Audit: Mismanagement at Pearson Airport cost city at least $63,395 over last decade

When The Columbian contacted Williamson, he said he had not heard about the audit or its findings. He was provided the document for review but declined to comment.

Bad discounts, missed opportunities

Loss at the Pearson Airport can be divided into two categories: actual dollar amounts, and potential revenue lost due to problems like expired contracts and needlessly reserved hangars.

According to the audit, the then-manager gave unauthorized discounts to 52 tenants of T-hangars and tiedowns over a decade resulting in a “gift of public funds” and actual loss of $17,130, plus an additional $5,078 for discounts that continued well past their time limits.

The relationship between the fixed-base operator and the city is similar to that of a landlord and tenant — in essence, the fixed-base operator pays the city rent and a percentage of fuel sales in exchange for two commercial buildings from which to sell fuel and conduct airplane repairs. Like most tenant/landlord relationships, the fixed-base operator would typically see a slight annual bump in its rent.

But according to the audit, Williamson gave the fixed-base operator an unapproved 86 percent discount on its rent, costing the city $19,896 in potential revenue. He also billed the fixed-base operator at 2010 rates through 2016, despite the contract expiring in 2012. The failure to renegotiate a contract cost the city $12,294, the auditor found. And by failing to implement the typical 1.5 percent annual increase on the fixed-base operator’s rent, the city lost an additional $21,749 in potential revenue.

The city also covered utility expenses that should have been paid by the fixed-base operator, costing $9,099.

In another line item, the audit reports that Williamson cost the city up to $28,710 in potential revenue by holding one T-hangar open for “city use.” In reality, the hangar was “used intermittently by the former Airport Manager and FBO for personal and/or business use at no cost and without contracts, 2011 to 2018,” Harder wrote.

As of Aug. 31, 2018, of the airport’s 161 occupied T-hangars and tiedowns: 88 had out-of-date requirements or rental rates, 10 had improperly altered contracts and seven had no contract at all.

In addition to the lost revenue, the city also ran afoul of Federal Aviation Administration guidelines requiring that all airport tenants own properly licensed aircraft. As of August 2018, 13 of the Pearson tenants didn’t have valid planes stored at the airport. An additional 14 couldn’t be verified as airworthy or not due to lack of documentation.

The audit highlighted a few other managerial issues. Williamson lacked a consistent, transparent waiting list process, Harder found. He would also perform cash receipting at the airport office, having customers leave unsecured cash at the fixed-base operator office. Additionally, airport staff didn’t know everyone who held a gate key card.

Chain of command

The auditor also found “insufficient examination of red flags and concerns, reported by employees and tenants, by city personnel at multiple levels, from 2008 to July 2018,” according to the document.

Which begs the question — who knew what, and when?

Those red flags “aren’t specifically enumerated in the report, so I can’t speak to that,” City Manager Eric Holmes said. “I can tell you that the first time that I was aware of the items that are enumerated in this report was when I read the report.”

“I did have conversations with tenants over the years where they expressed concerns about the responsiveness of the airport manager,” Holmes added. “(But not) the kinds of items that are identified in this report.”

In 2011, the Washington State Auditor’s Office performed an accountability report of multiple departments of the city of Vancouver. Pearson Airport was among 13 different city assets and procedures the auditor investigated.

No wrongdoing was uncovered.

“In the areas we examined, the city’s internal controls were adequate to safeguard public assets. The city also complied with state laws and regulations and its own policies and procedures in the areas we examined,” the state document reported.

Vancouver Program and Policy Development Manager Jan Bader said that a sweeping state spot check wouldn’t find the level of detail of an internal city auditor.

“All cities get audited by the state auditor’s office,” Bader said.

Bader was “surprised and disappointed” by the findings of the city auditor’s lengthy investigation, she added.

Fixes

Since Williamson’s resignation, Bader is in charge of the airport. She’s leading the team implementing the auditor’s recommendations to correct the lax policies that cost taxpayers thousands of dollars.

In response to the audit, the city put together a Corrective Action Plan for the Pearson Airport.

Some of the recommendations included:

• Airport management should obtain approval for hangar rates, discounts and rental contracts through the city council or city manager.

• The city should budget for a second employee at the airport to split the manager’s duties.

• Staff should research leasing software that would allow rental agreements and other documents to be digitally and easily accessed by other city departments.

• Staff should review the contracts of all the tenants, including the fixed-base operator, and make sure everything is approved and up-to-date.

• Rate increases should be reviewed by staff to make sure they’re on-schedule.

• Airport should require new tenants to provide copy of their identification, proof of aircraft ownership and proof of their plane’s airworthiness when signing the rental agreement.

• Airport should require all new tenants to use city-issued locks for their hangars.

• Staff should establish a formal, written waiting list policy.

It’s been an exhaustive undertaking, Bader said. Some of the recommendations — like obtaining city council/manager approval of all new contracts, and requiring tenants to show proof of their planes’ airworthiness — have already been implemented.

“It’s been going pretty well. We only have a few of the corrective actions left to complete,” Bader said.

The search for a new permanent airport manager is in its final stages, with a finalist who will likely be announced next week, Bader said. The position’s salary range is between $93,757 and $121,884.

She’s more than ready to pass the torch after the cleanup, she said.

“The airport’s in a lot better shape now than it was when we started this process,” Bader said. “I’m really looking forward to the next airport manager.”