Item Number: 13
City Council / Board of Directors
Written Communications
Meeting of: June 3, 2025
Submitted By:
James Murawski, Airport Director
Subject:
Approve payment of US Customs and Border Protection invoices #530017367 and #580076578
Recommendation:
That the Southern California Logistics Airport Authority Board of Directors approve payment of US Customs and Border Protection invoice #530017367 in the amount of $44,260.48, and invoice #580076578 in the amount of $5,241.25.
Fiscal Impact:
Approval of these invoices for payment will result in the expenditure of budgeted airport operations funds from Airport account 4501013A-52300 in the amount not to exceed $49,501.73. Budgeted US Customs Contract Services funds are sufficient to accommodate the aggregate expenditure.
Current Budget
Balance
4501013A-52300 US Customs Contract Services $146,351.00 Strategic Plan Goal:
Goal A. Financial Sustainability: Payment of these invoices provides for the ongoing services of US Customs and Border Protection (“US Customs”) at the Southern California Logistics Airport (“SCLA”), allowing tenants to reach international markets.
Background:
Since approximately the year 2000, the Southern California Logistics Airport Authority (“SCLAA”) has utilized US Customs to provide customs clearance services at the SCLA.
The presence of US Customs at the SCLA enables our facility to function as a Port of 4 1
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Entry with Foreign Trade Zone status, which allows for direct international flights and international commerce to take place at the SCLA. Port of Entry status reduces costs for the flying public and those who visit the SCLA for maintenance services by allowing international flights to land directly at the SCLA without the need to stop at another Airport to process pilots, cabin crew, passengers, or cargo for entry into the United States. In addition, international cargo departing from the SCLA can be processed by US Customs, thus making their services essential to SCLA tenants. Furthermore, the ability to accommodate international flights increases traffic counts and fuel flowage, which directly benefits the SCLA.
The designation as a Foreign Trade Zone allows for reduced customs duties on domestic businesses conducting both domestic and foreign transactions through the SCLA.
Importers and exporters can defer or eliminate US Customs duties altogether in some situations which adds to the global appeal of the SCLA.
By facilitating onsite US Customs services, the SCLA is positioned to support existing tenants and to attract future tenants from the international aviation and logistics markets.
For labor and overhead fees, US Customs issues invoices based on estimated costs for the upcoming federal fiscal quarter. After the quarter ends, the actual costs are reconciled against costs that were actually incurred, resulting in a credit to a future invoice or a supplemental invoice to pay.
Preliminary US Customs Quarter 2 invoice #530015981, was issued to the SCLA on November 20, 2024, and paid in full on January 15, 2025. However, this invoice was an estimate of expected future costs, whereas the actual costs have since been determined by US Customs to be higher than the amount initially paid. As a result, the supplemental invoice #530017367 reflects the actual labor and overhead costs associated with the second quarter.
In addition to labor and overhead costs, the SCLA is responsible for the costs related to communication and technology services that US Customs utilizes to facilitate their work at the Airport.
Discussion:
Attached is invoice #530017367, requesting payment for the second federal quarter for standard services from January 1, 2025, through April 05, 2025, in the amount of $44,260.48 due to adjusted payroll and overhead expenses. This invoice is based on reconciled expenses that were incurred by US Customs during the specified period.
Attached is invoice #580076578 for $5,241.25, requesting payment for communication and technology services for the month of April 2025.
To date, the SCLAA has paid $113,649.00 for US Customs services in fiscal year 2024- 2025. The aggregate total of invoices #530017367 and #580076578 is $49,501.73, which if paid as requested will cause the dollar amount spent with US Customs in the current 4 1
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fiscal year to exceed the Executive Director’s authority of $125,000, as stated in City Municipal Code 2.28.060.
In future years Staff will include a Purchase Order with US Customs for approval with the annual agreements that are presented to the SCLAA Board. This future action will prevent similar items from US Customs being brought to the SCLAA Board.
Therefore, staff requests and recommends that the Southern California Logistics Airport Authority Board of Directors approve the payment of US Customs invoices #530017367 and #580076578 in the aggregate amount not to exceed $49,501.73.
Staff remains available for any questions or comments you may have.
JM/jg
Attachments: A. Invoice #530017367
B. Invoice #580076578
C. Municipal Code 2.28.060