One of two outdoor escalators is lifted into place in front of the airport terminal building in this file photo of improvements made at the Newport News-Williamsburg International Airport. (Joe Fudge / Daily Press)
Except for two airports’ purchases of cleaning and de-icing chemicals, Newport News/Williamsburg International Airport was the only facility in the state to use public funds for capital projects improperly in recent years, a new state audit found.
Of note was $3.5 million in state funds meant to pay for improvements to public facilities — along with $1 million of federal and local taxpayer monies — to pay off a $4.5 million debt of People Express Airlines, the audit found.
The Peninsula Airport Commission also used $1.3 million of state funds for a parking garage escalator in violation of state rules, the audit reported. Those rules bar the use of state funds for projects on which airports collect money, such as the parking garage.
In addition, the commission used $30,000 of the state funds, which are meant for capital projects, to develop rules and regulations for itself, the audit found.
The state reviewed the usage of funds by Virginia airports for fiscal years 2014, 2015 and 2016. The only other airports to use funds improperly over those years were Roanoke, which spent $62,000 on runway de-icing chemicals, and Lynchburg, which spent just less than $5,800 on cleaning chemicals, the audit found.
The Newport News airport used the state funds for People Express and the escalator in fiscal year 2015.
TowneBank and the airport’s former law firm — Jones Blechman Woltz and Kelly — agreed last year to return $2 million of the public funds used to pay off the People Express’ debt to the bank.
That move cleared the way for the state to end a freeze on payment of funds for capital projects imposed in early 2017, after the Daily Press reported on the loan payment. The airport had not done so on the much-delayed financial reports it was required to file with the state.
That freeze could have been devastating for the airport, but the commission’s ongoing capital plans for improvements to its facilities remain on schedule, spokeswoman Jessica Wharton said.
She said the commission will be able to afford all the work.
Those projects include a $3.2 million rehabilitation of the baggage area and a $3.4 million perimeter road. The state’s share of those will amount to $657,000, with the federal government picking up the bulk of the cost.
While the use of the state capital funds for the escalator project will affect the commission’s ability to draw from a second state airport financing program, Wharton said the airport had not planned to use that program for any upcoming projects.
The audit also reported that the year after spending state funds to pay off the People Express loan and for the escalator, the commission also proposed using more than $2 million of state funds for its consolidated security checkpoint. That sum included just less than $767,000 of costs that are not eligible for the state funding program, the audit found.
The audit noted that the commission had not used all the funds from its passenger facility charges available for the work.
Wharton said the airport has since used all that revenue.
Meanwhile, a new state manual for the use of airport funds has dropped language that the commission’s former executive director Ken Spirito, former commission lawyer Herbert V. Kelly Jr., and former commission chairman, ex-Newport News City Manager Jim Bourey, had said allowed the expenditure. Then-Secretary of Transportation Aubrey Layne said their reading violated decades of state policy.
The new manual, published last month, also added language that said the capital funds may not be used for “purposes related to supporting the operation of an airline, either directly or indirectly, through grants, credit enhancement or other related means.”
Ress can be reached by telephone at 757-247-4535