Community of Diomede Page i 

### BEFORE THE DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY



# Establishing Air Transportation for

Diomede, Alaska

DUNS # 809387467



## Proposal Under the

Small Community Air Service

Development Program

Docket OST

- 2010

- 0124

Legal Sponsor: State of Alaska Department of Commerce,

Community and Economic Development

Congressional District Alaska: At LargeCommunity of Diomede Page ii Table of Contents

Title Page

................................ ................................ ................................ ............................. i

Table of Contents

................................ ................................ ................................ ............ ii

- iii

Overview

................................ ................................ ................................ .............................. 1

I

. Overall Summary

................................ ................................ ................................ .............. 4

Project Scope and Goal

................................ ................................ ................................ ........ 4

The Intent of the Application

................................ ................................ ............................... 4

Recommended Solution

................................ ................................ ................................ ....... 4

Sponsor and Contact Information

................................ ................................ ........................ 5

II. Community of Diomede

................................ ................................ ................................ .. 6

Physical Location

................................ ................................ ................................ ................. 6

Iñupiat Culture

................................ ................................ ................................ ..................... 6

Local Economy/ Housing /I nfrastructure

................................ ................................ ............... 7

I II. Diomede Air Transport

................................ ................................ ................................ .. 8

Service Area

– Defined by M ail C arrier

................................ ................................ .............. 8

Recommended Solution

................................ ................................ ................................ ....... 9

IV. Potential Economic Development

................................ ................................ ............... 10

V. Grant Administration

................................ ................................ ................................ .... 1 1

The Intended Service

................................ ................................ ................................ ......... 1 1

Program Structure

................................ ................................ ................................ .............. 1 1

Funding and Cash Contribution

................................ ................................ ......................... 1 2

V I

. Unreasonably High Air Fares

................................ ................................ ...................... 1 2

Distressed Community Status 2010

................................ ................................ ................... 1 3

V I I . Summary

................................ ................................ ................................ .................... 1 4

Key Points to Grant Application

................................ ................................ ........................ 1 4

Achievement of Two Major Strategic Goals

................................ ................................ ..... 1 4

Severely Limited Air Transportation to Diomede

................................ ............................. 14Community of Diomede Page iii Extremely High Air f are

................................ ................................ ................................ ..... 1 5

Life or Death Travel Alternatives

................................ ................................ ...................... 1 5

Community Economic Sustainability

................................ ................................ ................ 1 5

VII I

. A ttachment s

................................ ................................ ................................ .............. 1 6

Appendix B SCASDP Docket DOT

- OST

- 2010

- 0124 Summary Information

............ 1 6

- 1 8

Authorizing City of Diomede Resolution 2010

- 03

................................ ...................... 1 9

- 20

Joint l etter of suppor t from Senator s Lisa Murkowski , Mark Begich & Representative
Don Young

................................ ................................ ................................ ................... 2 1

- 2 2

Letter of support from Senator Donald Olson

................................ ................................ ... 2 3

Letter of support from Kawerak, Inc.

................................ ................................ .......... 24

- 25

Letter of support from Representative Reggie Joule

................................ ................... 2 6

- 2 7

Letter of support from Norton Sound Health Corporation

................................ ................ 2 8

Letter of support from Native Village of Diomede

................................ ..................... 2 9

- 30

Letter of support from City of Diomede

................................ ................................ ...... 3 1

- 3 2Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 1 Overview

The State of Alaska

, Department of Commerce, Community and Economic Development (DCCED) Division of Commun ity and Regional Affairs (DCRA) requests a grant from the U.S. Department of Transportation under the Small Community Air Service Development Program (SCASDP). The State is applying at the request of t he C ity of

Diomede and will act as its legal sponsor u nder the terms of the grant agreement should the application be funded

.

The SCASDP grant program will help support safe, reliable, year

- round air transportation

for the residents of remote Diomede , Alaska, and provide only the most basic community

access to health services and economic opportunit i es that do not exist now.

SCASDP grant application has two major strategic goals:

1. Establish for the first

- time scheduled weekly air service to Diomede, and,

2. Provide interim air service, allowing the time necessa ry for regional partners to negotiate financial participation in the Essential Air Service 50% match program.

Little Diomede Island is home to the Native Village of Diomede IRA Council, a federally recognized tribe of Iñupiat Alaska Natives. The village is located above the Arctic Circle in the Bering Strait, 25 miles off the northwest coast of Alaska. This community is a traditional subsistence based economy , with a minimal cash economy

. It is perhaps the most remote community in the United States; onl y one mile from the Russian border.

In Alaska Native communities, the word subsistence refers to hunting, fishing and gathering activities providing for both food and other necessities. Before European contact, subsistence was the only form of economic production in which Alaska Natives fed, clothed and housed themselves. Traditionally, subsistence has been produced usingApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 2 small scale technology to harvest and preserve foods for communal li ving. Today, Diomede, like many remote villages, cannot depend entirely on a subsistence economy.

Diomede has very limited community access with one state

- owned heliport ; however, Diomede has not had any commercial passenger helicopter service since July 2009. Evergreen Helicopters, Inc. (Evergreen) provides contracted U.S. mail air service for

Diomede once per week, weather permitting. In the past

, Evergreen flew mail on a two

engine Bokow

- 105 (BO

- 105) helicopter from Nome to Diomede with seat tickets available for purchase as mail weight allowed; typically one sea t ticket to Diomede and

four seat ticket s returning to Nome. Evergreen has provided expensive charter flights on

demand. In June 2009 the BO

- 105 experienced major mechanical problems , resulting in Evergreen switching to a single

- engine A

- Star helicopter for the mail delivery

. While FAA regulations allow passenger service on a single

- engine helicopter over open

- ocean, as a policy Evergreen will not fly passengers over open

- ocean , especially in the Arctic, on a single

- eng ine helicopter. Now Diomede has no passenger helicopter service. Their only means for community access is by small boat.

Small boat access is unpredictable because of weather conditions in the Arctic marine

environment. There have been instance s when c ommunity members were stranded in

Nome or Wales for weeks or mont hs due to unpredictable weather conditions. Additionally, barge service is very limited

, due to volatile weather and water conditions

of the Bering Strait

. The community is also hindered by inadequate moorage facilities

. Diomede does not have an ocean

- going boat harbor. R outine medical services are not

available fo r the residents of Diomede. A hospital, Norton Sound Health Corporation, is located 130 miles away in Nome, Alaska. Standard m edical problems, untreated

, can and

do turn into serious medical conditions. Now only e mergency medevac is available from

the Coast Guard or Alaska National Guard by helicopter as a last resort.

Diomede meets the Office of Aviation Analysis ’s priority re quirements to be considered

as eligible for grant funding under the SCASD P

. There is no year

- round commercial air

service for Diomede residents. I n the past when air service was available

, it was severely

limited , not scheduled, and airfares were unreaso n ably high. Typ ically

, air fare for the

130 mile one

- way seat from Diomede to Nome was $ 320 , and $640 round

- trip

. The rise in fuel prices will continue to drive air travel costs up in the foreseeable future.

Due to Diomede’s severe lack of ai r service or other forms of community access , the

State of Alaska/DCCED

- DCRA is requesting a grant in the amount of $ 1,2 5 0 ,000 or $417,000 per year for three years

, to establish air service f r o m Nome to Diomede

. Grant funding is estimated based upon a proposal from E vergreen to EAS, so that this dollar amount assumes passenger ticket revenue . This will provide one round

- trip flight pe r week with four seats on the helicopter. This is a most basic air service for the community

of Diom e de

.

The Alaska Department of Tra nsportation owns the heliport, and built it with funding from FAA’s Airport Improvement Program. The heliport is on the list of facilities in theApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 3 FAA’s National Plan of Integrated Airport Systems (NPIAS). The City of Diomede will spend $38,243 annually or $114,729 during the proposed grant period, to operate and maintain the heliport under contract with ADOT&PF. Additional ly the community will

establish the level of demand during this grant period for air transport services. Based on this data, t he community will seek support and financial match from key agencies who routinely travel to Diomede and use it to support its application through the EAS 50%

match program

.

T his grant application would provide very basic air transport and thereby help establish safe, reliable

, and scheduled air service for Diomede residents . U

. S

. citizens living on

Little Diomede Island face unique transportation problem s that no other U

. S

. citizens living in other cities face

. If funded

, the grant w ould substantiall y improv e the quality of

li fe in Diomede , Alaska

.

If there are any questions or further information is required, please direct correspondence

to:
Gail Dabaluz

, Special Projects Manager Division of Community and Regional Affairs

P.O. Box 110809

Juneau , AK 99 81 1

- 0 809 (907) 465

- 4814Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 4 I. Overall Summary

Project Scope and Goal

The community of Diomede is requesting a three year grant in the total amount of $ 1

, 25 0 ,000 to offer consistent air service on behalf of its residents. The purpose of the

pr oject address es a major air service deficiency in the community of Diomede. The community has never had scheduled air service, and did not even have a heliport until

1996. In the recent past, the community relied upon weekly mail service from Evergreen Helicopters, Inc

. The company provide d helicopter service for vital services, such as food and supply transport. Diomede residents could purchase seat ticket s on the mail carrier, a s space allowed

. Evergreen Helicopters, Inc. no longer provides the air

t ransportation for the community of Diomede

, including all contracted air service

. The contracted helicopter air service was $10,000 per trip from Nome to Diomede, and even this service is no longer available

.

The Intent of the Application

The grant appli cation seeks financial support from the federal government to establish air service for Diomede. A future goal will be to secure financial support to maintain air service for the community through the EAS 50% match program

.

By securing grant funds, it will provide the necessary financial assistance toward providing safe, reliable air transportation to Diomede residents. Without it, Diomede residents do not have the quality of life all Alaskans and United States citizens have

. Without air service to Diomede, residents cannot import necessary daily goods and services, seek health care, look for employment opportunities, invite economic development ventures, or obtain specialized professional services.

E stablished air service as presented in this proposal will greatly improve the everyday quality of life for each Diomede resident. Securing the financial resources to obtain a subsidy rate agreement for the provision of air service in Diomede will immediat ely

address the current emergency conditions residents are experiencing.

Recommended Solution

With the resources obtained from this grant and the in

- kind contributions from local organizations, Diomede will be able to fully execute a simple and focused t ransportation plan. It consists of two components:

**•** E stablish reliable, safe air transportation with the grant to provide funding for a subsidy rate agreement with a helicopter service company

.

**•** The established scheduled air service for Diomede will docume nt passenger demand and provide the needed time for regional parties to negotiate participationApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 5 in the EAS 50% match program, which will provide long

- term scheduled air

service for Diomede.

The community is very invested in e stablishing air service, as we ll as partner agencies that are required to travel to and from the community , but currently have no practical means of flying to Diomede . Future economic development opportunities can be further explored, if consistent air service is a service routinely p rovided.

Please note that Diomede is not considered eligible to apply for the Office of Aviation

, Essential Air Service grant funds, according to federal law. The October 24, 1978 law stipulated that small communities had commercial air service in order to be considered eligible for the Essential Air Service grant program. Diomede did not have commercial

air service in 1978 because they had no heliport and no scheduled air service , so they are not considered eligible to apply for these critical grant fund s. They are eligible to apply for the EAS 50% match program, but Diomede needs more time to gather the data and negotiate with the various parties to participate in the match amount.

Finally

, please be aware that Diomede , Alaska is the home to the Native Village of

Diomede IRA Council, a federally recognized tribe of Iñupiat Alaska Natives

. We

believe Environmental J ustice is an additional issue U

. S

. DOT must consider during the grant making process for the SCASD program.

Sponsor and Contact Information:

Sponsor: The Department of Commerce, Community and Economic Development

Contact: Tara Jollie, Director Division of Community and Regional Affairs 550 W. Seventh Avenue, Suite 177 0 Anchorage, AK 99501

- 1770Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 6 I I. Community of Diomede

Physical Location

The community of Diomede is 25 miles off the north west coast of Alaska in the Bering

Strait . It has 117 residents , down from 143 two years ago . It is about one mile from the

Russia n boarder and 130 miles northwest of Nome, Alaska . The international boundary line is at approximately 65.758611 N ort h L atitude and 168.953056 West L ongitude. The

actual area of Diomede encompasses 2.8 square miles of land and 0.0 square miles of water. The island community is a mass of boulders and is approximately 7 miles in diameter. The topography of the island does not support any tree habitat or shrubs and has very little vegetation. Summer temperatures range from 4 0

– 50 degrees Fahrenheit, with cloudy skies and fog. Winter temperatures average

- 10 to 6 degrees Fahrenheit, with 10 inches of annual precipitation and 30 inches of snowfall. Winds blow consistently throughout the year, averaging 15 knots with wind gust s up to 60

– 80 miles per hour. The Bering Strait is generally frozen between December and June. Because Diomede is located on extremely rocky slopes, the community experiences harsh storms

, and lack s useable land for housing construction. This terrain i nfluences the city’s inability to construct a water and sewer system, landfill and airport.

Aerial view of Diomede, Alaska

Iñupiat Culture

Diomede is an Iñupiat village, whose community members live a traditional subsistence lifestyle. They hunt bear ded seal , walrus and polar bear for food throughout the year.

Various shellfish are harvested as well. There is archeological evidence that date

Diomede as a village 3,000 years old . It was previously a spring hunting village site, and over time, became a permanent dwelling.Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 7 After World War II ended, the Soviet Union established the Iron Curtain and Big Diomede became a Russian military base. The Russian Iñupiat Natives were forcibly

removed from their ancestral homelands and relocated to mainland Russia. Little Diomede residents never saw their Russian relatives again.

Local Economy/Housing/Infrastructure

Jobs in the community are service oriented. The jobs in Diomede are for the city government, school district, Alaska Native Corporation and tr ibal entity. Of these jobs,

15

- 20% are temporary; the remainder of the community rely upon subsistence living, governmental assistance and retirement pay. Seasonal mining, construction and

commercial fisheries have been on the decline. Subsistence huntin g and fishing are significant means of survival for Diomede residents. The most current resource data show unemployment for Diomede residents over 16 years old at 70% or greater.

Housing in Diomede has been provided by the Bureau of Indian Affairs (BIA) and the Department of Housing and Urban Development (HUD) prefabricated homes. Prior to 1976, homes in Diomede were constructed utilizing traditional methods. A traditional Iñupiat home was erected with a wood frame covered by a layer of sod and then encl osed entirely by rocks.

As previously mentioned, there is no permanent airstrip for planes in Diomede. The village utilizes heavy equipment and water to create an ice runway during the winter months. When the ice runway is not utilized, Evergreen has a w eekly single

- engine helicopter deliver mail as well as goods and services. Passenger service is not available.

The freshwater system in Diomede is derived from a mountain spring during the summer months, as well as desalinization of sea water. The water is then stored in a 434,000 gallon water tank for winter consumption

. There is no running water, with the excepti o n of the elementary, high school and teacher’s livi ng quarters. At the public laundry facility residents can purchase fresh water at 5 0 cents per 10 gallons. T he Diomede ground is made of boulders and steep terrain, the Public Health System (PHS) has ruled out an underground water piping system as a viable option for the community

.

Diomede does n ot have a sewer system and residents use honey buckets. The h oney bucket system places a plastic bucket under a wooden frame with a toilet seat lid, in place

of a water

- born sewage system

.

The community does not have a solid waste, or refuse system. Burn able products are

incinerated and other non

- burnable items are placed onto the ice during the w inter

months and into the ocean. The Alaska Department of Health and Human Services,

Division of Public Health has not found any other alternatives to waste dis posal, due to the ground conditions of Diomede.Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 8 II I

. Diomede Air Transport

Service Area

– Defined by Mail Carrier

Diomede does not have reliable air transportation for its community and its members

. Diomede does have weekly mail delivery, resulting from the contract between the United

States Postal Services and Evergreen Helicopters, Inc

. In the past, w hen space was available, seat tickets were sold on Evergreen International Aviation mail helicopters for

Diomede resi dents to commute to and from their home community

. Even when this service was available, due to the type of helicopter used for the mail contact, seating was

limited to one seat ticket per commute. For a one

- way ticket from Diomede to Nome,

pa ssengers were charged $320 , or $640 round trip

. If Diomede experienced stormy weather, residents could be stranded in Nome or Wales for weeks, if not months.

Evergreen has utilized a twin

- engine helicop ter for the weekly mail routes. When the helicopter requir ed subs tantial repair work a year ago, it was replaced with a single

engine helicopter. While FAA regulations allow use of a single

- engine helicopter

, Evergreen has decided, as a policy, a single engine helicopter is not suitable for human

transport across Arcti c open ocean.

During the winter months, Diomede is able to constr uct an ice runway, allowing a 9 seat airplane to land. If the weather allows the ice runway to be built, it is in operation 2

- 3 months at a time. In 2009, the sea ice did not freeze up enoug h for the ice runway to be

built so there was no fixed

- wing air service and helicopter charter service only through July 2009

.

There are no road systems in the Bering Strait region. Many rural Alaskan communities that do not have a road system tend to be more isolated. Because of this isolation, transportation costs for goods and services are much higher than the regional hub areas in Alaska, and exponentially higher than the contiguous United States.

In most isolated villages, residents do not own a car. Most utilize All Terrain Vehicle s (ATV), snowmobiles and aluminum or motor boats or traditional Iñupiat skin boats for transportation. The aluminum boats used for open sea transport are not equipped for long

transpor ts and due to Diomede’ s extremely rocky and steep incline, securing boats to any fixed structure is a huge risk. The terrain precludes construction of a runway.

When ice conditions allow, Diomede has an ice runway during 2

- 3 of the winter months,

allowin g fixed

- wing aircraft to land. However, when the community experiences warmer winter conditions, an ice runway is not a viable option. In fact one year while plowing the runway, a state

- owned bulldozer went through the soft ice and disappeared in deep

wa ter

.

When air transport has not been available due to limited air service, lack of ice runways, or mechanical problems, some Diomede residents have opted for open skiffApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 9 transportation. T his is a risky endeavor and tragedy has struck those who have resort ed to this option. In 1998, 6 residents (including small children) attempted to travel 28 miles

in the Bering Strait via open skiff, from Diomede to Wales and back to Diomede. The

skiff was able to land in Wales and after purchasing essential goods, the s kiff began its journey back to Diomede. The skiff disappeared and all 6 residents were lost at sea ; their

remains were never found.

This past academic year, the Bering Strait School District contracted a larger fishing vessel to transport school teachers from Nome to Diomede. This trip took a total of 36 hours and the teachers had to wait 16 hours upon arriving in Diomede for the water s to calm down so they could be lifted from the fishing boat to shore. The schoolteachers had to be lightered from the fishing boat to shore because of the hazardous combination of rocky shoreline and rough seas prevented the larger boat from landing.

The Bering Strait School District wants to rehabilitate the school at Diomede, but have been unable to send the necessary engineers and architects that are needed to do the necessary site review and planning. Additionally the Bering Strait School District is not able to send any contractors to do the actual construction without air service. So the

students at Diomede continue to have a sub

- standard school facility.

The State of Alaska has not been able to deliver state services to the village because of

the lack of air service. For example, the Alaska Department of Transportation owns and operates the heliport at Diomede, and DOT has been unable to send an electrician to Diomede to repair landing lights at the airport. DOT is not able to do a transportatio n planning study for Diomede because there is no air service to go and have public meetings in Diomede. Similarly

, last year the Alaska Department of Military and Veterans Affairs was not able to send personnel to Diomede to maintain the National

Guard Ar mory building and as a result the roof caved in due to heavy snows. The Department of Public Safety is not able to send personnel to Diomede for any law enforcement purpose. The Department of Health and Human Services is not able to send personnel to inv estigate any family or child protection issues.

R ecommended Solution

In the past year, Diomede residents have not had the ability to freely travel from their home community to neighboring communities. This has hindered their ability to seek economic oppo rtunities and routine health care for their individual well being.

After many discussions with the key organizations, it has been determined that is in the

best interest of the residents of Diomede to work with the State of Alaska/Department of
Commerce, Community and Economic Development , Division of Community and Regional Affairs, as their legal sponsor

, to seek grant funds to e stablish air transport to their community. Based upon the Department’s ability to administer both federal and state grants, thi s would be the first step toward securing the financial resources to initiate

scheduled and sustainable air transport to Diomede.Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 10 Diomede is not able to apply for the Office of Aviation/Essential Air Service grant funds, which would provide a subsidy to es tablish air service to the community. They are not eligible to apply for these grants funds, since the federal law stipulates that scheduled commercial air service had to have been in place prior to October 24, 1978. It would require an act of Congress to reverse the federal law.

In the interim the grant application for the small SCASD grant program can provide the

much needed financial resources to establish scheduled weekly air transport to Diomede as well as provide the time needed to document the leve l of need for air transport

services

.

As previously mentioned, Diomede has weekly mail services via Evergreen . The company ceased air service for Diomede residents in July 2009. The helicopter used to transport Diomede residents required a complete mechan ical overhaul. In its place, a smaller helicopter was dispatched to provide weekly mail service. Evergreen will not provide air services to and from Diomede with a single engine helicopter as a matter of company policy

.

For events that are life threateni ng or require immediate medical attention, transport to the mainland by boat is not an option for the community at all. Medevac by Coast Guard or Alaska National Guard is only available in emergency situations and all transports are

taken to Seattle

.

For community members who may be in imminent danger, finding refuge from a perpetrator is nearly impossible, without reliable air transportation to and from Diomede. Professionals that can provide injunctive relief for victims are not able to perform their

st atutorily defined mandates, without air transportation.

Diomede residents who unexpectedly pass away, pose an exceptionally heart wrenching dilemma to the inadequate air transportation issue. For those who require an autopsy, these standard requests a gr ieving family makes in any other community, face lengthy delays for transport. This adds unnecessary heartache to a grieving family. There is one documented case where the body of a boy had to be transported to Nome in a helicopter in a sitting position with other passengers. These are unacceptable conditions in a country as wealthy as the United States.

I V. Potential Economic Development

Although Diomede’s remote location has hindered community transportation, there have

been recent stud ies undertaken to explore the Northwest Passage as an emerging strategic location for ocean freight traffic. The Army Corps of Engineers and regional partners such as Kawerak, Inc. and the Denali Commission have initiated a feasibility study to strategize constructing a boat harbor in Diomede. The extreme ly harsh Arctic O cean weather conditions, coupled with the inhospitable terrain, are issues that require a pragmatic approach when evaluating studies to construct a boat harbor. If a boat harborApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 11 can be constructed, it would offer Diomede barge services, opening the door for future economic development opportunities. The boat harbor could be used as a landing port for vessels and workers supporting future offshore oil exploration to the north of the Bering Strait. Dio mede could also be a future tourist spot, offering a unique snapshot of

Arctic life for small cruise liners.

V. Grant Administration

The Intended Service

The requested $1,250,000 will be matched with $ 114

, 729 cash contribution from the City of Diomede, which they use to maintain and operate the heliport . The community of

Diomede intends to use the funds as follows:

**•** Establish scheduled weekly air service to Diomede to demonstrate demand level ; and

,

**•** Provide interim air service that will provide the neces sary time for various regional partners to negotiate financial participation in the Essential Air Service 50% match program, which will continue air service after SCASDP grant funds expire.

Program Structure

The Department of Commerce, Community and Econ omic Development (DCCED) as the legal sponsor for Diomede has federal receipt authority to accept grant funds from the Office of Aviation Analysis. Upon award of grant funds, the Department will prepare a Request for Proposal (RFP) to negotiate a rate agr eement for air service in Diomede.

After securing a vendor through the RFP process, the Department will negotiate a subsidy

rate agreement to establish scheduled air service at Diomede, Alaska as soon as possible

.

DCCED will monitor the pro ject, assuring that all program expenditures and progress ar e consistent with US DOT guidelines and grant objectives. DCCED will submit quarterly progress reports during the life of the grant agreement.

The grantee will obtain a certificate of sponsor’s attorney, as t he legal sponsor for the project. All grant terms and conditions will be identified in the certificate of sponsor’s attorney, in accordance to Title 49 U.S.C. The State of Alaska

, Department of Law and the Office of Aviation Analysis will provide technic al assistance to DCCED to finalize the certificate of sponsor’s attorney and negotiate the terms of the agreement.Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 12 Funding and Cash Contribution

The grant application is $1,250,000. This will include a cash contribution from the city

of Diomede totalin g $ 114

, 729

. The City of Diomede ’s cash contribution will be the

continued maintenance and operation cost for the existing helipad. The total amount will be applied as show below.

Diomede Grant Program Fund Allocation over Three Years

Fund Source Amount Total Office of Aviation Analysis $

Year One $416,667 $416,667

Year Two $416,667 $416,667

Year Three $416,666 $416,666 City of Diomede , heliport maintenance

Year One $ 38,243 $ 38,243

Year Two $ 38,243 $ 38,243

Year Three $ 38,243 $ 38,243

Total: $1,364,729 $1,364,729

DCCED /DCRA program oversight will not exceed $100,000 per year for three years

. This will include one project administrator salary and fringe benefits, travel to Diomede, office equipment and supplies. DCRA will closely monitor the performance of the project, coordinat e communication with the community, air carrier providing service

, and other partner agencies. DCRA will submit all required reports as well as an end of project report as required by the funding agency. DCRA will ensure all grant activities meet federal, state and local statutes, regulations, ordinances and customs.

V I

. Unreasonably High Air Fare s

There is no helicopter service available to Diomede, and emergency medevac is only

available from the U

. S

. Coast Guard or Alaska National Guard as a last resort measure. For a community that meets federal standards of an economically distressed community, securing funds in order to travel for a medical appointment or to seek employment opportunities is an insurmountable challenge.

Given the scarce economic opportunities in the community of Diomede and the unpredictability of air transport, resid ents have very little chance to seek jobs. Diomede is an economically distressed community. The federal government defines an economically distressed community as follows:

**•** Per capita income of 80 percent or less than the national average; or

**•** An unemploy ment rate one percent greater than the national average for the past 24 months.Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 13 The most current data for per capita and unemployment rates for Diomede reported by

the Denali Commission are as follows:

Distressed Community Status 2010

Alaska Communities by Borough/Census Area and Place

2010

Distressed Community 2009 Distressed Community Average earnings in

2009 from UI employment & fishing Percentage

with 2009 earnings less

than

minimum wage of $14,968 Percentage employed all 4 quarters of 2009

Distressed Non

- Distressed 11,388 75.7 30.0
Distressed Community Criteria 2010 Update by the Denali Commission

The 2010 distressed community data report is updated annually by the D enali Commission, with data derived from the State of Alaska/Department of Labor

- Research and Analysis Section. The state agency uses the m ost current population, employment and earnings data available to the comm unities considered distressed.

Distressed communities are determi ned by comparing :

**•** A verage income of a community to full

- time minimum wage earnings,

**•** T he percentage of population earning greater than full

- time minimum wage earnings , and

**•** A measure of the percentage of the population engaged in year

- round wage and salary employment.

In addition to comparing per capita income and unemployment rates in each community, the Denali Commission included aggregate data for distressed communities. The Commission included three sources of data in the 2010 distressed community lists.

**•** 2009 Permanent Fund Dividend (PFD) applications. The application includes each applicant’s age, social security number, and physical place of residence.

**•** Alaska unemploym ent insurance wage records for calendar year 2009. The records include wage and salary worker earnings from all private, state, and local government employers. Federal government, military and self employed earnings

are not available and not included in th e earnings estimate.

**•** Calendar year 2008 Commercial Fisheries Entry Commission (CFEC) total fish value data by community, which is the most current data.

Including the 2009 PFD applicants age 16 and over in 2009 were assigned to an Alaska borough/census ar ea and community by place of residence. PFD applicants age 16 and over were matched with wage and employment information by SSN. CFEC 2008 totalApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 14 fish values were added to wage and salary earnings to compute community average

market income.

A community t hat meets two of the following thre e surrogate standard criteria are

considered distressed:

Criteria 1: Average market income in 2009 is less than $14,968.

Average market income = Community UI earnings + Community CFEC earnings

Number Residents 16 a nd Over

$14,968 = Minimum Wage until 7/24/09 ($7.15/hour x 1,120 hours/year)

Criteria 2: More than 70% of residents 16 and over earned less than $14,968 in

2009.

Percent residents with earnings < than $14,968 = 100 x number residents w/ earnings < than 14,968

Number Residents 16 and Over

Any community with more than 70% of its residents earning less than $14,968 in 2009

meets the criteria.

Criteria 3: Less than 30% residents 16 and over worked all four quarters of 2009.

Percent residents employed all 4 quarters = 100 x number residents employed all 4 quarters

Number residents 16 and over

Any community with less than 30% of its residents employed all four quarters of 2009

meets the criteria.

V II

. Summary

Key Point s to Grant Application

This grant application establishe s the desperate need to restore air service to the community of Diomede. Key points to the grant proposal are:

**•** Achievement of T wo M ajor S trategic G oals

Establish ing scheduled weekly air service to Diomede, demonstrating demand

level and p rovid ing interim air service, allowing the necessary time for regional partners to negotiate financial participation in the Essential Air Service 50% match program.

**•** Severely Limited Air Transportation to Diomede Air transportation has been severely limited to the community since July 2009, over a year’s time. N ot having reliable, safe air service to Diomede hasApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 15 negatively impacted the daily living conditions of its citizens. All se rvices available to the community, including medical, dental, mental health and social service providers has abruptly ended, with the suspension of helicopter service.

**•** Extremely High Airfare When helicopter service was available to Diomede residents, the airfare was extremely high. Round

- trip airfare was $640 from Diomede to Nome.
Oftentimes, only one seat ticket was available for sale. Given the treacherous weather conditions in Diomede, it is not unusual for travelers to be stranded in another community for weeks or months at a time. Charter helicopter service, while not available now, cost about $10,000 for a round

- trip flight from Nome to

Diomede when it was available.

**•** Life or Death Trav el Alternatives Given the dire transportation issues in Diomede, residents have utilized either skin or aluminum boats to travel in open ocean. Travel in open ocean conditions is extremely dangerous and residents have lost their lives, attempting to secur e goods and services so many of us take for granted in our daily lives.

**•** Community Economic Sustainability Diomede cannot offer professional economic opportunities for t heir residents or

others to remain in their community. Lifelong Diomede residents have been

forced to move to communities that have reliable transportation. Professional and service providers that have reside d in Diomede , move elsewhere, due to the unpredictable and harsh weather conditions. In 2009, new schoolteachers were being transpor ted to Diomede by boat. Due to rough seas, they were forced to

moor outside of Diomede for 16 hours , totaling a 36

- hour transit

.

With these key points in mind, DCCED believes that the $1,250,000 grant will be an excellent application of the program’s sca rce funds. It will establish scheduled air service to Diomede, ensuring the overall well being of an entire community

. Additionally the grant will provide the basis to demonstrate passenger demand level and provide the necessary time to allow regional en tities to negotiate participation in the Essential Air Service 50% match program for continuing air service beyond the three year grant period.Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 16 V III

. Attachments

APPENDIX B

SMALL COMMUNITY AIR SERVICE DEVELOPMENT PROGRAM

DOCKET DOT

- OST

- 2010

- 0124

SUMM ARY INFORMATION

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

form SF424 on htpp://www.grants.gov

A. APPLICANT INFORMATION: (CHECK ALL THAT APPLY)

 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 of grant:

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

Public Private

1. State of Alaska

- Department of Commerce, Community and Economic Development (Legal Sponsor) 2. City of Diomede

. 2.

3. 3.

4. 4.

5. 5.

C. PROJECT PROPOSAL: (CHECK ALL THAT APPLY)

 Marketing  Upgrade Aircraft  New Route

 Personnel  Increase Frequency  Low Fare

Service

 Travel Bank  Service Restoration  Subsidy

 Surface Transportation  Regional Service  Other (specify)

 Revenue Guarantee  Launch New Carrier

 Start Up Cost Offset  First Service

 Study  Secure Additional CarrierApplication under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 17 D. EXISTING LANDING AIDS AT LOCAL AIRPORT:

 Full ILS  Outer/Middle Marker  Published Instrument Approach
 Localizer  Other (specify)

E. PROJECT COST:

1. Federal amount requested: $1,250,000.00

2. Sta te cash financial contribution:

3. Local cash financial contribution: $ 114,729.00

3a. Airport cash funds: 0.00

3b. Non

- airport cash funds: 0.00

3c. Total local cash funds (3a. + 3b.): $ 114,729.00

4. TOTAL CASH FUNDING (1. + 2. + 3c): $1,364,279.00

5. Local funds contributed from already

- existing

Programs or projects included in line 3c. amount: 0.00

6. Local funds contributed from new commitments

or new resources included in line 3c amount: 0.00

7. Airport In

- Kind contribution: 0.00

(amount & description) 0.00

8. Other In

- Kind contribution: 0.00

9. TOTAL IN

- KIND CONTRIBUTION (7. + 8.): 0.00

10. TOTAL PROJECT COST (4. + 9.) $1,364,279.00Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 18 F. ENPLANEMENTS:

2000

- 0

- 2004

- 0

- 2008

- 0

- 2001

- 0

- 2005

- 0

- 2009

- 0

- 2002

- 0

- 2006

- 0

- 2003

- 0

- 2007

- 0

-

G. IS THIS APPLICATION SUBJECT TO REVIEW BY STATE UNDER

EXECUTIVE ORDER 12372 PROCESS?

 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)

 No  Yes (explain)Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 19Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 20Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 21Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 22Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 23Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 24Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 25Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 26Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 27Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 28Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 29Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 30Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 31Application under the 2010 Small Community Air Service Development Grant Program

Community of Diomede Page 32