Order: 201 1

- 7

- 1

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 1st day of Ju ly

, 201 1

In the Matter of Grant Applications

SMALL COMMUNITY AIR SERVICE

DEVELOPMENT PROGRAM

under 49 U.S.C. §§ 41743 et seq. DOCKET DOT

- OST

- 2011

- 0119

Served: July 1, 2011

ORDER SOLICITING

SMALL 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 and/or SCASDP ) to address air service and airfare p roblems in their communities. Proposals, including all required information, must be submitted to www.grants.gov no later than 5 PM, Eastern Daylight Time (EDT), on Tuesday
, August 2 , 201 1

. Communities are reminded to register with Grants .gov early in t he 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” p age of Grants.gov. 1 If a community is a registered user of Grants.gov, it is the community’s responsibility to verify that the Grants.gov account is valid and that the AOR (Authorized Organization Representative) is current and approved.

Required Steps

**•** Determine eligibility ( see Page 4 ); :

**•** Register with www.grants.gov ;

**•** Submit an Application for Federal Domestic Assistance (SF424) ;

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

.[ 2 ]

**•** Submit a cover sheet including all required information (see Appendix B );

**•** Submit a completed “Summary Information” schedule (see Appendix C );

**•** Submit a detailed proposal which meets all required criteria (see Appendix D ) ;

**•** Attach any letters of support to the proposal , which should be address ed to Aloha Ley, Associate Director, Small Community Program ; and

,

**•** Provide separate submission of confidential material, if requested. (see Appendix E)

An application will not be deemed complete and will be ineligible for a grant award until and unless all required materials , including SF424, have been submitted through www.grants.gov by

the 5 PM EDT August 2 , 2011 , deadline.

This order is organized into the following sections:

I. Background

II. Eligibility Information

III. Types of Projects

IV. Application Review Information

V. Award Administration Information

VI. Appendix A

- 49 U.S.C. § 41743

VII. Appendix B

– Cover Sheet Conte n ts

VIII. Appendix C

– Summary Information

IX. Appendix D

– Application Checklist

X. Appendix E

– Confidential Commercial Information

I. BACKGROUND

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 prov ide 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. 2

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 statu t e for communities and consortia that show that they can use the assistance “in a timely fashion,” applicants are

advised to consider that criterion in developing their proposals.

2 For detailed background on the Small Community Program, see our website at: http://ostpxweb.dot.gov/aviation/X

- 50%20Role_files/smallcommunity.htm

.[ 3 ]

Current funding and limitations

The Small Community Program is authorized to receive appropriations under 49 U.S.C. 41743(e)(2), as amended. Appropriations are provided for the program pursuant to Section 11 04

of the FY 2011 Full

- Year Continuing Appropriations Act (P.L. 112

- 10 (extending the FY 2010 Consolidated Appropriations Act (P.L. 111

- 117)). The Department has up to $15 million available for FY 2011 grant awards to carry out the Small Community Program

.

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. In past years, the Department’s individual grant sizes have ranged from $20,000 to nearly $1.6 million.

II. ELIGIBILITY INFORMATION

Registration with grants.gov

Communities not previously registered are encouraged to register with www.grants

. gov 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 2 , 2011

.

Communities are encouraged to contact the Grants.gov help desk for any technical assi stance 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.

Eligibility Requirements

When selecting applicants to participate in the Small Commun ity Program, the Department is statutorily required to apply the following eligibility criteria 3

1. As of calendar year 1997, the airport serving the community was not larger than a small hub airport, and it has insufficient air carrier service or unreas onably high air fares, :

2. The airport serving the community presents characteristics, such as geographic diversity or unique circumstances that demonstrate the need for, and feasibility of, grant assistance from the Small Community Program;

3. An applic ant may not receive an additional grant to support the same project from a previous

grant;

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

grant;

3 49 U.S.C. §41743 (c).[ 4 ]

5. No 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; and

6. No more than 40 communities or consortia of communities, or a combination thereof, may be selected to partici p a t e in the program in each yea r for which the funds are appropriated.

In assessing whether a previous grantee’s current proposal represents a new project, we 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 community 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 Section 41743(c), even if the revenue guarantee were structured differently or the type of carrier were different. However, we do not read Section 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 Section 41743(c).

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

**•** an air carrier to subsidize serv ice to and from an underserved airport for a period not to exceed 3 years;

**•** an underserved airport to obtain service to and from the underserved airport; and/or

**•** an underserved airport to implement such other measures as the Secretary, in consultation

with s uch 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 o f airport

facilities. 4

Priority Considerations:

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

those communities or consortia where: 5

**•** 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

4 49 U.S.C. §41743 (d ).

5 49 U.S.C. §41743 (c)(5).[ 5 ]

**•** 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 t he 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 ap plication 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;

**•** the extent to which the applicant’s proposed s olution(s) to solving the problem(s) is new or innovative;

**•** the population and business activity as well as 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;

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

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

**•** the uniqueness of an applicant’s claimed problems and whether the proposed project clearly addresses the applicant’s claimed problems; and

**•** whether the community’s proximity to an existing or prior grant recipient could adversely affect either its proposal or the project undertaken by the other recipient.

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 pr oposals. 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 car rier 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 face d many problems retaining and improving their[ 6 ]

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 greate r attractiveness.

Additional Criteria and Grant Limitations

Communities without existing air service . Communities that do not currently have commercial air service are also eligible, but air service providers must have met or be able to meet in a reasonable period all Departmental requirements for air service certification, including safety and economic authorities.

Essential Air Service c ommunities

. Small communities that meet the basic criteri a and currently receive subsidized air service under the Essential Air Service (EAS) program are eligible to apply for funds under the Small Community Program. However, grant awards to

EAS

- subsidized communities are limited to marketing or promotion proje cts that support existing or newly subsidized EAS . Grant funds will not be authorized for EAS

- subsidized communities to support any new competing air service. Furthermore, no funds will be authorized to support additional flights by EAS carriers or chang es to those carriers’ existing schedules. These restrictions are necessary to avoid conflicts with the EAS program.

Consortium applications

. The statute permits individual communities and consortia of communities to apply for grant awards under this pro gram. 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. This

is not a consortium. An application from a consortium of communities must be one that seeks to facilitate the efforts of the communities working together toward a joint grant project. In other words, the application must set forth one grant project, with one joint objective , and establish one entity to ensure that the joint objective is accomplished according to the terms of a grant

agreement. For example, several communities surrounding an airport may apply together to improve air services at that airport, with a joint obj ective of securing new or additional service to that airport. Or, surrounding airports may apply together in support of a regional plan to lower

fares or reverse a decline in traffic.

Prior grant recipients . 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 they are precluded from seeking new funds for projects for which they have already received an award under the Small Community Program

.

In its appli cation, 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 prior years of the program, interest in participation exceeded the funds available 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 c ommunities.[ 7 ]

Concurrent a pplications . A community or member of a consortium 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 community 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 gra nt. 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.

Multiple Appl ications . 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 community 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 o f a consortium, because no community can have concurrent grants.

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

encou raged 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 the project funds (Federal, local or in

- kind) for the develo pment and implementation of a marketing plan in support of the service sought.

Subsidies for a carrier to compete against an incumbent . The Department is reluctant to subsidize one carrier but not others in a competitive market. For this reason, communi ties 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 propos als. 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.

Cost Sharing and Local Contributions Are Important Fa ctors. 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 Prog ram is to promote community involvement in addressing air service/air fare issues through public/private partnerships. As a financial stakeholder in the process, the community gains greater control over the type, quality, and success of the air service

in itiatives 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[ 8 ]

financial contribution to the project. Thus, proposals that propose a community financial contribution will be given priority consideration.

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 t he Department receives the final report on the grant project. See “Award Administration Information,” below.

Types of contributions

. Contributions should represent a new financial commitment or new financial resources devoted to attracting new or improved service, or addressing specific high

- fare or other service issues, such as improving patronage of existing service at the airport. Contributions from already

- existing programs or projects ( e.g., d esignating 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. Contrib utions 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 ai rport operations. Airport revenues may not be used for revenue guarantees to airlines. 6 Community proposals that include local contributions based on airport revenues do not receive priority consideration for selection.

In

- kind contributions from the ai rport

. 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, 7 as are reduced fares offered by airlines.

6 49 U.S.C. §§ 47107, 47133.

7 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 selec ted 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 communit y 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.[ 9 ]

Cash vs. in

- kind contributions

. Communities that include local contributions made in cash are given priority consideration for selection.

Financial commitments must be fulfilled

. Applicant communities should note that, as part of the grant agreement between the Department and the com munity, 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 th e proposal, including the financial aspects, is critical to the success of the authorized project initiative

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

- airport sources, and subsequent to being awarded a grant, s eek 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.

Payment Reimbursement Receipts : The Small Community Program is a reimbursable

program ; therefore

, c ommunities are required to make expenditures in full for project implementation under the program prior to seeking reimbursement from the Department

. Reimbursement rates are calculated as a percentage of the total Federal funds requested divided by the Fe deral fund s plus the local cash contribution (which is not refundable).

P ayments / e xpenditures in forms other than cash (e.g. in

- kind) are not reimbursable. For example, if a community requests $500,000 in Federal funding and provides $100,000 in

local c ontribution the reimbursement rate would be 83.33 percent : ((500,000) / (500,000 + 100,000)) = 83.33.

III. TYPES OF PROJECTS

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.

The major 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 enha nce its current air service or attract new service, such as:

**•** 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

- deman d air taxi service;

**•** Offering an incumbent carrier 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 t raffic support from surrounding communities with regionalized service through one airport; or[ 10 ]

**•** Providing local ground transportation service to improve access to air service to the community and the surrounding area. 8

The SCASD P program has already supported numerous standard revenue guarantee and marketing projects; there is an increased prospect for favorable consideration if the proposal offers distinctive or creative aspects or features that have potential for establishing ne w and better practices

. 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 infor mation: Additional 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 deve lopment efforts over the past five years

and the results of those efforts

**•** . The community should describe past air service development efforts and their results in its grant 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 market s 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,

 Clearly identify the target audience of each component of the proposed transpor tation initiative, including all advertising and promotional efforts. including the community's specific project goal(s) and detailed plan for attaining such goal(s).

Plans should:

 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

consideratio n, a community must have a well

- developed project plan and a detailed

8 These exampl es 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 depend ing 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, DOT

- OST

- 2008

- 0100, DOT

- OST

- 2009

- 0149,

and DOT

- OST

- 2010

- 0124.[ 11 ]

timetable for implementing that plan. In establishing the timetable, however, the community should be realistic about its ability to meet its project deadlines. 9

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

become self

- sufficient. Under the statute, a community cannot

 Fully and clearly outline the goals and objectives of the project ; e.g. , "to broaden the awareness by residents in the Tri

- County area of the various services provided by

passeng er 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 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 permitted

. 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 ext ent 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 statu tory requirement to use Small Community Program funding in a timely manner.

 Include metrics by which progress towards goals wi ll be measured, the source(s) of those data, and how the data will be analyzed.

 If the 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 priority to those communities that already have established, or will establish, a public

- private partnership to facilitate air service to the public. The prop osal should fully describe the public

- private partnership that will participate in the community’s proposal and how the partnership will actively

9 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. participate in the implementation of the proposed project. In addition, applicants should identify each membe r of the partnership, the role that each will play, and the specific responsibilities of each member in project[ 12 ]

implementation. If the application does not include specific information on the partnership participation in the project, the Department will n ot 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 propos ed 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 contribut ions from the State and/or local government should be separately identified and described.

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

identi f ication of a list of critical milestones to be met during the life of the grant, including the need to modify or discontinue funding if the community cannot achieve

such milestones. This is an 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 self

sustaining after the grant award expir es . A particular goal of the Small Community Program is to provide long

- term, self

- sustaining improvements to air service for small communities. A community cannot seek further grant funding in support of the same project. 49 U.S.C. § 41743(c)(4). It i s possible that new or improved service at a community will be well on its way to becoming a self

- sustaining service , but it may not have reached that goal before the grant expires. Similarly, it is possible that extensive marketing and promotional effort s may be in pro g r ess, but not have been completed at the end of the grant period and will require continued support. 10

**•** Therefore, in developing its proposal, the community should carefully consider and describe in detail its plans for providing any necessary continued financial support for the project after the grant funding is no longer available. This aspect of the application reflects the community’s commitment to the grant project and is an important component to the Department’s considerati on 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

10 Project implementation costs are reimbursable from grant funds only for services or property delivered during the
grant term. 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 it

is applying as a c onsortium that consists of two or more local government entities.[ 13 ]

Private organizations cannot be designated as the legal sponsor of a grant under the Small Community Program. 11

Air Service Development Zone Designation

The statute authorizing the Small Community Program also provides that the Department will designate one of the grant recipients as an Air Service Development Zone. The purpose of the designation is to provide communities interested in attracting business to the area surrounding the airpo rt and/or developing land

- use options for the area to work with the Department on means to achieve those goals. The Department will assist the designated community in establishing contacts with and obtaining advice and assistance from appropriate governme nt agencies, including the Department of Commerce as well as other offices within the Department of Transportation, and in identifying other pertinent resources that may aid the community in its

efforts to attract businesses and to formulate land

- use optio ns. However, the community receiving the designation will be responsible for developing, implementing, and managing activities related to the air service development zone initiative. Only communities that are interested in these objectives and have a plan to accomplish them should compete for the available designation. There are no additional funds associated with this designation, and applying for the designation will provide no special benefit or preference to a community in receiving a grant award unde r the Small Community Program.

Grant applicants interested in selection for the Air Service Development Zone designation must include in their applications a separate section, titled, Support for Air Service Development Zone Designation.

 detailed information regarding the property and facilities available for development such as an existing airpark or land for such an airpark; That section sho uld include:

 the other modes of transportation that would be available to support additional economic development, such as rail, road, and/or water access;

 information concerning historic, existing, and any future business activity in the area that would support further development;

 demographic information concerning the community and its environs releva nt to the developmental efforts, including population, employment, and per capita income data; and

 any other information that the community believes is relevant to its plans to enhance air service development.

The community should provide as detailed a p lan as possible, including what goals it expects to achieve from the air service development zone designation and the types of activities on which it would like to work with the Department in achieving those goals. The community should also

indicate wheth er further local government approvals are required in order to implement the proposed activities.

11 The commun ity 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.[ 14 ]

IV. AWARD ADMINISTRATION INFORMATION

The grant awards will be made as prompt l y as possible so that selected communities can complete the grant agreement process and proceed to implement their plans. Given the competitive nature of the grant process, the Department will not meet with grant applicants with respect to their grant proposals.

The Department will announce its grant selections via 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 on the Department’s Small Community Program webp age.

Grant agreement. Communities awarded grants are required to execute a grant agreement with the Department before they begin to expend funds under the grant award. Grant funds will be provided on a reimbursable basis only, with reimbursements made o nly for expenses incurred and billed during the period that the grant agreement is in effect and at the appropriate

percentage rate

. 12 Applicants should not assume they have received a grant, nor should they obligate or expend local funds prior to receivin g 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 assuran ces 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 such the assurances

when t hey execute their grant agreements. Copies of the applicable assurances are available for review on the Department’s webpage at http://ostpxweb.dot.gov/aviation/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 community until such final report is received.

Additional information on award administration for selected communities will be provided in the

grant agreement.

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 invo lve an extension to the time period for completing the grant or a change in the types of activities authorized for reimbursement under the goals and objectives (“project scope”) of the grant agreement. Grantees are cautioned, however, that the Department cannot

12 The percentage is determined by: (SCASDP Grant Amount) ÷ (SCASDP Grant Amount + Local Cash

C ontribution + State Cash Contribution, if applicable).[ 15 ]

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 purpose of attracting low

- fare service cannot be am ended to permit it to attract service from a legacy carrier, since the latter, in each example, was never contemplated by the original

agreement.

Applicants are advised to obtain firm assurances from air carriers proposing to offer new air

service i f a gr ant is awarded . 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 communi ty 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 gran t extension to allow more t ime 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 o f a firm commitment on the part of an air carrier to deliver the desired

service.

To ensure understanding, grantees contemplating amendments to their agreements are urged to discuss their situations with the Small Community Program staff before requesting a formal

amendment.[ 16 ]

This order is issued under authority delegated in 49 CFR § 1.56a(f).

ACCORDINGLY,

1. Community proposals for funding under the Small Community Air Service Development Program should be submitted via http://www.grants.gov as an attachment to the SF424 no later

than August 2 , 2011 ; 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

A ssociation 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:

Susa n 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.govSMALL 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 t he national air transportation system; and

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

consortium.

(c) Criteria for participation.

-- In selecting communities, or consortia of communities, for

participation in t he 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

--[ 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 limit.

-- 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 4 0 communities or consortia of communities, or a

combination thereof, may be selected to participate in the program in each year for which

funds are appropriated for the program.

No community, consortia of communities, nor combination thereof may participa te 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) Prioriti es.

-- 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

assi sted under the program from local sources other than airport revenues;

(C) the community or consortium has established, or will establish, a public

private partnership to facilitate air carrier service to the public;

(D) the assistance will provide mater ial 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.

(d) T ypes of assistance.

-- The Secretary may use amounts made available under this section

--[ 3 ]

(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 app ropriate 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 subsectio n (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;

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

information to assess the service needs of small communities;[ 4 ]

(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 opt ions for the area, and

provide data, working with the Department of Commerce and other agencies.APPENDIX B

COVER PAGE

The cover page for all applications should bear the title "Proposal Under the Small Community Air Service Development Program, Docket DOT

- OST

- 201 1

- 0119" 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; Employee Identification Number (EIN) or Tax ID ; and

, (3) the 2

- digit Congressional district code applicable to the sponsoring organization and, if a consortium, to each participating community.APPENDIX C Page 1

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2011 0119

SUMMARY INFORMATION

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

SF424 on http://www.grants.gov

.

A. A PPLICANT I NFORMATION : (C HECK A LL T HAT A PPLY )

Not a Consortium Interstate Consortium Intrastate Consortium

Community now receives EAS subsidy

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

If previous recipient: Date of grant: Expiration date of grant:

B. P UBLIC /P RIVATE P ARTNERSHIPS : (L IST O RGANIZATION NAMES )

PUBLIC PRIVATE

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

C. P ROJECT P ROPOSAL : ( CHECK ALL THAT APPLY )

Marketing Upgrade Aircraft New Route

Travel Bank Service Restoration Subsidy

Surface Transportation Regional Service Revenue Guarantee

Launch New Carrier Start

- up Cost Offset First Service

Study Secure Additional Service Other (explain below)APPENDIX C Page 2

D. E XISTING L ANDING A IDS AT L OCAL A IRPORT :

Full ILS Outer/Middle Marker Published Instrument Approach

Localizer Other (specify)

E. P ROJECT C OST : D O NOT ENTER TEXT IN SHADED AREA

L INE D ESCRIPTION S UB T OTAL T OTAL A MOUNT

1 Federal amount requested

2 State cash financial contribution

Local cash financial contribution

3a Airport cash funds

3b Non

- airport cash funds

3 Total local cash funds ( 3a + 3b )

4 TOTAL CASH FUNDING ( 1+2+3 )

In

- K ind contribution

5 a Airport In

- Kind contribution **

5b Other In

- Kind contribution **

5 TOTAL IN

- KIND CONTRIBUTION

( 7a + 7b )

6 TOTAL PROJECT COST ( 4+8 )

F. IN

- KIND CONTRIBUTIONS **

For funds in lines 7a (Airport In

- Kind contribution) and 7b (Other In

- Kind contribution), please

describe the source(s) of fund(s) for each.APPENDIX C Page 3

F

. I S T HIS A PPLICATION S UBJECT T O R EVIEW B Y S TATE U NDER E XECUTIVE O RDER 12372

P ROCESS ?

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.

G. I S T HE A PPLICANT D ELINQUENT O N A NY F EDERAL D EBT ? (I F “Y ES ”, P ROVIDE

E XPLANATION )

No Yes (explain)

______________________________________________________________________________

______________________________________________________________________________APPENDIX D Page 1

APPLICATION CHECKLIST

I NCLUDED ? I TEM

For Immediate Action

Determine Eligibility (see Page s 3 & 4 )

New Grants.gov users must r egister with www.grants.gov

. Existing Grants.gov users must verify existing Grants.gov account has not expired and

the A uthorized O rganization R epresentative(AOR) is current

No Later than 5:00 pm EDT, August 2 , 2011

Communities with active SCASDP grants: n otify DOT/X50 of intent to terminate

exis ting grant in order to be eligib le for selection in FY2011

Complete Application for Federal Domestic Assistance (SF424) via www.grants.gov

Prepare C over S heet (see Appendix B)

Prepare S ummary Information (see Appendix C)

Prepare proposal, to include:

**•** A description of the community’s existing air service

**•** A synopsis of the community’s historical service

**•** A description of the community’s air service development efforts over the past

five years and the results of those efforts

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

**•** A strategic plan for meeting those needs under the Small Community Program, including the community's specific project goal(s)

, detailed plan for measuring and attaining such goal(s ), and a timeline chart

.

**•** A description of any public

- private partnership that will participate in the project

**•** A detailed description of the funding necessary for implementation of the community's project, including the federal and non

- federal contributions

**•** 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 proj ect 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

**•** A description of how the community plans to continue with the project if it is not

self

- sustaining after the grant award expires

**•** Designation of a legal sponsor responsible for administering the program

**•** Letters of s upport (community/Congressional)

**•** Letters of intent by an air carrier (where applicable)APPENDIX D Page 1

**•** Submit motion for confidential treatment (where applicable)

Submission Checklist

Attach cover sheet to completed SF424 via www.grants.gov

Attach summary information schedule to completed SF424 via www.grants.gov

Attach proposal to completed SF424 via www.grants.govAPPENDIX D Page 1

Confidential Commercial Information

Applicants will be able to provide certain confidential business 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 m ust segregate the confidential material in a sealed envelope marked “Confidential Submission of X (the applicant)

in Docket DOT

- OST

- 2011

- 0119,” 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 n ot 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 Rul e 12, the confidential portion of its filing will be treated as confidential pending a final determination. All confidential material must be received by August 2 , 2011, and delivered to the Office of Aviation Analysis, 8 th Floor, Room W86

- 310, 1200 New J ersey Ave., SE, Washington, DC 20590.

A template for the confidential motion can be found at http://ostpxweb.dot.gov/aviation/X

50%20Role_files/smallcommunity.htm

.