Developing a capital improvement program (CIP) to guide future investments can seem daunting. Funding sources, priority of needs, airport qualifications, as well as state, federal and local fiscal years all must be factored into the process. The following provides some guidelines to help determine what you need to include when starting a CIP, tips to streamline the process and other important considerations.
At its simplest, an airport CIP identifies project priorities and funding sources over a period of years and is used to plan for future projects and required funding needs. It is a document that serves as a planning tool for maintaining, developing or expanding an airport. Additionally, the CIP also serves as the basis for how the Federal Aviation Administration (FAA) and state funds are distributed. If a project is not included in your airport’s CIP, it will not be considered for federal or state funding.
The FAA prepares a national CIP each year based on collective information gleaned from each of the nine regional CIPs across the U.S. Each region has an office that gathers the CIPs completed for the airports in their region. These regions include:
Likewise, each regional CIP is assembled from information provided by individual state airport CIPs. To make sure funds are apportioned appropriately, it’s important to be in contact with your local department of transportation and FAA representatives early and often.
In order for a CIP to be most effective, you should include 20 years of projects. This helps to illustrate to your local and state governments the need for aviation funding. The U.S. Congress provides funding to many programs throughout the country. If Congress does not see a need beyond the next five years for aviation funding, they may use the money they have for other initiatives. It’s important for airport sponsors to show a need for funding into the future to continue to receive state and federal funding support for their airport projects.
But, we all know budgets and goals change. So, it’s important to review and update your CIP every year.
A successful CIP includes five parts:
Some projects funded only with a state grant might have various funding rates depending on the state and the project type. Coordinate early and often with your federal and state agency representatives to understand the funding split for your projects.
Qualifying for state or federal airport funding options depends on how your airport is classified. Put simply, there are two basic types of airport classifications: national and state.
National Plan of Integrated Airport Systems (NPIAS). NPIAS airports are airports that are eligible to receive federal funding. NPIAS airports can be commercial service airports or general aviation airports. If they meet specific criteria, such as having at least 10 based aircraft or being at least a 30-minute drive time from another NPIAS airport, the airport sponsor can receive federal funding. The FAA AIP Handbook lists projects eligible to receive federal funding. The FAA prioritizes funding projects needed for safety (runway reconstruction, taxiway reconstruction, obstruction removal) and then other projects to maintain the existing airport infrastructure and provide facilities for the user needs of the airport. Other projects eligible for federal funding include master plans, environmental assessments, snow removal equipment, hangar construction, access road rehabilitation and others. Meet with your FAA program manager often to determine eligibility and justification for your projects. Although the primary funding source for NPIAS airports is federal, they can still receive state funding for their projects.
State airport. State funded airports are those that are not included in the NPIAS but are included in a state aviation system. These are typically the smaller airports that receive state funding for eligible and justified airport projects.
The FAA AIP was created by the Airport and Airways Act of 1982 to assist in the development of a nationwide system of public-use airports. Amendments to the program since 1982 have consistently increased funding levels, participation rate, and eligibility.
The AIP has limits on eligibility. Generally, grant eligible items include airfield and aeronautical related facilities, such as: runways, taxiways, aprons, lighting and visual aids, as well as land acquisition, planning and environmental tasks needed to accomplish the Airport improvement projects. Some revenue producing items like fuel farms and FBO facilities may not eligible for AIP funds. Additionally, equipment eligibility is limited to safety equipment like Aircraft Rescue and Firefighting (ARFF) trucks and snow removal equipment (SRE). Mowers, earth moving equipment and airport operations vehicles are not eligible for funding. The FAA utilizes a priority system to rank development items. Generally, the smaller the Airport and the farther the item is from the runway, the lower priority it receives (e.g. runways have priority over taxiways, which have greater priority than aprons, which have priority over roads, etc.). However, development or equipment required by rule or law has a high priority.
There are two types of AIP funds that an airport may receive: entitlement and discretionary.
Entitlement funding is a main source of funding for general aviation airports. General aviation airports typically do not have scheduled passenger service and serve private aircraft, business aircraft and smaller charter aircraft.
Each year the FAA gives general aviation airports $150,000 to spend on justified and eligible projects. However, if the airport does not have a use for the funds, they can roll over the entitlement funds for up to four years, potentially banking up to $600,000. To access the funds, the airport must meet certain FAA requirements. Unused funds are sent back to the FAA for redistribution to other airports.
However, airports can do what are called entitlement transfers, where they roll unused funds over to other airports to use on their projects. If an airport decides not to do a project one year, they can lend all, or portions of, their entitlement funds to another airport within the state that is working on a project. The airport will then repay those funds back to the first airport in a specified year when it makes the most sense for both airports. By doing this, it keeps the entitlement funds within the state and avoids the funds going back to FAA to be used elsewhere.
Discretionary funding consists of leftover entitlements collected and redistributed nationally and is typically used on high-priority projects like runways and taxiways. Of note, discretionary grants tend to be awarded later and are usually not received until late in the fiscal year. State apportionment funding is similar to discretionary, but consists of federal funding given to the state to use, similar to discretionary funding.
State funding can include many funding types and rates. Examples of state funding are hangar loan programs and maintenance and operation grants. There are also vertical infrastructure funds and other state programs depending on which state your airport is located.
State bonding bill funds can be used in many states for airport infrastructure improvements. In Minnesota, a bonding bill is typically passed every even year. They require agreement from the state legislature and governor on how the funds should be spent, and bonding bill funds are not guaranteed until passed into law by the legislature.
There are also a number of miscellaneous grants that can be used. Two of the most common in Minnesota are the Department of Employment and Economic Development (DEED) grant and IRRRB grants.
All funding from both state and federal agencies must be for planning, design, construction or pavement maintenance projects, and cannot be used to supplement the operating expenses of the airport.
Airport revenue and local general fund and tax dollars can also help contribute to airport project funding. Airport revenue can come from things like:
With all of the funding options available and the differing times of year at play, it can easily confuse airport managers. Fortunately, there are a few things you can do to help streamline the process. The following tips can help keep everything straight.
Because keeping up on all of the calendar years necessary in an airport CIP can be challenging in its own right, here’s a simple reference guide.
October 1 – September 30
It depends on the state. Minnesota’s state fiscal year is July 1 – June 30. However, in Iowa the state fiscal year shifts every year. Other states are also different. It’s important to understand and pay attention to those deadlines and stay in the know.
Varies by airport sponsor (figure out yours to make sure)
Understanding project timing considerations and airport classification (federal or state funding) are important in developing an airport CIP – but here are a few additional points to consider when putting together a CIP:
An airport CIP is not only a document guiding the future of your community’s airport, it also guides the funding of the airport and how it will function in order to meet project needs. It’s important your CIP is soundly prepared. Contact your DOT and FAA representatives early and often with your projects. Involve the local units of government, airport committee and/or board early to demonstrate the need and economic benefit of the local airport. Give them a vision so they can begin to designate funds for the local share of project costs. To build a better foundation for Congress to continue to increase the allocation of federal funds to aviation, it’s important for every airport to develop a 20-year CIP.
Melissa Underwood is a senior airport planner and project manager who understands through precise planning and forward thinking, any project is possible. Contact Melissa