Order 2010-10-15

Served: October 26, 2010

 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 26

th day of October 2010

In the Matter of the

 SMALL COMMUNITY AIR SERVICE

 DEVELOPMENT PROGRAM

under 49 U.S.C. 41743 et seq.

DOCKET DOT-OST-2010-0124

ORDER AWARDING GRANTS

Summary

By this order, the Department selects 19 communities in 19 states to receive financial grants 

under the Small Community Air Service Development Program (Small Community Program) to 

implement the air service initiatives proposed in their grant applications. The communities and 

the amount of each award are listed in the Appendix to this Order. Award recipients must 

execute a grant agreement with the Department before they can begin to spend funds under the 

grants. Individual agreements must be executed by December 17, 2010, or the Department’s 

offer may be withdrawn.

Background

The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21), P.L. 

106-181, April 5, 2002, established a new pilot program, to be administered by the Department 

of Transportation, designed to help smaller communities enhance their air service and address 

issues related to high airfares.1 AIR-21 authorized the Small Community Program through FY 

2003. Vision 100-Century of Aviation Reauthorization Act (Vision 100), P.L. 108-176,

 

1 See Orders 2002-6-14 and 2003-9-14 for a complete description of the history of the program.
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December 12, 2003, amended the program, reauthorized it through FY 2008, and eliminated the 

“pilot” status of the program. The FY 2010 Federal Aviation Administration Extension Act 

(P.L. 111-69) extends the authorization of appropriations through FY 2010. The Department 

was appropriated $6 million to carry out the Small Community Program.2 However, the 

Department will make $7 million available for grant awards.3

When selecting applicants to participate in the Small Community Program, the Department is 

statutorily required to apply the following eligibility criteria:

1. As of calendar year 1997, the airport serving the community was not larger than a small 

hub airport, and had insufficient air carrier service or had unreasonably high air fares.

2. The airport presents characteristics, such as geographic diversity or unique circumstances 

that demonstrate the need for, and feasibility of, the Small Community Program.

3. Not more than 4 communities or consortia of communities, or a combination thereof, from 

the same State may be selected to participate in the program in any fiscal year.

4. No more than 40 communities or consortia of communities, or a combination thereof, may

be selected to participate in the program in each year for which the funds are appropriated.

5. An applicant may not receive an additional grant to support the same project.4

6. An applicant may not receive an additional grant, prior to the completion of its previous 

grant.5

In addition, the law directs the Department to give priority to those communities or consortia of

communities6 where: a) air fares are higher than the average air fares for all communities; b) a 

portion of the cost of the activity contemplated by the community is provided from local, nonairport revenue sources; c) a public-private partnership has been or will be established to 

facilitate air carrier service to the public; d) improved service will bring the material benefits of 

scheduled air transportation to a broad section of the traveling public, including businesses, 

educational institutions, and other enterprises whose access to the national air transportation 

system is limited; and e) the funds will be used in a timely manner.7

The Department is authorized to award grants to communities that seek to provide assistance to:

1. An air carrier to subsidize service to and from an underserved airport for a period not to 

exceed 3 years;

2. An underserved airport to obtain service to and from the underserved airport; and/or

3. An underserved airport to implement such other measures to improve air service both in 

terms of the cost of such service to consumers and the availability of such service, 

 

2 A portion of the funds available for the Small Community Program are used by the Department for grantsmanagement purposes. 

3 The Department will be adding additional funds that can be reallocated from prior year recoveries.

4 However, as stated in our Request for Proposals (Order 2010-7-16), previous grant recipients were free to submit 

grant proposals and seek funds for new projects. Refer to Order 2010-7-16 for a discussion on same projects.

5 49 U.S.C. 41743(c).

6 A consortium of communities is defined as a single entity. 49 U.S.C. 41743.

7 49 U.S.C. 41743(c)(5).
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including improving air service through marketing and promotion of air service and 

enhanced utilization of airport facilities.8

On July 30, 2010, the Department issued a request for proposals (RFP) from communities 

interested in receiving a grant this year, and requested that such proposals be filed no later than 

August 27 (Order 2010-7-16). Applicants were required to submit Standard Form 424, a 

standard federal government application form, in Grants.gov. Communities were requested to 

provide information that would help in consideration of their grant requests, including details 

about their existing air services, historical services, current service needs and deficiencies, a full 

description of the community’s proposal, plans for implementation, funding requirements, and 

plans for monitoring the success of the project, including modifying or discontinuing funding if 

the project is not meeting expectations.

Drawing on our experience from previous years, the RFP clarified various issues relating to the 

grant application process, including the sources of local funding, the consideration of in-kind 

contributions, the use of grant funds, and the eligibility to participate by past grant recipients and 

communities now receiving subsidized air service under the Essential Air Service (EAS) 

program. The order further emphasized that communities would be expected to meet the 

financial-contribution commitments that they include in their proposals.

2010 Grant Applications

In response to the RFP, we received 74 grant applications from communities in 35 states. 

Collectively, these communities sought nearly $31 million in federal assistance to support new 

and ongoing air service development projects. The large majority of applications were filed by

individual communities and a few were filed by consortia of communities. Additionally, 13

applications were from communities with small-hub airports and eight were from communities 

now receiving subsidized air service under the Department’s EAS program. Forty-five 

applications were submitted by communities that had filed applications in previous years. As 

required, all applicants provided information on historical and current air service and airfare 

issues facing their communities, the economic benefits of air service, proposed initiatives to 

remedy air service or airfare problems, and arguments in support of their proposals. Nearly all 

the communities pledged local contributions – funds collected from local, state, airport, or inkind sources – to complement their requests for federal assistance.

As in previous years, this year’s applications included proposals for feasibility studies, new or 

expanded service initiatives, service upgrades, and assorted combinations thereof. Our review of 

the applications confirmed that air service issues continue to be of great concern to many small 

communities. Nearly all of the applicants cited both service deficiencies and high airfares as 

problems affecting patronage of their air services. Many applicants noted that passengers often 

drive to other, more distant airports that have lower fares or offer a wider range of services to 

more destinations. Despite these “leakage” issues, the communities seeking funds believe that 

demand for improved service at their local airports can be stimulated with financial assistance.

 

8 49 U.S.C. 41743(d).
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The large majority of applicants specified the need to attract new and/or additional air services to 

their communities. Similar to previous years, a majority of applicants also proposed to 

implement their projects using revenue guarantees or subsidies, together with a variety of 

marketing and promotional initiatives. A critical component of most proposals was funding to 

support community-based marketing and promotional initiatives to stimulate demand and 

community awareness of local airport services. These efforts are directed at publicizing not only

the availability of air services, but also the convenience of using the local airport compared to 

more congested air service hubs or other, larger, nearby airports.

This year, several applications either did not meet the basic criteria for participation outlined 

above and were determined ineligible for selection, or the application itself was deemed 

incomplete. Most often, the applicant sought additional funding for the same, or essentially the 

same, project that was funded in a previous grant.

2010 Grant Awards

The Small Community Program is unique in that it encourages and affords communities the 

opportunity to develop their own solutions to their air service problems based on their particular 

needs and circumstances. By providing communities the opportunity to develop and implement 

air service projects tailored to their individual needs, the program aims to maximize the potential 

for success in the communities’ endeavors. Since the program’s inception, the Department has 

sought to maximize the number of participating communities, promote geographic diversity of 

the selections, and support a variety of solutions to the problems identified by applicants in order 

to provide a wide range of approaches for dealing with the challenges faced by similarly situated 

communities.

With these considerations in mind, we are selecting 19 grant proposals with the objective of 

entering into grant agreements with the communities/consortia identified in the Appendix to this 

order. Grant agreements must be executed with the Department before the recipients can begin 

to spend funds provided under this order. In addition, grant recipients are subject to all grant 

conditions and assurances required by federal law, regulations and executive orders.9 Funds for 

these awards will be obligated as of the date that each grant agreement is executed with the 

selected communities. Accordingly, the Department’s grant offers and agreements will be 

transmitted to the selected communities upon issuance of this order.

The proposals we selected incorporate the purpose of the statute, and provide an expanded 

opportunity to test a variety of approaches to improving small community air service in all 

regions of the country. For example:

 Seven of the awards are made to communities proposing revenue guarantees and/or

marketing support as means to attract new carriers, restore lost service or capacity, and/or 

provide air travelers with access to additional markets. These communities are Yuma, AZ;

 

9 See http://ostpxweb.dot.gov/aviation/X-50%20Role_files/scasdp/Assurances.pdf for applicable conditions and 

assurances.
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Idaho Falls, ID; Bangor, ME; Lansing, MI; Syracuse, NY; Eugene, OR; and Charlottesville, 

VA.

 Two of the awards are made to communities proposing revenue guarantees and marketing 

support to attract a second carrier – Dothan, AL, and Sioux City, IA.

 Two of the awards will assist Kinston, NC, and Provo, UT, in acquiring their first scheduled 

air service in many years.

 Two of the awards will assist Gainesville, FL, and Manhattan, KS, in providing assistance for 

marketing programs to promote existing, upgraded or recently acquired air services at their 

local airports.

 The award to Fort Wayne, IN, will help implement a shared use system for infrastructure 

flexibility that allows for airline co-location and cross utilization of gates.

 The award to Keene, NH, will enable the community to study the possibilities for developing 

plans for potential air service.

 The award to Mosinee, WI (Central Wisconsin), will enable the community to support 

aircraft upgrades as an existing carrier retires turboprop aircraft and restore lost 

service/capacity to other hubs.

 Three grant awards are targeted at EAS communities – Kearney, NE, – to study the 

possibilities for financial incentives for service enhancements. The awards to the Missouri 

Department of Transportation (Columbia10, Joplin, and Waynesville) and Parkersburg, WV,

will assist the communities in marketing changes in air service providers.

11 

All of the selected communities are contributing financial resources to their respective grant 

projects. In addition, 16 communities have pledged in-kind contributions in further support of 

their air service initiatives. The local contributions reflect a commitment that is important to the 

success of the proposed initiatives. Moreover, nearly all of the communities have (1) established 

robust public/private partnerships to enhance community participation and facilitate access to air 

services, and (2) provided a specific plan and timetable for using their grant funds in a timely

manner.

 

10 Columbia is a designated EAS community, but as of September 1, 2010, it receives unsubsidized scheduled air 

service. The grant will assist the community in promoting that service.

11 We note that grant applicants currently receiving subsidized air service under the EAS program are precluded 

from using SCASDP funds to secure air service by other carriers to additional destinations. As we stated in our RFP 

(Order 2010-7-16), we are prepared to entertain applications from EAS-subsidized communities that are directed 

toward improving use of the EAS being provided. However, we will not select proposals that would conflict with 

long-standing EAS policies, including financial support through this program of air services that would compete 

with the EAS, thus drawing traffic from the already subsidized services and increasing the subsidy requirements for 

those services.
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In six instances – Gainesville, FL, Lansing, MI, Kinston, NC, Syracuse, NY, the Missouri 

Department of Transportation, and Mosinee, WI -- we have reduced the grant award amount 

below the amount requested by each community in its proposal. In the case of Gainesville, 

Lansing, Kinston, Syracuse and Mosinee, this reduction reflects a narrowing of the proposed 

project’s funding to a more reasonable level for obtaining the service proposed at each 

community. In the case of the Missouri DOT, the reduction limits the allowable marketing

activities to three of the four communities (Columbia, Joplin, and Waynesville)12. We believe 

that our reductions should not adversely affect any of the community’s air-service projects. 

Accordingly, we are also reducing the required local cash contribution match offered by the 

communities by the same amount as the reduction in grant award. However, since we are 

changing the terms of the grant proposals, our award in all six cases is conditioned on the 

community’s acceptance of the lower amount. 

Air Service Development Zone

The statute directs the Department to designate an airport in one community awarded a grant 

under this program as an “Air Service Development Zone” (ASDZ), and to work with the 

community or consortium on means to attract business to the area surrounding the airport, to 

develop land-use options for the area, and to provide data, working with the Department of 

Commerce and other agencies. 49 U.S.C. 41743(h). A current grant recipient—with its grant

award period extending into FY2011— remains active as the ASDZ designee. As a result, the

Department did not solicit applications for selection as an ASDZ designee.

Grant Agreements

As noted above, the Department will execute grant agreements with each recipient. In the RFP, 

we stated that a community cannot accept a new Small Community Program grant while it is a 

party to an existing grant under the program, either as an individual community or as a member 

of a consortium. Accordingly, a community still party to an agreement pursuant to a SCASDP 

grant awarded in a previous year must terminate its participation in that agreement before it can 

accept a 2010 grant award and execute a new implementing agreement with the Department. 

Further, if such community is a member of an existing consortia grant, it must also be granted 

permission to withdraw from the agreement by the grant’s legal sponsor as well as the 

Department.

We also stated in the RFP that communities must establish milestones to monitor the progress of 

the proposed projects to determine whether amendments are necessary or whether the grant 

agreement should be terminated. As we have done in the past, milestones and progress reporting 

requirements will be included in the grant agreements. Federal funds under this grant program 

are disbursed on a reimbursable basis, with the communities expending funds for the grant 

project and then seeking reimbursement. Communities will not be reimbursed for funds 

expended prior to the date on which the grant agreement is executed. In seeking 

reimbursements, grant recipients must provide invoices or other evidence of the expenditure, 

 

12 The fourth community in its proposal, Kirksville, is not eligible for funding because it would duplicate activities 

that occurred under a grant the community received in 2007.
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details about the expenditure and how it relates to the grant project, and evidence of payment. In 

addition, the legal sponsor is required to certify that each invoice is relevant to the authorized 

grant project and has been paid. Communities will be required to comply fully with the terms of 

their proposals and the grant agreements.

ACCORDINGLY,

1. We select the communities/consortia listed in the Appendix to receive grant awards under 

the Small Community Air Service Development Program as described in this order;

2. Grant recipients are subject to all grant conditions and assurances that appear at 

http://ostpxweb.dot.gov/aviation/X-50%20Role_files/scasdp/Assurances.pdf. In addition, 

to the extent that this agreement permits expenditure of the awarded SCASDP funds in 

any manner that would not be permitted for funds received as part of FAA’s Airport 

Improvement Program (AIP), such permission is strictly limited to the expenditure of the 

SCASDP funds awarded under this agreement. Nothing in this agreement negates the 

recipient’s obligations to fully comply with FAA Order 5100-38C;

3. Grant recipients must execute a grant agreement with the Department before they can 

begin to spend funds provided under this order; and

4. A copy of this order will be served on the legal sponsor for each of the communities 

awarded grants.

By:

SUSAN L. KURLAND

 Assistant Secretary for Aviation

 and International Affairs

(SEAL)

An electronic version of this document is available

at http://www.regulations.gov
Appendix

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

2010 GRANT SELECTIONS

 GRANT

COMMUNITY STATE AMOUNT

Dothan AL $750,000

Yuma AZ $400,000

Gainesville* FL $140,000

Sioux City IA $500,000

Idaho Falls ID $500,000

Fort Wayne IN $203,000

Manhattan KS $300,000

Bangor ME $500,000

Lansing* MI $750,000

Missouri DOT* MO $210,000

Kinston* NC $350,000

Kearney NE $50,000

Keene NH $30,000

Syracuse* NY $500,000

Eugene OR $500,000

Provo UT $500,000

Charlottesville VA $500,000

Mosinee (Central Wisconsin)* WI $250,000

Parkersburg WV $60,000

TOTAL $6,993,000

* Grant proposal is conditionally selected since the amount awarded is less than the 

Community requested.