Impact of Regulatory Compliance Costs on Small Airports (2013)

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63 This chapter summarizes the results of the five case studies conducted for this research. Appendix C provides detailed reports on each of the case studies. The following airports were the subject of case studies: • Golden Triangle Regional Airport (GTR)—Columbus, Mississippi • Yakima Air Terminal/McAllister Field (YKM)—Yakima, Washington • Stewart International Airport (SWF)—Newburg, New York • Santa Barbara Municipal Airport (SBA)—Santa Barbara, California • Huntsville International Airport (HSV)—Huntsville, Alabama 7.1 Overview of Case Study Airports The FAA classifies the first three airports as non-hub airports and the last two airports as small hub airports. Table 14 summarizes data on activity and operations at the five airports. Golden Triangle receives service in the fewest markets (only one) with the fewest round-trips (three). It also had the fewest enplanements and commercial operations. From airport to airport, enplanements, commercial operations, and commercial service increase together, with Huntsville having the most enplanements and commercial operations and service. Table 15 provides data on the physical facilities at the airport, including acreage, runway lengths, gates and loading bridges, ticket counters and ticketing positions, and baggage claim facilities. 7.2 Impacts of Federal Requirements The detailed reports in Appendix C document the impacts to each of the case study airports from the requirements in each of the four regulatory areas. The impacts to the case study airports are compared with the average costs reported in the survey. This section provides a summary overview of the impacts. 7.2.1 FAA/DOT Requirements GTR’s costs for FAA/DOT requirements were generally below the average cost reported in the survey. Nevertheless, the airport management team considers FAA requirements to be the most significant. They noted in particular the cost of complying with new requirements for updating GTR’s airport emergency plan (AEP). GTR’s AEP went from 30 to 180 pages. The AEP requirement is an example of adminis- trative or operational requirements that do not qualify for grant funding. As a small airport, GTR cannot afford to hire a consultant to perform work that is not grant funded; work is completed by existing staff. If requirements continue to grow, the airport management team is unsure if the airport will have the money to hire new staff. The increase in the local matching share from 5 to 10 per- cent is another added cost. GTR’s management team is also concerned about the cost impact of the proposed regulation on safety management systems (SMSs) for all Part 139 airports. YKM’s costs of FAA compliance were in some cases below average (e.g., for perimeter fencing modifications to comply with Part 139) and in other cases above average (e.g., airfield sign and marking requirements). Like GTR, it is difficult for YKM to meet FAA requirements that do not qualify for grants. Without grant funding, YKM cannot hire contractors or con- sultants to complete the work, and the airport cannot afford to add staff. YKM relied on existing airport staff to meet many of the FAA requirements, and the management team was unable to estimate the staff time required or cost of com- pliance. For AIP-funded projects, YKM regularly used PFCs to pay the local matching share, putting it in the minority of airports reporting funding. SWF’s organizational structure is unique among the case study airports. Since 2007, SWF has been part of the system C H A P T E R 7 Case Studies

64 of airports operated by the Port Authority of New York and New Jersey (Port Authority), with day-to-day operations managed by AFCO AvPORTS Management LLC. As a part of the Port Authority system, SWF benefits from access to the Port Authority’s resources in meeting some FAA requirements. For example, Port Authority central staff provide engineering and architectural services or contract for them on behalf of SWF. Port Authority central staff also administer SWF’s PFC program and absorbed any costs associated with the new PFC requirements adopted during the study period. However, as part of a larger organization, SWF faces more levels of review, and a more time-consuming review process to get approval for many initiatives. SWF sometimes finds itself in competition for resources with other Port Authority airports. As to specific FAA requirements, SWF was minimally affected by the new Part 139 requirements for existing cer- tificate holders. Its costs for acquiring a new vehicle access control system for the airfield were substantially higher than the reported average, but SWF acquired the system as a vol- untary measure. Although SBA has a larger staff than the non-hub airports in the case studies, airport management reported that com- pliance with federal requirements is sometimes difficult, due to lack of sufficient staff positions or lack of sophisticated technical expertise. With respect to the FAA requirements, SBA’s costs were generally minimal or otherwise below average. One exception was compliance with FAA’s new requirements for RSAs. For this requirement, SBA’s cost was the highest reported and included major earthwork and road relocation. Another significant cost of the RSA project was environmental mitigation. HSV’s costs of compliance with FAA and DOT requirements were generally higher than the average costs reported in the survey. Requirements with higher than average costs include vehicle access controls, DBE requirements, and airfield sig- nage and marking requirements. In contrast, HSV’s costs for the new consultant selection requirements are below average. 7.2.2 Environmental Requirements GTR performed an EA to support a runway extension during the study period. Because the extension involved land acquisitions, ESAs were conducted for three separate par- cels. GTR’s cost for the EA were consistent with the average reported in the Phase 2 survey; on a per-parcel basis, its costs for the ESAs were below average. GTR meets SPCC plan requirements through a joint plan with its fixed-base operator (FBO) tenant. Airports typically do not include tenants in their plans to avoid potential liability for tenant actions. Airport Enplanements Commercial Operations Non-stop Markets/Flights Full-Service FBOs2 Golden Triangle Regional Airport 36,329 2,970 1 / 3 1 Yakima Air Terminal 53,832 7,237 3 / 9 1 Stewart International Airport 201,684 12,440 5 / 121 2 Santa Barbara International Airport 382,894 29,185 6 / 33 2 Huntsville International Airport 606,127 32,716 9 /34 1 1 Service to one market with three round-trips to be discontinued. 2 Fixed-base operators. Table 14. Summary of operations for case study airports. Airport Acres Runway Length(s) Hold Rooms/ Gates/Loading Bridges Ticket Counters/ Check-in Stations Baggage Claim Facilities Golden Triangle Regional Airport 1,000 8,002 x 150 ft 1 / 2 / 0 3 / 3 1 baggage carousel Yakima Air Terminal 825 7,604 x 150 ft 3,825 x 150 ft 5 / 5 / 0 2 / 2 2 bag drops Stewart International Airport 2,100 11,817 x 150 ft 6,004 x 150 ft 8 / 8 / 7 22 / 36 2 baggage carousels Santa Barbara International Airport 9481 4,183 x 100 ft 4,178 x 74 ft 2 / 5 / 4 2 5 counters 4 bag drops Huntsville International Airport 7,178 10,006 x 150 ft 12,600 x 150 ft 10 / 14 / 12 6 / 32 3 baggage carousels 1 Includes approximately 400 acres of wetland preserve. 2 One loading bridge gate currently not operational. Table 15. Summary of facilities for case study airports.

65 In the area of environmental compliance, the YKM case study focused on wildlife management and spill prevention. YKM reported developing the new wildlife hazard training curriculum required by the FAA using staff resources and assistance from the U.S. Department of Agriculture. The new requirement for minimum training hours did not affect YKM because its existing training program exceeded the new minimum. YKM’s spill prevention costs are minimal. Replacement of materials in spill response kits costs only $400 per year. Required inspections are performed by airport staff as part of normal responsibilities, and training is incorporated into the airport’s emergency response training exercises. As for many of the FAA requirements, SWF’s obligations under NEPA are carried out or managed by Port Authority central staff. SWF conducted an ESA with a cost of $20,000, which is substantially higher than industry norms. The cost was high because the site was known to be the location of a historic fuel spill. SWF’s SPCC compliance costs included updating its SPCC plan at a cost below the average reported in the survey. SWF also constructed a used oil collection and secondary containment system. SBA’s NEPA compliance costs were the largest of the case study airports. SBA spent $1 million to conduct an EIS and $9 million in mitigation measures identified in the EIS. The mitigation requirement includes annual expenditures of $325,000 that will continue until 2014. In addition, SBA needed water quality permits and certifications from California state agencies. The costs of these requirements were approximately $150,000. SBA also conducted a voluntary air emissions analy- sis and greenhouse gas inventory. Despite the costs outlined above, SBA does not consider federal environmental require- ments to have the greatest impact. HSV also conducted an EA under NEPA during the study period. HSV’s costs for the EA ($61,000) were above the average reported. HSV also reported performing multiple ESAs at an average cost ($11,500) lower than the average reported in the survey. One ESA required HSV to clean up a leaking underground tank as a mitigation measure. The costs of the cleanup ($20,000) exceed the average mitigation costs reported in the survey. HSV incurred spill prevention costs in the form of training and two updates to its SPCC plan. HSV also constructed spill containment for its mobile refueler, and it incurs costs for periodic inspections and testing. 7.2.3 Security Requirements All case study airports added or upgraded physical access control systems or related systems, with HSV reporting the highest costs of any airport in the survey ($23 million). GTR participates in the LEO support program, but TSA reimbursement is fixed. The airport is considering whether it would save money by giving up the TSA reimbursement and meeting its LEO obligation by less costly alternatives that do not qualify for the TSA reimbursement. YKM noted the declining level of TSA reimbursement under the LEO support program. YKM also relocated its passenger screening checkpoint to accommodate office space for the TSA. The TSA paid the full costs of the project, which were below the average reported in the survey. The State of New York provides LEO support at SWF in exchange for airport facilities, and SWF does not participate in the TSA’s LEO support program. SWF added a passenger screening lane during a general terminal upgrade, but it could not isolate the costs of this component. The TSA funded minimal upgrades to checked baggage screening facilities. SWF is the only case study airport that reported adding facilities to accommodate CBP screening functions. SWF constructed the facilities on a voluntary basis, and its costs were below the average reported in the survey. SWF management considers security requirements to be the airport’s largest continuing compliance effort. SBA also upgraded passenger and baggage screening as part of the construction of a replacement passenger terminal. SBA reported the costs of each to be approximately $2 million, which were well above the averages reported in the survey. SBA reported adding staff at a cost of $1 million per year to comply with new security requirements. SBA management considers security requirements to have had the greatest impact on the airport due to this recurring cost. Like SBA, HSV considers security requirements to be the most significant. HSV’s public safety budget increased 62 per- cent after the events of 9/11 to meet new operational require- ments. The TSA’s audit review and investigation activities have been increasing. There has been a corresponding increase in staff time and resources devoted to helping the TSA complete the oversight activities and to responding to TSA findings. HSV also incurred the highest costs of any airport in the survey to accommodate passenger screening activities. The high costs resulted from the need to provide additional public space for meeters and greeters after the TSA limited gate access to ticketed passengers. 7.2.4 OSHA Requirements None of the case study airports reported significant OSHA compliance costs. SWF reported the cost of staff training time for occupational safety and health training to be $12,000, which is above the average reported cost. SBA reported costs of $9,000 for staff training time, which is below the average reported. As public agencies, airports are not subject to direct OSHA regulation. Two airports—GTR and HSV—have voluntary

66 occupational health and safety programs. The remaining case study airports—YKM, SWF, and SBA—are subject to state requirements. SWF’s airport management contractor is subject to OSHA jurisdiction. 7.3 Key Findings and Conclusions Requirements that are administrative or operational in nature put a strain on all case study airports, because grant funding is generally unavailable. These airports lack the budget resources to add permanent staff or to retain consul- tants. The small hub airports (SBA and HSV) reported similar challenges to the non-hub airports, even though they have substantially larger staff than the non-hub airports. SBA and HSV consider security requirements to be the most significant, as does SWF. Both small hub airports specifically mentioned operational requirements that led to additional staff and more of the time of existing staff devoted to security issues. These operational and administrative costs generally do not qualify for reimbursement or federal assistance. There was a consensus among the case study airports that the reimburse- ment provided through the LEO support program has not kept pace with the costs of providing LEO presence at passenger checkpoints. HSV and SBA benefit from substantial non-aeronautical revenue from collateral development. These revenue sources are not typical. Moreover, even with the additional revenue, the airports reported feeling the same financial strains as the other case study airports. Table 16 summarizes the compliance costs incurred by the case study airports and the funding received from other sources. The majority of non-airport funding is federal fund- ing, but a small amount (less than $30,000 or less than one- tenth of 1 percent) came from state funds. No airport was able to finance its compliance costs without spending some airport funds. SBA and YKM had the highest percentage of non-airport funds at 87 percent each. SWF had the lowest percentage of non-airport funds at 36 percent. Airport Total Compliance Costs Non-airport Funds Non-airport Funding Federal State/Other Golden Triangle Regional Airport $804,800 $443,000 $17,750 57% Yakima Air Terminal $8,539,046 $7,416,804 $0 87% Stewart International Airport $4,876,947 $1,771,564 $0 36% Santa Barbara Municipal Airport $39,469,200 $34,336,800 $0 87% Huntsville International Airport $29,789,321 $21,352,036 $12,060 72% Total Case Study Airports $83,479,314 $65,320,204 $29,810 78% Table 16. Summary of costs and non-airport funding for case study airports.