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C.M. > Module 1 Finance and Administration > Flashcards

Module 1 Finance and Administration Flashcards

1
Q

Air Mail Act of 1925 (The Kelly Act)

A

Authorized the postmaster general to contract for domestic air mail service with commercial air carriers. By transferring it to private companies, the government helped create the commercial aviation industry. Also stated only those who use aviation should pay for it. “aviation should pay for itself”

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2
Q

Air Commerce Act of 1926

A

Created a new aeronautics branch in the department of commerce an charged the agency with:

  1. fostering air commerce
  2. Issuing/enforcing air traffic rules
  3. Licensing pilots
  4. certifying aircraft
  5. Establishing airways
  6. Operating/maintaining navaids
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3
Q

CAB

A

In 1940, CAA split authority:

  • made safety rules
  • Conduct accident investigations
  • Economic regulation of the airlines

CAA Retained:

  • ATC
  • Pilot/aircraft certification
  • Safety enforcement
  • airway development

-Dissolved in 1978 by the airline deregulation act of 1978

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4
Q

The works progress adminisration

A
  • Part of FDR’s New Deal
  • Assisted in funding new airports/expansions of existing facilities
  • Funded the development/expansion of 852 airports
  • only provided 50% of the funding
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5
Q

Federal Aid to Airports Program (FAAP)

A

Provide grant funds for certain airport projects (mostly RWY/TWY development)

To be eligible:
-Have to be part of National Airport Plan (NAP) which provide recommendations for construction, mx, operations

  • federal government provides 50% funding
  • Had to be available for public use without discrimination
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6
Q

The Federal Aviation Act of 1958

A
  • Created the FAA
  • directed the FAA to take over safety rule-making from CAB
  • responsible for developing a common civil-military system of air navigation and atc
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7
Q

Airport and Airway development Act

A

-Passed to continue flow of grant money to airports

2 programs:

  • Airport development aid program (ADAP)
  • Planning grant program
  • Created a certification program and Airport Operations
    • Part 139
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8
Q

ADAP

A

Airport Development Aid Program

Provides funds for airport development projects (expanding the list of eligible projects)

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9
Q

Planning Grant Program

A

Provided funds for airport master plans and system plans

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10
Q

Airport and Airway Revenue Act

A
  • 1970
  • Created the airport and airway trust fund
    • Financed by 8% tax on domestic passengers airfares, $3 surcharge on passenger tickets, 7 cents tax per gallon of fuel, 5% on air freight, annual registration for aircraft by weight
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11
Q

1982: Airway improvement Act

A
  • Established AIP
  • Expanded list of eligible projects
  • Changed NAP to National Plan of integrated airport systems (NPIAS)
  • Created classification system (Small, large hub, etc)
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12
Q

2003: The vision 100- Century of Aviation Reauthorization Act

A
  • NextGen

- Multiple initiatives to make air travel more efficient, secure and safer overall

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13
Q

Airport Stakeholders: Government Entities

A

FAA, TSA, CBP, ICE, federal protective service, department of agriculture

State/local: Airport Operations, police/fire

ATC and mx of navaids, providing pax/baggage screening, screening of international passengers/baggage, wildlife control

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14
Q

Airport Stakeholders: Aeronautical Users

A

airlines, corporate flight departments, private aircraft operators, FBO, flight schools, aircraft mx, aircraft charter

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15
Q

Airport Stakeholders: Non-Aeronautical Users

A

Concessionaires, vendors, contractors, non aircraft tenants, rental cars, advertisers

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16
Q

Airport Stakeholders: The Community

A

Passengers, air cargo shippers, surrounding developments, that rely on the airport (hotels, restaurants), industrial parks that are located near the airport for the benefits

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17
Q

Stakeholder desires: Airlines

A

efficient passenger baggage, cargo and aircarft throughput, which is both a determination of the airport deign and operations. they also want maneuvering space for aircraft, office and administrative facilities, and amenities for their passengers.

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18
Q

Stakeholder desires: Corporate aircraft operations

A

own fueling abilities, affordable fuel on site, a great degree of confidentiality/discretion

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19
Q

Stakeholder desires: Private Aircraft

A

ramp space, tie downs, hangar space

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20
Q

Stakeholder desires: FBOs and SASOs

A

An airport good for business, level playing field, minimum standards

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21
Q

Stakeholder desires: Non-Aeronautical Users

A
  • Good passenger traffic

- maximum visibility

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22
Q

NPIAS

A
  • Identifies 3331 existing and 14 proposed airports that are important to the national airport transportation system and can receive grants under FAA AIP
  • Published every 2 years and a 5 year projection
  • includes eligible airport projects that are considered necessary to provide safe efficient and integrated system of public use airports adequate to meet the needs of national defense, USPS and civil aviation
  • Identifies the airports, the role they serve and the amounts/types of airport development eligible for federal funding under the AIP over the next 5 years

-ONLY AIP ELIGIBLE DEVELOPMENT

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23
Q

Qualifications to be part of NPIAS

A
  • Publically owned
  • If its private but designated as a reliever by the FAA
  • Privately owned with scheduled air service of at least 2,500 annual enplanements
  • GA reliever airports
  • Airports receiving scheduled air service to where a freight forwarder, FBO, is under contract with USPS
  • Any public use where a unit of ANG or reserve unit permanently based
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24
Q

Airports that don’t meet criteria but may be part of NPIAS if:

A
  • Part of state airport system plan
  • Serving a community more than 30 minutes from the nearest NPIAS airport
  • Forecast to have 10 or more based aircraft within the next 5 years
  • Currently being considered by an eligible public sponsor who’s willing to undertake ownership and development of the airport
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25
Q

Airports who don’t meet any criteria can be included through special justification such as:

A
  • A determination that the benefits of the airport will exceed its development costs
  • Written documentation describing isolation
  • Airports serving the needs of American Indian tribes
  • Airports needed to support recreation areas
  • Airports needed to develop or protect important national resources
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26
Q

3 measurements to gauge airport activity

A
  • Enplanements
  • Operations
  • Cargo Tonnage
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27
Q

5 types of airports

A
  • Private
  • Commercial Service
  • Cargo service
  • GA/GA reliever
  • Military
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28
Q

Commercial Service airport

A

Publically owned and have at least 2,500 annual enplanements

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29
Q

GA airport

A

Public use and no scheduled service or less than 2,500 enplanements

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30
Q

GA Reliever Airport

A

designated by the FAA to relieve congestion at commercial service airports and to provide improved access to the community

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31
Q

Cargo Service Airport

A

served by aircraft transporting cargo with a total annual landed weight of more than 100 million pounds. An airport can be both commercial service and cargo

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32
Q

Joint-Use Airport

A

Airport owned by DOD at which both military and civilian aircraft make shared use of the airfield

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33
Q

Shared-Use airport

A

U.S. government owned airport that’s co-located with a civil airport specified under, at which, portions of the movement/safety areas are shared with both parties

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34
Q

Primary Airport

A
  • Receive scheduled air carrier service with 10,000 or more enplanements a year
  • Grouped into 4 categories:
    • Large
    • Medium
    • Small
    • Non-hub
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35
Q

Nonprimary Airport

A
  • Mainly used by GA aircraft
  • Included are nonprimary commercial service airport (enplanements 2,500-9999), GA and relievers
  • Grouped into 5 categories:
    • National
    • Regional
    • Local
    • Basic
    • Unclassified
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36
Q

Large Hub Airport

A
  • Largest commercial service airports
  • Serve at least 1% or more of total US passengers
  • 29 large hubs in the US (70% of all passengers)
  • Tend to be more commercial/cargo and minimal GA
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37
Q

Medium Hub Airport

A
  • 33 in the US
  • Enplane .25-1% annually
  • 17% of all passengers
  • Mix of both commercial and GA
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38
Q

Small Hub Airport

A
  • Enplane .05-.25% total passengers
  • 76 in the US
  • 9% of all enplanements
  • Commercial usually less than 25%
  • Usually higher levels of GA
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39
Q

Nonhub Primary Airport

A
  • 10,000 enplanements
  • 251 airports
  • 3% of all enplanements
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40
Q

Nonprimary Airport

A
  • Predominantly GA
  • Included are nonprimary commercial service
    • Receiving 2,500-9,999 enplanements
  • GA/reliever airports
  • 125 Airports
  • Enplane .1%
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41
Q

GA included in NPIAS

A
  • Account for enough activity
  • @ least 10 based aircraft
  • @ least 20 miles from the nearest NPIAS airport
  • 36%
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42
Q

GA National Airports

A
  • 84
  • Located in metro areas near major business centers
  • heliports/seaplane bases not included
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43
Q

GA Regional Airports

A
  • 467
  • located in metro areas
  • no heliports/seaplane bases
  • support both interstate and intrastate flying
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44
Q

GA Local Airports

A
  • 1236
  • Mostly piston aircraft
  • Accommodate flight training, EMS, and charter
  • No heliports
  • Business/personal needs
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45
Q

GA Basic Airports

A
  • Often have just 1 RWY, helipad, or seaplane base
  • Private
  • 3 heliports
  • 20 Seaplane bases
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46
Q

ICAO

A

International Civil Aviation Organization

Ensure that flight operations are conducted in a consistent manner and that there’s a common vocabulary and operating principles amongst pilots, aviation systems, and airport operators

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47
Q

Commercial Operations

A

-14CFR119 air carriers and commercial operators
-Identifies requirements for aircraft engaged in
commercial carriage in passengers carrying or cargo

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48
Q

Scheduled Air Carrier Operation

A
  • Part 121
  • Provides a schedule containing departure location, departure time, arrival location of flight offered
  • Can only operate at airports that are under part 139
  • Restrictions based on class of airport but can allow alternatives if approved by the air carrier if not on a regular basis or an emergency
  • Covers 15 minutes before take off to 15 minutes after landing
  • ARFF, Wildlife, snow, and lightning
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49
Q

14CFR121

A

Operating requirements: Domestic, flag and supplemental operations (i.e. air carrier certifications)

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50
Q

14CFR135

A
  • Usually non-scheduled
  • Operator requirements: commuter and on demand operations and rules governing persons on board such aircraft (i.e. air charter/taxi)
  • Different training, safety and maintenance standards
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51
Q

14CFR380

A
  • Public charters (i.e. when an air carrier leases a plane to resort company to use the plane to fly their members to a destination).
  • Required to operate to/from part 139 airports
  • 1 way/round trip flight performed by direct air carrier and sponsored by an air charter
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52
Q

Direct Air Carrier

A

Certificated domestic/foreign air carrier, an air taxi operator or a commuter air carrier that directly engages in the operation of an aircraft under a certificate, permit or exemption issued by DOT. Has control over the operation function performed in providing transport

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53
Q

Indirect Air Carrier

A
  • Uses commercial air transport to move passengers/cargo but doesn’t own/control aircraft
  • Any person (industry or corporation) such as tourist/athletic organization that engages in services of a direct carrier in the transport of passengers, cargo or baggage
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54
Q

Available information before a flight

A
  • A/FD
  • Weather at both airports
  • NOTAMs
  • Other important information
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55
Q

Visual Meteorological Conditions

A
  • 1,000 ft. AGL (clouds)
  • 3SM
  • below 18k MSL= no flight plan required
  • “See and Avoid”
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56
Q

Sectional Charts

A

-Airport, weather, navigation, communication frequencies
-navaids
-light patterns of cities at night
-terrain features
-obstructions
airspace

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57
Q

High vs. Low altitude enroute charts

A

low= below 18k MSL
high=above 18k MSL

Show victor airways or jet routes between navaids

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58
Q

Types of weather reporting

A 
ASOS= Airport Surface Observation Station
AWOS= Airport Weather Observation Station
ATIS= Automated terminal information Service
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59
Q

Airport Sponsor

A
  • Airport owner/operator
  • Governing entity of a single airport or airport system
  • board of locally elected/appointed officials
  • “Any public agency or private owner of a public use airport as defined by the airport/airway improvement act of 1982”
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60
Q

Enterprise Fund

A

Typically municipal airports. Refers to a branch of government that operates like a business

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61
Q

5 basic types of airport sponsors

A
  • Municipality
  • Airport Authority
  • Port Authority
  • State
  • Private
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62
Q

Airport Advisory Board

A

Review requests from airport staff and prepare recommendations for the airport sponsor to act upon

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63
Q

Airport Authority

A
  • Created through enabling legislation that makes the authority the legal sponsor of the airport
  • Makes decisions on the direction and overall mgmt of the airport
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64
Q

Reasons municipalities create airport authorities

A
  1. Airport market/service area have outgrown political boundaries, such as when its operated by a single entity but has economic impacts that affect a wider region
  2. Authorized control of the airport allows for governing board to concentrate/specialize on airport business matters rather than general social/communication issues not related to the airport
  3. Authorities can provide on scene decision making, which shortens the process and allows mgmt to take advantage of fleeting opportunities and less political influence
  4. Can provide multiple jurisdictions with representation in the airports operation and development
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65
Q

Advantages of municipal owned airports

A
  • Airport administration often has better access to the resources of other city departments
  • Reduces requirements to have duplicate HR, purchasing, accounting, police/fire
  • Power to tax/issue bonds to aid in opportunity and capital development of an airport
  • Access to larger resources
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66
Q

Disadvantages of municipal owned airports

A
  • Policy makers are often unfamiliar with the operation of an airport nor can they devote a lot of time
  • Airport must compete for the same amount of attention as other departments
  • When financial times are tough in the city, the airport is usually viewed as another department and not that it generates its own funds, which leads to cuts
  • Decisions best for the airport mat conflict with what’s best for the community
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67
Q

Port Authority

A

Special type of legally chartered institution that generally has the same status as a public corporation, but, along with the airport, operates other types of facilities such as harbors, toll roads, subways, etc

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68
Q

Advantages to an Airport/Port Authority

A
  • Focused leadership and specialized attention
  • Equitable taxation
  • Authorities can provide a more business-focused, efficient operation and economy of scale
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69
Q

Disadvantages to an Airport/Port Authority

A

Resources and finances may not be readily available in quantities/levels necessary to provide support to the airport

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70
Q

FAA office of Airports

A
  • Planning/developing a safe/efficient national airport system
  • All programs related to airport safety and inspections
  • Standards for airport design, construction, and operation
  • Awards CIP grants, approves PFCs, compliance with grant assurances
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71
Q

Airport Authorization Program

A

Transfers the federal obligation, as well as the responsibility for operations, mx, and development of an airport from a public sponsor to a private one

exempt from paying federal funds back

Partial contract privatization isn’t considered privatization by FAA definition

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72
Q

Qualities an Airport executive must possess:

A

Clear comprehension of the essentials of pure business mgmt skills including:

  • development/execution of business strategy
  • ops mgmt related to providing the “product” to the airport customer
  • Finance and accounting
  • Organizational behavior including personnel mgmt and HR functions
  • Tactics/processes of effective marketing
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73
Q

Airport executive must understand and balance 2 philosophies

A
  • The airport is a public entity and must be managed as a public entity
  • The airport is a business enterprise and a place for commerce to take place and therefore must also be managed as a business
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74
Q

Duties of the airport sponsor

A
  • set goals
  • identifies strategies for fulfilling the vision of the airport
  • approves plans and programs
  • assigns and oversees the airport manager’s responsibilities
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75
Q

Governing body vs. Airport mgmt/manager

A

Governing body:

  • Establishes policy
  • Sets goals
  • identifies strategies for fulfilling vision of the airport
  • Executes contracts
  • serves as airport advocate
  • approves plans/programs
  • assigns/oversees airport managers responsibilities
  • Selects consultants/service providers

Airport Manager:

  • Implements policy
  • runs airport day to day
  • reports to governing body
  • operates airport safely and efficiently
  • maintains airport/facilities
  • prepares financial plans
  • oversees public relations
  • makes provisions for passengers
  • recommends/enforces regulations
  • secures new business
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76
Q

Factors that are involved in determining airport organization

A
  • Type of governing body owning the airport
  • Size of airport
  • Extent to which different functions of the airport are operated by internal/external parties
  • political environment in which the airport is located
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77
Q

Finance/Administration

A

-Addresses areas of accounting:
-payroll, audits, receivables/payable
-Managing budget:
HR
Procurement
PR
Air Service Development
Marketing
Real estate
Revenue mgmt

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78
Q

Planning/Engineering

A

-addresses areas of CIP, construction standards, airport master plan and ALP
-Compliance with environmental laws
-participate in regional transportation planning
-administrative space planning
-noise abatement planning
Frequently work with FAA’s airports district office (ADO) in administration of federal grants through AIP

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79
Q

Operations/Security/Maintenance

A
  • enforces both operations/security regulations on the airfield and sometimes landside/terminal areas
  • operations deals with FAA certification inspectors for part 139
  • Daily inspections and maintenance
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80
Q

Community relations, marketing, and air service development

A
  • Marketing for airport services and properties
  • publicity and response to issues
  • marketing to new airlines
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81
Q

Airport Legal Counsel

A
  • often reports directly to the board or airport executive

- deals with user agreements, leases, mgmt of environmental issues, insurance, HR issues

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82
Q

NPRM process

A

a draft set of regulations is prepared by a federal agency and then published to the federal register. Upon publication, a public comment period is opened, usually 30-60 days, but varies. Anyone can comment and after the comment period is over, the government agency reply to each comment. They can make changes to regulation then publish it again in the federal register at which point the regulation is enforceable

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83
Q

FAA’s major roles

A
  • Regulating civil aviation to promote safety
  • encouraging/developing civil aeronautics, including new aviation technology
  • developing/operating a system of ATC and navigation for both civil and military aircraft
  • Researching and developing the national airspace system and civil aeronautics
  • developing and carrying out programs to control aircraft noise and other environmental effects of civil aviation
  • regulate commercial space transportation
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84
Q

FAA’s 5 lines of business

A
  1. airports (ARP)
  2. air traffic organization (ATO)
  3. Aviation safety (AVS)
  4. Office of commercial space transport (AST)
  5. NextGen
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85
Q

Air Traffic Organization (ATO)

A

Responsible for keeping air traffic moving and navaid maintenance

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86
Q

Aviation Safety (AVS)

A

focuses on the certification of pilots, mechanics, and other air safety related professionals

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87
Q

Office of Commercial Space Transport (AST)

A

Responsible for all activities related to US commercial space transport industry

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88
Q

Airport District Office (ADO)

A

Oversees compliance with part 139 and grant assurances, airport safety/certification, land transfers, engineering issues, pavement maintenance/CIP, environmental, noise, master plan, RWY safety and guidance issues

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89
Q

Flight Standards District Office (FSDO)

A

Regional office of FAA that concentrates on enforcing regulations pertaining to aircraft and airman certification and licensing. Usually contacted for things such as low flying aircraft, accident reporting, air carrier certification and operations, aircraft maintenance, aircraft operational issues, aircraft permits, airman certification for pilots, mechanics, repairman, dispatchers and parachute riggers

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90
Q

Advisory Circulars

A
  • help explain the intent of an FAR to provide guidance and information to the aviation public in a designated subject area or to show a method of acceptable for complying with a regulation
  • Are not binding unless they’re incorporated with reference to a regulation
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91
Q

Incorporation by reference

A

Allows federal agencies to meet requirements to publish regulations by referring to materials already published elsewhere. The combination of referenced sub-parts is treated as if it were published in full

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92
Q

AC 150 series addresses airports and airport operations related planning/mgmt including:

A
  1. Airport Master Plan
  2. Airport Design
  3. ACM
  4. Airport Self Inspection
  5. Operational safety during construction
  6. Airport FICON assessments and winter operations
  7. Noise control and compatibility planning
  8. Community involvement in airport planning
  9. PFCs
  10. AEP
  11. Minimum standards for community aeronautical activities
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93
Q

FAA Orders

A
  • Directives on specific subjects/programs issued by FAA and remain in effect until rescinded
  • Provides guidance/instruction to FAA personnel on compliance, airport safety/operations and other related issues
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94
Q

SD’s and IC’s

A

SD- Provides changes in regulations to ASP
IC- Provides intelligence information for, or suggest best practices in the domain of airport security

Both are controlled as SSI and aren’t intended for public dissemination

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95
Q

Grant Assurances

A
  • Require the recipients to maintain and operate their facilities safely, efficiently and in accordance with specified conditions
  • Part of the final grant offer
  • Duration of obligation depends on type of recipient, and the useful life of the facility
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96
Q

Grant Assurances balance 3 public interests, which are:

A
  1. Allow airport executives to better manage local affaird
  2. They meet the requirement of the FAA to ensure that federal funds are effectively used to meet the need for public air transportation
  3. Meets the goal of the federal government to promote social objectives, such as disadvantaged businesses and the rights of those with disabilities

ex) Compliance with labor laws, legal provisions to ensure public access, compatibility issues

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97
Q

Types of Grant Assurances

A
  1. General federal requirements
  2. Responsibility/authority of airport sponsor
  3. Sponsor fund availability
  4. Good Title
  5. Preserving rights and powers
  6. Consistency with local plans
  7. Consideration of local interest
  8. Consultation with users
  9. Public hearings
  10. Air/Water quality standards
  11. Pavement preventative maintenance
  12. Terminal development prerequisites
  13. Accounting system, audit, record keeping requirements
  14. Minimum wage rates
  15. Veteran’s preference
  16. Conformity to plans and specifications
  17. Construction inspection and approval
  18. Planning objectives
  19. Operations and Maintenance
  20. Hazard removal and mitigation
  21. Compatible Land Use *
  22. Economic nondiscrimination
  23. Exclusive rights
  24. fee and rental structure
  25. Airport Revenue
  26. Reports and inspections
  27. Use by government aircraft
  28. Land for federal facilities
  29. ALP
  30. Civil Rights
  31. Disposal of Land
  32. Engineering and design services
  33. Foreign market restrictions
  34. Policies, standards and specifications
  35. Relocation and real property acquisition
  36. Disadvantaged business enterprises*
  37. Competitive access
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98
Q

Airport Compliance Manual

A
  • Provides guidance to FAA personnel on interpreting and administering the ongoing commitments made by sponsors to the federal government
  • Rights and powers of the airport
  • complaint resolution
  • airport operations
  • exclusive rights
  • unjust discrimination
  • minimum standards
  • lease agreements
  • revenue diversion
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99
Q

Conditions that obligate an airport to adhere to grant assurances

A
  1. Grant agreements issued under federal airport act of 1946, airport and airway development act of 1970, airport/airway improvement act of 1982
  2. Surplus airport property instruments of transfer, issued pursuant to section 13G of the surplus property act of 1944
  3. Deeds of conveyance issued under section 16 of 1946 airport act, under section 23 of the 1970 airport act, under section 516 of AAIP
  4. AP-4 agreements authorized by various acts between 1939-1944
  5. Commitments in environmental documents prepared in accordance with current FAA requirements, which address the NEPA act of 1969 and the AAA
  6. Separate written agreements between sponsor and FAA, including settlement agreements resulting from litigation
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100
Q

Airport Noncompliance List (ANL)

A
  • Lists obligates airports with egregious violations where the airport sponsor has been informally determined to be in noncompliance with its grant assurances and/or surplus property obligations as of a particular date
  • An airport is placed on the list if it falls in 1 or more categories and violations are so egregious as to preclude federal financial assistance until the issues are resolved
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101
Q

Categories that airports can violate:

A
  1. airports with a formal finding of noncompliance under 14CFR16 if corrective action hasn’t been taken
  2. Airports listed in the AIP
  3. Certain violations of the US Code
  4. Airports that are clearly in noncompliance despite FAA requests to the sponsor for corrective action
  5. Airports where the violations area so egregious as to preclude additional federal financial assistance until the issues are resolved
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102
Q

Duration of grant obligations is dependent on method of which the obligation was obtained, such as:

A
  1. Grant agreements for development other than land purchase
  2. Grant agreements for land purchase
  3. Surplus property deeds and non-surplus land conveyance documents
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103
Q

Grant agreements for development other than land purchase

A

Pavement and other facilities built to FAA standards are designed to last at least 20 years, and the duration of the obligation should generally be 20 years. The duration may be shorter for grants made exclusively for certain equipment, such as a vehicle, that clearly has a useful life shorter than 20 years

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104
Q

Grant agreements for land purchase

A

AIP grant agreements for the purchase of land provide that obligations do not expire, since the useful life of land doesn’t end or depreciate. However, federal aid to airports (FAAP) and airport development aid progra (ADAP) grants didn’t always contain this language, and the grant documents should be reviewed to determine whether the obligations expire in 20 years or continue indefinitely. Also, grants to a private operator of a public use airport (GA) provide for a defined duration of the obligations attached to the grant

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105
Q

Surplus property deeds and nonsurplus land conveyance documents

A

Documents conveying federal land and property interests for airport use generally have no expiration date, and obligations continue indefinitely until the sponsor is formally released from the obligation by the FAA. Obligations run with the land and bind subsequent owners

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106
Q

Grant Assurances that stay in place through the life of the airport

A
  • Exclusive rights
  • Airport Revenue
  • Civil Rights
  • Real property acquired with federal funds
  • Unless exempted by the FAA*
  • If no longer used/needed for which it was developed*
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107
Q

Assurances requires the airport operator to do the following:

A
  1. Maintain the airport in good and servicable conditions
  2. Use specific lands approved by the FAA for non-aeronautical use to generate revenue to support the airport’s aviation needs
  3. Operate the airport in the public interest
  4. Ensure there’s no grant of an exclusive right for any aeronautical purpose or use
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108
Q

Part 13 Complaints

A
  • Provides the public a method of reporting compliance violations if federal laws affecting air transportation
  • Considered informal
  • Not for grant assurance violations
  • Accepted verbally/written
  • Submit to the ADO or FAA regional office
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109
Q

How the FAA resolves part 13 complaints

A
  1. Evaluate facts surrounding the filing and identify possible sponsor violations
  2. Clarify rights/responsibilities of the airport sponsor and the complaining party
  3. Offer assistance to resolve the dispute in a manner consistent with the sponsor’s federal obligations
  4. Provide the sponsor the opportunity to comply with its federal obligations voluntarily when a violation is identified
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110
Q

Notice of apparent noncompliance

A

Identifies the apparent violations, specifies corrective actions that would resolve the violation without further agency action and prescribe a deadline for completion

If corrective actions aren’t performed and attempts have been made to bring the airport into compliance, the ADO or regional office may initiate it’s own part 16 complaint

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111
Q

14CFR Part 16: Rules of practice for federally-assisted airport enforcement proceedings

A
  • Processing of complaints against airports that receive federal assistance and relate specifically to grant assurances
  • A formal complaint and is often more serious as it imposes a deadline and has stringent requirements for the airport, the complaintant and the FAA
  • Must be filed directly with the office of the chief counsel of the FAA
  • Airport/airway improvement act, federal aviation act, surplus property act, and their predecessors
  • FAA has 20 days to respond
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112
Q

Part 16 was designed to achieve:

A
  1. Require parties to make a serious effort to resolve disputes informally before filing a formal complaint
  2. Focus FAA resources primarily on resolving complaints
  3. Promote informal resolution by speeding the initial evaluation
  4. Provide for a single complaint procedure to avoid overlap
  5. Requires complaintants to be directly affected by the dispute
  6. Specific deadlines for actions of all parties
  7. Limit the number/type of pleading and must have supportive documentation
  8. Establish burden of each party
  9. Provide and effective appeal process
  10. Establish FAA enforcement options
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113
Q

Following a part 16 complaint, those options are as follows:

A
  1. Withhold new grants, withhold payments on existing grants or terminating eligibility for future grants and PFCs
  2. Cease and desist orders
  3. Civil penalties
  4. judicial enforcement
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114
Q

Items to include in a part 16 complaint

A
  1. State name, address of each person who’s subject of complaint
  2. Specific provisions of each act that the complaint believes were violated
  3. Complete, yet concise, statement of the facts that substantiate each allegation
  4. Complaint should describe how the complaintant was directly and substantially affected by the act of, or omission of an act by, the respondents.
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115
Q

Investigations include the following:

A
  1. A review of the written submissions of the parties, information gathered by the FAA’s investigation of the matter or information furnished by the parties at the FAA’s request
  2. Oral and documentary evidence obtained through the FAA’s use of its authority to compel production of evidence
  3. Conducting or requiring that a sponsor conduct an audit of airport financial records and transactions
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116
Q

FAA may issue a “Final Agency Decision (FAD)” without a hearing in which:

A
  1. The complaint is dismissed after investigation
  2. A hearing isn’t required by statute and isn’t otherwise made available by the FAA
  3. the FAA provides the respondent an opportunity for a hearing, and the respondent waives the opportunity for a hearing
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117
Q

Airport Law

A

A collection of FAA regulations, jurisdictions, various statutes, grant assurances, ACs, and court decisions at the local, state, and federal levels. Typically deals with regulatory compliance, tenant relations, financing, airport operations and certification mostly related to part 139 and SMS and airport development issues

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118
Q

Things that will get you on the FAA’s bad side

A
  1. Airport attempts at regulating pricing
  2. Routes or restrictions on air carrier service
  3. Airport executive unreasonably restricts aircraft operations
  4. Airport executive unjustly discriminating against an airport user
  5. Airport revenue not being used to benefit the airport
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119
Q

Legal issues to be concerned with

A
  1. Freedom of speech (literature distribution)
  2. Freedom of movement (of people)
  3. Misuse of legal process (Public officials misusing power)
  4. Interference with person (Right to be free from injury/threat)
  5. Peace of mind (unnecessary mental suffering)
  6. Privacy
  7. Interference with reputation
  8. Property rights
  9. Contracts/business relationships
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120
Q

To constitute tort law:

A

There must be both actual damage/injury and intent to cause such. a malicious act or an unavoidable accident that cause no damage is insufficient cause for legal action. If damages were unintentional but still resulted through accidental interference or the lack of action, the person or entity at fault may have been negligent

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121
Q

Government Immunity

A
  • Government can’t commit a legal wrong and is immune from civil suit or criminal prosecution
  • Commonly extends to employees of federal/state/local government provided they’re acting within the scope and authority of their position
  • Often protected unless negligent
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122
Q

Negligence

A

Is the failure to use reasonable care. You fail to act as an ordinarily prudent person would act under the same circumstances

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123
Q

Federal Tort Claims Act

A

Waives the immunity if the act of a government employee caused damage

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124
Q

Tucker Act

A

Waives immunity over claims arising out of contracts with the federal government

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125
Q

Active Negligence

A

Occurs when someone has personally participated in an affirmative act of negligence, know about or complied in negligent acts or failed to perform a precise duty which he/she agreed to perform

Response to incident/accident, snow removal, airfield maintenance

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126
Q

Aviation and Transportation Security Act

A

-Created TSA
-3 major mandates:
1. Take responsibility for security of all modes of
transportation
2. Recruit, hire, train and deploy security officers for
450 airports
3. Provide 100% screening for explosives of all
checked baggage

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127
Q

NTSB

A
  • Became an independent agency in 1975
  • Investigates every civil aviation accident and significant accidents in other modes of transportation
  • Often delegates non serious/fatal accidents to the FAA
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128
Q

ICAO

A

-“secure international cooperation and the highest possible degree of uniformity in regulations/standards, procedures and organization regarding civil aviation matters.”

Specialized agency of the UN

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129
Q

Trade Associations

A
  • Lobbying congress
  • Working with regulatory agencies
  • Providing training
  • Seminars/trade shows
  • Accreditation
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130
Q

AAAE

A
  • September 1928
  • One of most influential associations in congress
  • Goal: to better serve airport executives by providing continued improvement in products/services, along with providing representation in DC
  • Provides lobbying, regulatory services, training, accreditation, and other professional development programs
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131
Q

Airports Council International (ACI)

A
  • 1991
  • Represent common interests and to promote cooperation with associations in the airport transportation industry
  • “The airport community now speaks with a single voice on key issues and concerns and despite regional diversity can move forward as a united industry”
  • 5 world chapters
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132
Q

ACI-North America

A

ACI-NA

  • Represents local, regional and state governing bodies that own and operate community airports in the US/Canada
  • Provides legislative advocacy, media promotion of airports and airport issues, information updates and conferences and research services
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133
Q

Airport Law Enforcement Agency Network (ALEAN)

A

Brings together law enforcement leaders and facilitates communication between airport executives, intelligence officers, and investigators of airport LEO’s to address mutual problems common to the field of airport security
-Shares expertise with elected officials and government agencies

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134
Q

International Air Transport Association (IATA)

A
  • April 1945
  • Promotes safe, reliable, secure and economical air services for the benefit of the world’s consumers
  • Represent, lead and serve the airline industry
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135
Q

Airlines for America (A4A)

A

Formerly ATA

  • Represents nation’s leading airlines
  • Played major roles in government decisions including the creation of the CAB, FAA, ATC system and airline deregulation
136
Q

Air Line Pilot’s Association (ALPA)

A
  • World’s largest airline pilot union representing over 54,000 pilots at 31 US/Canada airlines
  • Provides airline safety, security and pilot assistance/representation/advocacy
  • Mission; Promote safety, represent collective interests of pilots, assist in collective bargaining, promote health/wellness of members, be the ultimate guardian/defender of the rights and privileges of pilots
137
Q

Regional Airline Association (RAA)

A
  • 1975
  • Provides various tech. government relations and PR services
  • Promoting a safe, reliable and robust regional airline industry
138
Q

National Business Aviation Association (NBAA)

A
  • 1947
  • Leading organization for companies who rely on GA aircraft to help make their business more efficient/productive/successful
  • Mission: Foster an environment that allows business aviation to thrive
139
Q

Aircraft Owners and Pilots Association (AOPA)

A
  • 1939
  • Mission: To ensure that the sky remains within reach of everyone who dreams of becoming a pilot
  • Educates pilots/non-pilots/policymakers, supports activities that ensure long term health of GA, fight to keep GA accessible to all
  • Airport watch/Airport support network
140
Q

National Air Transport Association (NATA)

A
  • 1940
  • Represents interests of GA business community before government
  • Relative to airport occupancy, airport security, competition and environmental issues
141
Q

Aerospace Industries Association (AIA)

A
  • 1919
  • Represents nation’s leading manufacturers/suppliers of civil, military, biz av, helos, drones, space systems, aircraft engines, missiles, materials, services and IT
142
Q

National Association of State Aviation Officials (NASAO)

A
  • 1931
  • Ensure uniformity of safety measures, to standardize airport regulations, and to develop a truly national air transport system responsive to local/sate/regional needs
143
Q

National Air Traffic Controllers Association (NATCA)

A
  • Exclusive bargaining representation for FAA ATC

- Advancing the status, professionalism and working conditions of ATC

144
Q

Helicopter Association International (HAI)

A

-Providing programs that enhance safety, encourage professionalism and foster economic viability while promoting the unique contributions vertical flight offers

145
Q

Typical core management competencies that are applicable:

A
  • HR
  • Organizational Mgmt
  • Quantitative Analysis
  • Commerce
  • Business Law
  • Economics
  • Inverstment Mgmt
  • Budgets/Accounting
  • Employee Mgmt
  • Motivation/Leadership
  • Marketing
146
Q

Public Administration

A
  • Public Finance
  • Leadership/Professional ethics
  • Public policy making
  • Communications
  • Purchasing/Procurement
  • Urban planning and land use
  • Mgmt public services organizations
  • Politics
  • Environmental Law
  • Geographic information system (GIS)
  • Planning for emergencies/disasters
147
Q

Grant Assurance #4

A

“Good title”

  • Airport holds a good title to the airport that’s satisfactory to the FAA
  • Provide FAA with complete title search report of all airport property on current ALP
148
Q

Grant Assurance #5

A
  • “Preserving the rights and power”
  • Prevent an airport sponsor from taking any action that may deprive the airport sponsor of it’s rights/powers to direct/control airport development and comply with grant assurances
  • Prohibits an airport to sell/lease/encumber, transfer, dispose of any part of its title or other interests without written approval from the FAA
149
Q

Land Use Planning

A

An important tool in ensuring that land adjacent to or in the vicinity of the airport is consistent with activities and purposes compatible with normal airport operations

150
Q

Off Airport Land Use

A

Addressed in grant assurance #21. Requires the airport to make an attempt to restrict adjacent land use to activities/purposes common with airport operations

151
Q

Grant Assurance #20

“Hazard Removal/Mitigation”

A
  • Requires airport to take necessary action to protect airspace around the airport including visual/instrument approaches
  • Includes removing obstructions, securing land to prevent incompatible land use, and properly marking/lighting all obstructions
152
Q

Ways to attempt to prevent incompatible land use

A
  • Include off airport land in master plane
  • Noise compatibility studies
  • AIP grant money to purchase land
  • Negotiate with local zoning agencies
153
Q

Grant Assurance #21

“Compatible land use”

A

Airport Sponsor doesn’t have the authority to enact zoning ordinances but must demonstrate a reasonable attempt to inform surrounding municipalities on the need for land use compatibility zoning through dissemination of information, education or ongoing communications with surrounding municipalities

154
Q

Concurrent land use

A

Land can be used for more than 1 purpose at the same time

155
Q

ALP

A
  • Delineates airport boundaries, including all facilities
  • Identifies future plans
  • An airport must have an approved ALP to be eligible for AIP funds
  • Controls subsequent development of airport facilities and any construction/modifications or improvement
  • Doesn’t represent the release of any federal obligations attached to land/property
  • Doesn’t approve use for non-aeronautical purposes
156
Q

Common types of aeronautical use

A
  1. Scheduled/non-scheduled air carrier service
  2. Flight training and aircraft rental
  3. Aviation maintenance operations
  4. Maintenance repair stations
  5. Aerial photography
  6. Crop Dusting
  7. Aerial advertising
  8. Sight seeing
  9. Aerial Surveying
  10. Aircraft sales
  11. aircraft storage
  12. aviation fuel sales
  13. sale of aircraft parts
  14. Parachute activity
  15. Military operations
  16. FBOs
157
Q

Grant Assurance #19

“Operations and Maintenance”

A

Requires the airport to be operated at all times in a safe/serviceable condition and requires the airport operator to operate and maintain the airport in a safe/serviceable condition in accordance with minimum standards. Keep the airport safe is to regulate the activities found to be permissible at the airport and developing/enforcing business operating standards. Therefore, grant assurances allows for minimum standards

158
Q

Minimum standards

A

Set forth the minimum requirements an individual/entity wishing to provide aeronautical services to the public on a public -use airport must meet in order to provide those services, such as minimum leasehold size, required equipment, hours of operation and fees.

Ensures an adequate level of safe/efficient service is available to the public

159
Q

Benefits of Minimum Standards

A
  1. Promote safety in all airport activities and maintain a high quality of service for airport users
  2. To protect airport users from unlicensed/unauthorized products and services
  3. Enhance the availability of adequate services for all airport users
  4. To promote the orderly development of airport land
  5. Provide a clear and objective distinction between service providers that will promote satisfactory service
  6. Prevent disputes between providers and reduce complaints
160
Q

Conditions imposed by minimum standards

A
  1. Apply to all providers of aeronautical services, from full service FBOs to single service providers
  2. Impose conditions that ensure safe/efficient operation of the airport in accordance with FAA guidance when available
  3. Are reasonable, not unjustly discriminatory, attainable, uniformly applied and reasonably protect providers of aeronautical services from unreasonable competition
  4. Relevant to the activity for which they apply
  5. Provide the opportunity for others who meet the standards to offer aeronautical services
161
Q

Examples of common minimum standards

A
  1. Experience and capability
  2. Scope of allowance activity
  3. Leased premise requirements
  4. Facility maintenance, upkeep, cleanliness
  5. hours of operation
  6. Levels of expected service
  7. Required licenses, permits and certificates
  8. Training, minimum staffing, certificates
  9. Security
  10. Taxes, other fees
  11. Fueling/Fuel storage
  12. Equipment
  13. aircraft removal
162
Q

Grant Assurance #23

“Exclusive Rights”

A

Restricts airport executives from granting exclusive rights to conduct a particular service unless it would be unreasonably costly, burdensome for more than 1 FBO to provide such services or require a reduction of lease space to an existing tenant. Second exception doesn’t allow an airport to misuse space limitation exception by leasing all available space to an entity for the purpose of blocking access

163
Q

Rules and Requirements

A

Airport operators, acting in a government capacity, may exercise their police powers to regulate the operation of the airport. Rules/regulations designed to protect public safety, health, and welfare have been upheld as a valid use of police power provided the regulations are reasonable and don’t conflict with existing state/federal regulations

164
Q

Areas covered by rules/regulations

A
  1. Security
  2. Conduct of individuals using the airport
  3. Conduct of tenants/vendors using the airport
  4. Schedule of frees, rates, and charges
  5. Vehicle movement in the AOA
  6. aircraft operations
165
Q

Security

A

Submission to screening, authorized signatory for tenants, used of access media and the access control system, credentialing process, proper applications for SIDA badges, rules pertaining to various security areas, enforcement, challenge procedures, unattended bags, and prohibited items

166
Q

Conduct of individuals using the airport

A

Distribution/literature, commercial photography, advertising on airport property, lost and found, pets, pedestrian and vehicle operations, luggage cart use, traffic/public safety, parking and smoking

167
Q

Conduct of vendors/tenants using the airport

A

GSE requirements, environmental and waste mgmt, use of motorized carts in the terminal, airline and tenant snow removal responsibilities, taxis, and community ground transportation, skycaps, newspaper distribution and vending push carts

168
Q

Schedule of fees, rates and changes

A
  • Signatory vs. non-signatory carriers
  • Landing Fees
  • Terminal base rent
  • Use/control of concourse gates
  • Use of baggage sorting system
  • Car rental concessions
  • Land rent
  • Late payments
  • Bonds
  • Subletting
169
Q

Vehicle movement in the AOA/AMA

A
  • Vehicle permits
  • Airfield speed limits
  • Rules for driving on the AOA
  • Driver training
  • Bicycles/motorcycles/motorized cart operations
170
Q

Aircraft Operations

A
  • Removal of disabled aircraft
  • Take off
  • Run ups
  • Aircraft parking
  • RON parking
  • Use of mechanical lifts
  • Ramps for en/deplaning
  • Fueling/Defueling
  • De-icing
  • Noise Abatement
171
Q

Grant Assurance #39

“Competitive Access”

A

Requires medium/large airport to report to the secretary of transportation any denial of a request by an air carrier for access to the airport

172
Q

Grant Assurance #5

“Preserving Rights/Powers”

A

Restricts airport sponsor from taking any action that would deprive it of the ability to properly manage the airport

Addresses through the fence operations

173
Q

Through the fence agreements (TTF)

A
  • A business operation that’s located off airport and isn’t under the control of the airport, but which has access to the airport runway/taxiway system through an access agreement
  • Not prohibited but strongly discouraged
  • Case by case basis
174
Q

Aeronautical Revenue

A
  • Services provided by air carriers related directly and substantially to the movement of passengers, bags, mail and cargo at the airport
  • Landing fees, land leases, terminal/hangar rent, tie-down, fuel tax and fuel sales
175
Q

Non-Aeronautical Revenue

A

Land rent received from an off-airport industrial park that’s owned by the airport, reservation centers, catering facilities, rental car operations, parking, and concession sales

176
Q

Non-Operating Revenue

A

PFC’s, customer facility charges (landside access fees, for commercial ground transportation such as taxis), interest income and grants

177
Q

Examples of Operating Revenue

A
  • Landing/ramp parking
  • Fuel flowage fees
  • Concessions
  • Restaurants
  • Retail
  • Parking
  • Rental Cars
  • Travel agent programs
  • Air shows/Open houses
  • Community ground transportation
  • Newstands
  • Leased areas
178
Q

Examples of Non-Operating Revenue

A
  • Property Taxes
  • Sale of property
  • investment income
  • interest income
  • subsidies
  • Misc. sources not associated with the airport’s primary business
  • Government grants
  • PFC’s
  • Customer facility charges
179
Q

Operating Expenses

A

-Wages and benefits
-Engineering equipment maintenance
-Advertising
-Consultants
-Ground maintenance
-Supplies
-Vehicle maintenance
-Building maintenance
-Service utilities
Insurance

180
Q

Non-Operating Expenses

A
  • Depreciation
  • Debt service
  • Capital Improvement
  • Interest
  • Government contribution
  • Amortization of deferred financing costs
  • Licenses
  • Losses/damages
  • Currency exchange gain/loss
181
Q

Strategies to get increased non-aeronautical funding

A
  • Seek additional TSA funding to support increased security related to checked baggage
  • Seeking grants to “go green” VALE program grants
  • Lease vacant airport property or mineral rights to industries such as agriculture, oil/gas. May also reduce costs associated with land maintenance
  • Focus on developing improved marketing/sales plans, strategies and tactics for existing tenants
  • Eliminate free parking or valuate parking rate structures. Add value services such as valet and corporate parking
182
Q

Non-Operating Revenue Sources

A
  • Personal property tax collected on aircraft ownership
  • Possessory interest taxes for use of government land
  • Sale/lease of property
  • Interest on earned investments
  • Local tax revenue
  • Collection on utilities
  • PFCs and customer facility charges
183
Q

The Airport and Airway Improvement Act of 1982

A

All revenues generated by the airport if its a public airport, will be expended for the capital or operating costs of the airport, the local airport system or other local facilities which are owned/operated by the owner/operator of the airport , and directly related to the actual transport of passengers and property

184
Q

Single Audit Act of 1984

A

Airport must conduct an annual audit and assure that the government that the airport funds have been properly distributed

185
Q

Examples of Revenue diversion

A
  1. Generate economic development for the municipality
  2. Marketing/promotional activities unrelated to the airport
  3. Payments in lieu of taxes (pilots) that exceed the value of services
  4. Payments to compensate sponsoring government bodies for lost tax revenue exceeding stated tax rates
  5. Use of land for free or nominal rental rates
  6. Rental of land to or use of land by the airport sponsor for non-aeronautical uses at less than fair market value rent
186
Q

Penalties for revenue diversion

A
  • Loss of ability to collect AIP
  • Civil penalties up to $50k
  • Require assessment of interest in the amount of diverted revenue
  • Withholding of other grants available to the sponsor
187
Q

Airport revenue can be used for:

A
  • Capital/operating costs of the airport, the local airport system, or other facilities directly related to air transportation.
  • Promotional expenditures designed to increase air travel at the airport and stimulate new service/competition
  • Airport marketing expenses
  • Cooperative airline airport marketing expenses to promote air service
  • Reimbursement to sponsors of capital/operating costs
  • Certain mass transit access projects
  • Costs incurred by government officials for services to the airport
188
Q

Grant Assurance #26

“Reports and Inspections”

A
  • Sponsors are required to make available an annual budget report in the form prescribed by the DOT
  • Forms 5100-216 Government payment report and 5100-127 operating/financial summary (For enplanements above 2500) filled out within 120 days after the end of the fiscal year
189
Q

Form 5100-126

“Financial Government Payment Report”

A
  • Sponsor required to file as the annual report on revenue paid to other unit of government and on compensation the airport received for services/property provided to other units of government
  • Internal service funds are used to account for the financing of goods/services provided by 1 department of a government unit to another on a cost-reimbursement basis (i.e. when a municipality provides police/fire services)
190
Q

Form 5100-127

“Operating/Financial Summary”

A
  • Requires to breakdown revenue/expenses by:
    1. Aeronautical operating revenue generated from landing fees, terminal/international arrival area charges, apron changes/tiedown, FBO revenue, cargo/hangar rentals, fuel sales, aviation fuel sales tax
    2. Non-aeronautical operating revenue generated by land/non-terminal facilities, terminal food/beverage, retail store activities, rental cars, and parking lot activities
    3. Non-operating revenue generated by interest income, grant receipts and PFC’s
191
Q

4 Basic categories of accounting

A
  1. Bookkeeping
  2. Financial Accounting
  3. Auditing
  4. Management accounting
192
Q

Basic category of accounting: Bookkeeping

A

Process of recording all financial transactions in a journal. Often affiliated with the concept of double-entry accounting (debits/credits), which is handled automatically today by software

193
Q

Basic category of accounting: Financial Accounting

A

Use of accounting data to calculate and report cash flows, profit/loss of a financial entity. It puts accounting information into a form that’s easier for managers and outside personnel (non-accountants) to understand, in order to assess the success of the company or entity. Financial reports include an income statement and balance sheet

194
Q

Basic category of accounting: Auditing

A

Process of checking the financial records of a company’s owners/accountants to ensure integrity of the information

195
Q

Basic category of accounting: Management Accounting

A

Presents detailed information about individual products/services or managers that’s used to make decisions about costs, pricing, and who to promote. Divided into several types of activity, such as: cost accounting, which focuses on unit costs, and budgetary controls, which identifies inputs/outputs with managers to help them make operational decisions

196
Q

Enterprise Fund

A

Used to account for operations that are either financially operated in a manner similar to private business enterprises or where the governing body has decided that a periodic determination of revenue/expenses is appropriate for capital maintenance, public policy, accountability, or other purposes

Primarily used for activities that are financed through user charges; for airports, this can be lease revenue, landing fees, % of concession sales, etc

197
Q

Common Financial Documents

A
  1. Statement of net assets or statement of net position
  2. Statement of activities (income statement)
  3. Statement of cash flow
198
Q

Statement of net assets/statement of net position

A

(Balance sheet)

statement that account for both the items owned and controlled by the entity (assets) and the items owed to others by the entity (liabilities)

199
Q

Statement of activities

A

(Income statement)

Shows revenues of the entity, minus the expenses to arrive at the bottom line

200
Q

Cash flow statement

A

(For communication and nonprofits)

Shows how much cash the company has at the beginning of the reporting period and how much remained at the end of the reporting period

201
Q

Management’s discussion and analysis (MD+A)

A

Mgmt provides detailed discussion of financial health and explains positive and negative trends and anomalies

202
Q

Operating Budget

A

Focuses on those expenses/revenues necessitated by normal and ongoing operations

Objective is to provide and accurate estimate of the revenues/expenses of the airport for a future period, which is typically a year

203
Q

In formulating an operating budget, 4 important tasks must be addressed:

A
  1. Plan for the operational needs of the organization
  2. Obtain resources for the airport operating environment
  3. Distribute those resources throughout the organization
  4. Track the resource expenditures to ensure they’re used effectively/efficiently
204
Q

Capital Budgeting

A

Reflects an annual/multi-year financial plan for capital projects, or major equipment expenditures, and the stated means of implementing the plan

Usually associated with state/national planning processes such as CIP and with the master planning project process for which PFC’s and AIP funds are used

205
Q

Capital Budgeting Continued

A

Process of evaluating proposed long-range airport projects, or courses of future activity, for the purpose of allocating resources to those projects deemed desirable and important

206
Q

Line Item Budgeting

A

Lists each department and assigns a sum of money to the department or administrative unit to be spent as needed

The money is divided into categories for specific purpose (Travel, payroll, commodities) and each department is expected to spend its allocation in accordance with the requirements of each line. The more detailed the budget, the less flexibility

207
Q

Performance based budget

A

Lists what each administrative unit is trying to accomplish, how much its planning to do, and with what resources. It focuses on results rather than on money spent. Lays out what programs cost and what they achieve and the criteria between programs

Focuses on change:
Can assist policy makers by providing the background on the purposes of funded programs and provides a deeper understanding of agency activities

208
Q

Program Budgeting

A

Divides expenditures by activities (sn removal, ARFF, admin planning) with the emphasis on the appropriation of current spending priorities and the need for trade offs between the programs has the most potential for policy makers to review the implications of spending decisions by forcing comparisons between programs on the basis of stated priorities. Resources are allocated on the basis of goals, objectives and strategies

209
Q

Zero based budgeting

A

Starts from zero base and every function within an organization is analyzed for its needs/costs. Each unit must prioritize, rank and justify its needs, whereupon only those items falling under a certain appropriation limit are funded. Items at the top of the list are funded and items at the bottom are not

210
Q

Public entity vs. business enterprise

A

Public entity= will strive to set the lowest fees, rates, and charges possible

Business enterprise= Will attempt to see fees, rates, and charges that are commensurate with what the market will pay

211
Q

Grant Assurance #24

“Fee and Rental Structure”

A

Requires the airport sponsor to set fees/lease rates and other charges that are directed at making the airport as self-sustaining as possible. Airports may not establish rents, fees, etc based on the cost of the airport property improvements/noise mitigation programs that were paid for with federal funds

Airport must make financial decisions that are consistent with attempting to make the airport self-sufficient

212
Q

Airport and Airway Act of 1982

A

Requires airports to be as self-sustaining as possible under the circumstances at that airport

213
Q

Self-Sustaining

A
  • The airport relies only on its revenue streams for operational expenses
  • Doesn’t mean the airport cannot accept federal/state grants for capital projects
214
Q

FAA Authorization Act of 1994

A

Takes into account whether airport sponsors, when entering into a new agreement have undertaken reasonable efforts to be self-sustaining

215
Q

Purpose of being self-sustainable

A
  • Maintain the utility of the federal investment in the airport and is in the spirit of the principle that those not using aviation transportation are, theoretically, not paying for it.
  • Airport must establish long term goals/targets to make the airport as financially self-sustaining as possible
216
Q

Fair market value

A

-Must use for non-aeronautical use
-Surplus can be used to subsidize aeronautical costs
-exceptions:
-Property for community purposes such as parks, rec
facilities, bike/jogging paths
-Not for profit aviation organizations
-Transit projects/systems
-Military aeronautical units

217
Q

Fair Market Value (FMV) community purpose qualifications

A
  1. Property not needed for aeronautical use
  2. Property isn’t producing airport revenue and there are no near term prospects for producing revenue
  3. Community purpose won’t impact the aeronautical use of the airport
  4. Community purpose will maintain/enhance positive community relations in support of the airport
  5. Is consistent with the ALP
  6. Proposed use of the property is consistent with other requirements, such as certain surplus and non-surplus property federal obligations
218
Q

FMV not for profit purpose exceptions

A
  1. Aviation museums, CAP, accredited educational programs
  2. In-Kind services: the airport may offset the value of any services that the units provide to the airport against the applicable airport fees
219
Q

FMV transit projects exceptions:

A

When the airport sponsor owns a transit system, and its use is for the transport of airport passengers, property, employees and visitors, the sponsor may makes its property available at less than fair market value rent for public transit terminals, right of way and related facilities

220
Q

FMV private transit systems exceptions

A

airports generally charge private ground transportation providers fair market value rental rates; however, the sponsor may charge private operators less than FMV when the service is extremely limited and where the private transit service-such as business/rail/ferry- provides the primary source of public transportation to the airport

221
Q

FMV military aeronautical units exceptions

A
  1. Military units with aeronautical missions including the ANG, aviation units of the Army NG, USAF reserve, USCG, Naval reserve air units operating aircraft at the airport
  2. Search and rescue and disaster relief roles played by USCG, USAF auxiliary and CAP are also recognized as a prime aeronautical role
222
Q

Examples of non permissible for FMV

A

Purchase/Operation of road maintenance equipment and police or fire services that are not directly in support of the airport, nor would the use of airport property for non-aeronautical purposes for which the airport doesn’t generate and retain the revenue

223
Q

FAA’s rates and charges policy has principles which are:

A
  1. Airport/aeronautical user/free market and the policies of the sponsor, are generally responsible for compliance with all legal requirements but he FAA will intervene if needed
  2. Rates, fees, rentals, landing fees, and other fees imposed on aeronautical users for aeronautical facilities must be fair/reasonable
  3. Aeronautical fees may not unjustly discriminate against aeronautical users
  4. Airport proprietors must maintain a fee/rental structure that in the circumstance of the airport makes it self-sustaining
  5. Airport proprietors may extend revenue generated by the airport only for statutorily allowable purposes
  6. Fees imposed on international operations must also comply with international obligations of the US
224
Q

Approaches to rate setting

A
  • Residual or compensatory or combination of both
  • As long as methodology used is applied consistently to similarly situated aeronautical use and conforms with the requirements of the FAA’s policies
225
Q

Residual Agreements

A

Permit aeronautical users to receive a cross-credit of non-aeronautical revenues. The airport applies excess non-aeronautical revenue to the airfield costs to reduce air carrier fees. In exchange the air carriers agree to cover any shortfalls if the non-aeronautical revenues is insufficient to cover airport costs. Aeronautical users may assume part/all liability for non-aeronautical costs

226
Q

Compensatory Agreement

A

A sponsor assumes all liability for airport costs and retains all airport revenue for its own use in accordance with federal requirements. Aeronautical uses are charged only for the costs of the aeronautical facilities they use. The airport assumes the financial risk but retains all the profits

2 approaches:

  • Cost of service
  • Public subsidy approach
227
Q

Cost of Service approach

A

Fees/charges are set for each revenue-producing cost center, so that ideally, the charges match the costs of operation

228
Q

Public subsidy approach

A

Local government agency offsets the difference between the revenue and expenses by subsidizing the airport operations

229
Q

Hybrid Agreements

A

May charge aeronautical users for the use of aeronautical facilities with aeronautical users assuming additional responsibility for airport costs in return for a sharing of non-aeronautical revenues that offset aeronautical costs

230
Q

Rate Base

A

Total of all costs associated with providing airfield facilities and services to aeronautical users

231
Q

Unless otherwise agreed upon by aeronautical users, the airport operator must allocate capital/operating costs among cost centers with the following guidance:

A
  • Costs of airfield facilities/services directly used by the aeronautical
  • Costs of airport facilities that are used for both aeronautical/non-aeronautical uses if the facility/service supports the airfield activity reflected in the rate base (i.e. ARFF, LEO coverage, and snow removal among other services)
232
Q

Airport Operators should expect to provide the following information to aeronautical users in connection with consultations over charges to airport rates/charges:

A
  • Historic financial information for the 2 fiscal years prior to the current year
  • Economic, legal or financial justification for changes in the rates/charges at the airport
  • Traffic information for the proceeding in 2 years
  • Planning/forecast information to the extent applicable to current or proposed fees
233
Q

Some governing bodies operate more than 1 airport. Cost from multiple airports may be included in the rate base only if:

A
  1. The airport proprietor is also the proprietor of the 2nd airport
  2. The 2nd airport is currently in use
  3. Costs of the other airports are reasonably related to the aviation benefits that they provide to the 1st airport, such as relieving GA traffic or providing support to the aeronautical users of the 1st airport (navaid facility)
234
Q

For construction contracts over $100,000:

A

Federal regulations require the airport to obtain a bid guarantee equal to @ least 5% of the bid price as well as performance and payment bonds= 100% of the contract

235
Q

Davis-Bacon Act

A
  • Any federally funded construction project that exceeds $2k must comply
  • Providing weekly reporting of wages paid (minimum wage requirements)
236
Q

Requirements for federally funded projects exceeding $100,000

A
  • Publicly advertised
  • Must include enough information that the general public will know the nature of the project
  • How to bid on the work
  • When bids are due
  • Date/time/place of bid opening
  • Any criteria used in evaluating the qualifications of the bids must be included and can’t be prescribed after the responses have been received
237
Q

Sealed bid method

A

Contracts for construction and equipment must go to the lowest responsive and responsible bidder

Precise scope of work is laid out

238
Q

RFP

A
  • Used in competitive proposals
  • The selection isn’t limited to the lowest price but may include a #of factors such as the project approach, qualifications/experience of proposer and their personnel
239
Q

Design-Build delivery method

A

In which 1 entity (the design build team) works under a single contract with the project owner to provide design and construction services

240
Q

Task-order contracts delivery method

A

Permit government stocks of specific items to be maintained at the minimum levels and allow direct shipments to the users of products/services. Used by buyers who can’t predetermine the precise quantities of supplies/services they’ll require during the contract period

Airports aren’t allowed to extend contract beyond 1 year with re-advertising the contract

241
Q

Construction manager @ risk (CMAR) delivery method

A

Similar to a general contractor who’s retained to provide advice to the airport operator during the design phase, to take bids for construction from multiple prime trade contractors, and then to manage the prime trade contractors

242
Q

FAA ADO must:

A

pre-review and concur with design-build proposals in order for the project to be funded with AIP or for any AIP funded project using CMAR proposals or competitive proposals that don’t involve quality based selection with negotiated prices

243
Q

Professional services contract

A

Typically used for program mgmt, construction mgmt, planning studies, feasibility studies, arch services, preliminary engineering, design, engineering, surveying/mapping, and related services

244
Q

Single source/non-competitive contracts

A

Require prior approval from the ADO and are typically only approved when the item/service is only available from a single source or when competition is deemed inadequate or during an emergency

245
Q

Disadvantaged Business Enterprises (DBEs)

A

Small businesses that have socially/economically disadvantaged individuals who own at least a 51% interest of a business and control mgmt and daily business operations

246
Q

Considerations taken to determine DBE

A

On-site visits, personal interviews, license reviews, stock ownership, equipment, bonding capacity, completed work, resumes of principle owners, and financial capacity. The personal net worth standard used in determining eligibility is $1.32 million. Above that is not socially/economically disadvantaged for DBE purposes

247
Q

DBE regulation Title 49 CFR Part 126

A

Requires airports to implement a DBE program if they anticipate awarding more than $250k in prime contracts using federal funds during a fiscal year.

Airports establish a DBE approx. 3 year goal (%) in DBE participation for prime contracts related to construction (Including noise mitigation), professional services, and equipment acquisition

248
Q

Airport systems that rely on IT

A
  1. Badging/access control
  2. Airfield lighting and surface movement guidance control system (SMGCS)
  3. Airport operating data (FIDs, baggage and NOTAMs)
  4. Airside (radar, noise monitor, weather, pavement sensors)
  5. Audio/visual paging systems
  6. Landside (Parking, vehcile identification for taxi, etc)
  7. Building mgmt (HVAC, electrical, fire)
  8. Business and finance (property mgmt, finance, website, email)
  9. Cable (electrical, fiber) mgmt system
  10. CCTV
  11. Common use passenger processing system
  12. Computer aided dispatch
249
Q

Planning, implementation, upgrading, or maintenance should consider:

A
  1. Compatibility and integration
  2. Security and safety
  3. Scalability
  4. Usability
250
Q

Compatibility and Integration

A

Whether the changes, acquisitions or implementations integrate with the technological requirements of the entire IT system

251
Q

Security and Safety

A

Plans must be in place to ensure that changes, acquisitions, or implementations can be made such that security/safety concerns can be maintained during the affected period and for any unexpected delays associated with these processes

252
Q

Scalability

A

A very challenging aspect of managing IT systems at the airport. Ensure that plans are in place for managing the effects that result from future expansions or modifications to part/all of IT infrastructure

253
Q

Usability

A

Intuitive and easy to use

254
Q

Types of cyber attacks

A
  1. Denial of service
  2. Malware
  3. Phishing
  4. Identity theft
  5. Social engineering
255
Q

Denial of Service (cyber attack)

A

Intended to disable a machine or system, making it unavailable to others

256
Q

Malware (cyber attack)

A

Designed to gain access to or cause damage to a computer. Can be activated when a recipient of a message, email or link clicks on the link or downloads attached software

257
Q

Phishing (cyber attack)

A

Can come in the form of emails, messages, phone calls, or websites and is designed to steal information such as CC or personally identifiable information such as SS and drivers license information

Spear phishing: highly targeted where emails are sent to a few people and appears to be realistic in nature

258
Q

Identity theft/data mining (cyber attack)

A

Data mining= collecting/examining large database in order to generate new information, but when combined, with ill intent, an individual’s social media profiles, and other data, can be collected and used to determine locations, purchase histories and sensitive personally identifiable information i.e. CC

259
Q

Social engineering (cyber attack)

A

Human manipulation is when an attacker pretends to be someone/something known/trusted to the victim, who uses leverage to gain information the attacker desires. Information may help the attacker access additional information, such as passwords, or may manipulate the victim into downloading or linking malicious software

260
Q

Commercial general liability insurance

A

Typically provides 3 specific coverage areas to service providers and includes:

  • Hangar keepers liability: protects from damage they may cause to the aircraft under their care
  • Premises liability: coverage for injury to persons/property
  • Product liability: coverage on products, such as fuel/oil that tenants may sell
261
Q

Common risks to airports

A
  1. Damages to facilities and disruption of business for natural disasters
  2. Destruction to valuable information or data (documents/database)
  3. Injuries/death from operational procedures and infrastructure (elevators, equipment vehicles)
  4. Wrongful acts by stakeholders, especially executives/officers, or employees of an airport
  5. Failure to disseminate important information related to safety/security
  6. Aircraft accidents/incidents
  7. Crime
262
Q

Other strategies for mitigating insurance related risks:

A
  1. Compliance with requirements/standards as specified in part 139
  2. Conduct regular training/compliance with TSA/FAA regulations/standards
  3. Conducting annual/semi annual risk analysis programs
  4. Conducting daily inspection programs
  5. Maintain timely/accurate information sources along with dissemination processes
  6. Obtain blanket insurance policy provisions for all stakeholders of the airport and require similar insurance that serves airports
  7. Develop environmental policies and follow rules/standards of government agencies
  8. Screening/evaluation of new employees for safety/security
263
Q

4 types of leases

A
  1. Straight
  2. Graduated
  3. Revaluation
  4. Percentage
264
Q

Straight Lease

A

Remains constant throughout its term

265
Q

Graduated Lease

A

Provides for change in rent/fees at previously arranged intervals

266
Q

Revaluation Lease

A

Provides for periodic valuations of the property and rent adjustments to current values which can sometimes go down)

267
Q

Percentage lease

A

Calls for rents equivalent to a percentage of business sales, which are common in concession lease agreements

268
Q

Leasehold agreement

A

Represents and ownership interest in which a lessee holds real property, or in the case of a use agreement, the right to conduct a particular activity from a lessor for a period of time

269
Q

Commercial lease agreements contain the following:

A
  1. Recitals: detailed statement that reflects the facts, events, and description of the general terms/conditions of lease. Contains information on lessor/lessee as well as statements that reflect terms that have been agreed upon
  2. Grant of lease: official legal term that grants the lease to the lessee
  3. Lease term: date of commencement/duration of lease
  4. Rates/fees/charges: how much, rate adjustments, usually tied to a pre-determined rate
  5. Taxes: if need to be paid, in this section
  6. Security deposit: deposits listed here
  7. Improvements: any construction/improvements
  8. repair, maintenance and up keep: lessee/lessor responsibilities
  9. Covenants by tenant: licenses, permits and right of lessor to inspect the facilities and approve alteration, etc.
  10. Indemnity: Lessees promise to hold harmless and indemnifying the lessor from injury claims, etc unless caused by negligence, omissions, or willful acts on behalf of the lessor
  11. Required insurance minimums
  12. Signage and use of property by lessee: describes approved uses of property along with sign standards
  13. Subletting: if allowed, procedures
  14. Damage to premises: allows lessor to make rent adjustments or go after restitution/repairs for damage caused by lessee
  15. Condemnation: Termination of lease prior to expiration, property expectations
  16. Title: good title to lessee of leased premises
  17. Signature blocks: Can only be signed by those with the authority to commit the lessor/lessee to contracts
270
Q

Reasons for rental cost variance

A
  1. Location of the airport
  2. Size and type of facility needed
  3. Suppose infrastructure needed
  4. Exposure to traveler flow
  5. Efforts the airport takes to highlight various shopping opportunities in the facility
  6. Demand for the airport’s space
271
Q

Minimum annual guarantee

A

Guarantees that the tenant will pay the airport a minimum amount annually

272
Q

3 basic approaches to leasing concession space

A
  1. Standard approach- involves airport mgmt directly leasing/managing the space
  2. Development company/retail expert can be engaged to provide mgmt services overseeing rental/concessionaire development in lieu of the airport
  3. An industrial operator can be engaged as a master lessee and given responsibility for providing all required concessions or for subleasing to other concessionaires
273
Q

Aeronautical use agreements

A
  • Identifies the legal, financial, and operational relationship between the airport operator and airlines
  • Specifies how risks, revenues, and responsibilities are shared
  • Grant operating rights and to provide or attempt to guarantee, a reliable stream of revenue for the airport
274
Q

Signatory vs. non-signatory air carrier

A

Whether or not the air carriers have entered into use agreements. Signatories may exercise significant control over an airport’s capital budgeting process

275
Q

Majority-In-Interest (MII) Clauses

A
  • Give signatory airlines the ability to influence capital projects undertaken at the airport by giving them the right to approve/not approve proposed projects, depending upon how the agreement is structured
  • Common at airports with residual agreements and often allow airlines the right to review airport development that may affect rates/changes paid by airlines
276
Q

Things to consider when developing an airport: Step 1

A
  1. Physical restraints
  2. Zoning regulations
  3. Political factors
  4. Conveyance (or use) restrictions
  5. General/contract legal counsel

It’s vital to investigate and consider the impact on public welfare in terms of health, safety, security, and environmental concerns

277
Q

Things to consider when developing an airport:

Step 2: Market Analysis

A

Contract for a study or engage a knowledgeable consultant to help identify the best land use compared to local demand, and to determine the market’s strengths and weaknesses. A forecast for comparable space is then developed based on growth trends and influences such as road access, economic incentive, new employment facilities, etc

278
Q

Things to consider when developing an airport:

Step 3: Develop a Pro Forma economic analysis

A

Data from the market analysis is used to develop ranges of lease rates and a projection of operating expenses

Operating expenses: property mgmt/ leasing commissions, maintenance, utilities, insurance and taxes

Additional: construction, loans, and other significant costs

279
Q

Things to consider when developing an airport:

Step 4: Construction

A

Qualified construction/project manager can help with various permits, contracts, construction, change orders, field changes, and occupancy permits

280
Q

Things to consider when developing an airport:

Final phase: establish operating plan for life of facility

A
  • Close scrutiny of tenants
  • System of invoicing/collecting rent
  • Provisions for recovering utilities/maintenance
  • Active mgmt of development
281
Q

Developing non-aeronautical property

A

Airport in competition with private developers. Public bodies less likely to assume risk. If allowed, airport can form alliance with private developer to assume some risk. Joint ventures, profit part., and guaranteed rate of return are various approached

Alliances should be coordinated with FAA, especially when surplus property is developed/sold

282
Q

Airport Development factors

A
  • A need for development
  • Available land/facilities
  • Potential for economic gain
  • Supportive community
  • Financial resources
283
Q

1970 Airport and Airway Revenue Act

A

-Created the trust fund and required the collection of taxes or user fees from various segments. Fees were added to passenger tickets, domestic cargo waybills, and non-commercial aviation fuel

284
Q

Airport and Airway Improvement Act of 1982

A

-Established the AIP

AIP grants are awarded to public use airports if they’re included in NPIAS

Grants can be used for airport planning, airport development, or noise compatibility projects

285
Q

FAA order 5100.38C (AIP Handbook)

A

Addresses the grant process, eligibility of the sponsor, eligibility of the project, allowable costs, and prioritization

286
Q

AIP Funds

A

The law requires that funds be apportioned by formula (aka entitlement funds) to specific airports and types of airports each year. Each primary airport apportionment is based on annual passengers boarding at the airport, number of aircraft operations, amount of cargo, airports that are part of the small airport fund, and a state apportionment calculation.

Based on annual amount available, 18-20% goes to non-primary commercial service, GA, reliever airports

287
Q

Set Aside funds

A

Designed to achieve specified funding minimums such as approved noise abatement programs, airports eligible for the military airport program and GA reliever airports. Noise abatement =35% of funds

  • Noise abatement
    • NCP
    • Noise compatibility implementation programs
    • Compatible land use planning
    • Clean air act projects
288
Q

Discretionary Funds

A

-2 types
-Discretionary set aside and
capacity/safety/security/noise funds
-preserving/enhancing C/S/S and carrying out noise
compatibility planning programs at primary/reliever
airports
-Remaining 25% aka pure discretionary funds, may be
used for any eligible project at any airport

  • Projects funded should be based on national priority system and airport must be able to work on projects during same fiscal year or within 6 months, whichever comes later. 4% used military airport program.
  • If AIP at 3.2 billion increases, .66% goes to relievers with more than 75,000 annual operations, RWY >5,000 ft that have precision IAP, @ least 100 based aircraft and at least 20,000 hours of annual delays in commercial passenger aircraft take off and landing at the airport relieved
289
Q

Discretionary funds continued

A
  • At least $148 million must be available as discretionary funds after all apportioned and set asides are complete
  • If < $148 million remains, all apportioned and set asides are reduced by the same % in order to ensure $148 million is available
  • At large/small hub airports, federal share is 75% (80% for noise)
  • Federal shares for projects at sm/non-hub/GA is 90%
290
Q

Entitlement apportionments

A

The first funds to be issued to airports/states

291
Q

Discretionary Monies

A

Distributed by office of mgmt and budget and allow FAA to obligate congressional apportionment with a financial plan. The plan is based on regional submission of program plans to the FAA. After the project is fully processed and approved, regions notify sponsors of an allocation of funds. This notification doesn’t yet obligate sponsors of an allocation of funds. This notification doesn’t yet obligate sponsors nor involve a transfer of funds

292
Q

State apportionments and block grants

A

SA is AIP money for non-primary commercial service or GA and GA relievers. The amount of SA available are dependent on the amount of AIP funding available in a year

Some states are considered “block grants” which means the state assumes responsibility for administering AIP at airports “other than primary” (non-primary commercial, reliever, GA)

293
Q

Steps of receiving an AIP grant

A
  1. “Reservation of funds” before grant is signed
  2. “Obligation” reported when grant is signed

Payment made through the processing of requests submitted by the sponsor. Airports must initiate a payment request for project accomplishments in accordance with project progress and receipt of invoices and must include supporting documentation

294
Q

Grant Assurance #34

“Policies, Standards, and Specifications”

A

Requires the airport to carry out projects with policies, standards and specifications approved by the FAA, like AC’s which become mandatory for the project being funded along with any special conditions added by the FAA

295
Q

Project eligibility

A

AIP handbook provides guidance on eligibility but if a specific project isn’t identified, then an ADO must determine if it meets general guidelines

Can’t be approved unless its reasonably consistent, sufficient funds are available, the project can be completed without undue delay, location is included in the NPIAS and the project involves more than $25k in AIP.

ALP must be current and depict current project

296
Q

Typical work items eligible for AIP funds

A
  1. Site prep
  2. Construction, alteration, repair of RWY/TWY, aprons
  3. Access roads on airport property
  4. Construction/installation of lighting, utilities, navaids, and aviation weather related reporting equipment
  5. Safety equipment required for certification of an airport facility
  6. Security equipment required by regulations
  7. SRE
  8. Limited public-use terminal development at commercial service airports
  9. Equipment to measure runway surface friction
  10. Land acquisition
297
Q

Ineligible AIP funded projects

A
  1. Landscaping
  2. Artwork
  3. Parking facilities
  4. Airport operational costs
  5. Exclusive-use and near exclusive use areas (FBO support areas on an apron)
  6. Industrial park development
  7. Marketing plans
  8. Training
  9. Maintenance or office equipment
298
Q

Projects must be located within the airport boundaries unless:

A
  • Removal of obstructions
  • Installation of navaids
  • Dealing with airport utilities
  • Airport wastewater plants
  • Noise programs
  • ARFF training facilities
299
Q

Items specifically considered non-allowable

A
  1. Computer hardware in planning projects
  2. WHMP except where development may result
  3. Surface transportation origin-destination surveys
  4. Acquisition of communications systems except for safety/security
  5. Installation of ILS unless coordinated with the FAA
  6. Landscaping
  7. Demonstration programs for noise-compatibility purposes
  8. Construction of roads for non-aviation use
  9. Construction of fuel farms at other than military/non-primary airports
  10. Construction of maintenance facility except for ARFF/snow removal
300
Q

OMB Circular A-87

A
  • Cost principles for state/local governments
  • Describes requirements on allowable project costs
  • Governed by Single Audit Act of 1984
301
Q

Allowable costs in accordance with OMB circular A-87

A

-Direct or indirect
-Paid/incurred under a planning/airport development project or noise program implementation project
-Eligibility based on FAA opinion as well as whether the costs were:
-necessary for the accommodation of the project
-Reasonable in amount/conformity with applicable
plans/specifications
-Supported by satisfactory evidence
-Incurred after the date of execution of the grant
agreement

302
Q

Project costs incurred prior to execution of agreement may be reimbursed, if:

A
  • Costs were part of a study necessary for the project
  • Used to develop plans/specifications in preparation for the ALP
  • Involved in environmental assessments, land acquisition or airport noise compatibility program projects
  • Fund work accomplished after the issuance of the letter of intent
303
Q

Indirect Costs

A
  • Incurred for a common or joint purpose benefiting more than one cost objective
  • Not readily assignable to the cost objectives specifically benefited, without effort disproportionate to the results achieved

Allowable only if sponsor has an approved cost allocation plan and when requires, an executed indirect cost rate agreement

304
Q

Other allowable indirect costs

A
  • Project admin
  • Study design and planning
  • Engineering
  • Construction, design and project formulation costs
  • Construction/equipment costs
  • Legal fees/litigation costs
  • Land/relocation assistance
  • Noise compatibility
  • Audits
  • Other situations determined by FAA
305
Q

Non-allowable costs (indirect costs)

A
  • Prioritized facilities previously acquired
  • Materials and supplies
  • Non expendable machinery
  • Tools or equipment
  • Costs associated with bond financing or other methods of fundraising
  • Costs of obtaining liability insurance
  • Costs of other federal programs
  • Costs of tuition, travel and subsidence to attend conferences
  • Costs incurred prior to a future grant agreement
  • Costs of active associations with lobbying or influencing federal employees
306
Q

FAA order 5100.39A

A

Describes priority system for discretionary funds that’s used to determine which projects will receive funding. Also used with entitlement funds and block grants

307
Q

Priority goes to projects with emphasis on projects that relate to the following goals:

A
  1. Ensuring that the air transportation of people, services, and goods is provided in a safe and secure environment
  2. Preserving/upgrading the existing airport system in order to allow for increased capacity as well
  3. Improving the compatibility of airports with the surrounding communities and providing sufficient access to an airport for the majority of the public
308
Q

Through NPIAS, the FAA:

A

Identifies airports that are significant to the national air transportation system. Also identifies the costs of airport development that are needed over the next 10 years to expand/improve the system in order to anticipate and meet the present/future needs of civil aviation, to support national defense and to meet the needs of the USPS

309
Q

Airports Capital Improvement Plan (ACIP)

A

Portion of NPIAS that provides additional details including the anticipated sources of funds for specific developments that expect to be undertaken within 3-5 years and are considered likely to be funded through the AIP.

In addition to the ACIP, airports have their own CIPs, that usually extend 5-6 years out, but include not just projects eligible for federal funding, but also projects that are funded by state grants, operational revenue, bonds and other means

310
Q

National Priority System

A

Values only service to categorize airport development in accordance with FAA goals/objectives. NPS generates values 0-100, 100 being most consistent with agency goals. Point values reflect airport code:
A: Large/medium hub (5 points)
B. Small/non-hub (4 points)
non-primary reliever/GA points based on # annual
aircraft operations

311
Q

Other NPS points values:

A

National Priority System

  • Purpose points (Capacity, safety (10 pts), security (10 pts), reconstruction
  • Component points (Land, planning, apron, building)
  • Type points (Bond retirement, construction, fuel farm development, RWY/TWY signs)
312
Q

Grant Application Package

A
  • Review of relevant environment records
  • SMS plan for construction
  • DBE plan
  • Completion of necessary land acquisition
  • Completion of final plans
  • Engineers report
313
Q

FAA’s letter of Intent (LOI)

A

Program helps fund large-scale capactiy projects at primary/reliever airports

An LOI states that the FAA intends to obligate AIP discretionary/entitlement funds from future budgetary authority for that project

314
Q

Aviation Noise and Capacity Act of 1990

A

Allowed public agencies that control commercial service airports enplaning more than 2500 passengers annually to charge each enplaning passenger a $1, 2, 3 facility charge in accordance with FAA regulations

PFC’s are levied on the ticket, collected by the airlines and forwarded to the airport

315
Q

Revenues from PFC’s

A

Used to preserve or enhance safety, security, capacity, reduce noise and to enhance competition between carriers.

Max. PFC on 1 ticket is $18

316
Q

Aviation Trust Fund

A
  • Imposed taxes on passenger tickets
  • PFC legislation provides for a reduction in AIP grants to primary airports if they receive FAA approval and permission to impose a PFC. Large/medium hubs that collect PFC’s must return up to 50% of AIP apportionment if they collect $3, if they collect $4.50 then up to 75%
317
Q

Differences between PFCs and AIP charges

A

PFC is levied as a direct fee to the traveler and retained at the airport. Minimizes federal government handling and time constraints

AIP collected as federal surcharge and paid to the US treasury to be distributed back to the airports. Redistribution is subject to congressional appropriation and political process

318
Q

PFC quarterly reports

A
  • Required to report to airlines and FAA
  • Includes: Revenue received from collecting carriers, interest, and expenditures for the 1/4 and cumulative period, current project schedule and the amount committed for the use on projects that are already approved
  • For airports enplaning more than .25% US enplanements, an additional report is due to FAA each year by 8/1 that estimates PFC collection for the next fiscal year
319
Q

Separate accounting must be made of all PFC funds

A
  • Can be co-mingled with other airport funds but only when deposited into interest-bearing accounts or when interest generated on PFCs is accounted for separately
  • Annual independent audit is performed on PFC accounting procedure
  • FAA requires a plan of how unused PFCs will be used. If not submitted, the FAA can reduce future AIP entitlement funds by a comparable amount

-Before PFC implementation is allowed, approved environmental/airspace studies and an approved ALP must be submitted

320
Q

ANCA specifications on PFC uses:

A

Airport Noise and Capacity Act

  1. Approved projects only
  2. Payment of all/part of allowable costs
  3. The airport’s AIP matching funds
  4. Augmentation of AIP funded projects
  5. Payment of debt service or financing costs of eligible airport development bonds
321
Q

PFCs are applied to projects that preserve or enhance safety, capacity, security and competitiveness of national air transportation systems or mitigate adverse noise effects, like:

A
  1. An AIP eligible development or planning project
  2. Noise compatibility projects
  3. Gates and related areas for movement of passengers and bags
  4. Access projects on airport property
  5. Construction, reconstruction, repair or improvement of airport areas used for the operation of aircraft or for compliance with the responsibilities under ADA, Clean Air Act, or the federal Water Pollution Control Act
322
Q

As the realities of the bond market became known, the FAA revised the PFC conditions to reflect new elements:

A
  • In the event of a violation of the PFC act, the FAA can decrease a sponsor’s authority to collect PFCs to an amount necessary to pay off the bond.
  • The FAA can determine any PFC authority on any project not covered by bonds
  • The FAA can withdraw PFC authorization on any project when violations of the Noise Act occur
  • If a violation of the PFC Act occurs and the FAA reduces a sponsor’s PFC authority, then the sponsor must accelerate payments of bonds
323
Q

Risks of using PFCs soley for the backing of bond issues:

A
  • Termination of PFC collection rights by the FAA if there is a violation on ANCA
  • Potential airline bankruptcy or service changes
  • When the airport doesn’t implement the identified project within a specified number of years, and authorization to collect a PFC is revoked
324
Q

Bonds

A
  • Municipal bonds refer to generically to interest bearing obligations issued by state/local government entities to finance capital costs. These funding instruments are generally broken down into the following categories:
    1. General obligations
    2. Revenue and special facility bonds
    3. Hybrid source bonds
    4. Industrial development and exempt facility bonds
325
Q

General obligation bonds

A
  • Typically lower interest rate due to community guarantee
  • Issued only by states/municipality/ or other authorized general purpose governments. Usually require voter approval, pledge the full faith and credit of the bond issuer as security to the investor. This means the issuer is providing its pledge to support the bonds as necessary to meet the debt service required and is accomplished through the government’s ability to levy property sale or income tax. Bond issuers give bond holders first claim to monies in the general fund. Community also pledges the ability to pass legislation needed to increase general fund revenues to pay the debt service
326
Q

Revenue Bonds

A
  • Issued by state/local government or by airport commission or special distribution
  • Based on the philosophies that facilities should be paid for by those who use them and are backed by revenue from issuing agency. Consequently. they don’t usually require voter approval or constitute debt within the constraints of a municipality’s maximum obligation of allowed taxpayer debt.

Advantage: Can be issued for larger (25-30 year), resulting in decreased monthly payment. Enable airports to finance wide range of projects and are issued when the airport is seeking money to fund an expansion or help maintain current operations

327
Q

Special facility bonds

A

Issued by airport sponsors in order to obtain tax-exempt status. These bonds are secured by the revenue from the indebted facility (terminal, hangar, maintenance facility) rather than the airport’s general revenue fund

328
Q

Hybrid source bonds

A

Airport revenue bonds combined with PFCs, CFCs, G.O. bonds or some other ledge to fund a project. Debt instruments that carry pledges from 2 separate and distinct revenue streams, either of which could receive a credit rating. In these instances, the issuer’s full faith and credit is pledged to meet debt service, but facility generated revenues are fully expected to cover all requirements

329
Q

Industrial Development Bonds

A

Revenue bonds in the sense that the credit and repayment source for such bonds is the private entity for which the facilities are financed. Typically a municipal or government unit, issues such securities in order to finance facilities that are then leased to the private entity user at a rental rate- the debt service and for a term equal to the maturity of the securities. In some jurisdictions, the issuer loads the proceeds of the IDB’s directly to the private entity user on repayment terms equal to the terms on the IDB. No assurances made by any government agency

330
Q

Advantage of industrial development bonds

A

Can offer financing at tax exempt rates in return for making a capital investment. This can be the case when new development contributes to numerous public purposes of the issuer in such areas as job creation, cleaner air/water, and an increased tax base. Although airports are locally owned/operated, federal grant/tax exemption policies significantly assist airport capital development. Federal government requires many conditions for IDBs to be treated as a tax exemption. airport must consult with certified accountant or bond attorney

331
Q

Bonds

A

-Rated by a quality index (credit rating). It’s purpose is to provide investors with an impartial assessment of their investment protection. A rating helps determine the risk of full and timely debt repayment

  • Bond rankings:
    1. Best/high grade
    2. Upper-medium grade
    3. Lower-medium grade
    4. Non-investment grade
    5. Speculative grade
332
Q

Review of Bond Proposal

A

-Begins with the airport conducting preliminary informal discussions with the rating services before a sale. They help educate the rating service about the scope and need for the intended project. A bond services rating agency can provide a preliminary credit opinion by assessing preliminary financial strength and airport structure, thereby highlighting any areas of concern. An airport tour may be required in order to alert the credit agencies of the service area and particular airport facilities, capabilities and management

333
Q

Formal presentation of bond documents

A

Submitted to formal rating agencies after initial review. This is frequently done during a visit to the agency’s main office by a team composed of appointed and elected airport officials. Depending on the nature of the issue, a representative of the appropriate airport user, such as an airline within 2 weeks of the formal presentation to the rating service

334
Q

Information needed to assess quality of the airport’s debt position

A
  • Financial performance
  • Legal issues
  • Environmental planning
  • Capital programming efforts
  • General operations
  • Mgmt procedures
  • Expansion projects

-These have significant responsibility for resolving/mitigating problems in those areas

335
Q

Other indicators used by the rating agency

A
  • Role of local politics in airport policy and operations
  • The mgmt’s experience with large construction projects and financial planning
  • How well the airport’s staff works with tenants and the airport
  • Mgmt’s handling of public issues
336
Q

Customer Facility Charges (CFCs)

A

-Not regulated by the FAA the way PFCs are. CFCs are charged to rental car operators at an airport with the monies commonly going towards landside CIPs or landside related operations and maintenance projects

C.M. (4 decks)

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