Disseminating $10 billion
Senior FAA airport officials talk about the task before them
By John F. Infanger, Editorial Director
BALTIMORE — When President Clinton signed the Wendell H. Ford Aviation Investment & Reform Act for the 21st Century — or, AIR-21 — into law this spring, he capped a years-long industry initiative. Yet, dissemination of nearly $10 billion (through FY03) for the Airport Improvement Program now falls on an increasingly strapped Federal Aviation Administration. Recently, Woodie Woodward, FAA's Acting Associate Administrator for Airports, and Catherine Lang, FAA's director of Airport Planning & Programming, met with AIRPORT BUSINESS to discuss FAA's role in the changing airport funding environment. Here's an edited transcript of that discussion.
AIRPORT BUSINESS: It would seem that your immediate challenge is taking care of Fiscal Year 2000.
Lang: Absolutely. But at least most of the airport community knows that in the March preceding a new fiscal year is when we begin development of the capital investment plan, so we actually began work in March. When the bill was passed, we were pretty far along in that process but we had to immediately do a couple of things. We had initiated a program based on what was then current law, and AIR-21 at least for this year did make some formula changes which affected how the money could be distributed. So we had to go in and immediately re-calculate all of the money based on those formula changes and then go back and recalibrate the capital program. That's all done.
In a normal fiscal year it takes us about two to three months to begin actually putting money out the door. The Administrator asked us to get it out three to four weeks after the bill was signed and that was achieved, so money is now being programmed at airports around the country.
AB: The U.S. House is currently looking at approving an FAA budget for FY01 that shows a one-third increase. Any comment?
Lang: AIR-21 was the authorization act; it's still subject to annual appropriation. And the appropriators have looked at AIR-21 and have come back with their marks. So, the marks are thus far tracking, at least for AIP purposes, with what was in AIR-21.
AB: One thing we've been hearing in recent years, particularly from the Administrator, is FAA doesn't have enough money to do what it's been charged to do. It would seem like Congress is listening.
Woodward: I think the airports program now will do pretty well. Other parts of the agency still have some issues. The agency as a whole still has some funding problems.
Lang: We're very happy that our airport's organization budget, which is paid for out of AIP, was increased, because we took a pretty drastic cut this year.
AB: How many people at FAA actually work in positions related to the dissemination of AIP funds?
Woodward: Nationwide, we have 485 authorized positions, though we aren't quite up to that. Those people work not only on the dissemination of grant funds but in environmental areas, airport certification and inspection, a variety of activities.
Lang: Half of our workforce is the safety inspection workforce, dealing with airport certification requirements. The other half is involved in programming and planning activities, including AIP, PFCs, environmental. Frankly, all of those functions, I think, inform how we make our investment decisions.
The agency actually has very highly developed investment tools that we use. We have the national priority system, and its actually built on all kinds of state and local planning procedures against which we overlay our investment tools. The priority system works, I'd say, for the vast majority of our selections. We're audited on it.
In some cases, the more money you want, the higher the bar. So, you might satisfy eligibility in priority system requirements, but depending on how much money you want a benefit/cost analysis can be required, which has to be reviewed and approved by agency economists. And, if you want a multiyear commitment, a letter of intent (LOI) is required at large and medium hub airports. That goes through a vigorous financial review, a benefit/cost analysis, and you have to go through a review by air traffic that says there's a substantial benefit to system capacity.
AB: What's the status of the LOI program? It seems like it came on like gangbusters, and then drained the system in terms of future money to the point that it was somewhat shelved. Now, it appears to be undergoing a rebirth.
Lang: I think that analysis is right on the money. What happened is the program ramped up pretty dramatically in the early ’90s. The early LOIs are nothing like the new LOIs. We've gotten the pencil much sharper. I've been with the program the past three years and when I joined there was a moratorium because the AIP program had gone down, and we pretty much agreed along with Congress that never should more than 50 percent of the available discretionary funds be tied up in LOIs.
We're much more cautious these days, ensuring that there's never an overexpenditure of the program, that there's always an ability to do LOIs in the future. We really want an LOI to be a good financing device. It's a much more disciplined process today.
AB: What are some of the major challenges that you see initially coming out of AIR-21?
Lang: The good news is that we have a long-term bill; we spent huge amounts of time for three years working on that authorization, and now the real work for us frankly begins.
It's interesting to me to look at the most asked about provisions in the bill. There's the new GA entitlement, which for us will be the highest workload of any single provision. It will be very labor intensive.
And, I was surprised to see that the competition plans requirement (for large and medium hub airports with one or more carriers representing more than 50 percent of traffic) resulted in quite a few people asking immediately for guidance. That guidance went out about two weeks ago.
AB: Are there things in the bill that you are still trying to determine what they really mean? Woodward: Yes. I'm not sure we want Congress legislating everything. By allowing the agency, in consultation with a lot of folks, to talk about what does something mean and to talk to members of the Hill staff about what was their intent, is healthy. For example, with PFCs, I would prefer that we be given the latitude to put into place implementation plans that don't put an undue burden on airports or users, but at the same time protect the taxpayers' investment.
Lang: The best advice I can give any airport is to watch for the numerous program guidance letters we will be issuing over the next few months that go to the ADOs (Airport District Offices) and our field offices. They're available on our website. If it's in the bill, we have to write up guidance.
AB: Can you elaborate a bit on the challenges related to general aviation entitlements?
Lang: With the current program, we have essentially an entitlement relationship with commercial service airports that have over 10,000 enplanements and 50 states that get state apportionment funds. It's now going to change so that of all the remaining airports in the NPIAS (National Plan for an Integrated Airport System), and there's 3,500 airports in the NPIAS, each of them could now be eligible for an annual entitlement grant of up to $150,000. So, we have to do right now 2,600-2,700 more calculations annually.
It's going to change how we do AIP planning. It's really going to force everybody to get much more down in the weeds with where they are in their capital requirements, master planning, environmental work. About 800 of them today won't qualify for anything next year because of the way the statute was structured.
Tips for Successful Grantsmanship
By Robert C. White, Parsons Aviation
The passage of the AIR-21 legislation not only increases the funding for AIP Grants at U.S. airports, it will more likely double the FAA Grants-in-Aid to be processed. While the FAA is currently updating the guidelines under the new program, the following list of suggestions should help the process in obtaining and administrating FAA Airport Improvement Program Grants.
• Each year prepare, update, and submit a comprehensive Five-Year Capital Improvements Program (CIP) early in the FAA's fiscal year (Oct.-Dec.).
• The CIP is used by the FAA to select which projects are to be funded; therefore it is best to provide a detailed explanation of each project. Include cost estimates, identity of funding sources, a cost/benefit analysis, and graphics to show the "what, why, where, and when" you plan to do the project.
• Each FAA Airport District Office (ADO) will assign a project manager or program specialist to follow each project. Each airport sponsor should identify those individuals within the ADO who are working on their projects, and periodically discuss their progress.
• It is best to meet with the FAA/ADO staff at least two to four times each year. Prior to a scheduled meeting, the airport sponsor and the FAA/ADO should agree upon a detailed agenda to be discussed (so all parties can have the appropriate participants prepared and in attendance).
• Some projects at medium and large hub airports may require multi-year funding through a Letter of Intent (LOI). These applications should be handled with additional preparation and submitted prior to the March deadline. Airport sponsors should be prepared to show how they have maximized their efforts to obtain additional funding sources when applying for an LOI.
• Most FAA AIP Grants that utilize "discretionary" funds are for high priority projects — usually based on safety or capacity issues. Airport sponsors may enhance their ability to obtain discretionary funding by pledging entitlement funds towards the project.
• Airport sponsors sometimes have a problem meeting the September 30th deadline in accepting and executing grant awards. One solution may be to have the public body (board or commission), at the time of formal application, also approve the acceptance of the grant (if awarded) and the authorization for the appropriate execution of the grant (in advance).
• Year-end budget shuffling sometimes creates opportunities for unexpected grant awards by the FAA. Each airport sponsor should have some eligible grant pre-applications prepared (and, in all respects, "ready to go") for processing. Scheduling a special public body meeting (in advance of this possibility) with such an appropriate agenda (FAA grant application, award acceptance, and execution authorization) the last week in September may be advisable.
There are many more useful techniques in successful grantsmanship. Contact your FAA Airport District Office or airport consultant for additional guidelines.
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Robert C. White is Director of Aviation Services for Parsons Aviation in Miami, Florida. He has over 27 years of airport management and development experience, having served in top management positions for airports in Louisiana, Florida, Virginia, and Nevada. Bob may be reached at (305) 269-3104 or via e-mail at [email protected].
Select AIR-21 Highlights
Some select provisions of the AIR-21 aviation funding legislation signed into law by President Clinton in April:
• $3.2 billion for FY01; $3.3 billion for FY02; and, $3.3 billion for FY03. • Annual appropriations from Aviation Trust Fund will equal annual receipts to the fund, plus interest.
• Passenger Facility Fees cap increased from $3 to $4.50.
• Expanded funding opportunities for small communities willing to upgrade their airports to accommodate turbine-powered aircraft.
• Allows general aviation airports to maintain runways with federal funds.
• Directs for creation of a pilot program for cost-sharing for contract ATC towers that do not meet cost/benefit criteria.
• Expands to ten the number of states that can be designated for the State Block Grant Program.
• Creates a ten-member panel to oversee FAA, including a COO of ATC. (Source: NATA)
CAP Woodie Woodward, left, and Kate Lang are at the center of the distribution of AIP funding through FAA.