A report in the Santa Monica Daily Press notes that the FAA has determined Santa Monica Municipal Airport (KSMO) in California violated federal law by accumulating surplus revenues it intends to spend on general city services when the airport closes, rather than using those funds for aviation purposes.
In a Director’s Determination issued Dec. 22, 2025, FAA Director Michael Helvey found the city’s actions do not conform with federal grant assurances and revenue use restrictions. The ruling requires Santa Monica to revise its fee structure within 30 days and implement new aeronautical rates within 60 days, according to the newspaper account.
The case stems from a complaint filed in July 2024 by pilot Mark Smith, Kim Davidson Aviation, and the National Business Aviation Association. The complainants alleged the city violated federal obligations by distinguishing between aeronautical and non-aeronautical revenue surpluses and failing to use the entire airport revenue surplus to reduce rates charged to aviation users.
The city projects a non-aeronautical surplus of approximately $19 million by Dec. 31, 2028, when a 2017 settlement agreement allows the airport to close. City officials admitted they believed those funds would become available for general municipal purposes upon closure, according to the article.
You can read the full article here.
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