Jun. 8--The Board of Airport Commissioners on Monday approved a $4.4 billion budget for Los Angeles World Airports for the fiscal year that begins July 1.
A bulk of the spending plan is socked away in reserve funds, but the airport agency's operating budget remained relatively flat at $655 million to cover day-to-day operations at Los Angeles International Airport and its sister airports in Ontario, Van Nuys and Palmdale.
"The overall goals across the department is that we're looking to cut costs wherever we can," Ryan Yakubik, director of LAWA's capital development and budget, told the airport commission.
The airport agency is also projecting an overall 7.5 percent increase in operating revenue to $824.2 million over the next year as passenger traffic slowly rebounds at LAX.
The agency's increased revenues are driven primarily by anticipated increased passenger spending at eateries, shops and ground transportation at LAX, along with hikes in debt service recovered through landing fees and building rents, according to a LAWA report.
The largest portion of operating expenses is salaries, benefits and pensions for LAWA employees, representing $409 million, or 62 percent, or the total operating budget, Yakubik said.
While the airport department cut nearly 5 percent of employee costs through early retirements and attrition over the past year, those savings were offset by a 14.6 percent increase in health care and increased
pension expenses, Yakubik said.
"We were actually able to reduce the base salary and costs at LAX, even after bringing in a lot of bodies from Ontario and Van Nuys airports," Yakubik said. "The bad news is that those costs are offset by increases in health care costs."
On its own, LAX's operating costs during the 2010-11 fiscal year are expected to increase 2.3 percent to 567.9 million, while revenue is projected at 730.7 million.
Elsewhere, LA/Ontario International and Van Nuys airports will each see a 13 percent budget cut in operating expenses.
In a separate move, the airport commission approved a $4.99 million contract with Jacobs Engineering Group to provide consulting services over the next three years for LAX's facilities management program.
The Pasadena-based company will be charged with looking for design and construction efficiencies to keep costs down amid the ongoing expansion of the Tom Bradley International Terminal, building a new central utility plant, replacing escalators and elevators throughout the airport and overseeing a series of airfield improvements, according to an airport report.