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Palo Alto Airport - Involuntary Servitude

Original post made by Bob Wenzlau, Crescent Park, on Oct 20, 2010

I listened on last night at our Finance Committee on a deliberation of a speculative enterprise most business persons would not touch - taking on a airport an assuring its vitality. As a business, it is very risky, and we heard tales of small local governments losing millions each year. The problem with an airport, is the FAA will not let you close it down.

The small airport sector is in a national malaise. It is not the business sector one would hope our City to chose to take on. According to the expert, it is the first sector to decline, and the last to emerge. This is the sector the City will take on, involuntarily beginning perhaps as soon as 2012.

Even though the County has operated the airport, the city is obligated to take it over by 2017 if not earlier. The County has found it a loser, so now they will flip it back to the City of Palo Alto. Apparently, Palo Alto cannot say no.

The business plan shows a way to make money. But the money is in many respects a fantasy as there is no "payment" for the land to the city. The city puts in 110 acres of land - likely equivalent of $10,000,000 per year (using the rates they charge themselves at other facilities). Here we just push it in as an in-kind contribution. Beyond the free land, the airport is run down, needs sprucing up to compete, and it would likely be our funding to provide for it.

As a Palo Altan, I tolerate the airport, but I don't like it. I don't use it, I don't many that do. It stands against any slight symbol of sustainability. Its planes fly low (or someones do), and I don't like that noise. It has even caused it share of tragedy.

As a town, few know what a generous contribution we have made and an even greater we will be making - the gift of our land rent free. We will also be finding more scarce general funds going to enterprise. We will watch for new staff positions be created for an airport - you can't run an airport without staff.

I would have hoped to either allow the County to keep it, or to not have the City take it over. Apparently Palo Alto has no choice. I don't quite know what happens if you do say no, but there is a commitment to keep airports enforced by the FAA. Maybe we need a good lawyer. (I smile to think if we said lets close it if federal marshall would march into town)

Given we seem to have no choice, I will pick up my paint brush to help paint our new airport pig. They are nice folks, and do seem to enjoy flying. If we have an airport, let it be a green airport. The airport community seemed to see this as well.

Still I would invite our Council to give the FAA notice (20 years apparently) that we would like to have the right to shut it down. It has had a great history, but I don't see it in our future.

Comments (45)

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Posted by qq
a resident of Barron Park
on Oct 20, 2010 at 10:17 am

Maybe we can hire someone like Mayor Daley and get 'er done.

Web Link

qq


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Posted by Doug
a resident of Downtown North
on Oct 20, 2010 at 11:51 am

Bob,

If you get your way with the anaerobic digestion facility, on 10 acres of CPA land, does your business model include paying CPA about $1M per year in rent? Also, will your plan include the cost of hiring staff to monitor and control the plant?


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Posted by Bob Wenzlau
a resident of Crescent Park
on Oct 20, 2010 at 12:55 pm

Bob Wenzlau is a registered user.

Doug,

It is interesting to the discretion has to choose when a government would pay rent and when it should not.

Most would agree that parks should not pay rent. Neither should libraries.

When it comes to infrastructure rent starts showing up, or at least the value of the land. The water pollution control plant, while it does not pay rent, actually had a transaction that valued the land for all the participating agencies - essentially the City of Palo Alto was compensated for the land. The landfill has famously paid $100k per acre for years.

As the airport is a regional facility and infrastructure, I believe it is a fair question whether rent should be paid. Many of the operators (the FBOs) charge the users of the hangers or tie-downs rent to store their plane. These FBOs rent is based on no rent or payment actually being made for the land to the city. If the city comes in as a role of operating the airport, should the business model begin to incorporate rent payments?

I have accepted - there is not choice according to the FAA - that the airport is part of Palo Alto. If the County gives it back, Palo Alto has to pick it up. What I was questioning is why users get a free ride on the incredibly value of the land given to the airport. There is no give back to the city general fund for the dedication of a 100 acres to this site.

I found myself not quite convinced that the airport was a cash cow as the Weekly seemed to portray. Maybe if it is a cash cow reflects that any business that does not pay rent is likely getting an amazing gift.

Ironically my query may be moot. The FAA may not even permit the city to charge rent for the land. I had not appreciated til last night what a relative straight jacket an airport imposes on a town. They have numerous stipulations, however it is not clear whether or how they enforce the stipulations.

As for my favorite topic of compost: the city could likely stick high rent on the compost, anaerobic digestion or recycling center. Sure it can be a wedge into a environmental debate - if you charge too much rent, you can sink a project - like an anaerobic digester.

I suppose what I wanted was some daylight into the airport discussion which seemed just a bit too cozy and happy. I felt like we should really understand a bit what we are getting into as new expansion of Palo Alto government unfolds - that as an operator of an airport.


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Posted by PA Resident
a resident of Professorville
on Oct 20, 2010 at 1:01 pm

Why is Palo Alto getting into the airport business? Since the county can't make money operating the airport, what makes anyone think our City can? Many users do not live in Palo Alto so we would subsidize county residents' use. Why?

The plan proposes several years taxpayer investment without a return; this is called a loss. If there ever is any profit, the FAA rules prevent it from being added to the City's general fund. This is a no win situation - no return on investment and a loss of taxpayer's money if the airport loses money.

Our Council should do everything possible to turn the airport over to a private enterprise which knows how to run it. The Council is charged with providing public services that citizens need or use: roads, utilities, parks, schools, libraries, fire and police protection, etc., not a costly, limited resident use, noisy, and potentially dangerous enterprise. Liability anyone?


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Posted by Doug
a resident of Downtown North
on Oct 20, 2010 at 1:23 pm

I agree that the airport should be run by a fixed base operator (private enterprise). However, the FBO needs to be allowed to develop sufficient amenities, like hangers, to make it profitable.

As to the notion that CPA should automatically pay for libraries and parks and museums, etc., but not for a municipal airport, I can only say that I do not use any of the above, so why should I, as a citzen of PA have to pay taxes for them? I think the answer is obvious: Community amenities do NOT serve each and every citizen; they serve to enhance a vibrant and engaged commnity as a whole, and bring intrinsic value to a community.

I do not fly, at least not anymore, but I find the airport to be well-located, and it provides a way into the air...and a dream for flight that enough people still want. If we are going to charge rent for the land at the airport, then why shouldn't we also charge for other things on city land, like anaerobic digestors and parks and libraries?


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Posted by Arnold T.
a resident of College Terrace
on Oct 20, 2010 at 2:16 pm

The airport is transportation infrastructure that doesn't pay rent to the city. The city also doesn't collect rent on thousands of acres of other transportation infrastructure: streets. In fact, streets cost the city millions per year to maintain. It's obviously worth it so homes and businesses aren't land-locked with no way out.

Parks are a recreational asset that cost the city money to maintain.

Fire stations are emergency-preparedness assets that cost the city money to maintain.

The airport is transportation (obviously) and recreation (for many Palo Altans) and emergency-preparedness (hopefully we'll never need it for that). Should the airport cost the city millions per year to maintain like streets or parks do? I don't think anybody is proposing that. Should the city be interested in owning a piece of transportation/recreation infrastructure. I think so.

Many non-pilots want to close the airport because they don't fly. I don't golf. I don't swim. I have no school kids. I haven't been to the library in a long time. Do I think we should close all of those things? Absolutely not.

Things that have 100% cost recovery are definitely worth keeping. Things such as streets are worthwhile because they have important secondary effects on commerce, etc. Some other things such as parks are worth subsidizing for livability.

The airport has a larger impact on commerce than many understand. The report shows that it can have 100% cost recovery. I see no reason to abandon this piece of critical infrastructure because of an unsubstantiated belief that in 20 years the land can be rented out for $10M/year.


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Posted by Bob Wenzlau
a resident of Crescent Park
on Oct 20, 2010 at 4:46 pm

Bob Wenzlau is a registered user.

While the future business plan paints a rosy picture for our airports future, here are the notes as to why the County wants out:

"Without the potential income from the new hangars and due to the perceived constraints,
the County argues that the Airport will likely lose money in the future and cited various
other “business risks” in continuing to operate PAO. The County’s Business Plan states:
“The airport is severely constrained from physical, environmental and policy standpoints;
existing City policies specifically prohibit physical expansion of the airport into open
space areas [on the airport property], significantly increasing the intensity of operations,
or adding a third FBO. In light of these constraints, only minor changes to the Airport’s
airfield area were identified in the Master Plan.”

This is copied from the Palo Alto Airport Working Group (PAAWG) Report to Palo Alto City Council (2007).

We also heard sobering notes that many many small airports are operating at a loss.

So my bet is if the current operator (the County) is saying it is likely to be a loser, then it is likely to be a loser. I don't see our City doing capital investment in new hangars (more risk) to try to generate a cash flow.

Some posters think the airport is just one big road. As I reflect on the notion of is the airport just another type of road? (I know its not a library or park). Of interest, the airport is a business zone - not so with a road. Yep, the airplanes land, and as such are transport. But you have operating on public land numerous businesses that are ostensibly subsidized by a land grant. So when a business operates on public property should it be carrying a true cost, or should it be subsidized by our city?

Again, it appears we are stuck with the airport, so my commentary can only just offer some balance to what seemed like a group love hug last night around airport operations.



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Posted by Bruce Whitson
a resident of Old Palo Alto
on Oct 20, 2010 at 5:38 pm

Hey Bob:
Being a pilot myself, as you know, I love that airport and would hate to see it shut down. It, like having our own Public Utility, golf course and large park in the hills (Foothills Park) is among many things that make Palo Alto unique. The contribution in terms of land as our "in kind contribution" is a weak argument at best, it's a sunk cost. That airport has been around long before any Palo Alto resident alive was born. Lets say we do shut it down, since nature and developers abhors a vacuum, what would you propose to replace it...putting up another housing project or zoning it commercial/industrial...be prepared for a potential eye sore and adding to an already congested community. The airport adds to this and surrounding communities more than one can calculate.


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Posted by Bob Wenzlau
a resident of Crescent Park
on Oct 20, 2010 at 6:11 pm

Bob Wenzlau is a registered user.

Bruce,
It appears only Mayor Daley can shut the airport down. So I am sure you will be flying in and out for years to come.

I suppose I just wish the story told fairly, and have found the story so very rosy. When the city is pulling out its pockets empty, it seems we should judge any new spending out of our General Fund.

Obviously in my compost world, I have to wear the same robe - meaning I don't expect it to get a free ride. But it has been interesting that the compost gets loaded with a $100k per acre load, and just next door the airport gets the land for free. The airport has lots of businesses and payers - but gets free rent from our city. Yes, planes are more fun than compost.

It will take Mr. Daley to fix it. Good thing Rham Emanuel is running in Chicago, cause we can get him out here to PA.

Bob


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Posted by Doug
a resident of Downtown North
on Oct 20, 2010 at 6:42 pm

Bob,

I think it might be more complex than what you suggest.

Didn't the FAA put a lot of money into the Palo Alto airport, like paving and various upgrades? And don't pilots pay a fuel tax to fund the FAA? And didn't the county pull out, because Palo Alto refused to allow upgrades at PAO? I might be wrong about this, but I think this is correct. In essence, Palo Alto got a free airport, but then refused to be a responsible manager of the airport, despite the fact that PA was gaining a net revenue from the airport. Now, PA is in the position of having to run the show, and pay for the sins of the past negligence.

Your anaerobic facility, as I understand it, will be funded by Palo Alto, and it needs to be a net-cost-free to the city, right? I believe I read about alternative technologies that would handle the waste problem at the dump, and do it a lot better, and take less space. I don't have the time right now to find that reference, but I remember reading it somewhere. Does your business plan for your digester compare relative cost advantages viz a viz other approaches?


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Posted by common sense
a resident of Midtown
on Oct 20, 2010 at 7:21 pm

Bob, do more research - airport businesses generate sales tax, and the assessments on property also generate taxes.

Some of that tax money goes to pay for City employees like the Assistant to the City Manager for Sustainability, who's major accomplishment is setting up a 3rd farmers market, or the zero waste coordinator, which caused everyone's refuse rates to skyrocket...

And how do assess the use of the airport when used by those who need quick transport to Stanford Hospital?

I don't fly, but I suppport the airport as another amenity like I support other services (even though not all residents use them), like the libraries, parks, Children's Theater, Jr Museum, Art Center, etc.


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Posted by Bob Wenzlau
a resident of Crescent Park
on Oct 20, 2010 at 8:57 pm

Bob Wenzlau is a registered user.

Doug,

I welcome the chance to become expert on airports. However, I need to spend too much time studying compost. (I actually tried my hand at airport design when we tried to put some compost piles out there, and learned that even when I did my research, the airport crowd can be a pretty tough crowd - I doubt if my research would ever be accepted.)

Perhaps last night I just should have plugged my ears at the Finance Committee until the compost item came up on the agenda, but I did not. I thought someone should report out, and offer perhaps a slightly different perspective.

Instead of my doing more research, my hope is the city will do more research, informed with a bit more skepticism than I experienced last night. Again, we presumably will be taking the airport over, so I hope we can control the losses. The city will need to play a smart game, and my concern is that running airports is not our city's core competency.

As a business man myself, I put much heart into hearing the current business owner say it is a loser. Seems that the County wants out because the airport, at least economically, is a dog. They said, and I read it. That succinct statement had more value than spreadsheet projections of pro forma revenues.

Probably dug myself a bit deeper in the hole here, but wanted to at least respond in part to your comment.

Bob


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 21, 2010 at 5:46 am

The Palo Alto Airport has been a nuisance, and a financial disaster, since its early days on the Stanford lands. The residents of College Terrace were in the process of suing in order to get the air operations moved, as early as 1934:

Web Link

WWII put a damper on general aviation for the duration of the war, but private flying commenced as soon as the war was over. The airport was in-and-out of financial problems the whole time that it was in private hands. The true costs of operating the airport are generally not known, since the County Airport Administration has not done the best job managing the records of the operation. The City has contributed money, in order to correct environmental problems which the County would not address, and these costs have not been added into the total cost of the operation.

The Flight Control Tower was built with Federal Money, and the salaries/benefits of the FAA people are paid by the Federal Government/Taxpayer. Other Federal Money has been applied to the site, from time-to-time. The cost of the levees has never been considered, nor the original buildings. And then there is the so-called "Master Plan", which calls for several million more dollars in facilities upgrades in the coming years. At a minimum, the costs of these upgrades will have to be borne by the facility operator. However, from listening to people using the airport, they don't see that they should be expected to pay for these upgrades, when/if they are made.

Currently, there is no one that holds a "master inventory" for the site, which accurately lists all of the real property, its physical status, and replace/by dates/costs.

Recently, we (the residents and businesses) have become aware that there is a $6+M "hole" in the refuse fund, and that the Director (making well more than $200K yearly when all the benefits/perks are added in) has been "retired" for reasons unknown. It is extremely difficult to believe that the City will be able to hire people who will actually run this operation as a business, and not another of the many City operations that expect to be subsidized when they run out of money--no matter how much money we pay them.

There are many issues associated with safety, where airports are involved. The 02.17.10 crash, which blacked out Palo Alto for a day, has yet to have even one City official (elected or selected) speak to the matter of this crash, or the issue of safety of a "pocket" airport operating in the middle of an urban setting with perhaps 300,000 people living within a five-mile radius (which is where most small aircraft crashes occur). Given this most recent history, there doesn't seem to be anyone in the Palo Alto City Government, or the County Government, that is particularly concerned with safety issues.

While the idea (of a couple years ago) to "swap" land on the Bayshore highway with local automobile dealers was a very bad idea, this plan dwarfs that by several orders of magnitude, and will end badly.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 21, 2010 at 6:01 am

> The city also doesn't collect rent on thousands of acres of other
> transportation infrastructure: streets. In fact, streets cost the
> city millions per year to maintain

Ah .. the "rent" in this case is called a tax, which government collects from property owners, people who work (income tax), people who purchase retail (sales tax), and people who drive (gasoline tax). In fact, anyone who looks at all of these taxes comes to realize that the "government" is currently taxing us (by statute) at about 65% of our incomes. So, claiming that the government doesn't charge "rent" doesn't hold much water.


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Posted by Bob Wenzlau
a resident of Crescent Park
on Oct 21, 2010 at 9:46 am

Bob Wenzlau is a registered user.

In our discussion, let's just say the rent is a red herring - let's just assume the city throws the land in for free. My concern persists.

I still bet the airport operations will be a loser for the City as the city budget is concerned. More staff, more capital improvements, a new commission, more expenses. It will require more borrowing for capital improvements.

I have wondered why in fact we have to take it back at all? It might be cheaper in the long run if we chipped in some money to the County, but the County kept running it. Perhaps we could just renew the lease, and not get the city into the airport business.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 21, 2010 at 10:13 am

The airport has been a problem, in one way or another since it was first started. It was run by a private operator in the late 1940s, and early 1950s, who claimed that the facility would have to close without government subsidies. The following two articles (1953 and 1954), from the Palo Alto Times, provide the details:

Web Link

Times were fairly simple in those days .. the issues, and the costs, are more complicated, and more expensive, today. Given that no one in government understands "ownership", it makes no sense to be involved in this enterprise, given how small Palo Alto is.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 21, 2010 at 10:22 am

> Rent a "red herring" ..

Ah .. with about $500M in highly valuable land tied up for this particular use--claiming that non-residents of Palo Alto, and Santa Clara county have a "right to use this property--rent free" .. is simply not going to fly. Particularly in this day and age of automatic pay increases for government employees, regardless of their performance.

The City has to become far more aware of the revenue generating possibilities of its property than it has in the past.. when so many people go to think: "It's all free in the library" ..

An ROI of $0.0 on a $500M property is just .. well .. "Nuts!" ..


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Posted by John
a resident of Community Center
on Oct 21, 2010 at 11:09 am

I echo the feelings of Bob, Wayne, and others who say things like " if the county can't make money operating the airport, what makes anyone think our City can?" If Wayne's figures are correct, and he seems to know a lot about the airport, then only 80 residents have hangers at the airport - with ~60,000 Palo Alto residents that's just over 0.1% of the residents. So, why would the residents of Palo Alto even consider subsidizing this? sure there are more planes not in hangers but the % of residents with planes is still probably less than 1% of the total Palo Alto residents who will be asked to subsidize the Airport.

This reminds me of the Palo Alto harbor at Baylands. We were all paying the costs of dredging the harbor for the pleasure of the few boats owners(many probably not PA residents). Even when it closed there were dozen of owners who simply left their boats there and walked away leaving them stuck in the mud, for someone else to pay the cost of removal.

I find it disturbing that Doug tries to make any comparison with the anaerobic digestion facility - a facility that will serve EVERY household in Palo Alto AND provide money to the general fund.
Bob Wenzlau (managing a busy family and his own Palo Alto business) was asked to volunteer his time (along with others) to serve on the Compost Blue Ribbon task force by the City Council. He did so willingly. To suggest that it is "his" anaerobic facility as Doug does is not only false, but an insult.

I would love to see some airport users volunteer their time to help the ENTIRE city, not just to benefit the cause of a facility that has never made money for the county or the city, and serves a small fraction of our residents - while providing us with noise and air pollution, and some serious safety risks from time to time.


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Posted by jardins
a resident of Midtown
on Oct 21, 2010 at 11:18 am

Bob,

Many thanks for your detailed, voluntary report to the community--that's very responsible of you, given that you went to that meeting to hear deliberations about compost. All the best with your anaerobic digester proposal!


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Posted by Resident
a resident of Another Palo Alto neighborhood
on Oct 21, 2010 at 11:34 am

As someone who thinks the airport is a great asset for our City, but has very little knowledge of how the airport functions I would love some answers to the following questions.

It seems that the airport (or City) charges a tie down fee for planes which are based at the airport. Does this fee cover the entire costs for each plane based at the airport or are there other charges eg for each take off, landing, passenger using the airport, etc. as a commercial airport charges? If not, why not?

What charges are there for visiting planes that use the airport? Once again if a plane based out of state for instance uses the facilities are there landing, take off fees, passenger fees, etc? If not, why not?

Presumably there are fueling, servicing, aircraft maintenance, charges, but do the taxes on these charges go to the City or the County?

Also, how are charges made for things like tower use, runway use, hangar use, etc. arrived at? In other words, does a small 2 seater plane get charged the same as a larger 4 seater plane or a helicopter?

If we are to evaluate whether the airport is worth running by the City rather than the County, and whether the airport can actually make money, the average non-flying Palo Altan should be aware of how the airport generates money and whether the charges are realistic for the service they receive.

We have to know if the airport is a service like a library, park or city owned museum, or whether it is a business regulated by the city and run like any other business enterprise with the exception of the city or county management criteria. Since many businesses, even flight schools, are run from the airport they are probably in the business to make a profit (or at least not to run at a loss) and the airport should be the same.

My personal opinion is that it should be like any other business and if it is not making enough money to cover its costs then the costs should be increased, the taxes by the city (or county) should be increased, and those who use the facility for whatever reason should be paying for the upkeep of the airport and not Palo Alto (or SC County) residents.

This should not be something like the Childrens Theatre which costs the City $1m per year instead of those who use it paying realistic fees. It should be much more like Little League where the costs are covered by the fees of the players.


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Posted by Doug
a resident of Downtown North
on Oct 21, 2010 at 2:00 pm

It was Bob W. who first brought up 'rent' not being paid by the airport. I simply asked him if his anaerobic digestor project would be required to pay an equivalent rent per acre. I don't think a community ammenity, be it an airport or a composting site or a park or a library should pay rent, period.

Given that the composting committee, of which Bob is an active member, initially had its eyes on the airport lands, it seemed to me that he was not not being particularly objective in his analysis of the airport. To say it another way, I think Bob was being more than a little political in his comments.


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Posted by Bob Wenzlau
a resident of Crescent Park
on Oct 21, 2010 at 3:30 pm

Bob Wenzlau is a registered user.

Doug,
My daughter, probably wisely so, said the "political" approach was to keep my mouth shut.
So I would not accept the wisdom you accorded me by calling it political.

Your version of "political" would be that this does not get discussed or vetted more broadly than was accorded at the Finance Committee.

Doug, you might thank me for this. In hind sight, I know the discussion of the composting and anaerobic digester has benefitted the project. We now are primarily driven by finding an economic winner - and it is looking like we are on course there. So we are on course for an economic winner for the city, that also is an sustainability winner.

Perhaps more dialogue on the airport can insure the same outcome for any operations, and we avoid a trajectory that might have had us toward forced spending that few would have had a voice on.

Bob


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Posted by neighbor
a resident of Greenmeadow
on Oct 21, 2010 at 3:54 pm

There are several big differences between the airport and other city services:

1. A teeny-tiny portion of residents utilize the airport vs. the numbers who utilize parks, libraries, roads, etc.

2. Residents who are swimming, reading books, and driving from place-to-place don't wake me up out of a sound sleep ever, unlike someone flying low over my house at 1am. BTW, why are flights controlled at night at SJ airport, but not here?

3. Unlike the airport's support of non-residents (non-tax payers), we don't subsidize out-of-town resident's desire to swim, take classes, or check out books, although we do share most of our parks. When non-residents want to take a class through the city, they are charged a higher fee than residents.

4. Swimming, taking classes, and library activities don't pose a risk to residents. Airplanes do.

Would love to see that area turned into something of value to the a larger portion of our community.


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Posted by Paul
a resident of Downtown North
on Oct 21, 2010 at 3:56 pm

Amen, neighbor


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Posted by John
a resident of Community Center
on Oct 21, 2010 at 4:24 pm

Doug,

Apparently you did not read my message clearly. You state again "I simply asked him if his anaerobic digestor project. . ." The compost issue is NOT Bob's project it is the City who is undertaking this and many other people are involved here.
And, this forum is NOT about the compost facility, it is about the Palo Alto Airport (or should I say YOUR airport?) and whether the city should pay to operate it or not.


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Posted by Doug
a resident of Downtown North
on Oct 22, 2010 at 12:09 am

The anaerobic diegestor is definitely Bob's project, since he and a few others convinced the CPA to invest about $200K into an economic analysis of his/their project. It most definitely is NOT a CPA project at this point. It is, more generally, similar to the current economic analyis of the airport. Both projects will need to pay their own way. We shall see.

Any economic analysis of a basic city amenity should include best practices. The airport needs to look at more and better hangers, along with increased rents. The anaerobic project needs to look at the best way to deal with our refuge, including sewage sludge, woody pulp, toxics, etc. It is not clear to me that simple anaerobic composting is the best way, but I am open to the concept, as I hope Bob W. and his committee (and our City) are.

With regards to external costs of city amenities, such as noise and traffic, non-citizen use, etc., that is a very complex issue. For example, very few people use Byxbee Park, compared to the airport, and many of them are not PA citizens. Yet they drive their cars out there, and the land lock-up is of enormous cost, when one considers alternative uses of that open land.

There are many points to ponder, but I would suggest that we all take the 'rent' issue off the table.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 22, 2010 at 6:01 am

While the focus of the current discussion seems to be the finances of the airport (which are poorly documented by private sector standards, there is the issue of safety--which seems to have been under most people's radar. The NTSB/FAA keeps records of accidents/crashes/incidents online, going back to 1964. The following is a collection of some of these crashes:

Web Link

This collection of investigation narratives makes it painfully clear that pilot error/malfunction is at the root cause of most accidents. The current system does not seem to consider the danger to the people living/working on the ground, within a five-mile radius of this airport. The current system seems to only focus on the airplane and pilot. If the City were to be the owner/operator, then safety would be the concern not only of the Municipal Corporation--but the property owners and residents too. It would be imperative to have some sort of "safety compliance officer" on the payroll, to review all of the accidents/incidents at this facility. It would be necessary to provide a level of safety that exceeds the FAA's rather detached interest in the safety of the general population. Such an activity would add costs which have not now been considered.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 22, 2010 at 6:33 am

Articles From The San Jose Mercury, Demonstrating How Palo Alto Residents Are Captives Of Pilots Who Fly Irresponsibly, and Unsafely.

Over the years, there have been any number of situations where pilots have “buzzed” pedestrians in the general vicinity of the airport, or flown too low over residential properties.The City government has been helpless to do anything, because the facility has been run by the County, and the County has been irresponsible as an operator—not showing any interest in safe operations of the pilots in the air.

Article--
Web Link


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Posted by Doug
a resident of Downtown North
on Oct 22, 2010 at 12:11 pm

I fail to see why a municipal airport has an enhanced liability issue. All such airports have general liability insurance for anything that happens on their premices. The same would be true for any city-owned facility, like an anaerobic digestor or, for that matter, a city-owned street. Pilots and drivers and plant operators are expected to follow the rules. If, for example, a driver runs a red light and hits another car, then the driver is responsible, not the city.

Municipal airports generally have a good safety record, because the FAA runs a tight ship. However, a given pilot might decide to take a shortcut, or otherwise break the rules. If so, the liability is oh him/her, not the airport. The "safety compliance officer" is already in place...it is called the FAA.

With regards to "buzzing", it is a violation, if the altitude limit is exceeded. Again, that is a violation of FAA rules. We also have drivers on city streets who burn rubber, act crazy, etc., but that is not the fault of our city.

I must admit that I, too, hate low-flying aircraft that are noisy. But I hate traffic noise, too. I cannot escape traffic noise, but airplane noise is intermittent. One area of improvement that PAO could make is to enforce the permissible decibel levels of all its planes. It should also (and everytime) respond to identified aircrat that violate the altitude limitations.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 22, 2010 at 1:05 pm

From reviewing some of the expenditure documents of the Palo Alto Airport (PAO), and also the audit of the Palo Alto Auditor, it became clear that "true cost" accounting was not be used by anyone associated with the airport. Since the FAA pays for the Flight Control portion of the airport, attempts to request the total dollars expended over the years for Tower Operations (salaries and benefits), as well was the cost of building the Operations Tower (ca. 1967), ran into a brick wall. (While the door is still open on the possibility of obtaining this information, I was told by an FAA representative that unless I could identify every spending source that the FAA administered, they would not be able to provide any information about how those dollars were spent.)

The FAA did provide a list of the dollars/projects which it had spent in the last few years on "infrastructure" related projects. This number comes to about $3.8M which has benefited the pilots, but has been paid for by the Federal taxpayers. If the FAA does not continue to provide these funds in the future, where will they come from? And why shouldn't the operator of the airport be expected to report "true costs" of this operation--just like a private sector company would be expected to do?

PAO/FAA Spending on Infrastructure:
Web Link


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 22, 2010 at 1:38 pm

> I fail to see why a municipal airport has an enhanced
> liability issue

This is probably too complicated to discuss properly in this venue. However, the suggestion that "airports have general liability insurance for their premises" is correct, but not even remotely broad enough to deal with the problems of "liability" associated with airports and crashes.

The 02.17.10 crash in EPA should have made that point in spades. The crash was not on airport property, so the airport's liability insurance would not be a source of funding to pay the owners of the damage done, or to compensate those killed in the crash.

I provided an estimated cost of the economic damage in another post:

Web Link

With no way to know for certain, but it's possible that that crash might have cost Palo Alto, East Palo Alto and Menlo Park upwards of 75M dollars in lost productivity, lost business, damaged goods/produce, and extra expenditures to bring in aux. power generators, etc.

With homes costing $1M-$30M in the areas surrounding the Palo Alto Airport--who should be responsible when a plane goes down in PA/EPA/Stanford/LA/LAH/MV/MP? The County seems to have a $1M (per incident) insurance requirement for plane owners who want to "tie-down" their planes at County Airports. One Million doesn't go far in this land of "lawyers/lawyers/lawyers" .. so, who should pay the expenses to clean up after one of these guys loses control of his/her aircraft, and plows into a cluster of Palo Alto homes, or a school?

It is not possible to believe that the City of Palo Alto will not be a counter-party to any number of multi-million dollar suits, if it becomes the owner/operator of this airport.

The City has been sued any number of times--and often loses. One significant loss was the Arastradero Land Company suit, back in the early '70s. The City settled for $7.5M (against a $15M judgement, at a time when its budget was about $28M.) The City suspended/cancelled a number of infrastructure projects for many years in order to find the funds for paying this settlement. It is inconceivable that the City would not sooner-or-later be found guilty of something that contributed to a crash--and the taxpayers would be on the hook for funding the settlement.

Remember, there are a lot of lawyers who have become fabulously wealthy by saying the magic words: "You either knew, or should have known...".

Not being involved with this airport is the only way that the City of Palo Alto can be sure that it will not be involved in a very expensive lawsuit, sometime in the future.


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Posted by Doug
a resident of Downtown North
on Oct 22, 2010 at 3:43 pm

I don't get the concept of excessive liability. If a gasoline tanker, delivering fuel to our local Shell station, flips over, because it is traveling too fast around a corner, and creates a multi-fatalilty accident, then that would be the fault of the driver, not the city, which provided the streets. If the accident happend at a nexus of services, like an electrical substation, and it wiped out city-wide services for a couple of days, would PA be liable becasue it provided a street that the tanker drove on?

I think this airport argument is becoming weird!

I wonder if Bob W. wishes he would not have mentioned it?


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Posted by Bob Wenzlau
a resident of Crescent Park
on Oct 22, 2010 at 3:53 pm

Bob Wenzlau is a registered user.

Doug,

I have learned and reflected quite a bit on this, and don't find it weird. I find all of Wayne Martin's work authoritative, and gives me background that hereto had never known. Were lucky to enjoy his contribution as it offers some balance to other documents that are in public circulation.

I know that you stand for what you believe, and will never be persuaded that there is anything harmful with a small airport, or any reason that a reasonable people could not question its role. As an advocate for your cause, it is hard to accept anything off message.

Who we are speaking to in this discussion is the rest of our town. I trust those that are following have learned a few things before this post fades into the Palo Alto Town Square history bin. Click Wayne's links as it is amazing to see the old coverage - history does repeat itself.





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Posted by Doug
a resident of Downtown North
on Oct 22, 2010 at 4:07 pm

Bob,

You first announce a red hering ("The city puts in 110 acres of land - likely equivalent of $10,000,000 per year"), then you object when I simply request a business plan from you with a similar 'rent'. The I suggest that we put the 'rent' issue off the table. Then Wayne Martin come in with an over-the-top liability issue (which he cannot defend).

OK, Bob, you have yet to respond to my request that you come up with a 'best practices' approach to dealing with our waste problem. I have done some digging, and it appears that anaerobic digestion is an aproach that solves very little, yet costs a lot, compared to other methods, which solve much more of the issues.

I think you are trying to "sell" anaerobic composters, Bob, but you cannot seem to do it. Therefore, you take on the airport issue, and throw up red herrings. You need to defend your composter project on its own, Bob. Then let the voters decide.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 22, 2010 at 6:22 pm

> Then Wayne Martin come in with an over-the-top liability issue
> (which he cannot defend).

I believe that I have defended it, but if you need more convincing--it's historically been called the "deep pocket co-defendant". Your example is wrong--many City governments have been sued (and lost) by lawyers claiming that the "design" of a highway, or intersection, was faulty--thereby requiring the City to be partially responsible for the accident sustained by their client.

Here is an example right here in Palo Alto:
Web Link

The daughters of Phyllis Seidman, the Palo Alto resident who was fatally struck while crossing Cowper Street in her wheelchair Dec. 2, 2008, have filed two claims against the City of Palo Alto in an amount exceeding $2 million.
---

While not every "deep pocket" lawsuit involving City governments actually wins at trial--the precedent is set to allow trail lawyers to try to suck as many defendants into court as possible.

Here's another example from just a few weeks ago, in Clark County, WA:
Web Link

Will recession-starved Vancouver be held liable for a highly intoxicated driver who drove the wrong way on state Highway 14 in January and hit three cars, killing herself and injuring two people?
---

Even if this poster doesn't "get it", the liability issue looms large over the City as owner/operator of an airport.





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Posted by Doug
a resident of Downtown North
on Oct 22, 2010 at 6:31 pm

Once again, an over-the-top example by Wayne Martin.

Municipal airports are designed to standards that must be approved by the FAA. If something bad happens, due to design flaws, the liability is on the Feds.

Palo Alto does need to worry about its tree canopy issue, which causes its sidewalks to buckle, with many resultant lawsuits, but the airport is a non-issue.


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Posted by Joe
a resident of Barron Park
on Oct 22, 2010 at 6:35 pm

The City of Concord was a defendant in the lawsuits surrounding the crash of a twin engine plane into the Sun Valley Mall that occurred two days before Christmas on December 23, 1985. Seven people died, including three aboard the plane. Four people on the ground were killed including a 14 month old baby and 22 year old young woman at the mall to pick up her engagement ring. Over eighty people were hospitalized, some severely burned to their face, neck and arms. Shoppers at the mall tried to cover their faces from the blast, only to have the plastic bags they were holding melt to their skin.

Web Link

Can you imagine what would happen if similar accident happened at the Stanford Mall today?


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 22, 2010 at 6:39 pm

> Municipal airports are designed to standards that must be
> approved by the FAA

The issue is not the airport design so much, as it is the safe operation. For instance, the 02.17.10 accident was caused, in part, because the pilot chose to operate IFR (Instrument Flight Rules) and something went wrong. The reason that the PAO allows IFR, in part, is because the Palo Alto City Council agreed to accept this procedure--even though they had not allow it before that time (about 1984). It's very possible that a aircraft injury lawyer could use this fact to claim that the City should be a co-defendant in a trail against the estate of the 02.17.10 pilot (who is now dead). From reading the local media accounts, this fellow had registered his plane via a small "corporation", which probably did not have many assets. So, what's the point of suing the empty remains of this "corporation", when you can sue a "fat" Palo Alto.

This particular example may, or may not, prove true. A litigation lawyer has been retained by one of the families of one of the men who died in that accident. It will be a while before that suit plays out, but don't be surprised to see Palo Alto, and the Santa Clara County Airport Administration, as defendants in this suit--at least in the beginning.


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Posted by Doug
a resident of Downtown North
on Oct 22, 2010 at 8:28 pm

It just keeps getting weirder and weirder.

According to the logic just supplied by Wayne Martin, our city could be involved in a lawsuit in civil court for not providing proper security at Byxbee Park, if a murder happens out there. For that matter, if a murder happens in Mitchell Park, and a cop is not there full time, maybe a lawsuit will be filed. Therefore, we should shut down all our parks, and gain all the riches of a buyout, right?. Once that supersafe condition is established, we would no longer need to worry about civil lawsuits.

And we wouldn't have any parks, either.

Can we all just ATTEMPT to get serious on this issue?


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 23, 2010 at 6:40 am

In the 1920s and 1930s, the Federal Government promoted General Aviation, as it helped to provide "connectivity" to many small communities throughout the country, which did not see a big highway building program until the 1950s. Today, highways, and large airports, provide "connectivity" to most small towns, although the FAA continues to promote General Aviation when few actual users of the country's many small airports exist. The following two articles from fairly recent USA Today editions reveal the depth of this problem:

Web Link

The US Government's long-term financial obligations perhaps now exceed $200T, which will be paid by future generations. Taxpayers need to be asking why we need so many small, government-funded, airports.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 23, 2010 at 6:56 am

> Getting weirder and weirder

Not certain how this example adds anything to this discussion, but
this very situation has occurred in other cities; however, the courts have ruled that the police do not have an obligation to protect "everyone" .. just the public at large:
------
Web Link:
SEC. 2. FINDINGS.
The Congress finds the following:

(1) Police cannot protect, and are not legally liable for failing to protect, individual citizens, as evidenced by the following:

(A) The courts have consistently ruled that the police do not have an obligation to protect individuals, only the public in general. For example, in Warren v. District of Columbia Metropolitan Police Department, 444 A.2d 1 (D.C. App. 1981), the court stated: `[C]ourts have without exception concluded that when a municipality or other governmental entity undertakes to furnish police services, it assumes a duty only to the public at large and not to individual members of the community
----
Warren v. District of Columbia
From Wikipedia, the free encyclopedia

Warren v. District of Columbia[1] (444 A.2d. 1, D.C. Ct. of Ap. 1981) is a U.S. Court of Appeals case in which three rape victims sued the District of Columbia because of negligence on the part of the police. Two of three female roommates were upstairs when they heard men break in and attack the third. After repeated calls to the police over half an hour, the roommate's screams stopped, and they assumed the police had arrived. They went downstairs and were held captive, raped, robbed, beaten, and forced to commit sexual acts upon one another and to submit to the attackers' sexual demands for 14 hours. The police had lost track of the repeated calls for assistance. DC's highest court ruled that the police do not have a legal responsibility to provide personal protection to individuals, and absolved the police and the city of any liability.[2]
----

The post about the City of Concord being a defendant in the shopping mall plane crash proves this point in spades--yet we have people claiming that it's impossible for a City owning an airport to be involved as a defendant in civil (and possibly even criminal) actions.

What's really "weird" is that people don't know more about the basics of the law, that affect us all.


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Posted by Wayne Martin
a resident of Fairmeadow
on Oct 23, 2010 at 7:16 am

Here is another problem that faces the Palo Alto Airport, and could involve its owners in potentially costly lawsuits:
-----
NEW LAW PROHIBITS LANDFILLS NEAR AIRPORTS
Web Link

President Bill Clinton signed into law on April 5 a bill prohibiting the construction or establishment of municipal solid waste (MSW) landfills within six miles of small airports.

...

Congress found that collisions between small aircraft and birds have resulted in fatal accidents. Prohibiting landfills with substances that attract birds is crucial to aviation safety, the bill states.
----

From reading the article, it would appear that the Palo Alto Landfill predates the law, and may be exempt (unless the exemption were to be rescinded at some time in the future). Whether the Palo Alto Landfill is exempt, or not, does not change the fact that birds are attracted to landfills, and can easily fly across the airport getting to/from the dump. If a bird were to come in contact with an aircraft, a crash would be a likely event. The question then would arise why a landfill was allowed to operate next door to a municipal airport--given that Congress had found this to be a dangerous situation.

An aggressive lawyer would be looking to claim that the City of Palo Alto was somehow "negligent" operating both a landfill and an airport side-by-side--particularly after Congress had passed a law banning this sort of thing.

If/when the landfill closes, then perhaps this danger will abate. However, until it does, the mixture of birds and planes will continue over on the Palo Alto Baylands.


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Posted by daniel
a resident of Embarcadero Oaks/Leland
on Oct 23, 2010 at 10:10 am

I keep asking a naive question for which I have never received a satisfactory answer:why should I, as a Palo Alto property owner and tax payer subsidize the mostly out of towners, mostly hobbyists who use this airport? Some of the pilots housing their planes in the Palo Alto airport are Atherton and Los Altos Hills residents. Can anyone imagine that, assuming those towns had the available land for a general aviation airport, even one resident, including the pilots, would support building one?
It's outrageous that we are providing a freebie to relatively few, mostly non residents for a highly polluting and dangerous activity facilitated by city owned public land? This is a classic welfare for the rich case. This airport is a chronic money losing white elephant and needs to be shut down as quickly as possible.


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Posted by Resident
a resident of Another Palo Alto neighborhood
on Oct 23, 2010 at 11:53 am

Daniel

Like you, I have asked questions and have not got a reply even though I am on the other point of view.

How do you know that these pilots, regardless of where they live, are getting freebies at the airport? Do we know what fees they charge the pilots/owners of the planes? We are told there are tie down fees but don't know if these are realistic fees. On top of that, do they have takeoff/landing charges, passenger charges, or any other type of charge each time they use their planes?

Additionally, do visiting planes have to pay rent or tie down fees for the time they spend on the ground at Palo Alto? Do they have landing/takeoff charges? Do arriving passengers have to pay a fee?
What about helicopters, are their fees the same as planes? And do all planes pay a flat fee or is it according to the number of engines or the number of seats?

Who actually owns the land the airport sits on? Is it the City of Palo Alto? Does the City of Palo Alto get any percentage of the fees or taxes the Airport charges?

The answers to these questions should be addressed before we can decided whether the City or the County can make a profit from the airport, or if not actually make a profit but certainly not to run at a loss.

The small planes flying above my house don't bother me as much as some of the military planes, helicopters and planes flying into SFO, or the Caltrain with its noise from the crossings as well as the deisel trains.

I would definitely be happy supporting the airport if I knew more about it. I don't really have the time or sufficient interest to go to meetings to find out this information, but having it readily available here seems to make sense to me.

I hope we both get some answers to our questions.

The answer to these type of questions


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Posted by Doug
a resident of Downtown North
on Oct 23, 2010 at 12:22 pm

Regarding the safety issue, the experience of Reid-Hillview in San Jose is relevant. After yet another attempt to close RHV, Santa Clara County hired SRI International to look at the overall safety issue:

"The county commissioned a $330,000 safety study by SRI International of Menlo Park. In a 1994 report, SRI said Reid-Hillview Airport has only half the national accident rate for small airports and that the risk to airport neighbors would be far greater if stores, industry or housing were built on the land" ( Web Link )

Another way to look at this is that Palo Alto, if it closed PAO, and allowed development of the land, would need to pay higher insurance fees to cover the rare lawsuits that might occur.

Regarding why Palo Alto should support an amenity that non-PA citzens can use, I suppose that Redwood City could make the same complaint about PA citizens parking their boat in RC harbor, or PA citizens using the MV main library (becasue it is so much better than anything in PA). Shoreline Park is used by many more PA citizens than MV citzens using Byxbee Park. Amenities are something that city offers to the general public, unless there is a specific reason not to.

PAO should be glad that outside pilots park their planes at our airport...better to pay for the airport! When PA takes over the airport, it should hire a private FBO to run the show, AND change the rules of land use, so that more and better hangers and facilities can be built. PAO has enormous potential as a money maker, and a catalyst of future economic growth for Palo Alto...but only if we stop stopping it.


Sorry, but further commenting on this topic has been closed.

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