Order: 2010-7-16 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the 30th day of July, 2010 

In the Matter of Grant Applications 

SMALL COMMUNITY AIR SERVICE 

DEVELOPMENT PROGRAM 

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

DOCKET DOT-OST-2010-0124 

Served: July 30,2010 

ORDER SOLICITING 

COMMUNITY GRANT PROPOSALS 

OVERVIEW 

By this order, the Department invites proposals from communities and/or consortia of 

communities interested in obtaining a federal grant under the Small Community Air Service 

Development Program (Small Community Program) to address air service and airfare problems 

in their communities. Proposals, including a completed "Summary Information" schedule as 

shown in Appendix B of this order, must be submitted in the above-referenced docket no later 

than 5 PM, Eastern Daylight Time (EDI), on August 27,2010. 

The Small Community Program was established under the Wendell H. Ford Aviation Investment 

and Reform Act for the 21st Century (AIR-21), P.L. 106-181, and reauthorized under the Vision 

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

designed to provide financial assistance to small communities to help them enhance their air 

service. The Department provides this assistance in the form of financial grants that are 

disbursed on a reimbursable basis.' The FY 2010 Federal Aviation Administration Extension 

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

• For detailed background on the Small Community Program, see our website at: 

http://ostpxweb.dot.gov/aviation/X-50%20RoleJiles/smaUcommunity.htm. 
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was appropriated $6 million to carry out the Small Community Program.^ However, the 

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

The program is limited to a maximum of 40 grant awards, with a maximum of four grants per 

State, in each year the program is funded. There are no limits on the amounts of individual 

awards, and the amounts awarded will vary depending upon the features and merits of the 

proposals selected. Over the past nine years, the Department's individual grants have ranged 

from $20,000 to nearly $1.6 million. Authorized grant projects may include activities that 

extend over a multi-year period under a single grant award; however, because there is a priority 

established by statue for communities and consortia that show that they can use the assistance "in 

a timely fashion," applicants are advised to consider that criterion in making their proposals. 

Applicants must first register with www.grants.gov before submitting an Application for 

Federal Domestic Assistance (SF424), a standard federal government grant application 

form, and must include their proposals as an attachment to the SF424. An application will 

not be deemed complete until and unless all required materials are filed by the August 27, 

2010, deadline. Communities are reminded to register with Grants.gov early in the 

application period since the mandatory Grants.gov registration process can take up to 

three weeks to complete. Tutorials and other guidance for completing the required registration 

and application procedures are available at the "Applicant Resources" page of Grants.gov.'^ 

ELIGIBILITY INFORMATION 

Who is Eligible to Apply for a Grant? 

Basic criteria. Eligible applicants are those communities that (1) are served by an airport that 

was not larger than a small hub airport for calendar year 1997,^ and (2) have insufficient air 

service or unreasonably high airfares. Communities that do not currently have commercial air 

service are also eligible, but they must have met or be able to meet in a reasonable period all 

necessary requirements of the Federal Aviation Administration for the type of service involved 

in their grant proposals. Communities served by medium and large hubs are not eligible to 

apply. 

Essential Air Service communities may apply. Small communities that meet the basic criteria 

and currently receive subsidized air service under the Essential Air Service (EAS) program are 

eligible to apply for funds under the Small Community Program. Indeed, a number of EAS2 Program funding for this year may be affected by a provision that directs the Secretary to transfer funds 

from any program within or administered by the Office of the Secretary to the Essential Air Service 

program if that program does not have sufficient funds to meet its statutory obligations. In addition, a 

portion of the funds available for the Small Community Program are used by the Department for grantsmanagement purposes. As of June, Congress appropriated $4,980,000 of the $6 million in funding; 

however, the remaining $1,020,000 is expected to be appropriated in the next reauthorization bill. If funds 

are not authorized by the time selections are made, grant funds will remain at the $4,980,000 level. 

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

^ See http://www07.grants.gov/applicants/app_help_reso.jsp. 

5 The hub classifications are based on the Federal Aviation Administration's CY 1997 enplanement data. 
subsidized communities applied in past years and some have received grant awards. However, 

grant awards to EAS-subsidized communities are limited to marketing or promotion projects that 

support existing or newly subsidized air services. Grant funds will not be authorized for EASsubsidized communities to support any new competing air service. Furthermore, no funds will 

be authorized to support additional flights by EAS carriers or changes to those carriers' existing 

schedules. These restrictions are necessary to avoid conflicts with the EAS program. 

Additional consideration for communities/members of consortia that have previously 

received a grant. Communities or members of a consortia that were awarded grants in previous 

years and want to apply for a grant this year should be aware that (I) they are precluded from 

seeking new funds for projects for which they have already received an award under the Small 

Community Program and (2) they cannot accept a new grant while they are a party to an existing 

grant under the program, either as an individual conmiunity or as a member of a consortium. 

Grant must be for a new project. No community may participate in the program in support of 

the same project more than once. 49 U.S.C. § 41743(c)(4). In assessing whether a previous 

grantee's current proposal represents a new project, we would compare the goals and objectives 

of the earlier grant, including the key components of the means by which those goals and 

objectives were to be achieved, to the current proposal. For example, if a conununity received 

an earlier grant to support a revenue guarantee for service to a particular destination or direction, 

a new application for another revenue guarantee for the same service would be disqualified under 

§ 41743(c), even if the revenue guarantee were structured differently or the type of carrier were 

different. However, we do not read § 41743(c) to disqualify a new application for service to a 

new destination or direction using a revenue guarantee, or for general marketing of the airport 

and the various services it offers. We recognize that not all revenue guarantees, marketing 

agreements, equipment purchases, etc. are of the same nature, and that if a subsequent proposal 

incorporates different goals or significantly different components, it may be sufficiently different 

to constitute a new project under § 41743(c). 

In its application, a community that is a previous grant recipient should compare and contrast its 

proposed project with its previously funded one(s) to demonstrate why its latest proposal 

represents a new project. Communities should also note that in each of the prior eight years of 

the program, interest in participation exceeded both the funds available and the number of 

communities that could take part in any one year. For this reason, the fact that a community has 

already received one or more grants will be a consideration when comparing its new proposal 

with those of other applicant communities. 

No concurrent erants are permitted. A community or member of a consortia may participate in 

the program a subsequent time only after its participation in a prior grant has terminated. 49 

U.S.C. § 41743(c)(4). Simply stated, a conmiunity can have only one Small Community 

Program grant at any time. If a grant applicant is applying for a subsequent grant and its current 

grant has not yet expired, it must notify the Department of its intent to terminate the current grant 

prior to entering into the new grant. In addition, for grant applicants that are members of a 

consortia grant, permission must be granted from both the grant sponsor and the Department to 

withdraw from the current grant prior to being eligible to receive a subsequent grant. 
Subsidies for a carrier to compete against an incumbent raise concerns. The Department is 

reluctant to subsidize one carrier but not others in a competitive market. For this reason, 

communities that propose to use the grant funds for service in a city-pair market that is already 

served by a carrier must explain in detail why the existing service is insufficient or 

unsatisfactory, or provide other compelling information to support such proposals. This 

information is necessary for the Department to consider the competitive implications of giving 

financial or other tangible incentives for one carrier that the other carrier is not receiving. 

Subsidy proposals should reflect market analysis and a complementary marketing 

commitment. A thorough understanding of the target market is essential for the ultimate 

success of new or expanded air service. Likewise, the chances that such a service will become 

self-sustaining are enhanced when its implementation is supported by a well-designed marketing 

campaign. For these reasons, communities requesting funds for a revenue guarantee/subsidy/ 

financial incentive are encouraged to include in their proposals an in-depth analysis evidencing 

close familiarity with their target markets. Such communities also are encouraged to designate 

in their proposals a portion of their requested ftmds for the development and implementation of a 

marketing plan in support of the service sought. 

A consortium is more than a collection of communities. The statute permits individual 

communities and consortia of communities to apply for grant awards under this program. In 

some instances in the past, several communities in a State have filed a single application as a 

"consortium," but in effect the application was a collection of individual community requests 

involving different projects. We do not view this as a consortium. Rather, an application 

representing a consortium would be one that facilitates efforts of communities working together 

toward a joint grant project. For example, several communities surrounding an airport may 

apply together to improve air services at that airport, or surrounding airports may work together 

to provide regional air service. 

Multiple applications by a community will not be considered. The Department requests that 

communities file only one application for a grant. In the past, some communities have filed both 

individual applications and applications as part of a consortium. In many cases these 

applications have involved the same project at the same or different funding levels. We will not 

consider the stand-alone application if a community is also submitting a largely identical request 

as part of a consortium. To the extent that a conununity files separately and as part of a 

consortium for complementary projects—for example, one for a revenue guarantee and one for 

marketing—we will consider such proposals. However, communities should be aware that they 

can receive only one grant, either the stand-alone grant or as a member of a consortium, because 

no community can have concurrent grants. 

Cost Sharing and Local Contributions Are Important Factors 

The statute does not require communities to contribute toward a grant project, but those 

communities that contribute from local sources other than airport revenues are accorded priority 

consideration. One core objective of the Small Community Program is to promote community 

involvement in addressing air service/air fare issues through public/private partnerships. As a 

financial stakeholder in the process, the connmunity gains greater control over the type, quality. 
and success of the air service initiatives that will best meet its needs, and demonstrates a greater 

commitment towards achieving the stated goals. The Department has historically received many 

more applications than can be accommodated and nearly all of those applications have proposed 

a community financial contribution to the project. Thus, proposals that propose a community 

financial contribution will be given priority consideration. 

Types of contributions. Contributions should represent a new financial commitment or new 

financial resources devoted to attracting new or improved service, or addressing specific highfare or other service issues, such as improving patronage of existing service at the airport. 

Contributions from already-existing programs or projects (e.g., designating a portion of an 

airport's existing annual marketing budget to the project) are considered less favorably than 

contributions for new and innovative programs or projects. For those communities that propose 

to contribute to the grant project, that contribution can be in the following forms: 

Cash from non-airport revenues. A cash contribution can include funds from the State, the 

County or the local government, and/or from local businesses, or other private organizations 

in the community. Contributions that are comprised of intangible non-cash items, such as the 

"value" of donated advertising, are considered "in-kind" contributions (see further discussion 

below). 

Cash from airport revenues. This includes contributions from funds generated by airport 

operations. Airport revenues may not be used for revenue guarantees to airlines.^ 

Community proposals that include local contributions based on airport revenues do not 

receive priority consideration for selection. 

In-kind contributions from the airport. This can include such items as waivers of landing 

fees, terminal rents, fuel fees, and/or vehicle parking fees. 

In-kind contributions from the community. This can include such items as donated 

advertising from media outlets, catering services for inaugural events, or in-kind trading, 

such as advertising in exchange for free air travel. Travel banks and travel 

commitments/pledges are considered to be in-kind contributions,' as are reduced fares 

offered by airlines. 

Cash vs. in-kind contributions. Only local contributions made in cash are given priority 

consideration for selection. Contributions made in-kind or through other services may be 

valuable in helping to promote the objectives of the application, they are not afforded priority in 

the selection process. 

6 49 U.S.C. §§47107, 47133. 

' A travel "bank" involves the actual deposit of funds from participating parties (e.g., businesses, 

individuals) into a designated bank account for the purpose of purchasing air travel on the selected airline, 

with defined procedures for the subsequent use or withdrawal of those funds under an agreement with the 

airline. Often, however, what communities refer to as a travel "bank" in reality involves travel "pledges" 

from businesses in the community without any collection of funds or formal procedures for use of the 

funds. As with other types of in-kind contributions, the Department views travel banks and pledges 

included in grant proposals as an indicator of local community support. 
Financial commitments must be fulfilled. Applicant communities should note that, as part of 

the grant agreement between the Department and the community, the community has legally 

committed itself to fulfilling its proposed financial contribution to the project and that its failure 

to meet this commitment could lead the Department to terminate the grant. Community 

participation in all aspects of the proposal, including the financial aspects, is critical to the 

success of the authorized project initiative. As with the grant awards in past years, receipt of the 

full federal contribution awarded will thus be linked to the community's fulfillment of its 

financial contribution. Furthermore, communities cannot propose a certain level of cash 

contribution from non-airport sources, and subsequent to being awarded a grant, seek to 

substitute or replace that contribution with either "in-kind" contributions or contributions from 

airport revenues, or both. Given the statute's priority for contributions from non-airport sources 

and the competitive nature of the selection process, a community's grant award could be reduced 

or terminated altogether if it is unable to replace the committed funds from non-airport revenue 

sources. 

Reimbursements for Advance Payments: The Small Community Program is a reimbursable 

program therefore communities are required to make advance payments for funds expended in 

association with the project implementation under the program and then seek reimbursement. 

Reimbursement rates are calculated as a percentage of the total Federal funds requested divided 

by the Federal fund plus the local cash contribution (which is not refundable). Advance 

payments in forms other than cash (e.g. in-kind) are not reimbursable. If there is any question 

about whether a proposed payment would be considered as "in-kind" or cash, the applicant 

should contact the Department before submitting its proposal. 

APPLICATION AND SUBMISSION INFORMATION 

Filing Deadline and Procedures 

Grant applications are due by 5 PM EDT on August 27, 2010. As part of the submission 

process, an applicant must register as a grant applicant at www.grants.gov and complete the 

Application for Federal Domestic Assistance form SF424. An applicant must also include its 

grant proposal, including a completed "Summary Information" schedule (see Appendix B), as an 

attachment to its SF424. In addition, the cover page of each application should contain the 

information specified under "Cover page contents," below. Questions regarding the program 

should be directed to the Office of Aviation Analysis on (202) 366-2347 or aloha.ley@dot.gov. 

SF424. Communities not previously registered are encouraged to register with Grants.goy 

early during the application period because the registration and SF424 application process 

required by www.grants.gov can take up to three weeks to complete. A community may file 

its proposal anytime after the initial registration process has been completed on www.grants.gov 

as long as the entire application is filed by August 27, 2010. Communities are encouraged to 

contact the Grants.gov help desk for any technical assistance in filing their applications. 

The Grants.gov "Applicant Resources" page (www07.grants.gov/applicants/app_help_reso.jsp) 

provides instructions and guidance on completing the registration and application processes. 

Further, grant proposals must be submitted as an attachment to the SF424. An application will 
NOT be deemed complete and will be ineligible for a grant award unless the SF424 and the 

attached proposal (including the completed "Summary Information" schedule) have been 

submitted through Grants.gov by the 5 PM EDT, August 27, 2010, deadline. 

Cover page contents. The cover page for all applications should bear the title "Proposal Under 

the Small Community Air Service Development Program, Docket DOT-OST-2010-0124" and 

should include: 

(1) the name of the community or consortium of communities applying for the grant; 

(2) the legal sponsor and its Dun and Bradstreet (D&B) Data Universal Numbering System 

(DUNS) number, including + 4; and 

(3) the 2-digit Congressional district code applicable to the sponsoring organization and, if a 

consortium, to each participating community. 

Confidential treatment of information. Applicants will be able to provide certain information 

relevant to their proposals on a confidential basis. Under the Department's Freedom of 

Information Act regulations (49 C.F.R. § 7.17), such information is limited to commercial or 

financial information that, if disclosed, would either likely cause substantial harm to the 

competitive position of a business or enterprise or make it more difficult for the Federal 

Government to obtain similar information in the future. 

Applicants seeking confidential treatment of a portion of their applications must segregate the 

confidential material in a sealed envelope marked "Confidential Submission of X (the applicant) 

in Docket DOT-OST-2010-0124," and include with that material a request in the form of a 

motion seeking confidential treatment of the material under 14 § CFR 302.12 (Rule 12) of the 

Department's regulations. The applicant should submit an original and two copies of its motion 

and an original and two copies of the confidential material in the sealed envelope. The 

confidential material should not be included with the original of the applicant's proposal that is 

submitted via www.grants.gov. The applicant's original submission, however, should indicate 

clearly where the confidential material would have been inserted. If an applicant invokes Rule 

12, the confidential portion of its filing will be treated as confidential pending a final 

determination. All confidential material must be received by August 27, 2010, and delivered to 

the Office of Aviation Analysis, 8'*" Floor, Room W86-310, 1200 New Jersey Ave., SE, 

Washington, DC 20590. 

Types of Projects and Application Content 

The statute is very general about the types of projects that can be authorized so that communities 

are provided flexibility in addressing their particular air service and airfare issues. Because 

circumstances may differ among communities, applicants have some latitude in identifying their 

own objectives and developing strategies for accomplishing them. 

One objective of the Small Community Program is to help communities secure enhancements 

that will be responsive to their air transportation/air fare needs on a long-term basis after the 

financial support of the grant has ended. There are many ways that a community might enhance 

its current air service or attract new service, such as: 
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• Promoting awareness among residents of locally available service; 

• Attracting a new carrier through revenue guarantees or operating cost offsets; 

• Attracting new forms of service, such as on-demand air taxi service; 

• Offering an incumbent cartier financial or other incentives to lower its fares, increase its 

frequencies, add new routes, or deploy more suitable aircraft, including upgrading its 

equipment from turboprops to regional jets; 

• Combining traffic support from surrounding communities with regionalized service through 

one airport; or 

• Providing local ground transportation service to improve access to air service to the 

community and the surrounding area.^ 

Communities are encouraged to be iimovative and to consider a wide range of initiatives and air 

transportation services in developing their proposals, such as intermodal or regional solutions. 

At the same time, proposals must not be general, vague, or unsupported. The more highly 

defined and focused the proposal, the more competitive it will be, particularly in light of the 

priority consideration afforded by the statute to those applicants that can use the funds in a timely 

manner. 49 U.S.C. §41743(c)(5)(E). 

There is no set format that must be used in submitting grant proposals. At a minimum, however, 

a proposal must provide the following information: 

• A description of the community's existing air service, including the carrier(s) providing 

service, service frequency, nonstop destinations offered, fares, and equipment types. 

• A synopsis of the community's historical service, including destinations, traffic levels, 

service providers, and any extenuating factors that might have affected traffic in the past or 

that can be expected to influence service needs in the near to intermediate term. 

• A description of the community's air service development efforts over the past five years and 

the results of those efforts. Many communities have been active on an on-going basis for 

many years in air service development efforts, while others are just beginning. To the extent 

that a community has previously engaged in other air service initiatives, including through 

public/private partnerships, it should describe those efforts and their results in its grant 

* These examples are illustrative only and are not meant as a list of projects favored by the Department. 

Interested communities can view actual proposals submitted in prior years. Go to 

http://www.regulations.gov and, under "Search," enter one of the following depending on the desired 

filing year: DOT-OST-2002-11590, DOT-OST-2003-15065, DOT-OST-2004-17343, DOT-OST-2005-

20127, DOT-OST-2006-23671; DOT-OST-2007-27370 and DOT-OST-2008-0100, DOT-OST-2009-

0149 for proposals filed in 2002, 2003, 2004, 2005, 2006, 2007, 2008 and 2009, respectively. 
- 9 -

proposal. The description should include marketing and promotional efforts of airport 

services as well as efforts to recruit additional or improved air service and airfare initiatives. 

• A description of the community's air service needs or deficiencies. A community should 

submit any information about (1) major origin/destination markets that are not now served or 

are not served adequately, and (2) fare levels that the community deems relevant to 

consideration of its grant request, including market analyses or studies demonstrating an 

understanding of local air service needs. 

• A strategic plan for meeting those needs under the Small Community Program, including the 

community's specific project goal(s) and detailed plan for attaining such goal(s). Plans 

should: 

^ Clearly identify the target audience of each component of the proposed transportation 

initiative, including all advertising and promotional efforts. 

•^ Set forth a realistic timetable for implementation of the grant project including a timeline 

chart. Because the statute includes timely use of the grant funds as a priority 

consideration, a community must have a well-developed project plan and a detailed 

timetable for implementing that plan. In establishing the timetable, however, the 

community should be realistic about its ability to meet its project deadlines.^ 

^ For proposals involving new or improved service, explain how the service will become 

self-sufficient. Under the statute, a community caimot seek grant funding in subsequent 

years in support of the same project. Moreover, in developing a proposal, it is important 

that a community seriously consider the scale of its proposed project and the timetable for 

achieving the stated goals. To the extent that a proposed project is dependent upon or 

relevant to the completion of other federally funded capital improvement projects, the 

community should provide a description of, and the construction time-line for, those 

projects, keeping in mind the statutory requirement to use Small Community Program 

funding in a timely manner. 

^ Fully and clearly outline the goals and objectives sought to be achieved; e.g., "to broaden 

the awareness by residents in the Tri-County area of the various services provided by 

passenger carriers at the Tri-County airport," or "to obtain new and affordable service to a 

hub airport in a direction where there is no such service." When an application is 

selected, these goals and objectives will be incorporated into the grant agreement and 

define its basic project scope. Once an agreement is signed, if circumstances change and 

an amendment is sought to allow for different activities or a different approach, the 

Department will look to whether the change being sought is consistent with those 

^ The projected timetable will be an integral part of the grant agreements between the selected 

communities and the Department. Therefore, there is no advantage to a community in proposing an 

aggressive timetable that cannot be met, and there may be disadvantages if the community finds that it 

cannot meet its timetable or if its timeline is deemed unrealistic. Communities should carefully consider 

all factors affecting implementation of their projects and develop realistic timeframes for achieving those 

objectives. 
• 

• 

• 

10-

fundamental project goals and objectives. Proposed changes that would alter those 

fundamental goals and objectives cannot be authorized, because doing so would 

undermine the competitive nature of the selection process. Applicants are also 

encouraged to include in their proposals alternative or back-up strategies for achieving 

their desired goals and objectives. By incorporating such information into the grant 

agreement, desired changes may be accommodated. 

^ If die applicant received a Small Community Program grant in the past, explain how its 

proposed project differs from its earlier one by comparing and contrasting project goals, 

objectives and methods of achieving them. 

A description of any public-private partnership that will participate in the project. Full 

community involvement is a key aspect of the Small Community Program. The statute gives 

a priority to those communities that already have established, or will establish, a publicprivate partnership to facilitate air service to the public. The proposal should fully describe 

the public-private partnership that will participate in the community's proposal and how the 

partnership will actively participate in the implementation of the proposed project. In 

addition, applicants should identify each member of the partnership, the role that each will 

play, and the specific responsibilities of each member in project implementation. If the 

application does not include specific information on the partnership participation in the 

project, the Department will not be able to evaluate how well a community has met this 

consideration, and the applicant will not be deemed to have met this priority consideration in 

the Department's evaluation of the community's proposal. 

A detailed description of the funding necessary for implementation of the community's 

project, including the federal and non-federal contributions. Proposals should clearly 

identify the level of federal funding sought. They should also clearly identify the 

community's cash contributions to the proposed project, "in-kind" contributions from the 

airport, and "in-kind" contributions from the community. Cash contributions from airport 

revenues should be identified separately from cash contributions from other community 

sources. Similarly, cash contributions firom the State and/or local government should be 

separately identified and described. 

Applicant communities should be aware that, if awarded a grant, the Department will not 

reimburse the community for pre-award expenses such as the cost of preparing the grant 

application or for any expenses incurred prior to the community executing a grant agreement 

with the Department. In addition, ten percent of the grant funds will be withheld until the 

Department receives the final report of the grant project. See "Award Administration 

Information," below. 

An explanation of how the community will ensure that its own funding contribution is spent 

in the manner proposed. 

• Descriptions of how the community will monitor the progress of the grant project and the 

identity of critical milestones to be met during the life of the grant, including the need to 

modify or discontinue funding if identified milestones cannot be achieved. This is an 
11 

important component of the community's proposal and serves to demonstrate the 

thoroughness of the community's planning of the proposed grant project. 

A description of how the community plans to continue with the project if it is not selfsustaining after the grant award expires. A particular goal of the Small Community Program 

is to provide long-term, self-sustaining improvements to air service at small communities. A 

community cannot seek further grant funding in support of the same project. 49 U.S.C. § 

41743(c)(4). It is possible that new or improved service at a community will be well on its 

way to becoming self-sustaining, but not have reached that goal before the grant expires. 

Similarly, it is possible that extensive marketing and promotional efforts may be in process, 

but not have been completed at the end of the grant period and will require continued 

support.'0 Therefore, in developing its proposal, the community should carefully consider 

and describe in detail its plans for providing continued financial support for the project after 

the grant funding is no longer available. This aspect of the application reflects on the 

community's commitment to the grant project and is an important component to the 

Department's consideration of the community's proposal for selection for a grant award. 

Designation of a legal sponsor responsible for administering the program. The legal sponsor 

of the grant project must be a government entity. If the applicant is a public-private 

partnership, a public government member of the organization must be identified as the 

community's sponsor to receive program reimbursements. In this regard, communities can 

designate only a single government entity as the legal sponsor, even if applying as a 

consortium that consists of two or more local government entities. Private organizations 

cannot be designated as the legal sponsor of a grant under the Small Community Program.'' 

Air Service Development Zone Designation 

The statute authorizing the Small Community program also provides that the Department will 

designate one of the grant recipients in the program as an Air Service Development Zone 

(ASDZ). A current grant recipient - with its grant award period extending into FY2011 -

remains active as the ASDZ designee. As a result, at this time the Department is not soliciting 

applications for selection as an ASDZ designee. 

• 

'0 Project implementation costs are reimbursable from grant funds only for services or property delivered 

during the grant term. 

' ' The community has the responsibility to ensure that the recipient of any funding has the legal authority 

under State and local laws to carry out all aspects of the grant. 
12-

APPLICATION REVIEW INFORMATION 

The Department will carefully review each proposal, and the staff may contact applicants if 

clarification is needed. The grant awards will be made as quickly as possible so that 

communities awarded grants can complete the grant agreement process and proceed to 

implement their plans. Pending unforeseen circumstances, the grant selection process should be 

completed by December 2010. Given the competitive nature of the grant process, the 

Department will not meet with grant applicants with respect to their grant proposals. The 

Department's selection of communities for grant awards will be based on the communities' 

written submissions. 

Priority factors considered. The law directs the Department to give priority consideration to 

those communities or consortia where: '^ 

• air fares are higher than the national average air fares for all communities; 

• the community or consortium will provide a portion of the cost of the activity from local 

sources other than airport revenue sources; 

• the community or consortium has established or will establish a public-private partnership to 

facilitate air carrier service to the public; 

• the assistance will provide material benefits to a broad segment of the traveling public, 

including business, educational institutions, and other enterprises, whose access to the 

national air transportation system is limited; and 

• the assistance will be used in a timely manner. 

Additional factors considered. Applications will be evaluated against the priority 

considerations listed above. Our experience has been that more applications are received than 

can be funded under the Small Community Program. Consequently, consistent with the criteria 

stated above, the selection process will take into consideration such additional factors as: 

• the geographic location of each applicant, including the community's proximity to larger 

centers of air service and low-fare service alternatives; 

• the proposed federal grant amount requested compared with the local share offered; 

• whether the applicant community has previously received a grant award under this program 

and, if so, whether its application includes an explanation of how the community's proposed 

project differs from its previously funded project; 

• the community's demonstrated commitment to and participation in the proposed grant 

project; 

'2 49 U.S.C. 41743 (c)(5). 
13 

• the relative size of each applicant community; 

• the community's existing level of air service and whether that service has been increasing or 

decreasing; 

• whether the community's proposal, if successfully implemented, could serve as a working 

model for other communities; 

• current demographic indicators for the community, such as population, income and business 

activity; 

• the grant amount requested compared with total funds available for all communities; 

• whether the community has a realistic plan to use the funds in a timely manner; 

• the uniqueness of an applicant's claimed problems and whether the proposed project 

addresses those problems; 

• the extent to which the applicant's proposed solution(s) to solving the problem(s) is new or 

innovative; and 

• whether the community's proximity to an existing grant recipient could impact its proposal. 

Full community participation is a key goal of this program as demonstrated by the statute's focus 

on local contributions and active participation in the project. Therefore, applications that 

demonstrate broad community support will be more attractive. For example, communities 

providing proportionately higher levels of cash contributions from other than airport revenues 

will have more attractive proposals. Communities that provide multiple levels of contributions 

(state, local, airport, cash and in-kind contributions) also will have more attractive proposals. 

Similarly, communities that demonstrate participation in the development and execution of the 

proposed air service project will enhance the attractiveness of their proposals. In this regard, the 

Department welcomes letters of intent from airlines on behalf of community proposals that are 

specifically intended to enlist new or expanded air carrier presence. Such letters will be 

accorded greater weight when authorized by airline planning departments. 

Proposals that offer innovative solutions to the transportation issues facing the community will 

be more attractive. Small communities have faced many problems retaining and improving their 

air services and in coping with air fares that are higher than typical for larger communities. 

Therefore, proposals that offer new, creative approaches to addressing these problems, to the 

extent that they are reasonable, will have their attractiveness enhanced. Proposals that provide a 

well-defined plan, a reasonable timetable for use of the grant funds, and a plan for continuation 

and/or monitoring of the project after the grant expires also will have greater attractiveness. 
14 

AWARD ADMINISTRATION INFORMATION 

The Department will announce its grant selections in a selection order, which will be served on 

each grant recipient, all other applicants, and all parties served with this solicitation order. The 

selection order will also be posted in the Docket at www.regulations.gov and on die 

Department's webpage. 

Grant agreement. Communities awarded grants are required to execute a grant agreement with 

the Department before they begin to spend funds under the grant award. Grant funds will be 

provided on a reimbursable basis only, with reimbursements made only for expenses incurred 

and billed during the period that the grant agreement is in effect and at the appropriate 

percentage rate, which is determined by: (SCASDP Grant Amount) -r (SCASDP Grant Amount 

+ Local Cash Contribution + State Cash Contribution, if applicable). Applicants should not 

assume they have received a grant, nor should they obligate or spend local funds prior to 

receiving and fully executing a grant agreement with the Department. Expenditures made prior 

to the execution of a grant agreement, including costs associated with preparation of the grant 

application, will not be reimbursed. Moreover, there are numerous assurances that grant 

recipients must sign and honor when federal funds are awarded. All communities receiving a 

grant under the Small Community Program will be required to accept the responsibilities of these 

assurances and to execute the assurances when they execute their grant agreements. Copies of 

the applicable assurances are available for review on the Department's webpage at 

http://ostpxweb.dot.gov/aviatior\/X-50%20Role_files/smallcommunity.htm (click on "SCASDP 

Grant Assurances"). 

Grantee reports. The grant agreement between the Department and each selected community 

will require the submission of quarterly reports on the progress the community has made during 

the previous quarter in implementing its grant project. In addition, the grant agreement will 

require the submission, on a quarterly or other time-specific basis, of other materials relevant to 

the grant project, such as copies of advertising and promotional material and copies of contracts 

with consultants and service providers. In addition, each community will be required to submit a 

final report on its project to the Department, and 10 percent of the grant funds will not be 

reimbursed to the conmiunity until such fmal report is received. 

Cost reimbursement. Communities will be permitted to seek reimbursement of project 

implementation costs on a regular basis. The frequency of such requests will be at the 

community's discretion. In this regard, the Department will provide the grant recipient 

communities with details and procedures for securing reimbursements electronically. 

Grant amendments. A grantee may wish to amend its agreement with the Department in the 

event of a change in circumstances after the date the agreement is executed. Typically, 

amendments involve an extension to the time period for completing the grant or a change in the 

types of activities audiorized for reimbursement under the goals and objectives ("project scope") 

of the grant agreement. Grantees are cautioned, however, that the Department cannot 

authorize amendments that are incompatible with the scope of the agreement. For example, 

a grant awarded solely for the purpose of developing an airport marketing plan cannot be 

amended to permit subsidization of an air carrier's startup costs, or a grant awarded solely for the 
15 

purpose of attracting low-fare service cannot be amended to permit it to attract service from a 

legacy carrier, since the latter, in each example, was never contemplated by the original 

agreement. 

Grantees are also advised that the Department will not extend the expiration date of an 

agreement simply to allow more time for a community to solicit air carriers for new air service. 

Many grants have been awarded for the purpose of subsidizing new or additional air service for a 

small community, with the goal of that service becoming self-sustaining by the end of the 

subsidy period. In virtually all cases, the community seeking the grant funds received 

expressions of interest from one or more air carriers. In some instances, these expressions of 

interest failed to materialize and the community was left without any immediate prospects, at 

which time it asked for a grant extension to allow more time to pursue other carriers. Because 

the Department is charged by law to consider timely use of funds when selecting grant recipients, 

the Department will grant an extension only when the community can provide strong evidence of 

a firm commitment on the part of an air carrier to deliver the desired service. 

To avoid misunderstandings, grantees contemplating amendments to their agreements are urged 

to discuss their situations with the Small Community Program staff before requesting a formal 

amendment. 

This order is issued under authority delegated in 49 CFR § I.56a(f). 
-16 -

ACCORDINGLY, 

1. Conmiunity proposals for funding under the Small Community Air Service Development 

Program should be submitted via http://wmv.grants.gov as an attachment to the SF424 no later 

than August 27, 2010; and 

2. This order will be published in the Federal Register and also will be served on the Conference 

of Mayors, the National League of Cities, the National Governors Association, the National 

Association of State Aviation Officials (NASAO), County Executives of America, the American 

Association of Airport Executives (AAAE), and the Airports Council International-North 

America (ACI), and posted on http://www.grants.gov. 

By: 

Susan L. Kurland 

Assistant Secretary for Aviation 

and International Affairs 

(SEAL) 

An electronic version of this document is available 

on the World Wide Web at http:/www.regulations.gov 
APPENDIX A 

Page 1 

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM 

United States Code Annotated 

Title 49. Transportation 

Subtitle VII. Aviation Programs 

Part A. Air Commerce and Safety 

Subpart II. Economic Regulation 

Chapter 417. Operations of Carriers 

Subchapter II. Small Community Air Service 

-• § 41743. Airports not receiving sufficient service 

(a) Small community air service development program.~The Secretary of 

Transportation shall establish a program that meets the requirements of this section for 

improving air carrier service to airports not receiving sufficient air carrier service. 

(b) Application required.—In order to participate in the program established under 

subsection (a), a community or consortium of communities shall submit an application to 

the Secretary in such form, at such time, and containing such information as the 

Secretary may require, including— 

(1) an assessment of the need of the community or consortium for access, or improved 

access, to the national air transportation system; and 

(2) an analysis of the application of the criteria in subsection (c) to that conrununity or 

consortium. 

(c) Criteria for participation.-In selecting communities, or consortia of communities, 

for participation in the program established under subsection (a), the Secretary shall 

apply the following criteria: 

(1) Size.-For calendar year 1997, the airport serving the community or consortium 

was not larger than a small hub airport, and-
APPENDIX A 

Page 2 

(A) had insufficient air carrier service; or 

(B) had unreasonably high air fares. 

(2) Characteristics.-The airport presents characteristics, such as geographic 

diversity or unique circumstances, that will demonstrate the need for, and feasibility 

of, the program established under subsection (a). 

(3) State Iimit.-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) Overall limit.-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 ftmds are appropriated for the program. 

No community, consortia of communities, nor combination thereof may participate in 

the program in support of the same project more than once, but any community, 

consortia of communities, or combination thereof may apply, subsequent to such 

participation, to participate in the program in support of a different project. 

(5) Priorities."The Secretary shall give priority to communities or consortia of 

communities where— 

(A) air fares are higher than the average air fares for all communities; 

(B) the community or consortium will provide a portion of the cost of the activity 

to be assisted under the program from local sources other than airport revenues; 

(C) the community or consortium has established, or will establish, a publicprivate partnership to facilitate air carrier service to the public; 

(D) the assistance will provide material benefits to a broad segment of the 

traveling public, including business, educational institutions, and other 

enterprises, whose access to the national air transportation system is limited; and 

(E) the assistance will be used in a timely fashion. 
APPENDUC A 

Page 3 

(d) Types of assistance.-The Secretary may use amounts made available under this 

section-

(1) to provide assistance to an air carrier to subsidize service to and from an 

underserved airport for a period not to exceed 3 years; 

(2) to provide assistance to an underserved airport to obtain service to and from the 

underserved airport; and 

(3) to provide assistance to an underserved airport to implement such other measures 

as the Secretary, in consultation with such airport, considers appropriate to improve air 

service both in terms of the cost of such service to consumers and the availability of 

such service, including improving air service through marketing and promotion of air 

service and enhanced utilization of airport facilities. 

(e) Authority to make agreements.--

(1) In general.—The Secretary may make agreements to provide assistance under this 

section. 

(2) Authorization of appropriations.-There is authorized to be appropriated to the 

Secretary $20,000,000 for fiscal year 2001, $27,500,000 for each of fiscal years 2002 

and 2003, and $35,000,000 for each of fiscal years 2004 through 2008 to carry out this 

section. Such sums shall remain available until expended. 

(f) Additional action.-Under the program established under subsection (a), the 

Secretary shall work with air carriers providing service to participating communities and 

major air carriers (as defined in section 41716(a)(2)) serving large hub airports to 

facilitate joint-fare arrangements consistent with normal industry practice. 

(g) Designation of responsible official.-The Secretary shall designate an employee of 

the Department of Transportation— 

(1) to function as a facilitator between small communities and air carriers; 

(2) to carry out this section; 
APPENDDC A 

Page 4 

(3) to ensure that the Bureau of Transportation Statistics collects data on passenger 

information to assess the service needs of small communities; 

(4) to work with and coordinate efforts with other Federal, State, and local agencies 

to increase the viability of service to small communities and the creation of aviation 

development zones; and 

(5) to provide policy recommendations to the Secretary and Congress that will ensure 

that small communities have access to quality, affordable air transportation services. 

(h) Air Service Development Zone.-The Secretary shall designate an airport in the 

program as an Air Service Development Zone and 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 provide data, working with the Department of 

Commerce and other agencies. 
APPENDIX B 

Page 1 

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM 

DOCKET DOT-OST-2010-0124 

SUMMARY INFORMATION 

All applicants must submit this information with their proposal, along widi a completed form SF424 on 

http://www. grants, gov. 

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY) 

D Not a Consortium D Interstate Consortium D Intrastate Consortium 

D Community now receives EAS subsidy 

D Community (or Consortium member) previously received a Small Community Grant 

If previous recipient: Date of grant: 

Expiration date of grant: 

B. PUBLIC/PRIVATE PARTNERSHIPS: (LIST ORGANIZATION NAMES) 

Public Private 

1. L 

_ _ 

3^ J. 

_ _ 

PROJECT PROPOSAL: (CHECK ALL THAT APPLY) 

n Marketing 

n Personnel 

n Travel Bank 

• Upgrade Aircraft 

n Increase Frequency 

n Service Restoration 

D New Route 

n Low Fare Service 

D Subsidy 
APPENDIX B 

Page 2 

n Surface Transportation D Regional Service D Other (specify) 

n Revenue Guarantee D Launch New Carrier 

D Start Up Cost Offset D First Service 

n Study n Secure Additional Carrier 

D. EXISTING LANDING AIDS AT LOCAL AIRPORT: 

n Full ILS D Outer/Middle Marker D Published Instrument Approach 

n Localizer D Other (specify) 

E. PROJECT COST: 

1. Federal amount requested: 

2. State cash financial contribution: 

3. Local cash financial contribution... 

3a. Airport cash funds: 

3b. Non-airport cash funds: 

3c. Total local cash funds (3a. + 3b.): 

4. TOTAL CASH FUNDING (1. + 2. + 3c.): 

5. Local funds contributed from already-existing 

programs or projects included in line 3c. amount: 

6. Local funds contributed from new commitments 

or new resources included in line 3c. amount: 

7. Airport In-Kind contribution: 

(amount & description) 

8. Other In-Kind contribution: 

(amount & description) 

9. TOTAL IN-KIND CONTRIBUTION (7. + 8.): 

10. TOTAL PROJECT COST (4. + 9.): 
APPENDIX B 

Page 3 

F. ENPLANEMENTS: 

2000 2004 2008 . 

2001 2005 2009_ 

2002 2006 

2004 2007 

G. Is THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER EXECUTIVE ORDER 12372 PROCESS? 

Q a. This application was made available to the State under the Executive Order 12372 Process for 

review on (date) . 

• b. Program is subject to E.O. 12372, but has not been selected by the State for review. 

• c. Program is not covered by E.O. 12372. 

H. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT? (IF "YES" , PROVIDE EXPLANATION) 

n No D Yes (explain)