding for the project was 90% FAA Grant, 4.5% state grant, and 5.5% County funds (by way of a CalTrans funded loan). The County loaned the funds to the Airport, supposedly to be repaid through operating revenue. Response: Agree. The Airport has three Cal Trans loans outstanding. Principal outstanding as of June 30, 2000: $592,298 The County employs an Airport Manager. The Airport Manager has reported to
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R13various County staff members, always ultimately reporting to the BOS by way of the CAO. A new manager, with extensive Airport management experience, was hired effective February 5, 2001. Response: Neither agree nor disagree. I know we have a new airport manager, but l don't remember his exact hire date. The BOS has adopted an Airport Master Plan and an Airport Business
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R14Development Plan. There is no operating plan. Response: Neither agree nor disagree. I have not stayed current on airport management issues.