FAA ASKS $31 MILLION QUESTION.

Byline: Rick Orlov Daily News Staff Writer

The Federal Aviation Administration demanded Thursday that Los Angeles officials justify the transfer of $31 million from the Department of Airports to balance the city's $4 billion budget this year.

David L. Bennett, director of the FAA's Office of Airport Safety and Standards, said he wants officials to provide him with detailed information on the reason for the transfer, whether it involved any interest payments as well as copies of all reports and audits supporting the transfer.

Bennett's letter said the Airport and Airway Improvement Act requires that all money generated at an airport be kept for capital or operating costs at the facility.

``The legislative history of the AAIA emphasized congressional intent not to burden airport users with hidden taxation for unrelated municipal services,'' Bennett wrote.

City officials said they would respond to Bennett's letter within the week and believe that the transfer of money was justified.

The Bennett letter is the latest volley in an ongoing battle Mayor Richard Riordan's administration has fought during his three years in office to get more money from Los Angeles International Airport.

Riordan first was successful in raising landing fees for airlines at the airport.

Earlier this year, City Controller Rick Tuttle issued an audit saying the city was owed between $300 million and $350 million for past contributions made to the development of the airport between 1950 and 1972.

Last month, the department transferred the $31 million to repay the city.

Assistant City Controller Tim Lynch said the office stood by its audit and believed that the city had acted properly.

``None of this money involved the interest payments that we believe are appropriate,'' Lynch said. ``All the money transferred was part of the principal.''