Airport Industry Familiarization and Training for Part-Time Airport Policy Makers (2011) / Chapter Skim
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Pages 3-48
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Purchasing Goods and Services for Your Airport 17. Use of Airport Revenue 18.
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4g e n e r a l T h e A ir p o r T F iN A N C iA L r u L e s 1. The Roles of Airport Policy Maker and Airport Manager Key Point Successful airports are characterized by an effective working relationship between airport policy makers and management.
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5R U L E S F IN A N C IA L T H E A IR P O R T G E N E R A L Typical roles and responsibilities of the policy-making body and airport management are shown below: Governing Body/Policy Maker Airport Management/Manager Establishes policy Implements policy Sets goals Runs the airport day-to-day Identifies strategies for fulfilling the vision Reports to the governing body Executes contracts Operates the airport safely and efficiently Serves as airport advocate Maintains the airport and its facilities Approves plans and programs Prepares financial plans Assigns and oversees the airport manager's responsibilities Oversees public relations Selects consultants and service providers Makes provisions for passengers and the public Recommends and enforces rules and regulations Oversees planning and construction projects Secures new business Airport policy-making boards generally have several documents that govern their activities, including: • Bylaws -- rules of order and protocol for documenting official acts; • Contracts and ordinances -- defines the board's relationship with the airport users and tenants; • Rules and regulations -- outline the board's relationship with airport users not otherwise bound by contracts and ordinances (see Issue Paper - Rules # 18: What's Expected of Airport Tenants and Users) ; • Job descriptions -- position descriptions for airport staff; • Code of ethics -- establishes policies as required by local/state law regarding the conduct of board members; defines conflicts of interest; and • Annual budget -- outlines anticipated revenues and expenditures.
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6g e n e r a l T h e A ir p o r T F iN A N C iA L r u L e s 2. Principles of Governance Key Point Members of airport governing bodies are charged with adhering to basic fundamental democratic principles of governance.
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7R U L E S F IN A N C IA L T H E A IR P O R T G E N E R A L R isks and Liabil it ies Public entities and those that serve them are exposed to certain risks and liabilities. Newly appointed policy makers especially may not understand their responsibilities or their liability if they or the policy-making body take improper actions.
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Some states also license airports based on state standards.A irp ort Ma nagement and Sta Po licy making Board Airport Owner Advocacy Industry Groups • American Association of Airport Executives • Airports Council International • National Association of State Aviation Officials • Aircraft Owners and Pilots Association • National Business Aviation Association Users • Concessionaires • Airlines • Tenants • Fixed Base Operators • Pilots • Hangar Owners Regulators/Government Partners • Federal Aviation Administration • Transportation Security Administration • State Aviation Agency • Local Agencies Key Stakeholders • Airport Customers • Passengers • Community • Neighbors • General Public Ai rp ort Ma nagement and Sta Po licy -making Board Airport Owner Advocacy Industry Groups • American Association of Airport Executives • Airports Council International • National Association of State Aviation Officials • Aircraft Owners and Pilots Association • National Business Aviation Association Users • Concessionaires • Airlines • Tenants • Fixed Base Operators • Pilots • Hangar Owners Regulators/Government Partners • Federal Aviation Administration • Transportation Security Administration • State Aviation Agency • Local Agencies Key Stakeholders • Airport Customers • Passengers • Community • Neighbors • General Public
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; • Administering a multi-billion dollar Airport Improvement Program for the planning and development of airports (see Issue Paper # 14 - Financial: Funding Capital Improvements) ; • Certifying pilots, aircraft, and commercial airports; • Maintaining standards for development of airports; • Regulating air travel; • Publishing the National Plan of Integrated Airport Systems (NPIAS)
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. AIP grants provide much of the funding for airport capital improvement projects that enhance capacity, safety, and security, preserve existing infrastructure, and mitigate environmental impacts.
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11 R U L E S F IN A N C IA L T H E A IR P O R T G E N E R A L FAA identifies the following basic principles of the NPIAS. Many of these are based on law and are reflected in FAA's programs, regulations, and policies.
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12 g e n e r a l T h e A ir p o r T F iN A N C iA L r u L e s 5. Understanding and Conveying the Value of Your Airport Key Point The value of an airport to a community can be significant because it provides access to the national airspace system and serves the needs of businesses, the flying public, emergency medical activities, aerial firefighting, aerial agriculture, search and rescue operations, law enforcement, and other uses.
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✓ Learn who local, state, and federal decision makers are and be prepared to work with the airport manager to promote your airport's needs to these individuals. ✓ See publications and websites from airport industry groups.
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Common terminology that pilots and air traffic controllers use relative to runways are "preferred" and "primary" runways. The primary runway is normally the one that is longest and/or has the best navigational aid capability.
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Air Traff ic Control and Pi lot Communic ations Some airports have an air traffic control tower (ATCT) where ATCT staff communicates with pilots to ensure aircraft are properly separated when taking off or landing.
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g e n e r a l F In a n C Ia l r u l e s T h e a Ir p o r T 16 7. Basic Elements of Your Airport Key Point An airport's infrastructure is often discussed in terms of landside and airside facilities.
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R U L E S F IN A N C IA L G E N E R A L T H E A IR P O R T 17 D iscussion The airport owner ensures landside features such as access roads, circulatory roads, and auto parking are of sufficient capacity and are appropriately maintained to meet passenger and customer needs. Other features seen on the landside of an airport include both aviation and non-aviation related businesses, support buildings, and facilities.
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Some are small and fairly calm while others are large and bustling with activity for much of the day. Although unique as standalone entities, all airports link communities to the national air transportation network and are seen as places of action and commerce since their primary role is to safely transport people and cargo.
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General Aviation Airport (Small) Airlines Passenger terminal General aviation terminal Food service Taxis on site Concession shops Charter service Fixed-base operator full-service Fixed-base operator minor service Cargo facilities Flight training Medivac facilities Air traffic control Federal customs/ inspection Federal passenger security operations Airport rescue and fire fighting operations Airport maintenance on-site Snow removal/ de-icing Applic ation ✓ Tour your airport to become aware of its activities, services, and tenants.
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Federal Aviation Regulations (FAR) Part 139 outlines these "competency" requirements and applies to airports that serve scheduled air carrier aircraft with more than nine seats or unscheduled air carrier operations in aircraft with more than 30 seats.
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R U L E S F IN A N C IA L G E N E R A L T H E A IR P O R T 21 Part 139 certificated airports are required to have an emergency plan; however, all airports should have a plan for how to handle emergencies. The plan should be coordinated closely with other regional emergency plans and agencies.
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The primary elements of an airport master plan include: Master plans also consider state or regional system plans which assist with understanding how the airport fits in a larger region or area, both now and in the future. • inventory of existing facilities; • development of 20 year forecast of aviation activity; • identification of facility requirements to meet anticipated aviation activity; • consideration of alternatives; • overview of environmental impacts; • analysis of financial feasibility; • preparation of an ALP, showing the 20-year proposed development.
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While use of the term "ALP" typically refers to the primary drawing sheet, the ALP actually consists of an entire set of drawings which includes: • Airport Layout Plan Drawing -- existing and proposed facilities (the primary drawing) ; • Terminal Area Plan -- enlarged view of terminals, aprons, hangars, and auto access/parking; • Airport Airspace Plan -- protected "imaginary" surfaces in airspace surrounding the airport; • Land Use Map -- existing and future land use on and around airport property; and • Airport Property Map -- airport property boundary, inner parcels, and adjacent properties.
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The FAA relies on the ACIP to serve as the basis for the distribution of limited grant funds under the AIP. A sponsor's ACIP represents their five-year program for planning and development at their airport.
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R U L E S F IN A N C IA L G E N E R A L T H E A IR P O R T 25 Projec t Design and Construc t ion Assuming projects are consistent with an approved ALP and have environmental approval and funding for construction is fairly certain, sponsors normally proceed with preparation of detailed design documents and project construction. There are specific federal requirements for how these services are procured (see Issue Paper # 16 – Financial: Purchasing Goods and Services for Your Airport)
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Typical Incompatible Land Uses Airport Obstructions RUNWAY SURFACE RU N W AY PRO TEC TIO N SU RFA C E RUNWAY PROTECTION SURFACE RUNWAY PROTECT ION AREA RUNWAY PROTECT ION AREA Tree Penetration Structure Penetration Tree Penetration Cell Tower Penetration Tree Penetration Airport Obstructions RUNWAY SURFACETree Penetration Structure Penetration Tree Penetration Cell Tower Penetration Tree Penetration PICK ONE
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R U L E S F IN A N C IA L G E N E R A L T H E A IR P O R T 27 Noise Considerable progress has been made over the past 20 years to reduce aircraft engine noise; however, this issue remains as a point of controversy between airports and their neighbors. The public is concerned not only about the total amount of noise to which it is exposed, it is also concerned about the number of flights that pass over their home, the individual noise levels emitted from aircraft, the time of day or night aircraft pass over, and the aircraft's height in proximity to the ground.
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D iscussion Some of the significant national issues that hold the potential to have the greatest local impact are: • Sustainable funding for airport development and use of federal aviation tax revenues. Many airports depend heavily on federal funding for activities such as airport development, federal operation and maintenance of air traffic control systems and navigational aids, and airport security.
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R U L E S F IN A N C IA L G E N E R A L T H E A IR P O R T 29 • Trends in aircraft development and their impact on airport operations and airport development. Just as aircraft have evolved from the Wright Flyer to jets, industry continues to develop new aircraft types.
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g e n e r a l T h e a ir p o r T r u l e s F in a n C ia l 30 13. Sources and Uses of Operating Funds Key Point To ensure the effective and efficient delivery of aviation services to the community they serve, airport governing bodies develop and implement financial management policies and procedures, including an annual operating budget, for operating expenditures and revenues.
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✓ DO NOT illegally use airport revenue for non-airport expenses. Anticipate being pressured to do otherwise.
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Airport development funding is principally provided through: • FAA AIP grants; • State grants; • Passenger Facility Charge (PFC) revenues (commercial airports only)
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AIP grants are used for the planning and development of airports including infrastructure, land acquisition, and noise compatibility programs. AIP funds cannot be used for airport operating expenses.
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In the year 2010, the maximum entitlement amount a general aviation airport could obtain was $150,000 per year. General aviation airports can also compete for AIP grants through state apportionment allocations.
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Passenger Faci l i t y Charge (PFC ) Pro gram Commercial airports are permitted to assess a fee on passengers known as a passenger facility charge (PFC)
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. Strategic Plan Business Plan Land Use Plan Airport Master Plan Plan Air Service Plan Marketing Plan Vision Mission Strategic Plan Annual Goals Annual Budget A Typical Business Process: Strategic Plan Strategic Plan Business Plan Land Use Plan Airport Master Plan Plan Air Service Plan Marketing Plan Vision Mission Strategic Plan Annual Goals Annual Budget A Typical Business Process: Strategic Plan $
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By conducting surveys and measuring performance, the governing body is ensuring, to the greatest extent possible, that the highest quality aviation services are provided to the public. Rules and Regulations and Minimum Standards.
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g e n e r a l T h e a ir p o r T r u l e s F in a n C ia l 38 16. Purchasing Goods and Services for Your Airport Key Point Airports purchase a wide array of supplies, services, equipment, and even land.
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R U L E S T H E A IR P O R T G E N E R A L F IN A N C IA L 39 Construction contractors need to be properly licensed and bonded and must comply with the construction plans and specifications developed for the project. The construction plans show the project requirements in a graphic form, while the specifications describe in greater detail the requirements of the materials to be used, testing/quality assurance methods, how work is measured and accepted for payment, schedule/time, and employee wage rates requirements.
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FAA policy and federal law identify several specific examples of permitted uses of airport revenue including: • Capital development of airport facilities; • General operating costs of the airport; • Operating costs such as the promotion of public and industry awareness of the airport's facilities and services; and • Operating costs for the promotion of new air service and competition at the airport, but not directly subsidizing air carrier operations. FAA policy and the law identify specific examples of revenue diversion, such as: • Direct or indirect payment by the airport that exceeds the fair and reasonable value of those services and facilities provided to the airport; • Inconsistent or inequitable costs allocated to the airport by a local governing body providing services to the airport; • General economic development; Revenue diversion is the use of airport revenue for purposes other than airport capital or operating costs.
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There are many other examples of permitted and prohibited uses of airport revenue. Local FAA offices can assist airport sponsors to better understand the legal requirements relative to the use of airport revenue.
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These measures should apply to all persons using the airport. Also, airport owners should establish minimum standards for commercial aeronautical activities conducted at the airport.
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If there are none, consider working with the airport manager to adopt them. ✓ Make sure your airport rules and regulations and minimum standards are reasonable and non-discriminatory to aeronautical services.
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Obligations related to the funding of land acquisition remain in force in perpetuity. See Issue Paper 14 – Financial: Funding Capital Improvements for more information about how to get grant funds and what kinds of projects are eligible.
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These programs ensure maximum life expectancy for pavements so scarce dollars can be effectively utilized. Applic ation ✓ Become familiar with the formal grant assurances with which airport sponsors agree to comply when accepting federal grant funds.
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g e n e r a l T h e a ir p o r T F in a n C ia l r u l e s 46 20. Alternate Uses and Restrictions of Your Airport Key Point Airport policy makers are sometimes asked to consider restricting the use of the airport or to disallow certain activities.
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R U L E S F IN A N C IA L T H E A IR P O R T G E N E R A L 47 Generally, airports cannot restrict certain aircraft perceived to be noisy, nor can they restrict nighttime operations. There are complex regulatory requirements for doing this and one should contact FAA's Airports District Office or FAA Regional Airports Division before considering such action.
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Appendices
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Key Terms
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