Friday, November 23, 2012

San Diego County Regional Airport Authority: Staff still travels in style - Tightened policy in 2009 only covered board members

During a business trip to Singapore in May, county airport authority president and CEO Thella F. Bowens ordered a $91 steak, a $37 salad and a $23 bottle of water at dinner on the public agency’s tab.

The San Diego County Regional Airport Authority paid $9,765 for Bowens’ trip to Singapore, where she was speaking at an industry conference.

The bill included $6,956 for Bowens’ business-class plane ticket, four nights in a $569-per-night hotel room, and meals including her $177 steak dinner and $56 breakfast buffet.

Board members at the airport authority, which oversees and operates Lindbergh Field, said amid a public outcry in 2007 that they would make policy changes to rein in travel spending.

They said it again after another round of public scrutiny in 2009, and voted unanimously to cap board members’ out-of-town hotel, meal and related expenses at the maximum daily reimbursement set by the federal government. The caps did not extend to agency staff.

“Ultimately, the board decided that being able to maintain flexibility for the staff in terms of all the kinds of travel they do — particularly related to route-development and travel regulation — did not merit imposing the per-diem cap on the staff,” said board Chairman Robert Gleason. “At the time, there had been public attention to board expenditures, and that was the main topic of our discussions.”

Public records obtained by The Watchdog show that, since 2009, the authority has paid to send employees to conferences at resorts in Hawaii, and to fly business-class to conferences and meetings in destinations including Morocco, Greece, Portugal, Switzerland and Denmark.

Employees stayed at luxury hotels including the Taj Palace Hotel in New Delhi, India; The Phoenician in Scottsdale, Ariz.; and the W Hotel in Washington, D.C., where rooms are “playgrounds filled with palatial pleasures,” according to the hotel’s website.

In the first nine months of this year, the airport authority spent more than $50,000 on Bowens’ travel alone.

Airport officials said employee’s travel was critical to advancing the business interests of the airport, which derives its budget from users of Lindbergh Field. Revenue includes rent, concessions and fees that passengers, airlines and vendors pay.

“Airports are a self-supporting competitive businesses and we compete among other regions and among airlines for air service and for passengers,” Gleason said. “So a lot of what our out-of-town travel is about is route-development.”

Because the airport industry is global, employees must sometimes travel to distant destinations where important meetings about regulations are held, officials said. They said the benefits of sending employees to build business relationships and act as the airport’s voice more than covers the employees’ travel costs.

The cost of travel was small when considered in context, airport officials said.

The authority set aside about $300,000 for travel in its most recent fiscal year, less than 1 percent of its $151 million operating budget, Gleason said. He said the travel budget had decreased by 46 percent since the board changed its policies in 2009.

Even so, public officials should avoid making extravagant purchases with public money, experts said.

“It’s probably a very minor portion of the budget, but still, you want to have a perception that the staff is trying to adhere to good taste,” said William Sannwald, a professor in the School of Business at San Diego State University. “People lose trust in the institution if the organization has a reputation for lavish spending.”

The more often people see officials spending public money on extravagances such as an $11 mini-bar soft drink or $69 laundry bills, the less confident they feel that officials are protecting the public’s money when spending for big-ticket purchases and projects, Sannwald said.

Bowens and other airport authority employees did not respond to requests for comment, leaving answers to authority spokeswoman Diana Lucero.

Policy changes

Since breaking off from the Port of San Diego in 2003, the airport authority has incrementally tightened spending policies amid repeated public scrutiny of top officials’ business and travel costs.

One round happened in 2007 after a U-T article described the authority’s use of about $466,000 in public funds for top officials’ meals, alcohol, first-class plane tickets, San Diego Padres tickets, gifts to industry experts and trips to conferences in Bermuda, Hawaii, New Zealand and Paris.

In 2009, the Voice of San Diego website described continued lavish travel by top officials, and possible violations of policies against first-class seats on domestic flights and reimbursements for alcohol. Amid a resulting public outcry, board members voted unanimously for per-diem caps on their own spending.

About two months later, board members voted 6-1 to further increase documentation and oversight of travel and business spending. Gleason cast the dissenting vote. He argued the tighter policies didn’t go far enough. He noted then that recently-imposed per-diem spending caps didn’t apply to Bowens or her executive staff.

Airport officials ultimately decided allowing employees more flexibility to travel was justified by the business they bring in.

A single new flight can be worth more than $10 million to the region’s economy each year, while a nonstop international flight can be worth more than $100 million annually, Lucero said in a written response to questions.

“At the end of the day, the authority’s travel is a relatively small investment with an enormous return,” Lucero wrote.

When airport authority employees went to Las Vegas in May 2011 to discuss air service with officials at Spirit Airlines, the flying public paid for their $312-per-night hotel rooms, and picked up their $161 tab for dinner at Jean-Georges Steakhouse. The bill included $40 steaks and a $14 baked potato.

The two employees were the only guests at dinner, Lucero wrote. It was not part of the meeting with Spirit Airlines officials.

The approximate cost for each employee’s lodging and dinner was $392 — a little more than twice the federal government’s per-diem rate of $170 for lodging, food, and other expenses in Las Vegas.

As a result of the employees’ presentation to officials at Spirit Airlines, the airline launched four new routes from Lindbergh Field, Lucero said.

Not every trip has a specific, measurable return because it often requires several trips to develop business, Lucero said.

“It takes years of planning, cultivation and negotiation to bring new air service to an airport,” Lucero said in a written response to questions. “The ‘sales cycle,’ so to speak, is long and complex, due to the extremely high cost to an airline to bring just one new flight to the airport. The authority must develop those business relationships over a series of meetings and interactions.”

For example, Bowens’ attendance at the conference in Singapore was a valuable opportunity to build business relationships that could serve the airport authority’s long-term goal of expanding service to East Asia and Southeast Asia, Gleason said.

He said the airport is slated to add a flight to Tokyo in December, marking the start of Asia-Pacific air service at Lindbergh Field.

“We know there is consumer demand for flights to different parts of Asia,” Gleason said. “Making connections with people who might not travel to the U.S. but would travel for a conference there (in Singapore) is important.”

The Watchdog has requested copies of any notes, presentations, emails or other documents that might show Bowens’ work product during the Singapore trip, and is awaiting response.

Bowens spent up to $803 on her lodging and meals in a single day during the trip — nearly double the federal government’s $454 maximum per-diem rate for travel to Singapore, according to public records. The maximum per-diem rate allowed up to $309 for lodging and $145 for food.

As for the $177 Bowens spent on dinner at the conference, Gleason said it was reasonable. He said Bowens stayed at the conference hotel at the group rate, and she dined at the Marina Bay Sands restaurants because the resort was not close to other dining options.

Overall, policy changes to limit travel spending have been successful, Gleason said.

“I think the changes resulted in meeting the goals we had for them,” Gleason said. “I think we’re more effective than we’ve ever been in our history in terms of marketing, and we’ve been able to do it at less cost.”

In changing spending policies, the board wanted to “provide accountability and oversight for how things are being done in a way that was transparent to the public and, most importantly, continue to allow the staff the flexibility it needs to market the airport and to attract and maintain service,” Gleason said.

Authority officials said board members and employees have adhered to rules that ban reimbursements for alcohol — unless the purchase of alcohol has been preapproved — and reimbursements for domestic flights in excess of “prevailing applicable coach rate.”

Employees are allowed to fly business class on international flights that last more than six hours, according to the authority’s policies.

Airport authority documents show that employees have flown business- or first-class for domestic flights or domestic legs of international flights, but officials said the authority paid coach rates. Officials said employees sometimes used frequent flier miles or personal money to upgrade seats, and in other cases the airline gave them the better seats in consideration of their frequent flier status.

The balance of flexibility and limits in the airport authority’s travel policies have allowed the airport to continue developing business effectively, Gleason said.

“At the same time we’ve been able to produce really positive results from returns on those trips, we’ve been able to effect really positive results in terms of meeting the public trust,” Gleason said.

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