Impact of Delays

May 21, 2008
Small commercial airports hardest hit as airports await Congressional action.

It’s been quite the battle — airlines and general aviation facing off over funding, with Congress long at a standstill. Meanwhile, airports have found themselves caught in the middle of the stalemate, making do for months on end with continuing resolutions and short-term appropriations bills. More than just a minor hassle, however, the price of the resulting delays add up quickly, leaving airports — and taxpayers — to foot the bill.

As of press time, a major hurdle in the Senate was finally cleared, with the Finance Committee again debating a more permanent reauthorization bill. An FAA spokesperson says it’s difficult to tell what effect a possible reauthorization bill would have on this year’s budget, but that the agency will be ready to roll whenever it does come through. [In April, FAA issued guidance on Airport Improvement Program (AIP) grant administration, good through June 30.]

Karla Price, project manager at RW Armstrong, an Indianapolis-based consulting firm, says larger commercial airports and small general aviation airports are mostly unaffected by the lack of funding.

“It was probably more the in-between airports that were impacted the worst,” she says.

Pensacola Regional Airport is one of those airports in between. Airport Director Frank Miller says that with funds released, the airport was able to move forward with a portion of an $8 million apron expansion, part of a $75 million airport capital development program.

“It’s basically caused us to take a step back and identify which part of the ramp had a priority over the other part,” Miller says. “Essentially that decision was, if we don’t do this portion, what impact does it have on our overall construction?”

Miller says he’s hoping money comes through in time to fund the second portion of the project, before the contractor has to leave the site. “Otherwise, he leaves the project and then if he has to come back he has to remobilize. So there are some additional costs that we would look at, if that contractor finished this first phase and left the airport and then had to come back.”

The Price of delays
Stephen Luebbert, airport director at Texarkana Regional-Webb Field Airport, says he also has had to split a current project in half, delaying completion by a year.

“In our case, we were building an emergency operations center, about a $5 million project,” says Luebbert.

“We were forced to take the project apart, and we had to do that in very short order — about 20 days to tear down a $5 million design and break it into two phases.”

Luebbert says it’s adding 12 percent to the overall cost of the project. “Anytime you take a project apart on short notice you make mistakes, you add cost, you expose yourself to more inflation down the road, and it’s just really a poor way to manage a public function.”

Luebbert says it’s smaller commercial airports like Texarkana that are being hit hardest. “We just don’t generate enough revenue to cover the capital cost,” he comments. “And the capital costs are escalating rapidly. There was a time when you paved with asphalt because concrete was too expensive. The price of oil has driven the cost of asphalt up to where it’s equal to concrete. Now we’re paving with concrete because it’s more durable and it’s not any more expensive than asphalt. But the cost of construction has gone up about 30 percent in the last four years. If you want to spend $10 million on a $7 million project, just wait another year.”

He also sees the delayed project as a possible infringement of safety. Included in the construction is a new ARFF station.

“Right now, our firefighters are at a non-optimum location on the airfield, living in an industrial hangar with a maintenance function. Their access to the airfield is blocked by taxiing aircraft and that sort of thing, so this delay in repositioning them in getting this facility constructed in a cost-effective fashion, it wastes money and it potentially costs lives.”

Luebbert says he appreciates the active role his state representatives and senators have taken, but still sees the reauthorization problem resting squarely on Congress’ shoulders.
“This inability of our federal government to support this modernization, at a time when the public is clamoring for it and airlines are going bankrupt everyday, fuel prices are crippling the industry — there’s something the federal government can do, and they’re actually making it worse.”

Luebbert suspects the economy may be in a recession, but that the air transportation industry is actually sliding into a depression. In the meantime, he’s staying conservative in planning.

“It’s a balancing act and it’s part of what is involved in public service when you’re in one of these lean times and transition modes,” he says.

“I’ve got to be careful what I do here with capital development, that I don’t encumber the cities with risk that we would have to cover if the federal government defaults.”

As a result, Luebbert says, he’s had to hold off on designing a new passenger terminal at Texarkana, which was to be in part AIP funded. He says state matching funds are already in place. “It’s kind of frustrating.”

He estimates the terminal will miss its scheduled opening in 2012. In the meantime, maintenance costs stay high. “I have to keep the existing passenger terminal alive, which costs extra money,” Luebbert notes. “It dates to 1959 and it really needs to be in the national historical register, not used as a passenger terminal.”

Kevin Meikle, architect and airports planning manager for the city of Fresno (CA) Department of Airports, says maintenance costs for delayed replacement pavement is adding up for Fresno Yosemite International Airport as well.

He says that according to FAA pavement management program gradings, wear and tear on two parallel taxis at the airport will need to be replaced within two years.

“So now we don’t have the money to design the work, which means that maybe next year we’ll get it,” Meikle says. “So the construction’s put off an extra year.”

One of the reasons the pavement needs to be replaced, Meikle notes, is the cost for maintaining old pavement becomes prohibitive after so much time has passed — a cost covered by the airport, not FAA.

“We spend more money maintaining it for that extra year or two,” Meikle says. “Eventually it will get replaced, but it’s more money that we spend to maintain it to keep it running in a safe operating condition before it finally does get replaced. It degrades the optimum efficiency.

“It’s a double whammy for medium or smaller airports like us that there is no revenue source other than the AIP grants and the matching funds that we’ve got.”

Meikle says his airport actually isn’t in a bad position as far as construction is concerned.

“We’re fortunate in that the money we will be getting will enable us to execute all of the construction projects we currently have on the board.

“We were able to really accommodate everything the FAA will do because we’ll be busy; we’ll be building things; we’ll do what we plan to do; we just won’t be able to do a lot of design work for the next group of projects.”

Projects underway at Fresno include reconstruction of some connecting taxiways and other airfield work. He notes that taxiwork completed last year came in under budget, allowing the airport to roll over some of that grant to help this year.

Meikle says the limited funding this year is water under the bridge.

“In our eyes, it’s money we’ll never get,” he comments. “It’s just everything is delayed a year or so, depending on the projects. We’ll never see it again.

“If everything goes back to normal next year…we’re not going to get extra discretionary because we got zero this year. That’s not going to happen.”

He also says that for one year, the funding isn’t too much of a problem. “If this was to happen two or three years in a row it would be a huge problem,” Meikle says.

Impacts elsewhere
On the other hand, some airports have been luckier. Chris Rodgers, executive director of Erie Municipal Airport Authority, says his airport has all the money needed to complete projects as planned.

“We’re fortunate to not have any impact from our reduction in partial AIP reauthorization,” he says. A runway extension project at Erie is going forward.

“Thankfully, the shortage of dollars on the entitlement side was made up on the discretionary side.”

And there are some airports that are just holding off entirely. The Findlay (OH) Airport has delayed a taxiway relocation, hoping to see funding come through for the project next year.

Quad City Airport in Moline, Ill. also has projects on hold, including $3 million replacement for concrete panels on the primary air carrier runway, and $2 million for dirt work of a new taxiway and temporary runway.

In any case, Airport Consultants Council vice president T.J. Schulz says this year’s funding runs contrary to how FAA has set up the funding system.

Mike Devoy, ACC Board of Governors Chair and vice president of RW Armstrong, agrees. “You can’t plan. It’s so contradictory to what the FAA has set up to where you have to have a five-year [capital improvement programs]; you have to show what your projects are going to be; you have to cost them out; you have to get them prioritized; you’ve got to get them all lined up and now you don’t know what the funding is. So you’ve got this nice little plan that kind of gets thrown into turmoil.”

Schulz says the best strategy for airports is to be proactive, and be prepared. “Airports operating in this era of short term delays and stop and start of funding, they just need to have their ducks in order and make sure their grant approval papers are ready to be approved immediately by FAA.”

Schulz also notes that while changes in funding have sent airports scrambling, contractors may be moving on.

“[Contractors] start dedicating their resources and personnel to [other] projects, and when airports have their bids ready, lo and behold there aren’t many contractors out there responding to them.”

Ben DeLeon, director of airport planning and programming at the airports office of FAA, says funding that is available is getting through the system quickly. The only issue seems to be the bid process.

Devoy agrees. “The problem with doing these extensions is we went from not knowing if these projects were going to happen to having to get bids on hand and having to get them under contract in July. So it caused a lot of stress in the system.”

DeLeon at FAA attributes much of this year’s success to the agency’s partners in the industry. “They’ve all been down this road before.”