Alatorre Proposes Returning Disputed $30 Million to Airport

In the face of an escalating standoff with federal officials over millions in transportation funds, an influential member of the Los Angeles City Council on Friday moved to return about $30 million that Washington contends the city improperly diverted from the airport.

“The idea is not to further aggravate our relationship with the federal government,” said Councilman Richard Alatorre, a close political ally of Mayor Richard Riordan and chairman of the council’s Budget and Finance Committee.

Alatorre is also a Metropolitan Transportation Authority board member who has pressed hard for an extension of the Metro Rail subway into the Eastside.

The extension and other MTA projects, as well as $60 million in federal grants for airport improvements, have been jeopardized by the dispute over whether the city is entitled to airport revenues it transferred to the city treasury.

The Riordan administration has long contended that the city is entitled to certain airport funds, including reimbursement for city-provided fire protection and other services. The airline lobby has battled the city’s fund diversion efforts on several fronts. Last fall, it persuaded congressional budget writers to hold up transportation funding for projects in Los Angeles County if federal authorities find a more recent city transfer to be improper. The $30 million that Alatorre proposes to return involves another, earlier diversion.

In separate developments this week, federal transportation officials froze $60 million in grants for airport capital improvements and moved to freeze $70 million in construction funds earmarked for the countywide MTA.

“I know it puts us in a ticklish situation,” said Alatorre, acknowledging that once the city returns the $30 million to the airport it almost certainly would be precluded from getting it back.

“But . . . we already have a difficult relationship with the [congressional] Transportation Committee. We have two transportation officials telling us we are wrong. I don’t see any way we are going to change their minds,” Alatorre said in an interview this week.

His motion calls for the return of $30,327,835 to the airport--most of the disputed $31 million transferred last summer, minus the small amount federal auditors agreed was properly taken by the city. A much smaller, more recent transfer--the one that put the MTA funds in question--was not addressed by Alatorre’s motion.

The mayor’s office questioned the logic in returning the $30 million, noting that that particular transfer was not what triggered the MTA funding threat.

Riordan downplayed the significance of the funding dispute. On KCRW-FM (89.9) radio’s “Which Way, L.A.?” public affairs program Friday, the mayor said that the matter would be resolved without serious damage to either the airport or the MTA funding prospects.

He also blamed the airline lobby for “using this as a political football.”

“I am not going to allow the people of Los Angeles to be extorted” out of money that rightfully belongs to them because “the airline people think they own the airport,” Riordan said.

Councilman Nate Holden, an early opponent of the fund transfers from the airport and chairman of the Transportation Committee, had persuaded the council to put the $31 million into an escrow account several months ago, when the threat to the MTA funding surfaced.