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Dealing a blow to the Riordan administration, the Federal Aviation Administration has ordered Los Angeles officials to return more than $30 million in revenues to Los Angeles International Airport.

Mayor Richard Riordan had ordered the transfer to help pay for police and other general fund expenses. But the FAA said the transfer violated federal law requiring revenues at federally subsidized airports to be spent on airport-related uses.

"As a federally assisted airport sponsor, having received more than $270 million of federal airport improvement grants for LAX, Ontario and Van Nuys airports since 1982, the city is obligated to ensure that airport revenue is used for lawful purposes," said David Bennett, the FAA's director of airport safety and standards, in a report last week.

But a Riordan spokesman said the transfer of funds was legal, and that the mayor would encourage the City Council to appeal the FAA's ruling.

"The L.A. City Attorney has told us that we're on very strong footing here, and there is no reason to believe he is wrong," said Steve Sugerman, Riordan's deputy mayor for communications.

Riordan had argued that the $31.1 million transferred last September was owed to the city's general fund for services rendered, including fire protection through the early 1970s.

But Bennett said the city failed to provide adequate legal justification for the repayment or documentation for the costs, and is only entitled to $780,000. The city must return approximately $30.3 million, plus interest, Bennett said.

The FAA also said it would freeze $60 million in federal grants for capital improvement projects at LAX, Ontario, Palmdale and Van Nuys airports until the city repays the transferred money.

The report also puts into jeopardy federal transportation funds for other city transit projects, including $70 million in federal funding for the Metropolitan Transportation Authority's subway project.

The city has 20 days from the date of the report to request a hearing on the decision, or 30 days to appeal it.

, Daniel Taub

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