# Presentation: 197242

## AIRPORT IMPROVEMENT PROGRAM UPDATE

## Topics

**FY 2007 budget**
**Non-primary entitlements**
**FAA funding**
**Major oversight initiatives**
**Grant administration performance metrics & efficiency measures**

## FY 2007 Budget

**Proposed 2.75 Billion**
**Tough budget climate**
**We’ll still have adequate funds to meet high priority safety, security, capacity needs.**
**We’ll also have adequate funds for environmental mitigation and noise compatible.**

## FY 2007 Budget Impacts

**At $2.75 billion, special entitlement formulas above $3.2 billion do not apply.**
- At larger primary airports, entitlements would be one-half of FY 2006 levels.
- At smallest primary airports, entitlements would decline from $1 million to $650,000.
- $150,000 non-primary entitlements eliminated.
- Unassigned state apportionment increases by XX percent nationally.
- Southwest Region – will increase by xx.

## FY 2007 Budget Impacts (con’t) 

**State apportionments will allow FAA and states to put dedicated non-primary dollars to the airports and projects where they will do the most good in the state where they’re allocated.  **

## Non-primary Entitlements		

**Non-primary entitlements and carryover**** **
**Use of NPEs for revenue producing facilities**

## Non-Primary Entitlements & Carryover

**In FY 2005, another record year for carryovers -- $432 million.**
**NPE carryover amounted to over 50% of that amount or $230 million.**
**This represented 60 percent of the value of new NPEs ($385 million) allocated in FY 2006.**

## Non-Primary Entitlements & Carryover

**Carried over NPEs don’t necessarily stay in the state.**
**Most state apportionment isn’t carried over.**
**Since FY 2001, $900,000 allocated to non-primary airports through NPEs.**
**FAA asking whether the NPE is most effective means to provide guaranteed funding to nation’s small airports.**

## NPEs & Revenue Producing Facilities

**Vision 100 – made revenue producing aeronautical facilities eligible.**
**Airport must have plan to finance airside needs.**
**FAA supported this provision based on GA community representations that at many airports, airside needs were funded.**

## NPEs & Revenue Producing Facilities

**FAA policy – non-primary entitlements should be applied first to unmet airside needs.**
**If airports have unfunded airside needs, use non-primary entitlements before state apportionment and discretionary.**
**FAA reviews airport’s 3 year capital improvement plan.**
**Check to see if state apportionment or discretionary being applied to airside projects while NPEs going to revenue producing facilities.**

## FAA Financing

**Aviation trust fund finances all FAA capital programs and about 75% operations.**
**In 2005, FAA facing a funding crisis.**
- Trust fund  balances declining
- Domestic ad valorem ticket tax finances bulk of Trust Fund.  Revenue going down.
- Demands going up.  AIP F & E authorized levels going up.

## FAA Financing (con’t)

**Trust Fund taxes expire at end of FY 2007**
**AIP authorization expires at the end of FY 2007**
**FAA started comprehensive review of financing**

## FAA’s Review

**Began a dialogue with stakeholders at April 2005 Trust Fund Forum**
**Key elements for new system**
- General Fund is not the answer
- System should include incentives for FAA to control costs and for users to use system efficiently
- Equitable treatment of stakeholders
- Continued user consultation

## FAA Review (con’t)

**Conducted extensive analysis of costs, especially ATO costs**
**Established interdisciplinary teams to develop financing options for all lines of business**
- Including conceptual statutory changes for reauthorization
**Solicited written input from stakeholders in fall 2005**

## OIG Noise Land Monitoring Audit

**OIG faulted FAA for lack of oversight of compliance with Grant Assurance 31, disposal of noise land.**
**First guidance signed out March 27, 2006.**
**First step – develop comprehensive noise land inventories and noise land reuse plans.**
**Once we have sufficient inventories, additional guidance**

## OIG Noise Land Monitoring Audit

**11 airports audited individually must complete inventories by January 2007; reuse plans by September.**
**Remaining 78 airports to complete inventories and reuse plans by August 2009.**
**Southwest Region airports ahead of schedule on inventories!!!  **

## KPMG Financial Audit

**Three related notices of findings and recommendations on grant oversight and documentation. **
**Focus on period between grant issuance and closeout.**
**Standardized documentation in grant folders**

## KPMG Financial Audit

**Risk-based protocol for grant oversight.  Less than 5 percent sponsors will notice any difference.**
**Upgrade to FAA grants management system (SOAR) to track progress of projects.**
**Coordination of draft action plan with regions completed March 24.  **
**Final approval by associate administrator scheduled by June 1, 2006. **

## FAA Website:www.faa.gov