John Wayne in the Black as El Toro Drain Ends

Now that John Wayne Airport will no longer have to underwrite Orange County’s effort to build an airport at El Toro, it will be able to keep its surplus revenue for the first time since 1994.

John Wayne will be about $1.7 million in the black this fiscal year, with a $7.8-million surplus expected in 2002-03, according to county estimates. This year’s surplus would be higher but for $4.9 million in remaining El Toro bills that must be paid.

The surpluses will be used to replenish a capital reserve fund drained of $54 million to cover El Toro costs over eight years. The airport also will put $10 million yearly in a contingency fund.

The end of El Toro spending is serendipitous, coming after warnings by airport manager Alan Murphy beginning last year that John Wayne’s reserves were waning.

In years past, John Wayne posted surpluses of $10 million to $15 million a year. But much of that was used for El Toro: Planning for the former Marine base used $9 million of airport money this fiscal year, a splurge that coincided with the Board of Supervisors adopting a plan for an airport serving 18.8 million passengers.

Last month, Orange County voters scuttled that plan, overturning airport zoning at the 4,700-acre base, replacing it with zoning for a large park, nature preserve and limited development. John Wayne Airport money may be used only for airport planning, according to federal regulations.

A week after the election, Orange County supervisors approved a series of rate hikes for parking, shuttle buses and aircraft storage at John Wayne to cover increased security and insurance costs, which jumped $12.8 million since the Sept. 11 terrorist attacks.

The airport estimated it would have been about $50,000 in the red by June 30 without the rate boosts.

Even without the new security costs, John Wayne Airport couldn’t keep handing over money to El Toro in coming years, Murphy told supervisors. Though one phase of planning was completed with the board’s adoption of the airport plan, design and implementation likely would have increased the yearly financial drain, he said.

“It had reached a point where we couldn’t give what we didn’t have,” Murphy said. “Our [reserve] balance was slowly coming down.”

The county was able to take such large amounts from John Wayne Airport because it had built up a huge cash reserve, he said. The reserve was used to pay for capital improvements outright without having to finance them--something that continued even with the El Toro drain. For example, the county paid $28 million to retire some of the bonds used to fund the airport’s $300-million expansion in 1991.

“No projects were put off because of El Toro spending,” Murphy said.

With a new airport rejected by voters, county officials are preparing to expand John Wayne. Supervisors approved limited growth for the airport before the March 5 vote. The plan, which must be accepted by the Federal Aviation Administration, calls for slightly increasing the airport’s maximum of 8.4 million passengers a year to 9.8 million. A court agreement that limits the size of the airport, which expires Dec. 31, 2005, would be extended to 2015.

El Toro planning manager Bryan Speegle had defended spending John Wayne Airport money on El Toro as a wise investment, saying it was worth risking the money because getting the land free from the federal government would be so valuable. Now supervisors are considering allowing Irvine to annex the property.