NEWPORT NEWS, Va. (WAVY) — State funding will start flowing again in August at the Newport News/Williamsburg Airport under new guidelines from the Department of Transportation.
An audit completed last month said the Peninsula Airport Commission must pay the Commonwealth back $3.5 million they used in 2015 to guarantee a loan for the now-closed airline PeoplExpress.
On Wednesday, Virginia Secretary of Transportation Aubrey Layne told the commission they didn’t have to pay the money back. Instead, he is cutting their roughly $1.8 million entitlement funding in half. The other half will be annually deposited into an escrow account. As the airport spends money from other sources — not state funding — on improvement projects, the state will use the escrow account to match the airport’s spending dollar for dollar. That will continue until the airport has used $3.5 million of their own money to improve the airport.
“It’s not a penalty … I think the public should not be penalized because of the bad fiduciary decisions made by this board,” Layne said.
In January, Layne decided to stop about $2 million in funding the airport received from the state.
Attorney General Mark Herring called the airport’s spending unconstitutional following a five-month audit by VDOT released last month.
“The state doesn’t want the money back,” Layne said Wednesday, as he laid out a path forward for the airport. “What it wants is it to use it the way it should have been used. That was the intent of the law.”
Before any money is released, Layne says all board members must go through conflict of interest and freedom of information training. He also suggested the board consider term limits for members, have fewer closed sessions and start live streaming their meetings to be more transparent.
“The only thing we can do now is work to clean up our reputation as far as public trust,” said Sharon Scott, a member of the Peninsula Airport Commission.
Scott says she expected Layne to be more heavy-handed.
“For him to allow us to still recoup the money, keep the money — use it to build our airport — I mean that’s excellent.”
In the midst of the audit, Elite Airways backed out of a deal to come to PHF. Scott is hoping the new commission can turn things around, and so is Layne.
“I have confidence they’ll have all the tools that they need to be successful. Only time will tell as they work together, but I heard a lot of good things today,” Layne said.
Virginia State Police is still investigating the airport’s past business practices.
Stay with WAVY.com for continuing coverage of this developing story.