# Presentation: 001894

## Airport Improvement Program (AIP) 102

- Warren Ferrell
- Financial Programs Manager
- FAA, Airports Division

## Presentation Overview

- FAA Airports Division – who we are and what we do
- Brief history of important events and legislation
- Explaining the ACIP process
- Financial Considerations

## Who We Are & What We Do

## We Are The Hub Of The System

**Homeland Security**

**AF/ANI**

**FS/FPO/AVN**

**AT**

## Airports Division Services 

- Airport Planning
- Airport Development
- Environmental Compatibility
- Airport Safety & Certification
- Airport Standards

## In A Nutshell

- We slap down pavement
- We ensure the pavement is safe
- We ensure the surrounding area is safe
- We ensure that the operations around the pavement are safe

## How Do We Do It?

- Via conferences/seminars/briefings
- Via joint planning conference
- Via compliance inspections
- Via certification inspections
- Via site visits
- Via financial assistance

## How Are We Organized?

*How Are We Organized?*

## Who Is Your Main Contact?

- Each of our Airport District Offices (ADOs) have program management responsibilities:
**Denver ADO:**
**Colorado**
**Utah**
**Wyoming**
**Seattle ADO:**
**Oregon  **
**Washington**
**Idaho**
**Helena ADO:**
**Montana**

## History of Important Events

## Key Aeronautic Events

- December 17, 1903 – Kitty Hawk
- 1914 – WWI civil aviation development ceases
- May 15, 1918 establishment of a regular mail route between NYC and DC
- 1920 “the new railroad” 145 municipally owned airports nationwide
**May 20, 1926**** ****– Air Commerce Act**** to promote development and stabilize commercial aviation**
**June 23, 1938**** – Civil Aeronautics Act established in one administrative body**
**Civil Aeronautics Authority – carrier regulation**
**Air Safety Board – accident investigation**
**Administrator – construction & operation of the airway system**

## Key Events continued...

- May 13, 1946 – Federal Airport Act provided for a system of airports under the CAA and provided 50% for airport construction (FAAP – Federal Aid to Airports Program, Part 151)
- August 14, 1957 – Airways Modernization Act established in response to mid-air collision over the Grand Canyon.  It provided for the national system of navigation and traffic control
- August 23, 1958 – Federal Aviation Act repealed previous aviation legislation, and established the Federal Aviation Agency
- October 15, 1966 – DOT was established and the Federal Aviation Agency became the Federal Aviation Administration

## Key Events continued...

- May 21, 1970 – Airport and Airway Development Act established a Trust Fund to pay for development  (ADAP – Airport Development Aid Program, Part 152)
- October 24, 1978 - Airline Deregulation Act eliminated government regulation of air markets
- September 3, 1982 - Airport and Airway Improvement Act established the AIP (Airport Improvement Program)
- April 5, 2000 - Aviation Investment and Reform Act for the 21st Century (Air 21) established unprecedented levels of funding
- November 19, 2001 - Aviation Transportation Security Act established TSA

## Explaining The ACIP Process

## The Role Of Planning

- It is not a necessary evil
- It is the beginning point of all _good_ projects
- It is the basis of the ACIP

*Planning is a critical element in airport development*

## 4 FAA Plans That Affect You

*Terminal Area Forecast (TAF)*
*National Plan of Integrated Airport Systems (NPIAS)*
*Regional Airport Plan (RAP)*
*Airport Capital Improvement Plan (ACIP)*

## The ACIP

**What it is**

**What it isn’t**

- 3 year plan of what we think is reasonable to accomplish
- An agreement between the sponsor and FAA on what should be done, and when it is planned to be accomplished.
- As a planning document, it is deliberative (not public)
- A collaborative effort to accommodate regional needs within a national context

- A simple compilation of sponsors CIP’s
- It is not a commitment to fund
- Something I concoct in my office

## FAA ACIP Process

- Look at 5 years to make 3 – goal is to limit wholesale plan changes
- Slack in years 2 & 3 to allow for unfunded ACIP projects to slide to top of list
- If AIP exceeds planning ceiling, top of next years ACIP is considered

- Planning Ceiling

- Year

- Million

- Lower (50%)

- Higher (95%)

- Degree of Confidence

## Key Time Frames

- 9/30  Project Schedules for upcoming fiscal year candidates are due
- 12/1  Deadline for 5 year ACIP-Disc$
- Dec.     ADO prioritizes Disc$
- Jan.  3 year Disc$ ACIP is developed
- 5/1    Grant Applications Due
- 6/1    ACIP is locked for next fiscal year

## ACIP Critical Elements

- _To make the system work_:
- People: ability to transmit critical need in a timely manner
- Funds:  availability and prioritizing competing needs
- Selling/communicating the plan

## Demystifying The ACIP Process

**ADO’s are given target planning ceiling**
**ADO’s meet to prioritize projects and update database**
**ACIP Development Team meets and synthesizes data (and checks for compliance with the RAP)**
**ACIP is submitted to Management for evaluation**
**Regionally approved ACIP is forwarded to Headquarters**
**National priority threshold is established and funds for regions are allocated**

## Financial Considerations

## Financial Program Encompasses

- Fiscal Component
- Eligibility Component
- Political Component*

## Financial Component

- Revenue Bonds
- Concessions (parking lots, auto rental, stores)
- Landing Fees
- Local funds (e.g state grant/general fund)
- Federal Grant
- Passenger Facility Charges

- _Commonly Used:_

- General Obligation Bonds
- Special Facility Bonds (non-airport beneficiaries)
- Bank Loan
- 3rd Party Development

- _Not Commonly Used:_

- Airport Funding Mechanisms

## Airport Financial Distribution

- Airports require heavy infrastructure investment
- The smaller the airport the greater the need for federal financial assistance

**Salaries & benefits**
**(25%)**

**Supplies (25%)**

**Power**

**Other**

**Labor**

**Capital**

## AIP Component Overview

## AIP Funding History ($M)

## AIP Grant Steps

- Input proposed project into the National Plan of Integrated Airport Systems (NPIAS)
- Identify appropriate time for funding - Airport Capital Improvement Plan (ACIP)
- Await Annual AIP Appropriation from Congress
- Project application approval
- Civil Rights (DBE & Title VI pre/post grant requirements)
- Ensure airspace and environmental reviews are approved
- BCA, if necessary
- Award contract based on bids
- Issue Grant
- Make timely payments
- Close grants in a timely manner

## How To Achieve Success

- Work toward target dates
- Construction should be done in the summer (early bids = better prices)
- Ensure formulation work is started early
- Benefit Cost Analysis
- Design
- Environmental
- Delayed Authorization is a great time to work with us on these issues

## Eligibility Component

- Statute
- Policy
- Legal Opinion
- Litigation

- _Why do we have these rules?_

- _How are these rules developed?_

- To establish a framework of unity from which we can work
- To provide background and documentation about program decisions

## 6 Simple Rules of Eligibility

- Airport must be in the NPIAS
- Project must be in the NPIAS-ACIP
- Consult Order 5100.38B (AIP Handbook)
- If it’s not in the Handbook, it does not automatically make it ineligible
- Eligibility does not equal fundability
- Don’t ask me, unless you really want the answer

## Eligibility Generalities

- Project must relate to movement of passengers and baggage
- Project must be on the airport
- Project can not provide preferential benefit
- If it’s not related to creating, upgrading, or rehabilitating pavement or the operations around it, or on it, you might want to ask whether you can do it with federal funds

## Political Component

- It is a reality:  Congressional inquiries; place names (earmarks); response to events
- Ignoring it will not make it go away
- Professionalism should keep it to a minimum (that includes not only our expertise, but our ability to show good reason for doing, or not doing something)
- Impacts our planning efforts
- Someone will always be unhappy with whatever decision is made

## One Last Point: OST Clearance

- Office of the Secretary of Transportation, Office of Congressional Affairs
- Notify Congress of intent to grant funds
- Occasionally, projects are held to coincide with a dignitary visit
- Sponsor may not be told of project approval prior to OST clearance
- When asked, the appropriate FAA response is that the project is in process

## The End