Module 3 - Airport Capital Development

Question 1

What is the Airport Planning Process?

Answer 1

It is an interdisciplinary process that is intended to result in organized, cohesive, and cost-effective airport development, subject to financial, environmental, and other constraints.

Question 2

What is a CIP Capital Improvement Plan?

Answer 2

list of planned capital improvements, their cost, their funding plan, and cash flow funding requirements.

Question 3

What is the Master Planning Process?

Answer 3

A long-range planning document that generally inventories existing facilities, forecasts aviation demand activity; determines facility requirements at certain milestones in activity; creates development alternatives to meet the forecast demand; and recommends a preferred development alternative using holistic evaluation criteria.

Question 4

What are the major parts of a Master Plan?

Answer 4

a. Preplanning
b. Public Involvement
c. Environmental Considerations
d. Existing Conditions
e. Aviation Forecasts
f. Facility Requirements
g. Alternatives Development and Evaluation
h. Airport Layout Plans
i. Facilities Implementation Plan (CIP)
j. Financial Feasibility Analysis
k. Sustainability

Question 5

What is a Master Plan Horizon?

Answer 5

20 years

Question 6

When are Master Plans required to be updated?

Answer 6

Periodically, when major changes in the airport or its surroundings occur, or in connection with significant federal funding requests.

Question 7

How long does it take for a normal Master Plan to be complete?

Answer 7

Start to finish, usually 2 years.

Question 8

What is the objective of a Master Plan?

Answer 8

To provide cost-effective and realistic development that meets aviation demand while ensuring that it is compatible with the environment, community development, other transportation modes, and other airports.

Question 9

Does a Master Plan require public consultation?

Answer 9

Yes

Question 10

What are some key data points for the inventory of existing inventory?

Answer 10

Age of buildings, Pavement Condition Index, size of apron, number & type of aircraft, number of FBOs.

Question 11

What produces long-term forecasts of aviation demand?

Answer 11

Aviation Activity Forecast
12. What is a PAL? Planning Activity List, also known as a Trigger

Question 12

What is a Federal Airport Capital Improvement Program (ACIP)?

Answer 12

A tool that serves as the primary planning tool for systematically identifying, prioritizing, and assigning funds to critical airport development and associated capital needs for the National Airspace System (NAS).

Question 13

What FAA Order covers the ACIP?

Answer 13

FAA Order 5100.39A

Question 14

Are Capital Projects subject to Environmental Review?

Answer 14

Yes, under the National Environmental Policy Act (NEPA) of 1969.

Question 15

What other FAA Orders provide guidance for NEPA?

Answer 15

FAA Order 1050.1E “Environmental Impacts: Policies and Procedures”, and FAA Order 5050.4B “National Environmental Policy Act (NEPA) Implementing Instructions for Airport Actions”.

Question 16

What are the two levels of Environmental review?

Answer 16

Environmental Assessment (EA), and Environmental Impact Statement (EIS)

Question 17

What does CATEX stand for?

Answer 17

Categorically excluded – determined not to individually or cumulatively significantly affect the quality of the human environment.

Question 18

What does FONSI stand for?

Answer 18

Finding of No Significant Impact – determined that no substantial effects on the environment are found.

Question 19

What is an ALP?

Answer 19

Airport Layout Plan -= a graphical depiction to scale of existing and proposed airport facilities and land uses, including approach clearances, and Part 77 surfaces.

Question 20

What are the reasons for cost overruns?

Answer 20

a. Scope changes between design and completion
b. Outdated or inaccurate cost estimates
c. Project complexity
d. Material or labor cost escalation
e. Geographical variations in construction costs, in particular, those related to variances in labor, material, transportation, energy, and regulatory compliance costs
f. Poor bidding procedures
g. Contractor management/oversight issues
h. Environmental concerns
i. Weather
j. Community concerns

Question 21

What funds are typically included in project budgets?

Answer 21

Contingency amounts and allowances.

Question 22

What are the different types of Project Delivery Processes?

Answer 22

a. Design-Bid-Build (DBB) – typically used by airports
b. Construction Manager at Risk (CMAR) – construction manager provides a guaranteed maximum price (GMP) and will absorb any overruns
c. Design-Build (DB) – the project is initiated with a construction contractor already selected to that they can participate in the design process.

Question 23

What is the best practice for an airport’s financial manager?

Answer 23

To adopt financial policies and targets to protect the airport’s long-term financial health while serving as an affordability constraint in capital development.

Question 24

What are the Capital Project Funding sources?

Answer 24

a. Federal Airport Improvement Program (AIP) Grants
b. Federal Transportation Security Administration (TSA) Grants
c. PFC Revenues
d. Airport equity (i.e. retained airport net revenues)
e. State grants and other local funds
f. Tenant and other third-party funding
g. Airport Revenue bonds and other debt instruments

Question 25

When was the Airport Improvement Grant created?

Answer 25

1982, based on the NPIAS.

Question 26

What are Entitlement Grants?

Answer 26

Grants are distributed by formula to primary commercial service airports based on levels of passenger and cargo traffic.

Question 27

What act allows for PFC?

Answer 27

Aviation Safety and Capacity Expansion Act opf 1990 and then increased by the Wendell Ford Aviation Investment and Reform Act for the 21st Cebtyre (AIR-21)

Question 28

What FAA Order covers the PFCs?

Answer 28

FAA Order 5100.1 Passenger Facility Charges, known as PFC Order

Question 29

How are PFCs handled?

Answer 29

Airlines collect PFCs on behalf of the airport and then remit them on a monthly basis

Question 30

When does a PFC get applied?

Answer 30

1. PFCs are charged for the enplaning segment. It does not apply to connecting itineraries

Question 31

How are PFCs kept?

Answer 31

In a separate restricted, interest-bearing account.

Question 32

When was the Transportation Security Agency (TSA) created?

Answer 32

2002

Question 33

What can TSA Funds be used for?

Answer 33

a. Install Baggage Conveyer systems related to aviation security
b. Reconfigure terminal baggage areas as required to install explosive detection systems
c. Deploy explosive detection systems behind the ticket counter, in the baggage sorting area, or in line with the baggage handling system.

Question 34

What are Customer Facility Charges(CFCs)?

Answer 34

User fee imposed by an airport operator on each rental car user, collected by rental car companies.

Question 35

Are there federal restrictions on CFCs?

Answer 35

No

Question 36

What is Third Party (Tenant or Developer) Funding?

Answer 36

Facilities provided by third parties under long-term leases or agreements at no financial risk to the airport. These investments revert to the airport at the end of the lease.

Question 37

What is a primary funding source for most airports?

Answer 37

Long-term debt is supported by airport revenue.

Question 38

What does the Dodd-Frank Wall Streat Reform and Consumer Protection Act of 2010 cover?

Answer 38

The issuance of municipal bonds.

Question 39

What does the Municipal Securities Rulemaking Board (MSRB) consider its core principles

Answer 39

a. Fair Dealing (MSRB Rule G-17) – the obligation of dealers and advisors to deal fairly with all persons and not engage in any deceptive, dishonest, or unfair practice
b. Sustainability (MSRB Rule G-19) – a requirement for a dealer to have reasonable grounds for believing that a recommendation made to an investor is suitable for the investor.
c. Standards of Conduct (MSRB Rule G-42) – the establishment of core standards of conduct for municipal advisors, including their obligations related to their fiduciary duty
d. Fair Pricing (MSRB Rule G30) – the requirement that prices, commissions, and any mark-up or mark-down to investors must be fair and reasonable
e. Best Execution (MSRB Rule G-18) – the requirement that dealers seek the most favorable terms reasonably available for their retail customer’s transactions.
f. Dealer Compensation (MSRB Rule G-15) – the requirement for dealers to provide customer confirmations that include information about the transaction, attributes of the security, the amount of any commission, and the amount of any mark-up or mark-down for certain trades
g. Time-of-Trade Disclosure (MSRB Rule G-47) – the requirement for dealers to disclose to customers all material information known about a transaction and security at or prior to the time of trade.

Question 40

What is Financial Forecasting?

Answer 40

A powerful tool for evaluating the financial implications of various capital programs.