City Refuses to Give $31 Million to LAX

The Los Angeles City Council on Tuesday refused to give $31 million in disputed money back to Los Angeles International Airport, thumbing its collective nose at the federal government’s demand this month that the city return the money.

Instead, the council voted after a 90-minute session behind closed doors to ask the Federal Aviation Administration and the airline industry for a meeting to discuss various outstanding issues, including the $31 million, several lawmakers said.

“They don’t just make decisions and we jump,” Council President John Ferraro said of the FAA. “They don’t have absolute power. Isn’t there an appeal process?”

Kara Gerhardt, a spokeswoman for the federal Department of Transportation, said the FAA had followed standard procedure of reviewing the situation before issuing the opinion that the $31 million transfer was unlawful and should be returned. The money was intended to repay decades-old loans from the general fund to LAX for capital improvements and emergency services, and was transferred in September just before the president signed legislation that made such actions illegal.

Gerhardt said her agency would await official notification of the city’s action before responding.

Dissenting in Tuesday’s vote were council members Rita Walters and Nate Holden, who have long advocated returning the funds to LAX rather than risk federal grants for other transportation projects, including Metro Rail.

“History has already taught me, and other bullheaded legislators, you don’t cut off the hand that feeds you--you don’t fight with Washington,” Holden said. “They’re making a terrible mistake.”

But Controller Rick Tuttle, who supports the transfer, said Tuesday’s move buys the city important time and leverage--to continue analyzing whether $31 million is the correct amount of LAX’s debt, and to negotiate with the airlines and FAA on unrelated airport disputes.

“If we had sent the $31 million back to the airport, then it’d be gone,” Tuttle said. “We have due process. We have appeal rights.”