U.S. Deportment 

ot Transportation 

Federal Aviation 

Administration 

December 4, 2015 

Via Federal Express 

Richard K. Simon, Esq. 

1700 Decker School Lane 

Malibu, CA 90265 

Rick Cole 

City Manager 

City of Santa Monica 

1685 Main Street, Room 209 

Santa Monica, CA 90401 

manager@smgov .net 

Marsha Moutrie, Esq. 

City Attorney 

City of Santa Monica 

1685 Main Street, Room 31 0 

Santa Monica, CA 90401 

Ivan Campbell, Esq. 

Deputy City Attorney 

City of Santa Monica 

1685 Main Street, Room 310 

Santa Monica, CA 90401 

Office of Airport Compliance and 

Management Analysis 

800 Independence Ave., SW. 

Washington, DC 20591 

Re National Business Aircraft Association, Krueger Aviation, Inc., Harrison Ford, 

Justice Aviation, Kim Davidson Aviation, Inc., Aero Film, Youri Bujko, James Ross, 

Paramount Citrus LLC and Aircraft Owners and Pilots v. City of Santa Monica, 

California FAA Docket No. 16-14-04 

Dear Counsel: 

Enclosed is a copy of the determination of the Federal Aviation Administration (FAA) with 

respect to the above-referenced matter. We find that City of Santa Monica remains obligated 

by the grant assurances until August 27, 2023. The reasons for the finding are set forth in the 

enclosed Director's Determination. 
2 

The Director's Determination does not constitute a Final Agency Decision and order subject 

to judicial review. [14 CFR § 16.247(b)(2)] A party adversely affected by the Director's 

Determination once issued may appeal the initial determination to FAA Associate 

Administrator for Airports pursuant to 14 CFR § 16.33(c) within 30 days after the service of 

the Director's Determination. 

Sincerely, 

Acting Director, Office of Airport Compliance 

and Management Analysis 
3 

CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on /l-:4-~01 b , I caused to be placed in the 

United States mail (first class mail, postage paid), a true copy of the Director's Determination 

for FAA Docket 16-13-08 addressed to: 

Counsel for Complainant 

John R. Copley, Esquire 

Garofalo Goerlich Hainbach, P.C. 

1200 New Hampshire Avenue, NW 

Suite 800 

Washington, DC 20036 

Counsel for Respondent 

David R. Guin, Esq. 

Batton & Guin 

P.O. Box603 

107 S. Main Street 

Louisburg, NC 27549 

Hand Delivered to: 

FAA Part 16 Airport Proceedings Docket 

FAA Office of Airport Compliance and Management Analysis 

I 

'-

a'r!dia ROberts 

Office of Airport Compliance and 

Management Analysis 
UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, DC 

National Business Aircraft Association, Krueger Aviation, 

Inc., Harrison Ford, Justice Aviation, Kim Davidson 

Aviation, Inc., Aero Film, Youri Bujko, James Ross, 

Paramount Citrus LLC and Aircraft Owners and Pilots 

Association 

Complainants 

v. 

City of Santa Monica, California 

Respondent 

DIRECTOR'S DETERMINATION 

I. INTRODUCTION 

Docket No. 16-14-04 

This matter is before the Federal Aviation Administration (FAA) based on a formal complaint 

filed in accordance with FAA Rules of Practice for Federally Assisted Airport Proceedings (FAA 

Rules ofPractice), Title 14 Code of Federal Regulations (CFR) Part 16. 1 

National Business Aircraft Association, Krueger Aviation, Inc., Harrison Ford, Justice Aviation, 

Kim Davidson Aviation, Inc., Aero Film, Youri Bujko, James Ross, Paramount Citrus LLC and 

Aircraft Owners and Pilots Association (Complainants) filed a formal complainant pursuant to 

Title 14 CFR Part 16 against the City of Santa Monica, California, (City) owner, sponsor, and 

operator of the Santa Monica Airport (SMO). 

Complainants allege that the City violated its grant assurance obligations based on the City's 

repeated and continued assertions that such obligations will no longer be in effect after June 29, 

2014. The Complainants' contend that the grant assurances continue until August 2023. The 

Complainants seek a determination on the date that the grant assurances expire. 

1 Enforcement procedures regarding airport compliance matters may be found at FAA Rules o(Practice for 

Federally Assisted Airport Enforcement Proceedings (14 CFR Part 16). These enforcement procedures were 

published in the Federal Register (61 FR 53998, October 16, 1996) and became effective on December 16, 1996. 
With respect to the allegations presented in this Complaint, under the specific circumstances at 

SMO as discussed below and based on the evidence of record in this proceeding, FAA finds that 

the City of Santa Monica is obligated under the grant assurances until August 27,2023. 

The FAA's decision in this matter is based on applicable Federal law and FAA policy, review of 

the pleadings and supporting documentation submitted by the parties and reviewed by FAA, 

which comprises the administrative record reflected in the attached FAA Index. 

II. THE PARTIES 

Airport 

SMO is a public-use airport owned and operated by the City. The 227-acre airport has 

approximately 269-based aircraft with 452 average aircraft operations per day. The airport is 

located in a congested air traffic area and serves as a reliever airport for Los Angeles 

International Airport, which is located seven miles to the south ofSMO. The airport's runway is 

4,987 feet long with 40-foot parallel taxiways on both sides of the runway. 

The FAA conducted a General Aviation National Asset Study in May 2012 that designated SMO 

as a regional airport that supports regional economies by connecting communities to statewide 

and interstate markets. 2 

The FAA records indicate that the planning and development of SMO has been financed, in part, 

with funds provided by FAA under the Airport Improvement Program (AlP), authorized by the 

Airport and Airway Improvement Act of 1982 (AAIA), as amended, Title 49 United States Code 

(U.S.C.) § 47101, et seq. Between 1985 and 2003, SMO received approximately $9.7 million in 

Federal airport development assistance. 

Complainants 

The Complainants are tenants of SMO or organizations with members who are aviation users of 

the airport. The Complainants desire clarification concerning the expiration date of SMO's grant 

assurance obligations as determined by FAA. [FAA Item 1] The following descriptions of the 

Complainants are as provided in the Complaint. 

The National Business Aviation Association, Inc. (NBAA) is a District of Columbia corporation 

that represents the interests of companies that operate aircraft. According to the NBAA, its 

membership includes more than I 0,000 companies that operate aircraft in connection with their 

business or are otherwise involved in business aviation. These entities can or do utilize SMO 

including but not limited to Krueger Aviation, Inc. and Kim Davidson Aviation, Inc. 

Krueger Aviation, Inc. (Krueger) is a California corporation engaged in the sale and brokerage of 

aircraft at SMO, where it has been a tenant for more than 40 years. Krueger currently occupies 

2 See U.S. Department of Transportation Federal Aviation Administration, General Aviation Airports: A National 

Asset, May 2012. 

2 
approximately 10,000 feet of office and hangar space on two acres that it leases from the City on 

the south side of SMO. It leases office and hangar space to seven sub-tenant businesses and 

maintains tie-down space for approximately 30 aircraft. 

Harrison Ford is an actor, businessman, and pilot. He has been a SMO tenant for 10 years, 

basing both fixed-wing (piston and jet) and rotor aircraft in his north-side hangar. Ford has 

testified before Congress as an advocate for general aviation and regularly flies missions in 

support of humanitarian causes. 

Justice Aviation, a California corporation, is a full service flight school and aircraft rental facility 

located on the south side ofSMO. A tenant for 21 years, Justice Aviation currently employs 

eight flight instructors and maintains between 9 and 11 aircraft for instruction and rental. 

Kim Davidson Aviation, Inc., a California corporation, is an FAA certified Repair Station and 

a factory authorized Cirrus Aircraft service center located on the south side of SMO. It has 

been a tenant since 1982, employing a staff of 11. 

Aero Film is a California limited liability company engaged in the production of television 

commercials. It is based at SMO, where it maintains offices and a hangar for two aircraft, a 

Cessna Citation SII and an MD 500 helicopter, both of which are used in its business. Aero Film 

has been a tenant for 11 years. 

Youri Bujko is the owner and pilot of two aircraft, a Mooney Super M20 E and a Cessna 

Crusader, which he maintains for both business and personal use on the south side ofSMO. He 

has been a tenant since 2008. 

James Ross is a recreational flyer who owns a Cessna 170, based in tie-down space on the south 

side ofSMO. He has been a tenant for 18 years. 

Paramount Citrus LLC, together with its affiliates, is the largest vertically integrated citrus 

business in the United States. Paramount Citrus Aviation, based in Bakersfield, California, is the 

business department of the agricultural based companies owned and operated by Paramount 

Citrus LLC and its related entities. Paramount Citrus LLC and Paramount Citrus Aviation are 

jointly referred to herein as "Paramount." Paramount has been a user ofSMO for more than 10 

years, and logs approximately 23 5 monthly operations at SMO in support of its business 

operations. Paramount relies on SMO as a vital hub for employee travel to multiple destinations 

across the western United States. 

The Aircraft Owners and Pilots Association, Inc., (AOPA) is an independent, not-for-profit 

education and advocacy association incorporated in New Jersey and headquartered in Frederick, 

Maryland. According to AOP A, it is the world's largest aviation membership association, 

representing approximately 370,000 pilots who fly for personal and business reasons. According 

to AOPA, more than 6,000 of its members are within a 25-mile radius ofthe City, and many of 

those members base their aircraft at SMO, including, but not limited to, Harrison Ford, Youri 

Bulko and James Ross. AOP A acts as their representative in this proceeding, consistent with 

FAA precedent. See, e.g., Bombardier Aerospace Corp. v. City of Santa Monica, Docket No. 16-

03-11, Director's Determination, at 1 n.l and 22 (January 3, 2005). 

3 
III. BACKGROUND AND PROCEDURAL HISTORY 

Procedural History 

Dated July 2, 2014, FAA received a Part 16 Formal Complainant alleging the Respondent 

violated 49 U.S.C. §47107(a) and airport Grant Assurances. [FAA Item 1) 

Dated July 17, 2014, FAA issued the Notice of Docketing. [FAA Item 2] 

Dated August 14,2014, Respondent filed a Motion to Dismiss. [FAA Item 3] 

Dated August 28, 2014, Complainant filed an Answer to the Motion to Dismiss. [FAA Item 4] 

Dated October 20, 2014, Respondent filed the Answer ofthe City of Santa Monica, California. 

[FAA Item 5] 

Dated October 30, 2014, Reply of the Complainants to the Respondent's Answer to the 

Complaint. [FAA Item 6] 

Dated November 11, 2014, Respondent Filed the Rebuttal to the Reply Brief of 

Complainants. [FAA Item 7] 

Dated February 19, 2015, FAA Requested Additional Information. [FAA Item 8] 

Dated March 25, 2015, FAA received information from Complainants based on February 

request to Respondent for additional information. [FAA Item 9] 

Dated April 1, 2015, FAA received information from Respondent based on February request 

to Complainant for additional information. [FAA Item 1 0] 

Dated May 7, 2003, Letter from the City to FAA requesting the Grant be reopened and to award 

additional grant money. [FAA Item 11] 

Undated Letter from FAA to the City agreeing to reopen the grant and disburse additional grant 

money. [FAA Item 12] 

Final Construction Report, Airport Improvements, Santa Monica Airport, AlP Project No.3-06-

0239-06 (II). [FAA Item 13] 

Dated August 2, 1999, Letter from the City requesting Amendment No. 1 to the grant dated 

August 2, 1999. [FAA Item 14] 

Santa Monica Airport, Airport Master Record, 5010. [FAA Item 15] 

Dated August 6, 2015, Notice of Extension of Time to issue the Director's Determination to 

August 21 , 2015. [FAA Item 16] 

4 
Dated August 21, 2015, Notice of Extension of Time to issue the Director's Determination 

to September 21, 2015. [FAA Item 17] 

Dated September 21, 2015, Notice ofExtension of Time to issue the Director's 

Determination to October 15, 2015. FAA Item 18] 

Dated October 16, 2015, Notice of Extension of Time to issue the Director's Determination 

to December 4, 2015 . [FAA Item 19] 

Factual Background 

SMO is a 227-acre airport located in a highly congested air traffic area, and is an important 

reliever airport for the Los Angeles International Airport (LAX), which is located just 7 miles to 

the south. As a reliever for LAX, SMO serves a vital and critical role as a general aviation 

reliever airport by diverting aircraft away from the air carrier airports and other more heavily 

used airports located in the Los Angeles area. SMO serves the role of a business airport capable 

of accommodating a wide range of business and personal aircraft, including corporate and 

business jets. 

The City and FAA entered into a Settlement Agreement on January 31, 1984, (1984 Agreement) 

setting forth the terms and conditions under which the City would continue to operate SMO. 

Under the Agreement, the City agreed to operate and maintain SMO without derogation of its 

use as a reliever airport until July 1, 2015. The 1984 Agreement, by its terms, did not address 

obligations after its expiration nor did it release the City from its AlP Grant or Surplus Property 

Act obligations. 

Relevant Grant History 

On June 29, 1994, the City applied for and accepted an AIP grant from FAA for $1,604,700 for 

planning, airport development, or noise program implementation. [FAA Item 3 exhibit A, 2] 

The grant was issued in 1994 under AIP Grant No. 3-06-0239-06. 

The projects under the grant were completed in two phases. The Final Construction Report, 

Airport Improvements, Santa Monica Airport, AlP Project No.3-06-0239-06 provided the timing 

for phase I. [FAA I tern 13] 

• Bid Opening - October 2, 1995 

• Preconstruction Conference - February 5, 1996 

• Work Started (Construction) - March 6, 1996 

• Work Substantially Completed (Construction)- June 11, 1996 

• Final Inspection- August 23, 1996 

By letter dated August 2, 1999, the City asked to amend Grant No. 3-06-0239-06 to reflect 

modifications to the original scope of work under Phase I. The letter indicated that the "request 

5 
would not result in a change in the total project budget cost under the grant. " [FAA Item 14] 

On November 8, 1999, The City executed Amendment No. 1. [FAA Item 5 exhibit 2] 

By letter dated September 27, 2002, the City requested to amend Grant No. 3-06-0239-06 (II) to 

"increase participation amount by $240,600 to a total of$1,845,300 to reflect increased cost 

and changed conditions that occurred during construction. " [FAA Item 5 exhibit D] 

FAA replied to the City and indicated that the 1994 grant was "financially and administratively 

closed." [FAA Item 12] 

On May 7, 2003, the City submitted a second letter renewing the request for additional funds for 

the project. Notwithstanding that this request was being withheld pending the outcome of an 

FAA Notice of Investigation, the City "implore[ d] the FAA to reconsider this matter and 

approve" the amendment. [FAA Item 11] 

FAA agreed to "reopen the grant to amend the grant agreement, thereby increasing the 

maximum US. obligation. " [FAA Item 12] Accordingly, FAA offered the City a grant 

amendment that increased the Federal obligation to $1,845,300. The City accepted the offer on 

August 27, 2003. [Item 5 exhibit B] The amendment provided, in part, 

The maximum obligation stated on Page 2, condition 1, is hereby increased by 

$240,600.00, from $1,604,700.00 to $1,845,300.00. All other terms and conditions of the 

Grant Agreement remain in full force and effect. 

The Final Construction Report, Airport Improvements, Santa Monica Airport, AlP Project No.3-

06-0239-06 (II) provided the timing for Phase II as follows: [FAA Item 13] 

• Bid Opening - July 30 and August 3, 2000 

• Project Award - June 24, 2001 

• Pre-construction meeting - August 16, 2001 

• Work Started (Construction)- September 24, 2001 

• Work Substantially Complete (Construction)- February 20, 2002 

• Final Inspection - March 27, 2002 

IV. APPLICABLE FEDERAL LAW AND FAA POLICY 

The Federal role in civil aviation is augmented by various legislative actions that authorize 

programs for providing Federal funds and other assistance to local communities for the 

development of airport facilities. In each such program, the airport sponsor assumes certain 

obligations, either by contract or by restrictive covenants in property deeds and conveyance 

instruments, to maintain and operate its airport facilities safely and efficiently and in 

accordance with specified conditions. Commitments assumed by airport sponsors in property 

conveyance or grant agreements are important factors in maintaining a high degree of safety 

and efficiency in airport design, construction, operation and maintenance, as well as ensuring 

the public fair and reasonable access to the airport. 

6 
A. The Airport Improvement Program (AlP) 

Title 49 U.S.C., § 47101, et seq., provides for Federal airport financial assistance for the 

development of public-use airports under the AIP established by the Airport and Airway 

Improvement Act of 1982, (AAIA) as amended. Title 49 U.S.C., § 47107, et seq., sets forth 

assurances to which an airport sponsor agrees as a condition of receiving Federal financial 

assistance. Upon acceptance of an AlP grant, the assurances become a binding contractual 

obligation between the airport sponsor and the Federal Government. The assurances made by 

airport sponsors in AlP grant agreements are important factors in maintaining a viable national 

airport system. 

B. Airport Sponsor Assurances 

As a condition precedent to providing airport development assistance under AlP, 49 U.S.C., 

§ 47107, et seq., the Secretary of Transportation and, by extension, FAA must receive certain 

assurances from the airport sponsor. Title 49 U.S.C., § 47107(a) sets forth the statutory 

sponsorship requirements to which an airport sponsor receiving Federal financial assistance must 

agree, FAA has also identified assurances that are necessary to carry out the program. The FAA 

has statutory authority to enforce compliance with the sponsor assurances. FAA Order 5190.6, 

FAA Airport Compliance Manual (Order), provides the assurances for sponsors and policies and 

procedures to be followed by the FAA in carrying out its functions related to compliance with 

Federal obligations of airport sponsors. The FAA considers it inappropriate to provide Federal 

assistance for improvements to airports where the benefits of such improvements will not be 

fully realized for the duration of their useful life or due to inherent restrictions on aeronautical 

activities. 

Assurance (B)(l), which addresses the duration of the grant assurances, provides: 

The terms, conditions and assurances of the grant agreement shall remain in full 

force and effect throughout the useful life ofthefacilities developed or equipment 

acquired for an airport development or noise compatibility program project, or 

throughout the useful life of the project items installed within a facility under a 

noise compatibility program project, but in any event not to exceed twenty (20) 

years from the date of the acceptance of a grant offer of Federal funds for the 

project. However, there shall be no limit on the duration of the assurance against 

exclusive rights or the terms, conditions, and assurances with respect to real 

property acquired with Federal funds. Furthermore, the duration of the Civil 

Rights assurances shall be as specified in the assurance. 

V. ANALYSIS AND DISCUSSION 

Motion to Dismiss 

The City filed a motion to dismiss based on (1) the Complaint failed to state a claim because it 

does not state a "specific provision" of the Act that the City has violated, (2) the Complainants 

lack standing, (3) FAA lacks jurisdiction to grant the relief requested, and ( 4) the Complainants 

7 
failed to engage in good faith efforts to resolve this matter informally. The City filed its motion 

on August 18, 2014, and the City's motion remains pending. Accordingly, the City filed its 

answer. 14 CFR § 16.26(b )(5). The Director hereby denies the motion for the reasons set forth 

below. 

Failure to State a Claim 

The pleading requirements for Part 16 are set forth in § 16.23 requiring the Complainant to state, 

"the specific provisions of each Act that the Complainant believes were violated." An "Act" is 

defined to include a grant assurance. 

3 The Director agrees that the Complaint is not clear in 

terms of the specific Act violated. Nevertheless, the provision is not jurisdictional and to the 

extent the Director can understand the basis of the Complaint, dismissal is not mandatory. In this 

case, the Complainants have asked the Director to clarify the expiration date of the grant 

assurances. The expiration date is set forth in assurance (B)(1). 

The Complainants argue the assurances remain in effect until 2023. The City contends they 

expired in June 2014. [FAA Item 1) FAA construes the Complaint to argue that the City's 

interpretation violates and/or undermines the grant agreement as a whole and, in particular, grant 

assurance (B)(1) both of which are "Acts." 

The City argues that regardless of its position on the expiration date, it has "not committed a 

violation of any Act or Grant Assurance, nor has the City failed to take action that it is required 

to take under any Act or Grant Assurance. " [FAA Item 3 page 3] However, the City has made 

clear in its answer that it regards its grant obligations to the FAA to have ended on June 29, 

2014. [FAA Item 5 page 15] 

For purposes of this motion to dismiss, we assume, without here deciding, that the 

Complainants' expiration date is correct. Kowal v. MCI Communications Corp., 16 F.3d 1271, 

1276 (D.C. 1994) (on motion to dismiss, Complaint is construed liberally and plaintiff granted 

the benefit of all inferences than can be derived from the facts alleged). The City's statement 

then constitutes a repudiation of the contract. Grant assurances are both contractual and statutory 

in nature, and contract law may guide FAA decisions. City and County of San Francisco v. FAA, 

942 F.2d 1391, 1396 (9th Cir. 1991). Both California and 9th Circuit case law support the 

position that where a sponsor has expressly repudiated the grant agreement, FAA need not wait 

for an actual instance of nonperformance to occur before addressing the issue. Taylor v. 

Johnston, 539 P .2d 425, 430 (Cal. 1975); First National Mortgage Co. v. Federal Realty 

Investment Trust, 631 F.3d 1058, 1069 (91

h Cir. 2011); see also Roehm v. Horst, 178 U.S. 1, 19 

(1900). This reasoning is particularly persuasive when the remedy sought is limited to 

establishing whether the grant obligation is currently in effect and when it expires. 

3 "Act'' is defined as "a statute listed in § 16.1 and any regulation, agreement, or document of conveyance issued or 

made under that statute." 14 CFR § 16.3 (emphasis provided). The Airport and Airway Improvement Act of 1982, 

49 U.S. C. §4 7101 et seq. , as amended and recodified, is a listed statute. 14 CFR § 16.l(a)(5). The grant assurances 

are part of an "agreement ... made under that statute," and thus constitute an "Act" under Part 16. 

8 
Finally, the determination of whether a sponsor is reasonably meeting its Federal obligations is a 

"judgment call." FAA Order 5190.6b, ~ 2.8(c). An important element of compliance is that 

" [the] federal obligations are fully understood." ld. This case involves not just the 

understanding of a particular assurance, but whether, as Complainants argue, any assurances 

apply at all. [FAA Item 4 page 7] A determination on whether the assurances are in effect 

therefore assures both current and future compliance. Although we will not consider future 

events or consequences under Part 16, the issue here posed is one in dispute now. Moreover, we 

may in limited circumstances, consider a case where the current situation portends the high 

likelihood of a future violation. See JetAway Aviation LLC v. Montrose County, Docket No. 16-

06-01, Director's Determination at 34 (Nov. 6, 2006). 

We find that the Complaint is adequately pleaded and the Director is readily able to determine 

which "Acts" the Complainants claim are violated. The City has clearly declared what it 

considers the expiration date of the grants to be, and the Complainants allege the City is wrong. 

If the date proffered by the Complainants were correct, the City's declaration would constitute an 

express repudiation of the contract. FAA finds that in the unusual case in which the sponsor 

expressly and unequivocally declared that the grant agreement expired, and where a reasonable 

counterargument exists, it is well within FAA's authority to rule: upon this limited but threshold 

issue by clarifying the expiration date. We decline to dismiss this Complaint on the grounds that 

it fails to state a claim. 

Standing 

To have standing under 14 CFR Part 16, a party must be "directly and substantially affected by 

any alleged noncompliance. " The Complainants include tenants and users of the airport, all of 

whom allege they will be directly and substantially affected if the City is not grant obligated. 

[FAA Item 1 pages 2-3] For instance, the Complaint alleges that Krueger Aviation, Inc. is 

engaged in the sale and brokerage of aircraft at SMO and has been a tenant for 40 years. It 

leases approximately 10,000 feet of office and hangar space from the City on the south side of 

SMO. Complainant National Business Aviation Association (NBAA) represents companies that 

operate aircraft for business purposes. These members include Krueger among others. With the 

exception ofNBAA, the Complainants pay fees (including landing fees) and/or rent to the City 

for use ofSMO. 

FAA finds that the Complainants are directly and substantially affected by the City's stated 

position that its grant obligations have expired. For a motion to dismiss we construe the 

Complaint in favor of the Complainants and note that the Complainants have pled that the City, 

but for Federal obligations, would likely close all or part of the airport. It is the City's stated 

view, ongoing litigation notwithstanding, that most if not all of these obligations ended in July 

2015. 

FAA finds Complainants' concerns to be reasonable based upon directions the City Council has 

provided to City staff (i.e. directing studies of potential closures) and a City Resolution, passed 

in 1981 but never rescinded, that states the policy of the City is to close the airport. [FAA Item 1 

page 6] In addition, the City is currently appealing an order dismissing a case in which the City 

challenged its Surplus Property Act (SPA) obligations. In that case, the City sought an order 

9 
"that the United States shall cease and desist from taking any action to require Santa Monica to 

operate the Airport Property as an airport after the 1984 Agreement expires in July of2015. " 

[FAA Item 1 exhibit 8] 

In the unique context of this case, FAA finds that the Complainants are harmed by the 

uncertainty involving the grants. Assuming the Complainants are correct that the assurances will 

expire in 2023, that would still provide an additional 8 years during which Complainants, 

regardless of how Surplus Property Act issues are resolved, could rely upon the airport 

remaining open in conformance with the assurances. The assurances provide uniform standards 

under which to operate that protect the investment of the United States and the rights of users 

and tenants. These include the fundamental assurance that the airport will be open for public use 

on reasonable terms. Assuming the assurances are in fact in effect, the stability and fundamental 

ground rules the assurances create are undermined by the City's repudiation, particularly given 

the current position of the City Commission, which, regardless of whether the Council has taken 

action yet, appears to lean towards a full or partial closure.4 We find the Complainants are 

directly and substantially affected by the uncertainty of the grant expiration date and have 

standing to bring this Complaint seeking clarification of that date. 

Jurisdiction 

Part 16 jurisdiction is established by 14 CFR § 16.1. Section 16.1 provides: 

The provisions of this part [16] govern all Federal Aviation Administration (FAA) 

proceedings involving Federally assisted airports ... instituted by . .. filing a complaint 

with FAA under the following authorities. 

Among the listed authorities are " [t]he assurances and other Federal obligations contained in a 

grant-in-aid agreement issued under the Airport and Airway Improvement Act of 1982 (AAIA), 

as amended and recodified, 49 U.S.C. 47107 et seq., specifically section 51l(a), 49 U.S.C. 

47107, and 49 U.S.C. 47133." 

The FAA is responsible for enforcing the grant assurances. Any action that is contrary to the 

sponsor's grant assurances is within the scope of FAA to review and address. When information 

contained in the administrative record to a Part 16 complaint leads the agency to review areas of 

noncompliance - whether or not they are alleged by the Complainant - the agency will, 

nonetheless, make a finding on those areas. See for example, M Daniel Carey and Cliff 

Davenport v. Afton-Lincoln County Municipal Airport Joint Powers Board, FAA Docket No. 16-

06-06, (January 19, 2007) (Director's Determination), Issue 7. All potential grant assurance 

violations are within the scope ofF AA to review and address, whether alleged in a Part 16 

complaint or identified through any other means. See Boston Air Charter v Norwood Airport 

4 See March 25, 2014, City Council Meeting minutes FAA Item I page 6 and exhibit 6. Also, see City Council 

meeting minutes dated October 27, 2015 ("direct staff to look at commencing the CEQA visioning process to do 

things with the airport other than current uses"). 

10 
Commission, Norwood, Massachusetts, FAA Docket No. 16-07-03 (August 14, 2008) (Final 

Decision and Order), pages 26-27. 

Section 16.1 is very broad and conveys jurisdiction where a complaint is filed under any of the 

listed authorities. Here, the Complaint has been filed under the authority of "[t]he assurances 

and other Federal obligations contained in a grant-in-aid agreement issued under the Airport and 

Airway Improvement Act of 1982 (AAIA)." Therefore, we find jurisdiction exists. 

Failure to Engage in Good Faith Effort to Resolve 

The City argues that the Complainants have failed to engage in good faith efforts to resolve this 

matter informally as required by 14 CFR § 16.21. The Complainants counter that they have 

exchanged letters with the City on this subject of the Complaint. Complainants' letter of June 

11, 2014, raises the issue of the grant expiration date and offers to meet with the City and to 

utilize a mediator. [FAA Item 1 exhibit 11] The Deputy City Attorney's reply, in the fmal 

sentence, informs Complainants' counsel that should he wish to discuss this further, "you are 

welcome to contact me. " [FAA Item 1 exhibit 12] 

Despite this offer, the City's response does not directly respond to Complainants' concerns and 

does not respond in any credible way to the Complainants' offer to meet or mediate. The letter 

merely states that "regardless of when the Grant Assurances expire ... years of formal and 

informal processes and proceedings lie ahead. " [FAA Item 1 exhibit 12] As both parties point 

out, the status of SMO is a contentious issue that has been the subject of significant past and 

present litigation. 

The expiration date itself has been disputed since at least 2011. City of Santa Monica v. FAA, 

631 F.3d 550, 552 (D.C. 2011). The City's position on the expiration date is clear and unlikely 

to be voluntarily reversed. The Complainants are not required to conduct continued informal 

resolution efforts when it appears clear that the City's position on the expiration date is 

longstanding and fixed. 

Accordingly, the motion to dismiss is denied on all grounds. 

VI. Issue 

Whether the City's Grant Assurance obligations expired on June 29,2014 or expire on 

August 27,2023. 

The Legal Effect ofthe 2008 Director's Determination In re City of Santa Monica, CA 

At issue in this case is the expiration date of the City's AlP grant obligations. The Complainants 

argue that: 

''this issue already has been the subject of an FAA ruling pursuant to Part 16. In re City 

of Santa Monica, California, docket nos. 16-02-08/FAA-2003-1 5807, FAA explained: In 

2003, the City requested, and FAA approved a grant amendment for $240,600, increasing 

11 
its AlP grant total to $10.2 million ... This was the last AlP-funded project at SMO to 

date. As a result, SMO is obligated under its AlP grant assurances until at least 2023. 

Director's Determination, at 13 (May 27, 2008) (emphasis added; footnote and citation 

omitted)." 

The Complainants "concur with the FAA 's position as stated in the Director's Determination, 

and urge FAA to maintain that position in this proceeding " [FAA Item 6 page 6]. 

In contrast, the City contends, "there has never been an administrative "ruling" by FAA that the 

City is obligated by its AlP grant assurances until 2023. " The City states that the issues in the 

prior Directors Determination had nothing to do with the expiration date of the grant assurances. 

[FAA Item 7 page 2] 

The date was at issue in administrative litigation that culminated in a ruling from the U.S. Court 

of Appeals for the DC Circuit. See City of Santa Monica v FAA, 631 F.3d 550 (DC 2011 ). In 

that case, the court found that it could resolve the material issues without determining the grant 

expiration date, which it noted remained disputed. /d. at 552. The FAA accordingly accepts the 

City's contention that the 2008 administrative determination is not dispositive, and this 

Director's Determination constitutes a fresh examination of the issue based on the record before 

us now. 

The Expiration Date is determined by the earlier of the Useful Life of the project and the NotTo-Exceed Date ofNo More Than 20 Years :from Acceptance of the Grant Offer 

The FAA may approve a project grant application "only if' it receives written assurances 

"satisfactory to the Secretary." Title 49 U.S.C. § 47107(a). To modify the assurances or to 

require compliance with an additional assurance, FAA must publish notice in the Federal 

Register and provide an opportunity for comment. Title 49 U.S. C. § 47017(a). The assurances 

in effect at the time the City of Santa Monica entered into its grant, on June 27, 1994, were 

noticed in the Federal Register on February 3, 1988. 53 Fed. Reg. 3104 (Feb. 3, 1988). 

Between February 3, 1988 and June 27, 1994, FAA amended the grant assurances twice. Neither 

affected the provision on duration. 5 

These covenants are not contractual terms open to negotiation, but vital legal requirements 

imposed by statute. "The conditions Congress imposed on the grant to local airport proprietors 

of money from the Airport and Airway Trust Fund are designed in part to insure the maintenance 

of conditions essential to an efficient national air transport system, including access to airports 

on a reasonable and nondiscriminatory basis. " City and County of San Francisco v. FAA, 942 

F.2d 1391, 1395 (9th Cir. 1991). 

s See 53 Fed. Reg. 34361 (Sept. 6, 1998); 54 Fed. Reg. 35748 (Aug. 29, 1989); A change noticed on June 10, 1994 

also did not affect the duration provision, and in any event only took effe.ct on July I I, I 994, so it does not apply to 

the assurances as they existed on June 27, 1994. See 59 Fed. Reg. 30076. 

12 
The Duration of the Grant Assurances Fall into Three Categories 

The duration of the assurances is provided in the assurances themselves. The assurances fall into 

three categories in terms of duration. First are the assurances for which there is "no limit" on 

duration. These assurances never expire so long as the airport is operated as an airport. Included 

in this category are "the assurances against exclusive rights [and) the terms, conditions, and 

assurances with respect to real property acquired with Federal funds." Grant Assurance (B)(l) 

Second are the civil rights assurances the duration of which is specified in the assurance 

themselves. Generally, the civil rights assurances also extend to the period during which the 

airport is used as an airport. 

Third, are all the other remaining assurances. The date that this order seeks to determine applies 

to the third category. 

Assurance (B)(l) provides: 

The terms, conditions and assurances of the grant agreement shall remain in full 

force and effect throughout the useful life of the facilities developed or equipment 

acquired for an airport development or noise compatibility program project, or 

throughout the useful life of the project items installed within a facility under a 

noise compatibility program project, but in any event not to exceed twenty (20) 

years from the date of the acceptance of a grant offer ofF ederal funds for the 

project. However, there shall be no limit on the duration of the assurance against 

exclusive rights or the terms, conditions, and assurances with respect to real 

property acquired with Federal funds. Furthermore, the duration of the Civil 

Rights assurances shall be as specified in the assurance. 

Assurance (B)(l) does not provide a time-certain date on which the assurances expire, but rather 

provides the methodology for determining that date. 

The issue in this matter arises because on August 27, 2003, the parties executed an amendment 

that increased the Federal grant amount by $240,600.00. At issue is the significance of this 

amendment. 

Complainants argue that when the City accepted $240,600 of additional funds in 2003 it 

extended the not-to-exceed date to 2023. [FAA Item 3 exhibit B) 

The useful life for this project 

For the assurances at issue here, the expiration date is provided by the methodology specified in 

Assurance (B)(l). Under (B)(l), the expiration date is a function of useful life, but is capped by 

a not-to-exceed date that is tied to the date the sponsor accepted an offer of Federal funds. Thus, 

there are two dates at play. In this Determination, we will refer to these dates as the not-toexceed date and the useful life date. 

13 
For useful life (B)(l) provides, 

the grant agreement shall remain in full force and effect throughout the useful life 

of the facilities developed or equipment acquired for an airport development or 

noise compatibility program project, or throughout the useful life of the project 

items installed within a facility under a noise compatibility program project ... 

Useful life commences from the point that the improvement is placed in service. There is no 

disagreement among the parties on when useful life commenced for this project. The parties 

agree that grant Amendment No. 2 funded a blast wall. They similarly agree that the wall was 

submitted for final inspection on March 27, 2002, and having passed final inspection, that is the 

date it was put into service. Based on the consensus position of the parties, FAA agrees that the 

blast wall was placed in service on March 27, 2002. With the service date determined, we now 

tum to useful life. 

The FAA's presumptive useful life is 20 years.6 The City has provided no position or opinion on 

the useful life of the blast wall, but the engineer notes that approximately 13 years of service 

have produced no apparent wear.

7 [FAA Item 10] 

The Complainants suggest a useful life in excess of 25 years. This position is based on the 

opinion of a civil engineer, hired by the Complainants, who inspected the wall in 2015. This 

engineer noted that a similar blast wall at Bob Hope Airport has been in service for at least 30 

years. The engineer testified that he had prior experience and responsibility with regard to the 

"condition and potential of airport structures." Declaration of Leopold Klabbers. [FAA Item 9] 

A similar blast wall at Bob Hope Airport was part of the structures for which he had 

responsibility and he testified that he also had a role in a "slight[] modifi[ cation]" to the wall that 

occurred shortly after its construction. 

Weighing all the testimony and particularly noting the static nature of the blast wall, the 

testimony of an engineer experienced with such walls, the useful life of a similar wall, lack of 

any apparent wear, and no contrary position set forth by the City, we accept the position of the 

Complainants and find the blast wall to have a useful life of 25 years. 

8 

As the maximum duration of this assurance is 20 years from the date of acceptance of the grant 

used for this project, that date rather than the longer useful life date governs. Thus, the useful 

life ends on March 27, 2027. 

6 FAA Order 5190.6B, p.4·3. 7 The City provided testimony of a civil engineer in its Public Works Department, but the engineer concludes that he 

does not know what the useful life is. The engineer did note that the blast wall "appears to be in a similar 

condition" from when "it was installed and began its useful life 13 years ago in 2002." 

8 Complainants actually argue for a useful life in excess of25 years, but fail to support or adequately limit such an 

open·ended assertion. 

14 
Not to exceed date 

In determining the expiration date, (B)(l) provides that the expiration dates are "not to exceed 

twenty (20) years from the date of the acceptance of a grant offer of Federal funds for the 

project." Upon acceptance of an offer ofFederal funds for an AlP project, the assurances 

become a binding contractual obligation between the airport sponsor and the Federal 

Government. 

On June 29, 1994, the City of Santa Monica accepted an AlP grant for a project at SMO. The 

grant agreement attached the standard set of grant assurances. Had nothing else happened, the 

not-to-exceed date for the grant assurances would have been June 29, 2014, the date that the City 

argues is, in fact, the actual expiration date. 

Complainants, however, observe that this is not the last date on which grant funds were accepted 

by the City. On September 27, 2002, the City Manager wrote to FAA and indicated that the City 

" requests to amend the Federal Grant for Project No. AlP 3-0600239-06(11) to increase 

participation amount by $240,600 to a total of$1,845,300 to reflect increased costs and changed 

conditions which occurred during construction." [FAA Item 5 exhibit 4] This was a 15 percent 

increase to the original amount of the grant. 

According to a subsequent letter from the City dated May 7, 2003, the City's request was not 

approved due to an ongoing FAA investigation. In addition, FAA considered the grant closed as 

of October 19,2001. [FAA Item 12] The May 7, letter reiterated the City's request for 

additional funds and "implore[ d) FAA to reconsider this matter and approve the requested grant 

reimbursement so the funds can be used to enhance and maintain the Santa Monica Airport. " 

The letter indicated that the "requested reimbursement func!s represent a substantial amount of 

revenue that could be utilized for much-needed and differed airfield maintenance projects." 

[FAA Item 11] Based on this letter, FAA wrote to the City and agreed to "reopen the grant to 

amend the grant agreement, thereby increasing the maximum US. obligation." [FAA Item 12] 

On August 27,2003, FAA and the City executed "Amendment No.2 to Grant Agreement for 

Project No. 3-06-0239-06." The amendment provided "in consideration of the benefits to accrue 

to the parties hereto" the parties "mutually agree that said Grant Agreement be and is hereby 

amended as follows: The maximum obligation . .. is hereby increased by $240,600.00 . ... " 

The amendment did not have its own provision on the expiration date but provided that "[a}ll 

other terms and conditions of the [original} Grant Agreement remain infullforce and effect." 

[FAA Item 3 exhibit B] 

Complainants argue that when the City sought and accepted $240,600 of additional funds in 

2003, a 15 percent increase from the original grant, it extended the not-to-exceed date to 2023. 

[FAA Item 1 page 7] 

The City argues that the original 1994 grant agreement governs the expiration date and that 

under that agreement upward and downward adjustments in the grant amount were 

contemplated, and that nothing suggested that "additional phases or amendments to the 

Agreement or the final audit" would constitute a separate agreement that would restart the notto-exceed date. [FAA Item 5 page 18] 

15 
The City also states that, "the City's very reasonable interpretation of the contract taken from the 

plain and express language within the four corners of those documents must control and, 

therefore, the FAA's determination must be that City's obligations ended pursuant to the 

Agreement in June 2014. " [FAA Item 5 page 4] 

Additionally, the City asserts that ifthere is any ambiguity in the documents then "both federal 

and state law dictate that such ambiguity must be interpreted against the drafter of the contract. " 

[FAA Item 5 pages 4 and 5] 

Consideration for the Second Amendment 

The Director disagrees with the City's assertions. Unlike the first amendment to the grant, 

changing the description of work but adding no funds, the second amendment involved an 

additional significant obligation of federal funds and no additional work performed or benefit to 

the public other than from the extension of the grant covenants. All AlP grants require that the cost 

of the project be shared between the Federal Government and the airport sponsor, Title 49 U.S.C. 

4 7109. This section of law requires that the airport sponsor, the City in this instance, absorb a 

minimum percentage of the cost of the project. The agency is in no way obligated to provide 

increased funding if there is an overrun; on the contrary, grant recipients should expect to cover 

such overruns as part of its contribution to the project. Instead, in this instance the grant recipient 

requested the additional funds in order to free up resources for other airfield maintenance projects. 

The City makes a number of arguments based on standard principles of contract law, but ignores 

the most fundamental principle of contract law-the need for an exchange of consideration. This 

principle applies to grant agreements just as much as to procurement contracts. See, e.g., Jackson 

v. Birmingham Board of Education, 544 U.S. 167 (2005). In this matter, the work for which the 

1994 grant had been provided had been completed and the grant closed. The City realized it had 

incurred an overrun, and implored FAA to provide additional funding. The FAA agreed to do so, 

and provided the funding. 

It is clear what consideration FAA provided, additional funding. The only consideration for the 

amendment provided by the City, however, would be the continued applicability of the grant 

assurances using the date of the signed second amendment as the starting date. Adherence to the 

conditions Congress sets in exchange for receiving grant funds has repeatedly been held to be the 

necessary consideration for the contract that is a grant agreement. Id, see also, Pennhurst State 

School and Hospital v. Halderman, 451 U.S. 1, 17 (1981). Simply continuing to adhere to the 

grant assurances using the date of the award of the original grant would provide no new 

consideration to support the additional funds provided. 

The Second Amendment was a new obligation akin to a new grant 

The City argues that there was nothing to indicate that the second amendment would have the 

effect of extending the expiration date of these assurances, or be the equivalent of a new grant. 

16 
The second amendment, however, bore every indicia but one of being a new contract: the old 

grant had been closed; the second amendment was mutually agreed to and signed by both parties; 9 

there was an offer, acceptance and an exchange of consideration. Under these circumstances, the 

Government Accountability Office has held that the funds provided for the amendment are for in 

essence the award of a new grant. 41 Comp. Gen. 134 (1961). 10 

The only arguably contrary indicator was the agreement that the terms and conditions of the 

original grant would remain in force. 1 1 As the scope of work for which the funds were provided 

was unchanged, and the assurances are statutory requirements the language of which does not 

change from grant to grant, this statement is neither surprising nor incorrect. It is the amount of the 

grant that was enlarged rather than the scope of what the grant was for. When a grant is enlarged 

beyond the scope of the original such that a new financial obligation is made, it "must be 

considered as giving rise to a new grant." 39 Comp.Gen. 296, 298 (1959).

12 

The City understood the requirements of the statutorily required grant assurances 

The City argues, in essence, that there was no meeting of the minds for the second amendment. 

The City Manager and the City Attorney executed this amendment on August 29, 2003. The 

amendment was signed during a ]period in which there was an ongoing FAA investigation13 of 

the City's ban on category C and D aircraft- a ban that FAA alleged, and which the U.S. Court 

of Appeals for the D.C. Circuit affirmed, violated the very assurances here at issue. City of 

Santa Monica v. Federal Aviation Administration, 631 F.3d at 559 (D.C. Cir. 2011). 

Moreover, in prior attempts to close the airport or to consider closing the airport, the City was 

reminded in formal opinions from both the City Attorney and the California Attorney General 

9 Typically, purely administrative changes to an agreement can be signed only by the Government and do not require 

mutual agreement. See 48 CFR 43.1 03(b) (this particular regulation concerns procurement contracts, but 

demonstrates the general distinction between bilateral and unilateral changes). 10 GAO focuses on the requirement in these circumstances to use funds current in the year the amendment is made 

rather than funds current in the year the original grant was made. The AlP is funded entirely with "no year" funds, 

i.e., funds available until expired, so it is not possible to compare the funds used when the second amendment was 

made to the funding used when the grant was originally awarded. It is the principle that under these circumstances 

the second amendment is in essence a new grant, rather than the type of funds used, which is relevant to this 

decision. In this particular GAO decision, additional funds were needed to complete the work, so completion of the 

work was sufficient consideration for the additional funds. In the matter at hand, however, the work had already 

been completed, and thus the need for additional consideration. 

11The City also mentions the fact that the grant number remained the same. [FAA Item 5 page 19}. The same grant 

number was used because the funds were for work already completed under that grant number. The Director finds 

that the use of the same AlP grant number for the second amendment does not obscure the fact that a new obligation 

of funds were made, consideration for which was an extension in the applicability of the grant assurances. 12 Another GAO case establishes the principle that if the bona fide need for the project remains the same, the 

purpose of the grant remains the same and the scope of the project remains the same, then the amendment is not 

equivalent to a new grant. 58 Comp. Gen. 676 (1979). Here, the purpose and scope of the project remained the 

same, but the bona fide need had already been met. The work had been completed, but additional funds beyond 

what had been originally agreed to were provided. 13 See Letter from Bob Trirnborn, Airport Manager to William Withycombe, FAA Regional Administrator (May 7, 

2003) (reference FAA's Notice of Investigation, Docket No. 16-02-08). 

17 
that Federal funding comes with reciprocal obligations that require the airport to remain open.

14 

Because of the controversy that surrounded the City's Federal obligations both at the time of the 

amendment and well before, the City knew or should have known that by seeking, and accepting 

additional Federal funds, congressionally mandated assurances would continue to apply. As the 

City offered no other consideration for the significant increase in funds, it knew or should have 

known that acceptance of these new funds would restart the date of that these assurances would 

apply. 

Settlement Agreement 

The City's argument that its intent is congruent with the Settlement Agreement is also rejected. 

The Agreement itself makes clear that only those grant agreements executed prior to July 1, 1995 

would not extend or alter operational obligations. Settlement Agreement, p. 8-9. The 

amendment at issue here is from 2003. Moreover, the Settlement Agreement itself 

acknowledged that Federal statute would control. [/d. at 9} That statute, 49 U.S.C. 47107, 

requires compliance with the relevant grant assurances for a period of not more than 20 years 

from the date the grant was accepted. As the second amendment was a new obligation of funds 

without a commensurate increase of scope of the grant, other than from an extension in the grant 

assurances, it is reasonable to interpret the additional grant funds as the beginning of a 20-year 

grant obligation period based on the City's acceptance. 

Interpretation of the Grant Assurances 

The City argues that the plain language of the grant supports its position and that if there is any 

ambiguity the rule of contra proferentem applies. Federal grants, however, are a hybrid - partly a 

contract in terms of voluntary offer, acceptance and consideration, and partly a creature of statute 

in terms of the conditions imposed by Congress in exchange for the funds. In Bennett v. Kentucky 

Department of Education, 470 U.S. 656, 669 (1985), the U.S. Supreme Court expressly addressed 

this issue. In that case it was argued that the contractual aspects of Federal grants meant that the 

doctrine of contra proferentem should apply to resolve any ambiguities. The Court held that as 

grants originate in and are governed by Federal statutes, the rules governing statutory interpretation 

apply. 

Consistent with this opinion, subsequent courts have held that FAA is entitled to deference in 

interpreting the grant assurance obligations. In BMI Salvage Corp. v. Federal Aviation 

Administration, Miami-Dade County, Florida, U.S. Court of Appeals 1lh Circuit No. 11-12583, 

(July 19, 2012), the court found "[b]ecause the FAA's interpretation is not plainly erroneous or 

inconsistent with the statute, we conclude that the FAA's finding that demolition is nonaeronautical is entitled to deference." 

Under the plain language of assurance (B)(l ), the not-to-exceed date is linked to "a offer" and 

not limited to the original offer. With the work for which the grant funds were originally 

provided completed, and the grant itself closed, additional consideration was needed for the 

additional funding. General reference to the additional consideration was in the language of the 

14 California Attorney General Opinion. CV 74-317 (May 30, 1975); Opinion ofthe City Attorney (Jan. 23, 1962). 

18 
second amendment -- FAA "has determined it to be in the interest of the United States" and that 

the second amendment was entered into "in consideration ofthe benefits to accrue to ... [both] 

parties .... " That consideration was, as it usually is for grants, agreement by the grant recipient 

to be bound by the statutory grant covenants. The applicable assurance at issue continues until 

throughout the useful life of the project but no later than 20 years from the date of that 

acceptance, August 27, 2003. 

The Director's finding here yields a reasonable outcome and is consistent with Congressional 

intent in establishing the AlP. The grant assurances are designed to assure that FAA and the 

public receive a benefit in return for the Federal investment. Assurance (B)(l) reflects the 

FAA's expectation that the benefit to the public extends, in general, for approximately 20 years. 

In this matter, the useful life would be longer, but the grant assurance is not to exceed 

20 years from acceptance of the new grant funds. The continued applicability of the 

relevant grant assurances until August 27, 2023, is consistent with the useful life of the 

project and the public benefit resulting from the project. Under the City's approach, the 

applicable grant assurances would have expired in 2014, yielding only 12 years of use 

and benefit from the improvements that were completed in 2002; a result at odds with the 

conditions, intent and purpose of the FAA's grant program. 

All other arguments made by the City have been considered and are not supported by the law or 

the facts. 

VII. Findings and Conclusions 

Upon consideration of the submissions of the parties, the entire record herein, the applicable law 

and policy, the Director, Airport of Compliance and Management Analysis, finds and concludes 

that the City remains obligated by the grant assurances until August 27, 2023. This finding is 

based on the acceptance of Amendment No.2 on August 27, 2003, resulting in additional AlP 

funds provided to the City. This acceptance ofF AA offer of additional grant funds, after the 

project had been completed, triggers the grant assurance under (B)(l) to remain in force for 20 

years from August 27, 2003. 

ORDER 

ACCORDINGLY, the Director finds that the Respondent City of Santa Monica remains 

obligated by the grant assurances until August 27, 2023. 

19 
RIGHT OF APPEAL 

This Director's Determination is an initial agency determination and does not constitute final 

agency action and order subject to judicial review. [14 CFR 16.247(b)(2)] A party to this 

Complaint adversely affected by the Director's Determination may appeal the initial 

determination to FAA Associate Administrator for Airports pursuant to 14 CFR 16.33(b) within 

thirty (30) days after service of the Director's Determination. 

ron . Huffman 

Acting Director, Office o irport Compliance 

and Management Analysis 

20 

!Je~IT :t ~IS Date 
INDEX OF ADMINISTRATIVE RECORD 

National Business Aircraft Association, 

Krueger Aviation, Inc., Harrison Ford, 

Justice Aviation, Kim Davidson Aviation, 

Inc., Aero Film, Youri Bujko, James Ross, 

Paramount Citrus LLC and Aircraft Owners 

and Pilots Association 

Complainants 

V. 

City of Santa Monica, California 

Respondent 

Docket No. 16-14-04 

EXHIBIT 1 

Item 1 - Part 16 Complaint, dated July 2, 2014. 

exhibit!- City of Santa Monica Inter-Department Memo dated January 23, 1962 

exhibit 2 - Office of the Attorney General of the State of California, Opinion No. CV 

74-317, dated May 30, 1975 

exhibit 3 - City Council Meeting, dated June 23, 1981, Resolution No. 6296 

exhibit 4 - Newspaper article titled "City rescinds eviction notices to airport firms", 

undated 

exhibit 5 - Santa Monica Airport Agreement, dated January 31, 1984 

exhibit 6-City Council Report, City Council Meeting, March 25, 2014 

exhibit 7 - City of Santa Monica Regular City Council Meeting Agenda, March 25,2014 

exhibit 8 - United States Court of Appeals for the District of Columbia Circuit, The City 

of Santa Monica, Petitioner, v. Federal Aviation Administration, Respondent; Final Brief 

of Petitioner City of Santa Monica, dated August 31, 201 0 

21 
exhibit 9 - United States District Court Central District of California, City of Santa 

Monica, Plaintiff, v. United States of America, Federal Aviation Administration and 

Michael P. Huerta, in official Capacity as Administrator of Federal Aviation 

Administration, Defendants; Complainant for Declaratory Relief Under the Quiet Title 

Act and United States Constitution, dated October 31, 2013 

exhibit 10 - United States District Court Central District of California, City of Santa 

Monica, Plaintiff, v. United States of America, Federal Aviation Administration and 

Michael P. Huerta, in official Capacity as Administrator of the Federal Aviation 

Administration, Defendants; Joint Rule 26 Report of Early Meeting of Counsel Dated 

January 16, 2014 

exhibit 11 - Letter from Richard K. Simon to Santa Officials, Rod Gould City Manager, 

Marsha Moultrie City Attorney, Stelios Mak.rides Airport Manager, dated June 11,2014 

exhibit 12 - Letter from Ivan 0. Campbell, Deputy City Attorney, for Santa Monica, to 

Richard K. Simon, dated June 23, 2014 

exhibit 13 - Letter from Steven J. Brown, NBAA Chief Operating Officer to The 

Honorable Pam O'Connor, Mayor, City of Santa Monica, dated March 24, 2014. 

Item 2 - Notice of Docketing dated July 17, 2014. 

Item 3 -City of Santa Monica, Motion to Dismiss the Part 16 Complaint of National Business 

Aircraft Association, ET AL; Memorandum of Points and Authorities in Support Thereof 

[Pursuant to 14 CFR. §16.25(a)(b), dated, August 14, 2014]. Includes Exhibits (A) Grant 

Agreement, Part V, Assurances, (B) Amendments 1 and 2, and (C) August 12, 2014, Santa 

Monica Council Meeting, Agenda Item 8-A. 

IS AlP 

exhibit A- Federal Aviation Administration, Grant Agreement, Part I Offer, to the City of 

Santa Monica, California, Sponsor dated June 27, 1994,AIP 15Project No. 3-06-0239-06, 

Contract No. DTF A08-94-C-20857, to the City of Santa Monica, California, Sponsor. 

1. Part 11-Acceptance date June 29, 1994 (pageS), signed by officials for the 

City of Santa Monica 

2. Application for Federal Assistance submitted June 15, 1994, by the City of 

Santa Monica. 

3. Part V of the Application for Federal Assistance, the Assurances, Dated 

October I , 1990 

exhibit B- Amendment No. 1 to Grant Agreement for Project No. 3-06-0239-06, dated 

November 8, 1999. Amendment No.2 to Grant Agreement for Project No. 3-06-0239-

06, dated August 27, 2003 

22 
exhibit C- City Council Report, City Council Meeting, August 12, 2014, Agenda Item 8-

A, and attestation of V ernice Hankins, City Clerk's Office, that the Staff Report is a true 

and correct copy of the S1taff Report Item 8-A. 

Item 4- Answer of the Complainants to Respondent's Motion to Dismiss, docketed August 28, 

2014. 

Item 5 - City of Santa Monica's Answer to Complaint, dated and Supporting Exhibits dated 

October 20, 2014. 

exhibit 1-- Federal Aviation Administration, Grant Agreement, Part I Offer, to the City 

of Santa Monica, California, Sponsor dated June 27, 1994. AlP Project No. 3-06-0239-

06, Contract No. DTFAOS-94-C-20857, to the City of Santa Monica, California, Sponsor. 

a. Part II-Acceptance date June 29, 1994 (page 5), signed by officials for the 

City of Santa Monica. 

b. Application for Federal Assistance submitted June 15, 1994, by the City of 

Santa Monica. 

c. Part V of the Application for Federal Assistance, the Assurances, Dated 

October 1, 1990. 

d. Current FAA Advisory Circulars for AlP Projects, effective June 1, 1994. 

exhibit 2 - Amendment No. 1 to Grant Agreement for Project No. 3-06-0239-06, dated 

November 8, 1999. Amendment No. 2 to Grant Agreement for Project No. 3-06-0239-

06, dated August 27, 2003. 

exhibit 3 City Council Report, City Council Meeting, August 12,2014, Agenda Item 8-A, 

and attestation of a City Clerk's Office, that the Staff Report is a true an correct copy of 

the Staff Report Item 8-A. 

exhibit 4 - Letter from the Manager of the City of Santa Monica to the FAA Airports 

Program Engineer regarding Santa Monica Airport Grant Amendment for Project No.3-

06-0239-06 (II), with attachment I dated September 27, 2002. 

Item 6 - Reply of the Complainants to the Respondent's Answer to the Complaint docketed 

October 30, 2014. 

Item 7 - City of Santa Monica's Rebuttal to the Reply Brief of Complaints, docketed 

November 13, 2014. 

Item 8 - The FAA's Request for Additional Information, dated February 19, 2015. 

Item 9- Complainant's Response to the request for additional information, dated 

March 25, 2015. 

23 
Item 10- City of Santa Monica's Response to FAA's Request for Additional Information 

Declaration, with Exhibit, date April 1, 2016. 

Item 11 - Letter from the City to FAA requesting the Grant be reopened and to award additional 

grant money, dated May 7, 2003. 

Item 12 - Letter from FAA to the City agreeing to reopen grant and disburse additional grant 

money, undated copy. 

Item 13 - Final Construction Report, Airport Improvements, Santa Monica Airport, AlP Project 

No.3-06-0239-06 (II). 

Item 14- Letter from the City requesting Amendment No. 1 to the grant dated August 2, 1999. 

Item 15 - Santa Monica Airport, Airport Master Record, 5010. 

Item 16 - Dated August 6, 2015, Notice of Extension of Time to issue the Director's 

Determination to August 21, 2015. 

Item 17- Dated August 21, 2015, Notice of Extension of Time to issue the Director's 

Determination to September 21 , 2015. 

Item 18 - Dated September 21,2015, Notice of Extension of Time to issue the Director's 

Determination to October 15, 2015. 

Item 19- Dated October 16, 2015, Notice of Extension ofTime to issue the Director's 

Determination to December 4, 2015. 

24