Data Supporting the Impact of Regulatory Compliance Costs on Small Airports, Volume 1: Appendixes to ACRP Report 90 (2013)

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ACRP 03-25, REGULATORY COMPLIANCE COSTS AND THE IMPACT ON SMALL AIRPORTS APPENDIX C CASE STUDIES

Table of Contents Appendix C-1. Regulatory Compliance Costs and the Impact on Golden Triangle Regional Airport – A Case Study ................................................................................................................................. C-1 Introduction ..................................................................................................................................... C-1 Airport Characteristics ..................................................................................................................... C-1 General Impacts .......................................................................................................................... C-3 FAA/DOT Requirements .................................................................................................................. C-3 Environmental Requirements .......................................................................................................... C-6 Security Requirements .................................................................................................................... C-7 Occupational Safety and Health Requirements .............................................................................. C-8 Findings and Key Considerations ..................................................................................................... C-8 Appendix C-2. Regulatory Compliance Costs and the Impact on Yakima Air Terminal/McAllister Field – A Case Study ............................................................................................................... C-10 Introduction ................................................................................................................................... C-10 Airport Characteristics ................................................................................................................... C-10 General Observations .................................................................................................................... C-12 FAA/DOT Requirements ................................................................................................................ C-13 Environmental Requirements ........................................................................................................ C-15 Security Requirements .................................................................................................................. C-16 Occupational Safety and Health Requirements ............................................................................ C-17 Findings and Key Considerations ................................................................................................... C-17 Appendix C-3. Regulatory Compliance Costs and the Impact on Stewart International Airport – A Case Study ............................................................................................................................... C-19 Introduction ................................................................................................................................... C-19 Airport Characteristics ................................................................................................................... C-19 General Observations .................................................................................................................... C-23 FAA/DOT Requirements ................................................................................................................ C-23 Environmental Requirements ........................................................................................................ C-25 Security Requirements .................................................................................................................. C-26 Page C-i

Occupational Safety and Health Requirements ............................................................................ C-27 Findings and Key Considerations ................................................................................................... C-27 Appendix C-4. Regulatory Compliance Costs and the Impact on Santa Barbara Municipal Airport – A Case Study ............................................................................................................................... C-29 Introduction ................................................................................................................................... C-29 Airport Characteristics ................................................................................................................... C-29 General Observations .................................................................................................................... C-33 FAA/DOT Requirements ................................................................................................................ C-33 Environmental Requirements ........................................................................................................ C-35 Security Requirements .................................................................................................................. C-37 Occupational Safety and Health Requirements ............................................................................ C-37 Findings and Key Considerations ................................................................................................... C-38 Appendix C-5. Regulatory Compliance Costs and the Impact on Huntsville International Airport – A Case Study ............................................................................................................................... C-40 Introduction ................................................................................................................................... C-40 Airport Characteristics ................................................................................................................... C-40 General Observations .................................................................................................................... C-44 FAA/DOT Requirements ................................................................................................................ C-44 Environmental Requirements ........................................................................................................ C-46 Security Requirements .................................................................................................................. C-48 Occupational Safety and Health Requirements ............................................................................ C-49 Other Compliance Requirements .................................................................................................. C-49 Findings and Key Considerations ................................................................................................... C-49 Page C-ii

List of Tables Table C-1. GTR Operations and Activity ............................................................................. C-1 Table C-2. GTR Airfield and Terminal Facilities ................................................................. C-2 Table C-3. GTR Services and Amenities for Aircraft Operators and Passengers ................ C-2 Table C-4. GTR Departments and Staffing Levels ............................................................... C-3 Table C-5. Summary of Regulatory Cost Impacts to GTR ................................................... C-8 Table C-6. YKM Operations and Activity .......................................................................... C-10 Table C-7. YKM Airfield and Terminal Facilities ............................................................. C-11 Table C-8. YKM Services and Amenities for Aircraft Operators and Passengers ............. C-12 Table C-9. YKM Departments and Staffing Levels ........................................................... C-12 Table C-10. Summary of Regulatory Cost Impacts to YKM ............................................. C-17 Table C-11. SWF Operations and Activity ......................................................................... C-20 Table C-12. SWF Airfield and Terminal Facilities ............................................................ C-21 Table C-13. SWF Services and Amenities for Aircraft Operators and Passengers ............ C-22 Table C-14. SWF Departments and Staffing Levels .......................................................... C-22 Table C-15. Summary of Regulatory Cost Impacts to SWF .............................................. C-28 Table C-16. SBA Operations and Activity ......................................................................... C-29 Table C-17. SBA Airfield and Terminal Facilities ............................................................. C-31 Table C-18. SBA Services and Amenities for Aircraft Operators and Passengers ............ C-32 Table C-19. SBA Departments and Staffing Levels ........................................................... C-33 Table C-20. Summary of Regulatory Cost Impacts to SBA ............................................... C-38 Table C-21. HSV Operations and Activity ......................................................................... C-41 Table C-22. HSV Airfield and Terminal Facilities ............................................................. C-42 Table C-23. HSV Services and Amenities for Aircraft Operators and Passengers ............ C-43 Table C-24. HSV Departments and Staffing Levels ........................................................... C-44 Table C-25. Summary of Regulatory Cost Impacts to HSV ............................................... C-50 Page C-iii

APPENDIX C-1 Regulatory Compliance Costs and the Impact on Golden Triangle Regional Airport – A Case Study Introduction This case study is intended to provide more detailed data and analysis of the impact of Federal regulatory requirements on the Golden Triangle Regional Airport (GTR). A description of the airport and its operations is provided, followed by a general discussion of the regulatory impacts faced by GTR. An analysis of GTR’s experience with compliance with each of the four regulatory areas addressed in the study then follows. As part of the analysis, GTR’s expenditures will be compared to the results of the industry surveys, using the interquartile mean as a measure of the industry average. The final section of the case study presents a summary of findings and considerations. Airport Characteristics GTR is a non-hub airport located in Columbus, MS. It is owned and operated by the Golden Triangle Regional Airport Authority. In CY 2010, GTR had 36,329 passenger boardings, or enplanements. At its current level of enplanements, GTR qualifies for the minimum annual passenger apportionment of $1.0 million under the Airport Improvement Program (AIP). Any additional AIP funding received by the GTR is discretionary funding. GTR currently receives scheduled service with three daily round trips to Atlanta operated by ExpressJet as a Delta Connection carrier. Table C-1 provides additional data on operations and traffic at GTR. Table C-1. GTR Operations and Activity Passenger Enplanements 36,329 Commercial Operations 2,970 General Aviation Operations 8,857 Scheduled Air Service 3 daily round-trips to ATL Express Jet d/b/a Delta Connection CRJ-200 GTR has a single 8,002 foot-by-150 foot runway with a single parallel taxiway and a connector taxiway system. Table C-2 provides additional data on airfield and terminal facilities at GTR. SOURCE: FAA data and airport staff Page C-1

Appendix C-1 Golden Triangle Regional Airport Case Study Table C-2. GTR Airfield and Terminal Facilities Runway 18/36 Taxiways Aprons Acreage Perimeter fencing, gates Terminal: ticket counters Gates and hold rooms Public space Checked baggage Security Screening 8,002 ft. x 150 ft. asphalt Single, full length asphalt parallel taxiway with multiple connector taxiways 2 concrete aprons; 2 asphalt aprons: 66,000 sq. ft. total 1,000 acres 22,000 linear feet; 10 gates total, 9 radio controlled with access badge required; 1 key-pad controlled 3 counters; 90 linear ft. 2 ground load gates 1 common hold room 15,000 sq. ft. in ticket lobby and pre- screening. 6,000 sq. ft. post screening (includes hold room) 1 carousel Passenger screening – 1 lane Checked baggage – 1 ETD GTR has a single full service fixed-base operator (FBO). The FBO provides aircraft fuel with Jet A and 100LL avgas available. Information regarding services and amenities available to aircraft operators and passengers is provided in Table C-3. Table C-3. GTR Services and Amenities for Aircraft Operators and Passengers Full Service FBOs RAS, Inc. Specialized Aviation Service Operations (SASO) Accessible Aviation – Flight School and Testing Aviation fuel Jet A Fuel and 100 LL avgas Mobile fuel trucks Terminal Retail Concessions Vending machines pre and post-security Terminal Operating Hours 4:30 am-8:30 pm Car Rental Three companies, on airport Source: Airport Staff SOURCE: Airport staff Page C-2

Appendix C-1 Golden Triangle Regional Airport Case Study GTR has a small staff. Table C-4 summarizes the organization and staffing levels of the airport. Table C-4. GTR Departments and Staffing Levels Department Staff Positions Administration Executive Director Business manager Maintenance 3 full-time 2 part-time Aircraft Rescue & Fire Fighting (ARFF) 3 full-time 6 part-time Airport parking 1 full-time 3 part-time Source: Airport Staff There is extensive cross utilization of staff among departments. Only trained ARFF personnel provide ARFF services, but the ARFF personnel assist other departments, as available and needed. General Impacts Of the four federal regulatory areas reviewed in this case study, GTR management considers FAA requirements to be the most significant. Such requirements strain the staff at small airports such as GTR. For example, GTR’s Airport Emergency Plan (AEP) grew from 30 to 180 pages. GTR does not retain a fire chief who could prepare the AEP; ARFF staffing is limited to operational fire-fighters. The Executive Director prepared the AEP. GTR generally does not have the financial resources to pay consultants, unless the consultant’s work is included in a grant funded project. Preparation of documents such as an AEP is considered an administrative or operational cost, and is not eligible for grants. Costs associated with FAA programs have been increasing. GTR management noted the increase in local matching share requirement recently approved by Congress, and the new benefit-cost-analysis (BCA) requirements for airports participating in the FAA contract tower program. Another impending impact is the requirement to provide data to support the FAA’s Geospatial Information System (GIS) and electronic airport layout plan (E-ALP). The costs of complying with the GIS requirements may be reimbursed by an AIP grant, but this additional cost means less grant dollars available for actual project implementation. GTR management is also concerned that safety management system (SMS) requirements, once adopted by the FAA, will be beyond the capacity of existing staff to handle while performing their other responsibilities. Airport staff may need to be added to comply. FAA/DOT Requirements Vehicle Operations on the Airfield – In 2002, the FAA issued AC 150/5210-20, Ground Vehicle Operations on Airports. In 2008, the FAA issued Change 1 to the AC. The AC addresses, among other things, vehicle access control, vehicle marking, and driver training. Page C-3

Appendix C-1 Golden Triangle Regional Airport Case Study GTR spent $500 to develop a new driver training curriculum and spends $100 annually on recurring driver training expenses. The airport will continue to incur driver training expenses because the FAA requires annual training. The airport’s access controls met the new standards. Compared to the other airports participating in the survey, GTR reported the minimum expenditures for both initial and recurring driver training costs. Average initial costs $20,450, and average recurring costs are $10,038. GTR is also one of the few airports that reported being in compliance with new requirements for vehicle access controls. Eighty-eight percent of surveyed airports reported modifying vehicle access policies or procedures, and 73 percent reported modifying enforcement and control practices. Part 139 Requirements – In 2004, the FAA amended 14 CFR Part 139 governing Airport Operating Certificates. The primary purpose of the amendment was to include airports with scheduled service from aircraft with 10 to 30 seats in the certification requirement. However, the amendment included modification to the certificate classification systems and new requirements for existing certificate holders. GTR held a Part 139 certificate in 2004. GTR’s largest expense to comply with the Part 139 amendments was the cost of installing a perimeter fence. Previously, the airport was surrounded by barbed wire fencing. GTR had to install an eight-foot tall wildlife fence topped by two feet of barbed wire, with access-controlled gates. The fence was constructed to comply with new perimeter security requirements added to Part 139 airports after the terrorist attacks of September 11, 2001 (9/11 attacks). The cost for this project was $200,000. The FAA paid $195,000, and GTR funded the remaining $5,000 with revenue from Passenger Facility Charges (PFCs). GTR incurs $1,000 per year in recurring costs for the fence. GTR’s experience does not align fully with the experience of other airports as reflected in the survey results. Based on the survey, acquisition of ARFF facilities or equipment was the largest expense category for existing Part 139 airports. GTR’s initial cost for installing the fence was 47 percent of the average cost of fencing projects reported in the survey ($426,840). GTR’s recurring compliance costs represent the minimum reported in the survey. The industry average is $6,667. GTR also reported spending $1,000 to update the Airport Certification Manual. The Part 139 amendment required all existing certificate holders to update their manuals. GTR’s costs were approximately 50 percent of the average cost reported in the survey ($2,002). In 2006 and 2009, the FAA issued updates to AC 150/5210-17, Programs for Training of Aircraft Rescue and Firefighting Personnel. GTR reported initial costs of $3,000 for the acquisition of the required training curriculum. The airport incurs recurring costs of $1,000 for annual training requirements. All costs are paid for with airport funds. GTR’s initial costs are close to the average cost reported in the survey ($2,947). However, GTR’s recurring costs are only 33 percent of the average reported in the survey ($3,097). Part 139 also requires certificated airports to maintain AEPs. In 2010, FAA issued Change 1 to AC 150/5200-31C, Airport Emergency Plan. As noted, because of limited airport staffing, the Executive Director prepared the AEP to comply with the new standards, spending approximately $2,000 worth of staff time for initial cost and $500 per year in recurring costs for maintaining the AEP. Costs were funded entirely by the airport. GTR’s initial and recurring costs are substantially below the average cost reported in the survey: $7,368 for initial cost and $1,033 per year for recurring costs. DBE Requirements – In 2000 and 2003, the Department of Transportation amended 49 CFR Part 26, which governs participation by disadvantaged business enterprises (DBEs) in DOT funded projects. In 2005, the Department of Transportation amended 49 CFR Part 23, which governs participation by DBEs Page C-4

Appendix C-1 Golden Triangle Regional Airport Case Study in airport concessions. The amendments to Part 26 did not have an impact on GTR, but GTR spent $2,000 initially to comply with the changes to Part 23 and spends the same amount annually. The compliance costs are treated by the FAA as an AIP administrative cost recoverable through AIP project grants. GTR has used $1,500 in grant funds to cover the added costs, with the balance financed by PFCs. GTR’s initial $2,000 expenditure is approximately 40 percent of the average reported in the survey ($5,025). The recurring expenditure of $2,000 per year is closer to the average reported in the survey ($2,533) Airfield Layout, Design and Standards – During the study period, FAA issued approximately 43 regulatory or compliance documents relating to airfield layout, design, equipment, facilities and operations. For small airports, potentially costly requirements include new requirements for runway protection zones (RPZ), runway safety areas (RSA) and signage and marking. GTR is one of the 85 percent survey respondents that reported no effect from the RPZ and RSA requirements because its existing configuration met the new standards. GTR did modify its airfield signs to meet the new requirements. Initial installation costs were $50,000. The FAA provided a $49,500 grant for the project, and GTR used PFCs to cover the local matching requirement. GTR’s costs were 69 percent of the average initial installation costs reported in the survey ($72,317). PFC Requirements – During the study period, FAA adopted new requirements for documentation for PFC approvals. PFC Update 50-06, issued in 2006, requires public agencies to provide additional supporting cost detail for projects with more than $10 million in PFC funding. GTR was not affected by PFC Update 50-06, along with 63 percent of the airports that responded “to the survey. GTR was affected by PFC Update 59-09, issued in 2009, requiring FAA staff to include additional information and analysis in the PFC documentation. GTR estimates a $500 cost for providing the additional information required by FAA staff to comply with this guidance, the minimum reported in the survey. The average cost reported in the survey is $6,332. Consulting and Engineering Services – In 2005, the FAA issued AC 150/5100-14D, Architectural, Engineering and Planning Consultant Services for Airport Grant Projects, establishing new requirements for consultant selection on AIP-funded projects. GTR reports an incremental cost of $1,000 per project to comply with the new requirements. This amount is the estimated cost of obtaining independent cost estimates to compare to the consultant’s proposed fee. This cost, however, is eligible for AIP funding. GTR’s estimated cost is equal to the minimum cost reported in the survey, with the average cost calculated at $267,167. In 2007 and 2008 the FAA issued a series of ACs on the use of GIS data in airport planning documents and other documentation. Like many small airports, GTR relied on engineering and surveying firms to comply with the requirements. The GIS work was done in connection with a runway extension and equipment installation project. GTR initially estimated the cost of compiling the GIS data at $15,000. The FAA provided $14,000 in grant funds; GTR used PFCs to finance the remaining $1,000. This figure actually understates total costs, due in part to FAA’s requirement to repeat aerial survey work. GTR management indicated that total costs could end up being between $30,000 and $35,000. Among other things, aerial survey work was redone to capture data when trees had lost their leaves. Even accounting for the additional work and associated costs, GTR’s expenditures would be only 20 percent of the average cost reported in the survey ($176,000). Page C-5

Appendix C-1 Golden Triangle Regional Airport Case Study Environmental Requirements The case study focused on GTR’s survey responses for the following areas: • Planning and development – environmental site assessments and NEPA-related documents • Water resources – spill prevention, control and countermeasure (SPCC) and national pollution Discharge Elimination system (NPDES) permits Planning and Development – GTR reported spending $45,000 for an environmental assessment (EA) to support a runway extension project. Because the project involved land acquisition, environmental site assessments (ESAs) were conducted for three separate parcels at a total additional cost of $20,000 ($6,667 per ESA, on average). GTR’s costs for EA preparation are consistent with the average cost reported in the survey ($50,000). GTR’s total cost for the ESAs is likewise consistent with the average reported in the survey (also $20,000). On a per parcel basis, however, GTR’s expenditure is approximately 33 percent of the average reported in the survey. Before issuing a finding of no significant impact (FONSI), the FAA required GTR to update its noise exposure map (NEM) noise contours, based on new requirements for maintaining current noise exposure maps for Part 150 noise compatibility programs. The additional noise analysis cost $11,000. The additional analysis had only a modest impact on the overall schedule for the NEPA process – adding three weeks. GTR received an AIP grant of $10,500 for the noise analysis. Mississippi provided $250, and GTR financed the remaining $250 with PFCs. The cost of GTR’s noise analysis was only $1,000 more than the minimum reported in the survey for comparable analyses completed to qualify for Part 150 funding, and only 14 percent of the survey sample average ($74,175). Water Resources: SPPC Requirements – GTR’s approach to meeting the requirement for a spill prevention control and countermeasure (SPCC) plan is a joint SPCC plan with its FBO, RAS, Inc. Airports for the most part do not include tenant operations in their SPCC plans due to the potential liability and associated costs the airport may assume for compliance-related issues (e.g. plan implementation, inspections, recordkeeping, spill reporting, etc.). In this case, however, the FBO is responsible for most of the compliance related activities associated with the aviation fuel tanks. The initial SPCC plan was completed in 2004. In 2009, the installation of new tanks and infrastructure and changes to the SPCC regulations triggered an update to the plan. The cost of the update, prepared by a consultant, was $5,000. This figure is 64 percent of the average cost for preparation of SPCC documentation reported in the survey ($7,800). However, the survey results may include a combination of initial SPCC plans and SPCC plan updates As with most airport storage of aviation fuel is the primary focus of the SPCC. The fuel is stored in double-walled above ground storage tanks and a mobile refueler. The stationary tanks are enclosed within a containment area. The SPCC also includes tanks operated by the airport, i.e. gasoline, diesel and backup generator tanks. The airport does not currently provide spill prevention training to its employees. GTR is in the majority of airports in this respect. Only six out of 22 airports (27 percent) that reported preparing SPCC documentation reported providing specialized training. Water Resources: National PDES – Mississippi regulates storm water runoff from construction sites, and requires the preparation of construction storm water pollution prevention plans (SWPPPs). Also, a Notice of Intent (NOI) must be submitted for individual projects. GTR hired a consultant to prepare a general Page C-6

Appendix C-1 Golden Triangle Regional Airport Case Study construction SWPPP at a cost of $2,000. This amount is 59 percent of the average cost of $3,417 reported in the survey. NOIs are usually submitted by the contractor, with the cost included in the overall contract price. GTR’s experience is that the incremental cost is usually low and typically less than $500 per NOI or project. Implementation of a construction SWPPP includes controls to minimize impacts to storm water discharges. GTR reported that contractors are generally responsible for installing controls, inspections and monitoring. Security Requirements The case study focused on four areas: • Cost of security equipment and facilities • TSA reimbursement for facilities, equipment or space • Additional employee or other operating costs • Passenger and baggage screening requirements Security Equipment and Facilities – GTR installed a new card access system and CCTV at a cost of $150,000. The project was completed to comply with requirements under Part 139, with the FAA providing grant funding for 90 percent of the project cost. Mississippi provided half of the local matching share (5 percent), and GTR funded the balance with PFCs. GTR reported a separate CCTV upgrade project that was also funded with AIP grants at the same federal share. The upgrade project was not required by FAA. TSA did not offer financial assistance for either project because neither was required by TSA. GTR’s expenditure was 33 percent of the average cost of full physical access control systems reported in the survey ($449,647) and was 64 percent of the average cost of stand-alone CCTV systems ($234,617). TSA Reimbursement for Facilities, Equipment or Space – The TSA reimburses GTR for office space and employee break rooms. GTR provides screening and baggage screening space at no cost to TSA. Checked baggage screening is done at a vacant ticket counter position. Based on current rental rates, GTR forgoes $34,000 per year in rental revenue on the baggage screening space and $15,600 per year on the passenger screening space, for a total estimated annual lost revenue of $49,600. The estimated annual rental revenue loss from providing TSA space at no cost represents 4.5% of GTR’s annual operating budget of approximately $1.1 million. Additional Employees or Operating Costs – GTR is not affected by the change in badging requirements adopted after 9/11, but GTR was unable to estimate the cost savings associated with this status. TSA security checkpoints are typically staffed from 45 minutes before a scheduled flight departure until after departure. TSA staff members work full-time at GTR and perform other duties when screening facilities are not open. The requirement for GTR to provide armed law enforcement officer (LEO) support for the screening process is becoming more costly for the Airport, because TSA’s contribution through the LEO support program is declining. GTR management is examining whether it would be more cost effective to provide LEO support through less expensive alternatives permitted by TSA, even if those alternatives do not receive TSA funding. Passenger and Baggage Screening Requirements – GTR undertook a voluntary project to move the passenger screening checkpoint and expand its footprint. AIP grants funded 95 percent of the $1.8 million cost, with the remaining five percent equally divided between PFCs and state funds. GTR Page C-7

Appendix C-1 Golden Triangle Regional Airport Case Study successfully negotiated with TSA to avoid a TSA charge to accomplish the relocation. The relationship with local TSA officials has been cooperative and constructive. GTR does not have customs or immigration inspection facilities. Occupational Safety and Health Requirements GTR is not substantially affected by occupational safety and health requirements. As a local governmental entity, GTR is not directly under the jurisdiction of the Occupational Safety and Health Administration (OSHA). GTR management advised that GTR follows OSHA requirements as a voluntary action. GTR contractors, which are regulated by OSHA, do not separate the costs of OSHA compliance from other costs in their bids or in their billing. Findings and Key Considerations As a small airport, GTR has limited resources to meet federal requirements. Staff is limited, and it sometimes falls to the Executive Director to prepare reports, plans or other documentation. When a requirement is related to a particular project, especially one that is grant eligible, GTR has been able to rely on contractors or consultants to meet the requirement and include the compliance costs in the overall project costs. GTR has on limited occasions relied on consultants to meet compliance responsibilities even without financial assistance. Even when grant funds are used, GTR often relies on state funds to pay one-half of the local match. The recently-implemented increase in the local matching requirement, together with the anticipated new federal requirements such as SMS, causes GTR’s management to be concerned about GTR’s ability to afford future compliance costs. Table C-5 summarizes the regulatory compliance costs reported by YKM. As noted previously, GTR relied on airport staff to meet many requirements during the course of their normal duties. Therefore, the figures in the table may understate the true impact to the airport. In addition, only limited questions were asked about recurring security costs and environmental costs. As a governmental entity, GTR does not fall under the direct jurisdiction of the OSHA. To the extent that OSHA requirements apply to construction projects on the airport, compliance costs would be borne by the contractors completing the project and would be incorporated into bid prices. Table C-5. Summary of Regulatory Cost Impacts to GTR Initial Costs Recurring Costs FAA/DOT Requirements $469,600 $5,700 Environmental Requirements $101,600 $400 Security Requirements $250,000 OSHA Requirements $842 Total Costs $822,042 $6,100 Federal Funds Received $666,500 $1,500 State Funds Received $17,750 $0 Page C-8

Appendix C-1 Golden Triangle Regional Airport Case Study Federal compliance costs have fallen less heavily on GTR than on other small airports. Out of 23 requirements for which GTR was able to determine or estimate a cost, GTR’s costs were below the average reported in the survey on 17 occasions, and approximately average on six occasions, In no instance did GTR’s costs exceed the average cost by a significant amount. Page C-9

APPENDIX C-2 Regulatory Compliance Costs and the Impact on Yakima Air Terminal/McAllister Field – A Case Study Introduction This case study is intended to provide more detailed data and analysis of the impact of Federal regulatory requirements on Yakima Air Terminal/McAllister Field (YKM). A description of the Airport and its operations is provided followed by a general discussion of the regulatory impacts faced by YKM. An analysis of YKM’s experience with compliance in each of the four regulatory areas addressed in the study then follows. As part of the analysis, YKM’s expenditures will be compared to the results of the industry surveys, using the interquartile mean as a measure of the industry average. The final section of the case study presents summary findings and considerations. Airport Characteristics YKM is a non-hub primary airport located in Yakima, WA. It is owned and operated under a Joint Operations Agreement (JOA – 1982) by the City/County of Yakima. Table C-6 provides data on operations and traffic at YKM. At its current level of enplanements, YKM qualifies for the minimum annual passenger apportionment of $1 million under the Airport Improvement Program (AIP). Additional AIP funding received by the Airport is discretionary. Table C-6. YKM Operations and Activity Passenger Enplanements 53,832 Commercial Operations 7,237 General Aviation Operations 18,154 Scheduled Air Service 3 daily round-trips to SEA Alaska/Horizon Air Bombardier Q-400 3 flights daily in each direction EAT-YKM-PDX SeaPort Airlines Cessna Caravan 208B YKM has two runways – a primary runway (9/27) and a crosswind runway (4/22). The FAA has advised the Airport that based on recent studies of wind coverage, the cross-wind runway no longer meets the criteria for federal support. Table C-7 provides data on airfield and terminal facilities at YKM. SOURCE: FAA data and airport staff Page C-10

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study Table C-7. YKM Airfield and Terminal Facilities Runway 9/27 7604 ft. x 150 ft. grooved asphalt Runway 4/22 3825 ft. x 150 ft. porous friction course Taxiways Full length parallel to RW 9/27 Full length parallel to RW 4/22 North/south taxiway converted from Runway 18/36 Multiple connector taxiways Aprons 3.9 million sq. ft. total Terminal apron – concrete Balance of aprons – asphalt Acreage 825 Perimeter fencing, gates 16,000 lin. ft.; 8ft. chain link, buried to prevent access by coyotes and burrowing animals Interior barbed wire fence for livestock grazing 65 vehicle gates; 25 pedestrian gates SIDA gates and terminal area gates computer controlled Remaining public access gates controlled with 4 digit key pads Restricted access gates (Airport personnel and emergency response, lock and key) Terminal: ticket counters 2 counters Alaska Air/Horizon – 80 linear ft. SeaPort – 40 linear ft. Gates and hold rooms 5 ground load gates and hold rooms Public space 22,958 sq. ft. in ticket lobby and pre- screening, 7,880 sq. ft. vacant space on terminal 2nd floor 8,000 sq. ft. beyond screening (including gates) Checked baggage 2 secure baggage drop doors Security Screening Passenger screening – 1 lane Checked baggage – 1 ETD SOURCE: Airport staff, Unison calculations Page C-11

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study YKM has a single full service fixed-base operator (FBO) and limited services/amenities. Information regarding services and amenities available to aircraft operators and passengers is provided in Table C-8. Table C-8. YKM Services and Amenities for Aircraft Operators and Passengers Full Service FBOs McCormick Air Center Specialized Aviation Service Operations (SASO) McAllister Museum of Aviation – 100 LL avgas sales; self-service pump Aviation fuel - FBO Jet A Fuel and 100 LL avgas Mobile fuel trucks and pumps Terminal Retail Concessions Vending machines pre and post-security Coffee shop space vacant Terminal Operating Hours 4:30 am-7:00 pm 9:00 pm-midnight Car Rental Two companies on Airport One company off Airport Source: Airport Staff Table C-9 summarizes the organization and staffing levels of the Airport. Table C-9. YKM Departments and Staffing Levels Department Staff Positions Administration 4 full-time Operations and maintenance 5 full-time 1 part-time ARFF 1 full-time (Index A) Source: Airport Staff General Observations As a small airport, YKM struggles to meet federal requirements in the time specified by the FAA. With limited staff and equipment, it can be difficult to meet certain requirements in house, such as the new marking requirements adopted by the FAA. If the compliance costs cannot be included in a grant funded project, it may be difficult to fund a contractor or consultant to do the work needed to meet the requirement. Most requirements for plans, manuals or other administrative issues are accomplished by staff as part of their regular duties with no separate accounting for costs. A costly requirement for YKM is providing Law Enforcement Officer (LEO) support for TSA screening activities. Even with the financial assistance offered through the TSA’s LEO reimbursement Page C-12

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study program, YKM relies on off duty officers, rather than reimburse the City or County for staffing the Airport during operating hours. Airport management anticipates that TSA’s contribution will continue to decline, adding to the costs YKM must cover. YKM has contract air traffic control services provided by SERCO and does not have to participate in the cost sharing of these services. FAA/DOT Requirements Snow and Ice NOTAMS – In 2000, the FAA issued a cert. alert modifying the acceptable procedures for issuing NOTAMS on snow conditions and friction measurements. YKM reported spending $6,000 for updating the NOTAMS twice. YKM is attempting to use PFCs to cover the cost of the modifications by including them in the PFC funding application for the friction testing equipment being acquired to comply with the FAA requirement. YKM is among the 64 percent of airports in the survey that reported modifying their procedures in response to the cert. alert. YKM’s costs were the highest reported in the survey. The average cost reported was $1,000. Vehicle Operations on the Airfield – In 2002, the FAA issued AC 150/5210-20, Ground Vehicle Operations on Airports. In 2008, the FAA issued Change 1 to the AC. The AC addresses, among other things, vehicle access control, vehicle marking, and driver training. In its survey response, YKM indicated modifying its driver training curriculum to comply with vehicle access requirements at no cost. YKM’s prior curriculum was a generic airport training curriculum. To comply with the FAA requirements, the new curriculum is specific to YKM and includes separate sections for aircraft movement and non-movement areas. YKM reported no cost because the modifications were made by airport staff as a part of normal duties. YKM was not able to estimate the staff time used to complete the modification. According to the survey, the average initial cost of meeting the new driver training requirements is $6,400, with recurring costs of $3,040 to comply with annual recurrent driver training requirements. For YKM, the driver training requirements are an example of the difficulty of quantifying the cost of a new requirement when compliance is accomplished by airport staff during the normal course of business. Part 139 Requirements – In 2004, the FAA amended 14 CFR Part 139 governing Airport Operating Certificates. The primary purpose of the amendment was to include airports with scheduled service from aircraft with 10-30 seats in the certification requirement. However, the amendment included modification to the certificate classification systems and new requirements for existing certificate holders. YKM held a Part 139 certificate in 2004. YKM’s largest expense to comply with the Part 139 amendments was the cost of installing perimeter fence. YKM had to install a fence along the south side of the Airport, which had been unfenced. The cost for this project was $428,429. The FAA paid $385,244, and YKM paid $42,805 financed with PFCs. YKM’s cost is close to the average cost of $426,840 reported in the survey. YKM revised its Airport Certification Manual (ACM) twice in 2004. Current management assumes that one of these updates was to meet the requirement of the Part 139 amendment. The work was done in house with no record of time spent. The updates predated the tenure of current management. Page C-13

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study In 2006 and 2009, the FAA issued updates to AC 150/5210-17, Programs for Training of Aircraft Rescue and Firefighting Personnel. YKM was one of only 13 percent of responding airports that were not required to modify their training procedures in response to the new requirements. Part 139 also requires certificated airports to maintain Airport Emergency Plans (AEPs). In 2010, FAA issued Change 1 to AC 150/5200-31C, Airport Emergency Plan. YKM updated its AEP in response to the new AC. The updates were completed by airport staff. YKM also used staff to update its snow and ice control plan in response to FAA requirements. Estimates of the value of staff time could not be made. DBE Requirements – In 2000 and 2003, the Department of Transportation amended 49 CFR Part 26, which governs participation by Disadvantaged Business Enterprises (DBEs) in DOT funded projects. In 2005, the Department of Transportation amended 49 CFR Part 23, which governs participation by DBEs in airport concessions. The amendments to Part 26 affected YKM, but current airport staff was unable to determine the nature of the impact or estimate its cost. YKM is in the majority of survey respondents (56 percent) that reported an impact from the amendments to Part 26. Airfield Layout, Design and Standards – During the study period, FAA issued approximately 43 regulatory or compliance documents relating to airfield layout, design, equipment, facilities and operations. For small airports, potentially costly requirements included new requirements for runway protection zones (RPZ), runway safety areas (RSA) and signage and markings. YKM completed a substantial project to comply with the RPZ and RSA standards. The project involved the approach end of runway 9/27. It included a road relocation, construction of a bridge over a stream, and relocation of power lines and telephone poles. The cost of the project was $3.04 million. The FAA provided $2.87 million in AIP funds, and YKM financed the balance ($171,000) with PFCs. YKM’s costs were in the 75th percentile of airports responding to the survey question on RPZ projects; the costs were slightly more than double the average costs of $1.49 million. YKM also modified its airfield signs to meet the new requirements. Initial installation costs were $4,624. The FAA provided a $4,393 grant for the project, and YKM used PFCs to cover the local matching requirement ($231). The costs reported by YKM are well below the 25th percentile of costs reported in the survey ($20,000). PFC Requirements – During the study period, FAA adopted new procedures for submission of PFC applications by non-hub airports. The procedures were required by statute and were intended to reduce the cost to non-hub airports of submitting PFC requests. YKM reported submitting a PFC application under the new procedures. It did not report any cost savings, because the application was prepared by airport staff as part of their normal duties. YKM’s experience contrasts with results reported in the survey responses. Five airports reported cost savings averaging $2,000. Consulting and Engineering Services – In 2005, the FAA issued AC 150/5100-14D, Architectural, Engineering and Planning Consultant Services for Airport Grant Projects, establishing new requirements for consultant selection on AIP-funded projects. Since that time, YKM has gone through the process. However, YKM management could not estimate the cost impact of the new requirements, because the impact would have been on airport staff. In 2007 and 2008, the FAA issued a series of ACs on the use of GIS data in airport planning documents and other documentation. To date, YKM has not been required to develop GIS data for the FAA. At some point in the future, based on current FAA policies, YKM will need to generate the data. Based on the survey results, YKM could face initial costs ranging from $1,000 to $658,000, with average costs of $176,000. Page C-14

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study Environmental Requirements The case study for YKM showed impacts to YKM from environmental requirements in the following key areas: • Planning and development – Wildlife Management • Water resources – Spill prevention, control and countermeasure Planning and Development – FAA AC 150/5200-36, Qualifications for Wildlife Biologist Conducting Wildlife Hazard Assessments and Training Curriculums for Airport Personnel Involved in Controlling Wildlife Hazards on Airports (June 28, 2006) describes the qualifications for wildlife biologists who conduct Wildlife Hazard Assessment (WHA)s for Part 139-certified airports. The AC also establishes the minimum wildlife hazard management training curriculum for airport personnel involved in implementing an FAA-approved Wildlife Hazard Management Plan. YKM is required to maintain a wildlife hazard management plan; therefore, YKM is required to provide annual staff training on wildlife hazard mitigation. Typically airports hire a qualified wildlife biologist to perform a WHA as part of WHMP development. YKM’s plan was developed in-house by airport staff during the normal course of duties and with the help of USDA personnel from Seattle, WA. Costs for the plan were not provided. The AC requires a minimum of eight hours for both initial and recurrent training. YKM indicated that even prior to the 2006 AC issuance, staff attended wildlife hazard training classes lasting up to eight hours annually. Site-specific concerns related to YKM’s WHMP include management of pocket gophers, which are prevalent in the area. Airport staff indicated these burrowing animals produce mounded areas on the airfield that damage Airport pavement surfaces and impact safety areas. As a result, YKM staff need to address pocket gophers on an ongoing basis but do not have the staffing resources to do so. Future issues and costs related to mitigating pavement integrity and safety areas may need to be addressed. Water Resource Requirements – The majority of aviation fuel handled at YKM is by mobile refueler or via self-serve aircraft fueling stations. The FBO is responsible for mobile refueler operations and any potential small spills that may occur. Spills above 15 gallons are handled by the Yakima Fire Department. YKM’s Airport Emergency Plan (AEP) includes information on spill response procedures and specifies when a response from the Yakima Fire Department is necessary. YKM’s reported costs associated with spill prevention include providing tenants with response equipment and performing periodic inspections. In general, YKM’s costs fall well below those reported in the survey. The reported costs are modest as only $400 was reported for replacement of materials in spill response kits. Many other small airports also provide their tenants with spill response equipment to minimize the potential airport liability from spills occurring on airport property. The average cost of specialized equipment to prevent or mitigate spills reported as part of the survey was $5,750. Inspections, up to 3 hours per month, are also performed by the Assistant Airport Manager as part of normal job duties. The inspections include leak detection, proper operation of equipment, and records reviews. Previously, the inspections were performed by the City of Yakima. Spill response training is conducted as part of the annual table-top training for YKM’s AEP. The full table-top training lasts 4-5 hours. Specific training on spill response may require an additional 4 hours for airport personnel. Based on Bureau of Labor Statistics standard hourly wage rates, estimated training Page C-15

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study costs would be $1,000 assuming five airport employees participate in the training. The average training costs reported as part of the survey was $1,603. YKM has made several attempts to establish the Airport under a NPDES Industrial Storm Water General Permit. This effort is ongoing, and the filing for the permit will be accomplished under a soon-to-be funded FAA CIP grant. The estimated cost for accumulating the data and submission of the data under an application is $15,000. This will lead to the writing and implementation of a SPCC plan. YKM’s projected costs are almost double the average costs reported in the survey results ($7,800). Security Requirements The case study focused on four areas: • Cost of security equipment and facilities • TSA reimbursement for facilities, equipment or space • Additional employee or other operating costs • Passenger and baggage screening requirements Security Equipment and Facilities – YKM installed a new access control system with card readers following the tragic events of 9/11. The cost of the system was $248,803. Previously security had been provided by key lock doors. The system included two computer systems. YKM’s costs were 55 percent of the average cost of $449,647 reported in the survey. TSA Reimbursement for Facilities, Equipment or Space – The TSA reimburses YKM for office space, employee break rooms and passenger checkpoint space. YKM provides baggage screening space at no cost to TSA. YKM was unable to estimate the revenue loss associated with the free baggage screening space. It is unusual for an airport to be compensated for the use of passenger checkpoint screening space by TSA. Additional Employees or Operating Costs – YKM incurs recurring costs for materials and staffing for issuance and reissuance of ID badges. However, these costs are recovered in the badging fee. TSA security checkpoints are typically staffed in three-hour blocks around scheduled flight arrivals. TSA staff members remain at the Airport and perform other duties when screening facilities are not open. The Airport continues to provide armed law enforcement officer (LEO) support through participation in TSA’s law enforcement reimbursement program, even though TSA funding for the program is decreasing. Following the events of 9/11, TSA requires airports to tow unaccompanied vehicles parked in front of or near the terminals. When this requirement was first introduced, towing was done by airport staff as part of their normal duties. Currently, YKM contracts for towing services on an as needed basis for each vehicle tagged. Passenger and Baggage Screening Requirements – YKM undertook a project to relocate the passenger screening checkpoint to provide space for TSA offices. Prior to TSA’s creation no office space was provided to support screening functions. The project cost $126,653 and was funded by TSA. The cost of YKM’s project was 27 percent of the average cost of $460,649 reported in the survey for passenger screening checkpoint projects. Page C-16

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study YKM has not modified its baggage screening facilities, placing it in the minority of survey respondents. Only 22 percent of responding airports reported they did not modify baggage screening facilities. YKM does not have customs and immigration inspection facilities. Occupational Safety and Health Requirements YKM is not substantially affected by occupational safety and health requirements. As a local governmental entity, YKM is not directly under the jurisdiction of the Occupational Safety and Health Administration (OSHA). YKM is subject to state regulation, which is passed through by the local government. YKM spends approximately $826 per year on personal protective equipment (PPE) for its employees. The PPE consists primarily of gloves for maintenance workers and specialized gloves for employees servicing electrical equipment. YKM contractors, which are regulated by OSHA, do not separate the costs of OSHA compliance from other costs in their bids or in their billing. Findings and Key Considerations As a small airport, YKM has limited resources to meet federal requirements. Staff is limited, and financial resources to pay consultants and contractors are constrained. YKM’s largest single compliance expenditure was the project to upgrade its perimeter fence, which received grant funding. When grant funds are available for projects to meet federal requirements, YKM has relied on PFCs to fund the local match. Table C-10 summarizes the regulatory compliance costs reported by YKM. As noted previously, YKM relied on airport staff to meet many requirements during the course of their normal duties. Therefore, the figures in the table may understate the true cost impact on the Airport. In addition, only limited questions were asked about recurring security costs and environmental costs. As a governmental entity, YKM does not fall under the direct jurisdiction of the OSHA. To the extent that OSHA requirements apply to construction projects on the Airport, compliance costs would be borne by the contractors completing the project and would be incorporated into bid prices. Table C-10. Summary of Regulatory Cost Impacts to YKM Initial Costs Recurring Costs FAA/DOT Requirements $3,655,633 Environmental Requirements $631,454 $350 $13,200 Security Requirements $375,056 OSHA Requirements $842 Total Costs $4,662,985 $13,550 Federal Funds Received $3,384,149 $0 State Funds Received $0 $0 Page C-17

Appendix C-2 Yakima Air Terminal/McAllister Field Case Study Compared with other airports, the overall reported impact to YKM is about average. Out of the six requirements for which YKM was able to determine cost impacts, YKM’s costs were above average in three instances and below average in three. For many of the compliance activities completed in-house, however, YKM was unable to determine compliance costs. Page C-18

APPENDIX C-3 Regulatory Compliance Costs and the Impact on Stewart International Airport – A Case Study Introduction This case study is intended to provide more detailed data and analysis of the impact of Federal regulatory requirements on Stewart International Airport (SWF). A description of the Airport and its operations is provided, followed by a general discussion of the regulatory impacts faced by SWF. An analysis of SWF’s experience with compliance in the four regulatory areas addressed in the study then follows. As part of the analysis, SWF’s expenditures are compared to the results of the industry surveys, using the interquartile mean as a measure of the industry average. The final section of the case study presents summary findings and considerations. Airport Characteristics SWF is a non-hub primary airport located in Newburgh, NY. The Airport is owned by the State of New York. It is currently operated by the Port Authority of New York and New Jersey (PANYNJ, or Port Authority) under a long-term lease. Day-to-day management and operations are provided by AFCO AvPORTS Management LLC (AvPORTS), under contract to the PANYNJ. SWF has been owned by the State of New York throughout the study period. However, operational control has varied during this time. Until March 31, 2000, the State of New York operated the Airport via an airport management company, Lockheed Air Terminal. On April 1, 2000 National Express, LTD, a United Kingdom corporation, took over operations under a 99-year lease approved by the FAA under the federal Airport Privatization Pilot Program. On October 31, 2007, National Express sold its leasehold to the PANYNJ. AvPORTS assumed responsibility for day-to-day operations and management on November 1, 2007. Table C-11 provides data on operations and traffic at SWF. At its current level of enplanements, SWF qualified for $1.8 million in annual passenger apportionment funds for FY 2012 under the Airport Improvement Program (AIP). Additional AIP funding received by the Airport is discretionary. Page C-19

Appendix C-3 Stewart International Airport Case Study Table C-11. SWF Operations and Activity Passenger Enplanements 201,684 Commercial Operations 12,440 General Aviation Operations 28,494 Scheduled Air Service 4 daily round-trips to PHL US Airways Express DH-400; CRJ-200 2 daily round trips to ATL (to be discontinued) Delta Connection CRJ-700 3 daily round trips to DTW Delta Connection CRJ-700 aircraft 1 daily RT to FLL JetBlue EMB-190 2 daily RT to MCO JetBlue EMB-190 SWF has two runways – a primary runway (9/27) and a crosswind runway (16/34). Table E-12 provides data on airfield and terminal facilities at SWF. SOURCE: FAA data and airport staff Page C-20

Appendix C-3 Stewart International Airport Case Study Table C-12. SWF Airfield and Terminal Facilities Runway 9/27 11,817 ft. x 150 ft. grooved asphalt Runway 16/34 6,004 ft. x 150 ft. grooved asphalt Taxiways Full length parallel to RW 9/27 (TW A) Taxiway access to ends of RW 16/34 and to the middle (incl. TW A) Multiple connector taxiways Aprons Concrete: 961,870 sf. Asphalt: 158,000 sf. Acreage 2,100 Perimeter fencing, gates 6.4 miles – 8 ft chain-link w/3 strands barbed wire per FAA specification 4 vehicle gates, 1 electrified for general vehicle access; 3 construction access Gate guard at construction entry gate Terminal: ticket counters 22 counters, 36 check-in stations 150 lf. Gates and hold rooms 7 gates with loading bridges 1 ground load gates and hold room Public space 19,550 sf. in ticket lobby and pre- screening, 23,375 sq. ft. beyond screening Checked baggage 2 carousels Security Screening Passenger screening – 1 checkpoint; 1 screening lane Checked baggage – 2 in-line EDS SOURCE: Airport staff, Unison calculations Page C-21

Appendix C-3 Stewart International Airport Case Study SWF has two full-service fixed-base operators (FBOs) and a range of services/amenities. Information regarding services and amenities available to aircraft operators and passengers is provided in Table C-13. Table C-13. SWF Services and Amenities for Aircraft Operators and Passengers Full Service FBOs Richmor Aviation, Atlantic Aviation Specialized Aviation Service Operations (SASO) Cessna Citation Center, Aircraft repair, overhaul Aviation fuel Jet A Fuel and 100 LL avgas provided by both FBOs All fuel dispensed by mobile fuel trucks Terminal Retail Concessions 2 fast food concessions and 1 news/retail concession pre-security 1 fast food concession and 1 news/retail concession post security Terminal Operating Hours 4:30 am-7:00 pm 9:00 pm-midnight Car Rental Six companies on Airport None off Airport Source: Airport Staff Table C-14 summarizes the organization and staffing levels of the Airport. Airport staff at SWF consists of 11 PANYNJ staff members and three PANYNJ consultants, 66 AvPORTS full-time employees, and 32 AvPORTS temporary employees. Table C-14. SWF Departments and Staffing Levels Department Staff Positions Executive Management 2 PANYNJ; 5 AvPORTS Business Services 1 PANYNJ; 6 AvPORTS Engineering & Environmental 4 PANYNJ Staff; 3 PANYNJ consultants; 2 AvPORTS Plant Structures, Operations & Maintenance 3 PANYNJ; 43 AvPORTS full-time; 32 AvPORTS temps. Properties & Business Development (including parking services) 1 PANYNJ; 10 AvPORTS Source: Airport Staff Page C-22

Appendix C-3 Stewart International Airport Case Study General Observations Due to its changing organizational structure and control throughout the Study Period, SWF provides a unique perspective. While being operated by the State, SWF experienced a lack of focus and expertise on the requirements of operating an airport. NEC brought management with the requisite expertise, but its focus was on bottom line profitability. During this period, SWF sought to achieve compliance with new and existing requirements while minimizing the level of effort and resources applied. Currently, as part of the PANYNJ’s system of airports, SWF sometimes benefits from the staff and resources the PANYNJ makes available to all of its airports. However, the PANYNJ is also under pressure to control costs. It is easier to justify an expansion of staff to implement a program that generates new revenue than one that is undertaken strictly for compliance purposes. Therefore, the PANYNJ as a whole, and SWF in particular, are under pressure to meet new compliance requirements within existing staffing levels. As a large organization, the PANYNJ has a decision process that is more involved and lengthier than is typical for an airport with a local governing body. However, SWF benefits from having access to resources that would not otherwise be available to a small airport. FAA/DOT Requirements Vehicle Operations on the Airfield – In 2002, the FAA issued AC 150/5210-20, Ground Vehicle Operations on Airports. In 2008, the FAA issued Change 1 to the AC. The AC addresses, among other things, vehicle access control, vehicle marking, and driver training. In its survey response, SWF reported spending $500,000 to upgrade its vehicle access controls and $100,000 in recurring costs. The initial expenditures were for computerized access control gates and surveillance cameras. The Airport’s existing access controls were in compliance with FAA requirements. The upgrades were undertaken voluntarily by SWF. The recurring costs are incurred for the staffing to conduct vehicle surveillance at airfield perimeter gates. SWF’s initial costs are 24 times higher than the survey sample average cost of $20,450. Its recurring costs (annual incremental costs due to the requirement) are almost 10 times higher than the survey sample average of $10,038. SWF also modified its driver training program in response to the AC. SWF acquired an interactive video training system produced by the American Association of Airport Executives that is customized for SWF. The $110,000 in initial costs reported by SWF represents the initial acquisition cost of the system. Subscription renewal and updating of the system account for the $5,000 in SWF’s recurring costs. SWF’s initial costs for driver training are approximately 17 times the survey sample average cost of $6,479. The recurring costs are 1.6 times the survey sample average of $3,040. Part 139 Requirements – In 2004, the FAA amended 14 CFR Part 139 governing Airport Operating Certificates. The primary purpose of the amendment was to require airports with scheduled service from aircraft with 10-30 seats to obtain a certificate. However, the amendment included modification to the certificate classification system and new requirements for existing certificate holders. SWF held a Part 139 certificate in 2004. SWF incurred no significant expenses in complying with the Part 139 amendments. No revisions to ARFF policy, procedures, equipment or facilities were required. Likewise no modifications to SWF’s perimeter fencing or its snow and ice control plan were undertaken. The revisions to the SWF’s Airport Certification Manuel were completed by airport staff as part of normal duties. Page C-23

Appendix C-3 Stewart International Airport Case Study SWF’s experience is consistent with the majority of survey participants with respect to the modified requirements for ARFF and fencing. Only 29 percent of responding airports reported expenditures to comply with ARFF requirements; thirty-one percent reported modifications to perimeter fencing. However, 58 percent of responding airports reported revisions to their snow and ice control plans, placing SWF in the minority. In 2006 and 2009, the FAA issued updates to AC 150/5210-17, Programs for Training of Aircraft Rescue and Firefighting Personnel. SWF was one of only 13 percent of responding airports that were not required to modify their training procedures in response to the new requirements. Part 139 also requires certificated airports to maintain Airport Emergency Plans (AEPs). In 2010, FAA issued Change 1 to AC 150/5200-31C, Airport Emergency Plan. SWF spent initially $25,900 to revise its AEP in response to the new AC. It spends $1,200 in recurring costs for annual updates to the AEP required by the FAA. SWF’s initial expenditure is almost six times the survey sample average cost of $4,364 and the second highest expenditure reported. The Airport’s recurring costs are approximately 38 percent higher than the survey sample average. DBE Requirements – In 2000 and 2003, the Department of Transportation amended 49 CFR Part 26, which governs participation by Disadvantaged Business Enterprises (DBEs) in DOT funded projects. In 2005, the Department of Transportation amended 49 CFR Part 23, which governs participation by DBEs in airport concessions. The amendments to neither of the regulations affected SWM. For Part 26, SWF is in the minority of survey respondents (48 percent) that did not report an impact. However, for Part 23, SWF is in the majority of survey respondents (56 percent) that did not report an impact. Airfield Layout, Design and Standards – During the study period, FAA issued approximately 43 regulatory or compliance documents relating to airfield layout, design, equipment, facilities and operations. For small airports, potentially costly requirements included new requirements for runway protection zones (RPZ), runway safety areas (RSA) and signage and markings. SWF completed a substantial project to increase the size of the RSAs at both ends of runway 16/34 to the minimum required by FAA. The project included elimination or relocation of perimeter roads, fence relocation, grading and earthwork. The cost of the project was $3.5 million. The FAA provided $1.8 million in AIP discretionary funds, and SWF financed the balance ($1.7 million). The share of funds provided (50 percent) was well below the standard Federal share (90 or 95 percent, depending on the year the grant was issued). According to SWF management, the FAA could not afford to provide any more AIP discretionary funds for the project. SWF’s cost was close to the sample survey average of $3.7 million. SWF did not modify its airfield signs to meet the new requirements. It is in the minority of airports responding to the survey. Seventy-nine percent of responding airports undertook an airfield sign project to comply with the new FAA requirements. PFC Requirements – During the study period, FAA adopted two requirements for additional documentation in support of PFC applications (PFC Update 50-06 and PFC Update 59-09). Since the purchase of the SWF lease by the Port Authority, administration of SWF’s PFC program has been provided by central Port Authority staff. The PFC program is one example of the benefit to SWF of being part of a system of airports. Consulting and Engineering Services – In 2005, the FAA issued AC 150/5100-14D, Architectural, Engineering and Planning Consultant Services for Airport Grant Projects, establishing new requirements for consultant selection on AIP-funded projects. Currently the PANYNJ provides engineering and Page C-24

Appendix C-3 Stewart International Airport Case Study planning services for SWF, or administers the consultant selection process. This is another example of the benefit to SWF of being part of a system of airports. Environmental Requirements SWF also benefits from its affiliation with the PANYNJ in complying with environmental requirements. Environmental documents required under the National Environmental Policy Act (NEPA) are currently prepared by PANYNJ staff. PANYNJ engineers also conduct inspections and monitoring required under SWF’s National Pollutant Discharge Elimination System (NPDES) construction permits. SWF reported impacts from environmental requirements in the following key areas: • Planning and development – Environmental Site Assessments, Wildlife management • Water resources – Spill prevention, control and countermeasure (SPCC), Storm water, Aircraft and airfield deicer collection and treatment • Waste Management Planning and Development, Environmental Site Assessments – SWF reported a cost of $40,000 for conducting an environmental site assessment (ESA). The high cost was the result of fuel spills at the airport. The ESA included monitoring of existing wells in the vicinity of the airport and drilling new monitoring wells. The monitoring requirement is scheduled to terminate in 2012. The FBO is responsible for periodic monitoring; SWF is responsible for monitoring associated with specific spills. SWF’s ESA cost is approximately twice the survey sample average cost of $20,000. Planning and Development, Wildlife Management – FAA AC 150/5200-36, Qualifications for Wildlife Biologist Conducting Wildlife Hazard Assessments and Training Curriculums for Airport Personnel Involved in Controlling Wildlife Hazards on Airports (June 28, 2006) describes the qualifications for wildlife biologists who conduct Wildlife Hazard Assessment (WHAs) for Part 139-certified airports. The AC also establishes the minimum wildlife hazard management training curriculum for airport personnel involved in implementing an FAA-approved Wildlife Hazard Management Plan (WHMP). SWF is required to maintain a wildlife hazard management plan; therefore, SWF is required to provide annual staff training on wildlife hazard mitigation. SWF contracted out the development of the WHA and WHMP, which is typical of small airports. SWF relies on a U.S. Department of Agriculture wildlife biologist located at the airport on a contract basis to implement the plan. The AC requires a minimum of eight hours for both initial and recurrent training. The on-site USDA wildlife biologist conducts the training. All personnel working on SWF’s airfield are subject to the annual training requirement. SWF estimates that 45-50 people attend the training class each year. One impact of the change in FAA requirements on wildlife hazard training was to increase the number of airport employees who are subject to mandatory training. SWF also conducted a threatened and endangered species survey at a cost of $10,000. SWF’s cost is 32 percent of the survey sample average cost of $31,667. Water Resource Requirements, SPCC – The majority of aviation fuel handled at SWF is delivered by mobile refueler. The FBOs are responsible for mobile refueler operations. SWF contracted out the Page C-25

Appendix C-3 Stewart International Airport Case Study preparation of a SPCC plan in 2000, at a cost of $3,500. The SPCC plan covers the entire airport, with separate sections for FBOs who are responsible for aviation fuel storage and the Airport, which is responsible for the storage of other fuel and oil. In addition, SWF holds a major oil storage facility (MOSF) permit issued by the State of New York. Annual training is provided to fueling operators. The training lasts approximately eight hours, and it is provided by PANYNJ staff. Previously, the training was provided by contractors. SWF reported cost for preparation of the SPPC is just 44 percent of the survey sample average cost of $7,800. SWF did not estimate the cost of training. Water Resource Requirements, Storm Water – SWF reported preparing a storm water pollution prevention plan (SWPP plan) and a construction storm water pollution prevention plan (CSWPP Plan), with costs of $5,500 and $2,500 respectively. SWF was not required to undertake control, mitigation or remediation measures in connection with either plan. The cost of the SWPP Plan was 59 percent of the survey sample average cost of $9,375. SWF’s reported cost of $5,500 was the median value of the survey sample. The cost of the CSWPP Plan was 73 percent of the survey sample average cost of $3,417. SWF’s experience with control, mitigation or remediation measures is consistent with the majority of airports responding to the survey. Only 13 percent of airports preparing a SWPP plan reported control, mitigation or remediation measures. Only nine percent of airports preparing a CSWPP Plan reported any of these measures. Water Resource Requirements, Deicer Fluid Collection and Treatment – SWF reported costs of $350,000 for equipment and facilities for collection and treatment of aircraft deicing fluid. SWF’s cost is 18 percent of the average cost reported in the survey. SWF also reported costs of $225,000 for equipment and facilities for collection and treatment of airfield pavement deicing fluid. SWF was the only respondent reporting expenses of this type. Security Requirements The case study focused on four areas: • Cost of security equipment and facilities • TSA reimbursement for facilities, equipment or space • Additional employee or other operating costs • Passenger and baggage screening requirements Security Equipment and Facilities – SWF has installed a new access control system, a closed circuit television (CCTV) system, a credentialing and biometric system, and breach control system since the 9/11 tragedy. SWF was unable to estimate the costs of the systems, but it reported receiving FAA funding for vehicles used for perimeter security, biometric equipment and CCTV cameras. SWF management maintains regular communication with the Transportation Security Administration (TSA) regarding compliance with security requirements. According to SWF management these communications frequently result in additional security expenditures. TSA Reimbursement for Facilities, Equipment or Space – The TSA reimburses SWF for office space and employee break rooms. SWF provides passenger checkpoint space and baggage screening space at no cost to TSA. SWF does not participate in TSA’s electric utility cost sharing program. SWF estimated the lost revenue from providing the free screening space to be $193,750. Page C-26

Appendix C-3 Stewart International Airport Case Study Additional Employees or Operating Costs – SWF incurs recurring costs for providing guards at the airfield gates. The cost to man the general access gate, which is open year-round, is approximately $100,000 per year. Construction gates are manned during periods of construction with an average of 3-5 months per gate per year. SWF has not incurred any out-of-pocket costs to provide law enforcement officer (LEO) presence at screening checkpoints. The State has provided LEO staffing in exchange for space at SWF. The PANYNJ is constructing a crime lab for the State in exchange for continued LEO staffing at Port Authority airports. While no cash outlay is involved, SWF and the Port Authority incur opportunity costs by providing space to the State. Passenger and Baggage Screening Requirements – In 2004, SWF undertook a terminal renovation project that included construction of a second passenger screening lane. The full cost of the terminal renovation was $4 million, and the FAA provided an AIP grant. SWF was unable to estimate the cost associated with adding the screening lane. TSA has since added a full body scanner to one of the screening lanes and currently operates only one lane. TSA undertook a project to improve SWF’s checked baggage screening equipment. TSA added roller tables to SWF’s existing out-bound baggage belt system. Existing facilities were sufficient to accommodate this addition. SWF incurred no costs for the modification. SWF has customs and immigration inspection services. It spent $450,000 to construct “temporary” inspection facilities on a voluntary basis. Construction of permanent facilities is underway. SWF’s expenditures were 1.2 times the survey sample average cost ($375,000). Occupational Safety and Health Requirements SWF is subject to state regulation for occupational safety and health as a part of the PANYNJ. AvPORTS and its employees, however, are directly under the jurisdiction of the Occupational Safety and Health Administration (OSHA), because of AvPORTS’ status as a private entity. The value of SWF staff time spent on occupational safety and health training is approximately $12,000 per year, which is 31 percent higher than the survey sample average cost of $9,138. SWF contractors, which are regulated by OSHA, do not separate the costs of OSHA compliance from other costs in their bids or in their billing. Findings and Key Considerations Of the airports included in the case study, SWF is unique in being part of a larger airport system and in relying on a private entity to provide day-to-day operational and management services. SWF benefits from its affiliation with the PANYNJ. For example, the PANYNJ has assumed responsibility for NEPA compliance, and it provides resident engineers to SWF. Nevertheless, SWF faces financial constraints typical of small airports. The PANYNJ generally considers revenue generating potential as part of its decision on expenditures of funds. The Airport is competing for resources with the other airports in the PANYNJ’s system. At times SWF must satisfy new compliance requirements with existing resources. SWF management considers security requirements to have a continuing impact. However, SWF’s largest single compliance expenditure was the project to upgrade its RSAs, at $3.5 million. SWF received AIP funding for this project, but at a reduced federal share of 50 percent. Page C-27

Appendix C-3 Stewart International Airport Case Study Table C-15 summarizes the regulatory compliance costs reported by SWF. After the Port Authority acquired SWF’s lease, some compliance requirements were satisfied by Port Authority staff. Also, SWF incurred costs for modifying passenger screening checkpoints as part of a larger terminal renovation project, but SWF management could not isolate the costs of security enhancements. In addition, only limited questions were asked about recurring security costs and environmental costs. As a governmental entity, SWF does not fall under the direct jurisdiction of the OSHA. AvPORTS is required to comply with OSHA with respect to its employees, but AvPORTS was not requested to supply OSHA compliance cost data. Further, to the extent that OSHA requirements apply to construction projects on the Airport, compliance costs would be borne by the contractors completing the project and would be incorporated into bid prices. Table C-15. Summary of Regulatory Cost Impacts to SWF The overall cost of Federal requirements has fallen more heavily on SWF than on other small airports. Out of the 14 requirements for which SWF and other airports reported costs, SWF’s costs were above average in nine instances and below average in five. The cost of environmental requirements on SWF has not been as great. All five of the requirements for which SWF’s costs are below average are in the environmental area. Initial Costs Recurring Costs FAA/DOT Requirements $4,161,047 $107,400 Environmental Requirements $1,042,000 $500 Security Requirements* $450,000 OSHA Requirements $12,000 Total Costs $5,653,047 $119,900 Federal Funds Received $3,384,149 $0 State Funds Received $0 $0 * Cost of Customs and Immigration facilities. Additional security costs were incurred, but costs are unknown Page C-28

APPENDIX C-4 Regulatory Compliance Costs and the Impact on Santa Barbara Municipal Airport – A Case Study Introduction This case study is intended to provide more detailed data and analysis of the impact of Federal regulatory requirements on Santa Barbara Municipal Airport (SBA). A description of the Airport and its operations is provided followed by a general discussion of the regulatory impacts faced by SBA. An analysis of SBA’s experience with compliance in each of the four regulatory areas addressed in the study then follows. As part of the analysis, SBA’s expenditures will be compared to the results of the industry surveys, using the interquartile mean as a measure of the industry average. The final section of the case study presents summary findings and considerations. Airport Characteristics SBA is a small hub primary airport located in Santa Barbara, CA. The Airport is owned and operated by the City of Santa Barbara. Table C-16 provides data on operations and traffic at SBA. At its current level of enplanements, SBA qualifies for $2.7 million in annual passenger apportionment funds for FY 2012 under the Airport Improvement Program (AIP). Additional AIP funding received by the Airport is discretionary. Page C-29

Appendix C-4 Santa Barbara Municipal Airport Case Study Table C-16. SBA Operations and Activity Passenger Enplanements 382,894 Air Carrier Operations 4,198 Air Taxi Operations 25,618 General Aviation Operations 80,805 Scheduled Air Service 4 daily RT to DEN 3 RT – United Express CRJ-200 1 RT – Frontier EMB-90 12 daily RT to LAX 8 RT – United Express EMB-120 4 RT – American Eagle ERD aircraft 10 daily RT to SFO United Express EMB-120 5 daily RT to PHX USAirways CRJ aircraft 1 daily RT to PDX Alaska-SkyWest CRJ-700 1 daily RT to SEA Alaska-SkyWest CRJ-700 SBA has three runways – a primary runway (7/25) and two closely spaced parallel crosswind runways (15L/33R and 15R/33L). Table C-17 provides data on airfield and terminal facilities at SBA. SOURCE: FAA data, airport staff, air carrier schedule information Page C-30

Appendix C-4 Santa Barbara Municipal Airport Case Study Table C-17. SBA Airfield and Terminal Facilities Runway 7/25 6,052 ft. x 150 ft. grooved asphalt Runway 15R/33L 4,183 ft. x 100 ft. asphalt Runway 15L/33R 4,178ft. x 75 ft. asphalt Taxiways Full length and partial parallel to RW 7/25 Full length parallel to RW 15L/33R Partial parallel to RW 15R/33L Multiple connector taxiways Aprons 5.6 million S.F. total pavement (incl. runways, taxiways) 25,800 S.Y. air carrier apron 201,375 S.Y. other apron Acreage 948 (includes approximately 400 acres of wetland preserve) Perimeter fencing, gates 42,210 L.F. total, with a combination of the following: • 6 ft. wood fence • 4 ft. chain link fence • 6 ft. chain link fence • 8 ft. chain link with “double lean” barbed wire 54 gates (33vehicle and 21 pedestrian) Proximity cards for access control at all gates Terminal: ticket counters 5 counters 127 L.F. Gates and hold rooms 4 gates with loading bridge capability (only 3 gates currently operational) 1 ground load gate 2 hold rooms serve the five gates Public space 4,082 S.F. in ticket lobby and pre- screening, 7,324 S.F. in hold rooms; 4,753 S.F. public circulation space beyond screening Checked baggage 4 secure bag drops Security Screening Passenger screening – 1 checkpoint; 3 screening lanes Baggage screening – 2 EDS fed by baggage conveyor belts 5 ETDs SOURCE: Airport staff Page C-31

Appendix C-4 Santa Barbara Municipal Airport Case Study SBA has two full service fixed-base operators (FBOs) and a range of services/amenities. Information regarding services and amenities available to aircraft operators and passengers is provided in Table C-18. Table C-18. SBA Services and Amenities for Aircraft Operators and Passengers Full Service FBOs Signature Flight Support, Atlantic Aviation Specialized Aviation Service Operations (SASO) Coastal Aircraft and Accurate Aviation (each providing aircraft maintenance) Accurate Aviation also provides aircraft tie-down space MAG aviation – aviation fuel sales 3 flight schools Aviation fuel Jet A and 100 LL avgas provided by both FBOs. Tanks owned by FBO’s; tanks will revert to airport at end of ground leases MAG Aviation provides 100 LL avgas through self-service pump FBO’s dispense fuel by mobile refueler Terminal Retail Concessions 1 gourmet coffee stand pre-security 1 gourmet coffee stand, 1 restaurant and 1 news/retail concession post-security Terminal Operating Hours 4:30 A.M.-12:00 A.M. (or last arrival) Car Rental 7 companies on Airport property 1 off Airport property Source: Airport Staff SBA has a full time staff of 53, and 15-20 part-time hourly staff. Full time staff includes the Airport Patrol Division, which provides law enforcement officer (LEO) support to TSA. Aircraft rescue and fire- fighting personnel (ARFF) are supplied by the City of Santa Barbara under contract. Table C-19 summarizes the organization and staffing levels of the Airport. Page C-32

Appendix C-4 Santa Barbara Municipal Airport Case Study Table C-19. SBA Departments and Staffing Levels Department Staff Positions Airport Director 3 Administration/Property Management 5.5 Airport Operations (Operations, Maintenance, Security and ARFF) 42 full-time airport staff 15-20 part-time staff ARFF staff (3 per shift) under contract Capital Support 2.5 airport staff 2 contractors Source: Airport Staff General Observations SBA benefits from leasing commercial-industrial property, which accounts for 40 percent of its operating revenue and helps cover the costs of compliance with regulatory requirements. SBA is similar to the other small-hub airport included in the case studies – Huntsville International Airport (HSV). With 53 full time staff (excluding ARFF staff) and 15-20 part-time staff, SBA has more internal resources to implement new compliance requirements compared to other non-hub airports included in these case studies. Even so, SBA indicated that staff resources were not always suitable or had the expertise to meet regulatory changes. For example, SBA added the part-time staff specifically to comply with TSA requirements for monitoring exit lanes and terminal curb-side. SBA management considers new security requirements to have had the greatest impact on the Airport, because of the added staffing needed to meet TSA requirements. However, SBA also reported significant wetland mitigation costs on a recurring basis, as discussed below. FAA/DOT Requirements Vehicle Operations on the Airfield – In 2002, the FAA issued AC 150/5210-20, Ground Vehicle Operations on Airports. In 2008, the FAA issued Change 1 to the AC. The AC addresses, among other things, vehicle access control and driver training. SBA reported spending $1,000 to comply with vehicle access requirements associated with the AC and changed its policies to prohibit operation of vehicles by the public on the AOA. Particularly, the $1,000 expense was for publicizing the new policy. No modification to gates or access controls was undertaken. SBA’s reported initial costs are four percent of the average cost of $22,227 reported in the survey. SBA reported no recurring costs associated with vehicle access. This contrasts with the average cost of $11,144 for recurring costs reported in the survey. Page C-33

Appendix C-4 Santa Barbara Municipal Airport Case Study SBA did not modify its driver training program in response to the AC. SBA is part of a small minority (eight percent) of airports that did not make modifications; 92 percent of survey respondents reported the need for driver training program modifications. Part 139 Requirements – In 2004, the FAA amended 14 CFR Part 139 governing Airport Operating Certificates. The primary purpose of the amendment was to require airports with scheduled service from aircraft with 10-30 seats to obtain a certificate. However, the amendment included modification to the certificate classification system and new requirements for existing certificate holders. SBA held a Part 139 certificate in 2004. SBA incurred no significant expenses in complying with the Part 139 amendments. No revisions to ARFF policy, procedures, equipment or facilities were required. Likewise no modifications to SBA’s perimeter fencing or its snow and ice control plan were undertaken. The revisions to the SBA’s Airport Certification Manual were not significant and SBA incurred minimal costs. SBA’s experience is consistent with the majority of survey participants with respect to the modified requirements for ARFF and fencing. Only 29 percent of responding airports reported expenditures to comply with ARFF requirements; thirty one percent reported modifications to perimeter fencing. Although 58 percent of responding airports reported revisions to their snow and ice control plans, SBA does not have a snow and ice control plan due to its location and climatic conditions. In 2006 and 2009, the FAA issued updates to AC 150/5210-17, Programs for Training of Aircraft Rescue and Firefighting Personnel. SBA was one of only 13 percent of responding airports that were not required to modify their training procedures in response to the new requirements. Part 139 also requires certificated airports to maintain Airport Emergency Plans (AEPs). In 2010, FAA issued Change 1 to AC 150/5200-31C, Airport Emergency Plan. SBA staff modified its AEP in the normal course of other required duties. As a result, SBA management was unable to estimate the cost of the modifications. An average cost of $4,490 for initial AEP modification was reported in the survey. The average recurring cost for annual updates reported in the survey is $867. DBE Requirements – In 2000 and 2003, the Department of Transportation amended 49 CFR Part 26, which governs participation by Disadvantaged Business Enterprises (DBEs) in DOT funded projects. In 2005, the Department of Transportation amended 49 CFR Part 23, which governs participation by DBEs in airport concessions. SBA reported being affected by the amendments to both regulations. However, because the DBE programs are administered by airport staff, costs to implement the amendments were not quantified. The average initial and recurring cost of the amendments to the regulation governing DBE participation in DOT funded contracts reported in the survey was $11,000. The average initial cost for compliance with the changes to concession DBE regulation reported in the survey was $7,620, and the average recurring cost was $2,900. Airfield Layout, Design and Standards – During the study period, FAA issued approximately 43 regulatory or compliance documents relating to airfield layout, design, equipment, facilities and operations. For small airports, potentially costly requirements included new requirements for runway protection zones (RPZ), runway safety areas (RSA) and signage and markings. SBA completed a substantial project to bring two of its RSAs into compliance with FAA standards. The project included acquisition of development rights and easements, relocation of two creeks, airfield access roads, utilities and navigational aids and major earthwork. The cost of the project was $34 million. The FAA provided $32.3 million in AIP funds, and SBA financed the remaining balance ($1.7 million). The federal share provided by the FAA (95 percent) was equal to the standard statutory share. Page C-34

Appendix C-4 Santa Barbara Municipal Airport Case Study SBA’s costs are the highest reported by any survey respondent and are more than nine times the average cost of $3.7 million reported in the survey. SBA has multiple fencing types surrounding the Airport. Neither FAA nor TSA has directed the Airport to accomplish fencing upgrades as stand-alone projects. Instead, the Airport has a continuing program to upgrade its perimeter fencing, in connection with other development projects. SBA has not tracked the cost of the fencing elements separately. SBA also assigns to airport tenants the responsibility for fencing upgrades as part of any significant development on their leased property. SBA did not modify its airfield signs to meet the new requirements and is in the minority of airports responding to the survey reporting signage modifications. Seventy-nine percent of responding airports undertook airfield signage projects to comply with the new FAA requirements. PFC Requirements – During the study period, FAA adopted two requirements for additional documentation in support of PFC applications (PFC Update 50-06 and PFC Update 59-09). SBA reported the new requirements did not add to the costs of preparing its PFC applications. An average cost of $17,167 was reported in the survey for compliance with PFC Update 50-06, and an average cost of $6,333 was reported for compliance with PFC Update 59-09. Consulting and Engineering Services – In 2005, the FAA issued AC 150/5100-14D, Architectural, Engineering and Planning Consultant Services for Airport Grant Projects, establishing new requirements for consultant selection on AIP-funded projects. SBA reported the new requirements had an impact as SBA retained a consultant to provide a cost benefit analysis for a proposed planning grant that cost $8,100. The average cost impact reported in the survey for this AC is $157,500. Environmental Requirements SBA reported expenditures to comply with environmental impacts in the following key areas: • Air Quality – Air emissions inventory • Planning and Development – Environmental assessment and environmental impact statements; and wildlife management • Sensitive Areas Air Emissions Inventory – Although there were no regulatory changes during the study period that required SBA to perform an air emissions analysis, a greenhouse gas inventory and evaluation was conducted as part of the new terminal project at the request of Santa Barbara’s city council. Particularly, council was concerned of the potential increase in carbon emissions from construction of the new terminal and associated operations of the airport. The inventory evaluated the entire airport, including airport operations and concluded that overall carbon emissions from the airport did not significantly change as a result of the project. The inventory and evaluation was conducted by a consultant at an estimated cost of less than $25,000. Planning and Development – SBA incurred costs for both an environmental assessment (EA) and an environmental impact statement (EIS) under the National Environmental Policy Act (NEPA) during the study period. As part of these projects, SBA was also required to prepare negative declarations (NDs) and environmental impact reports (EIRs) under the California Environmental Quality Act (CEQA). Typically, documentation for EAs or EISs is prepared at the same time as documentation for EIRs. The requirements for EIRs are reported by SBA to be generally more stringent and costly than the requirements for NEPA documents. Page C-35

Appendix C-4 Santa Barbara Municipal Airport Case Study SBA spent about $1,000,000 for a joint EIR/EIS to support the Aviation Facilities Plan, which included construction of a new airline terminal, runway relocation, creek relocation, taxiway extensions, and other airfield improvements and environmental mitigation. SBA paid for its portion of the EIS cost primarily with Passenger Facility Charge (PFC) funds. SBA also spent $9 million for extensive environmental mitigation that included clearing out invasive species, planting native plants, designing tidal circulation into wetland areas, and resorting upland habitats. This figure was included as part of the overall cost of $34 million reported for SBA’s RSA improvements. Consequently, SBA received federal funding for 95 percent of the cost associated with its initial wetland/stream mitigation activities. The Airport’s cost for the EIR/EIS preparation is more than 23 times higher than the average cost of $42,500 for an EIS reported in the survey. SBA reported consultation with FAA and regulatory agencies specifically related to wetland/stream impacts contributed to the greatest portion of costs for NEPA analyses. For example, SBA was required to perform field studies to determine how potential changes in tidal circulation would impact wildlife hazardous to aviation. SBA identified this particular study took three years to complete. SBA’s mitigation costs are the highest reported in the survey and 1,800 times higher than the average reported cost of $5,000. SBA incurs substantial costs for continuing mitigation in the form of construction and maintaining replacement wetlands. The maintenance obligation generally lasts for seven years after creation of the replacement wetland. SBA’s current maintenance efforts cost $325,000 per year. The maintenance obligation will expire in 2014. SBA management considers the wetland mitigation to be its most expensive environmental compliance requirement. SBA may be atypical in this case because of the large acreage of wetlands within the boundaries and vicinity of the airport. In order to obtain approvals to construct or conduct work in wetland or tidal areas, SBA had to obtain Clean Water Act Section 404 permits from the Army Corps of Engineers, Section 401 Water Quality Certifications from the California Regional Water Quality Control Board, and approvals from the California Coastal Commission in compliance with the Federal Coastal Zone Management Act. One of the requirements for California Coastal Commission was issuance of a Lake or Streambed Alteration Agreement from the California Department of Fish and Game which requires special-studies and application fees totaling up to $150,000. FAA AC 150/5200-36, Qualifications for Wildlife Biologist Conducting Wildlife Hazard Assessments and Training Curriculums for Airport Personnel Involved in Controlling Wildlife Hazards on Airports (June 28, 2006) describes the qualifications for wildlife biologists who conduct Wildlife Hazard Assessment (WHAs) for Part 139-certified airports. The AC also establishes the minimum wildlife hazard management training curriculum for airport personnel involved in implementing an FAA-approved Wildlife Hazard Management Plan (WHMP). SBA has a wildlife hazard management plan that was updated during the study period; therefore, SBA is required to provide annual staff training on wildlife hazard mitigation. The change in curriculum requirements resulted in a change to the general wildlife training received by SBA staff. In particular, SBA now relies on a training course taught by a state-certified biologist in Orange County. SBA sends four to five employees to training each year. In addition to employee time, SBA incurs out of pocket costs for transportation and course fees. Sensitive Areas – SBA has a comprehensive integrated pest management plan covering animals and plants to ensure non-toxic pesticides and herbicides are applied in areas accessible to the public. The plan was developed as a local initiative, not to comply with any federal requirements. Because the plan limits the use of certain herbicides and pesticides and extensive acreage outside of secured airport areas, the airport requires thousands of hours of manual labor to removing weeds and invasive plant species. Page C-36

Appendix C-4 Santa Barbara Municipal Airport Case Study Security Requirements The case study focused on four areas: • Cost of security equipment and facilities • TSA reimbursement for facilities, equipment or space • Additional employee or other operating costs • Passenger and baggage screening requirements Security Equipment and Facilities – To comply with TSA requirements, SBA installed a closed circuit television (CCTV) system as part of the project to construct a new passenger terminal. The cost of the CCTV system was approximately $300,000. SBA’s cost is 28 percent higher than the average cost of $234,617 reported in the survey. TSA Reimbursement for Facilities, Equipment or Space – The TSA reimburses SBA utilities and custodial services for the passenger screening checkpoint. TSA uses metrics based on design standards for electricity draw of the screening machines and standardized rates. TSA’s payment includes some compensation for TSA employee parking. SBA estimates that it loses $350,000 per year on the space it provides to TSA without charge. Additional Employees or Operating Costs – SBA added seven full time staff at a combined cost of $1 million per year to handle increased security patrol and operational requirements. The part-time hourly employees also perform security functions. For example, the AOA access badging workload has tripled as a result of new security requirements. The Airport does collect a badging fee and charges for background checks. Passenger and Baggage Screening Requirements – SBA recently completed construction of a new passenger terminal. SBA estimates that the baggage screening facilities in the new terminal cost $1.98 million, and the passenger screening checkpoints $1.99 million, The FAA provided AIP funds for construction of the baggage screening facilities, with local matching share funded by PFCs. TSA did not provide funding for either the passenger or baggage screening facilities. SBA’s baggage screening facility costs were more than two times higher than the average costs of $768,055 reported in the survey. The Airport’s passenger screening checkpoint costs were more than 4 times higher than the average costs of $460,649 reported in the survey. SBA does not have customs and immigration facilities. Occupational Safety and Health Requirements SBA is subject to regulation by the California Occupational Safety and Health Administration. (CALOSHA). CALOSHA’s requirements are more stringent than federal OSHA requirements. Contractors operating in California, including those doing work at the Airport, are also regulated by CALOSHA. SBA contractors do not separate the costs of CALOSHA compliance from other costs in bids or billing. Page C-37

Appendix C-4 Santa Barbara Municipal Airport Case Study SBA staff spends approximately 195 hours each year in occupational safety and health training, with a time value of $5,200. SBA’s occupational safety and health training costs are 57 percent of the average cost of $9,138 reported in the survey. Findings and Key Considerations As a small hub airport, SBA has a larger staff than the non-hub airports included in the case studies. However, SBA’s status as a small hub also brings additional levels of activity and additional complexity compared to non-hub airports. Therefore federal compliance can put a strain on airport staff resources just as it does for non-hub airports. SBA needed to add seven full time staff and 15-20 hourly employees (part-time) just comply with new security requirements, for example. The Airport’s largest single reported expense was for RSA compliance. The project cost of $34 million is the largest reported cost impact in the survey. SBA management also considers wetland mitigation to be its most expensive environmental requirement as part of RSA improvements. Wetland mitigation for the Project cost approximately $9 million of the total project cost. Ongoing responsibilities and costs are also associated with maintaining the mitigation site, including periodic site work, preparing annual reports, and consulting with regulatory agencies. This case study also identified that in some cases local or state requirements are more stringent and costly compared to federal requirements, or required in addition to federal requirements. For example, SBA was required to coordinate NEPA documentation for airport actions but was also required to meet the requirements of CEQA. Any additional analysis required to comply with CEQA must be funded entirely by the Airport. Also, local initiatives such as greenhouse gas evaluations and implementation of pesticide management practices are required to be performed at the airport’s expense. Table C-20 summarizes the regulatory compliance costs reported by SBA. As noted previously, many requirements included in the survey were satisfied using Airport staff during normal business hours, and therefore, SBA was unable to estimate the value of staff time spent on compliance. Nevertheless, the time spent by individual staff members on regulatory compliance is time these individuals cannot devote to other operational or administrative duties. As a result, the time spent on meeting regulatory compliance needs represents an overall “opportunity cost” to the airport. In addition, reported costs for environmental and OSHA requirements in some cases represent total costs incurred by the Airport, not the incremental costs of new requirements adopted during the study period. Table C-20. Summary of Regulatory Cost Impacts to SBA Initial Costs Recurring Costs FAA/DOT Requirements* $34,001,000 $0 Environmental Requirements* $10,660,800 Security Requirements $3,978,000 $325,000 $1,000,000 OSHA Requirements $5,200 Total Costs $39,539,800 $1,330,200 Federal Funds Received $35,153,800 $0 State Funds Received $0 $0 * Total Initial Cost of FAA DOT Requirements Includes $9 million environmental costs for wetland mitigation Page C-38

Appendix C-4 Santa Barbara Municipal Airport Case Study Compared with the average costs of compliance requirements reported in the survey, it appears that SBA is less impacted than other small airports. SBA reported below average costs for eight requirements and two requirements with above average costs. However, for many of the items that were below average, SBA reported no costs because compliance was accomplished using airport staff. In fact, SBA incurred the highest cost reported for RSA compliance projects and also reported substantial initial and recurring expenses for wetland mitigation. Page C-39

APPENDIX C-5 Regulatory Compliance Costs and the Impact on Huntsville International Airport – A Case Study Introduction This case study is intended to provide more detailed data and analysis of the impact of Federal regulatory requirements on Huntsville International Airport – Carl T. Jones Field (HSV). A description of the Airport and its operations is provided followed by a general discussion of the regulatory impacts faced by HSV. An analysis of HSV’s experience with compliance in each of the four regulatory areas addressed in the study then follows. As part of the analysis, HSV’s expenditures are compared to the results of the industry surveys, using the interquartile mean as a measure of the industry average. The final section of the case study presents summary findings and considerations. Airport Characteristics HSV is a small hub primary airport located in Huntsville, AL. The Airport is owned and operated by the Huntsville-Madison County Airport Authority. Table C-21 provides data on operations and traffic at HSV. At its current level of enplanements, HSV qualifies for $3.5 million in annual passenger apportionment funds for FY 2012 under the Airport Improvement Program (AIP). Additional AIP funding received by the Airport is discretionary. Page C-40

Appendix C-5 Huntsville International Airport Case Study Table C-21. HSV Operations and Activity Passenger Enplanements 606,127 Commercial Aircraft Operations 32,716 General Aviation Operations 23,153 Scheduled Air Service 9 daily RT to ATL 3 RT – Delta Connection (CRJ) 6 RT – Delta (DC-9, MD-80) 1 daily RT to DTW Delta Connection (CRJ) 4 daily RT to CLT US Airways Express (CRJ) 4 daily RT to DCA US Airways Express (CRJ) 3 daily RT to ORD 2 RT – American Eagle (ERJ) 1 RT – United Express (ERJ) 3 daily RT to DFW 1 RT – American Eagle (ERJ) 2 RT American (MD-80) 2 daily RT to DEN United Express (ERJ) 3 daily RT to IAH United Express (ERJ) 2 daily RT to IAD United Express (ERJ) HSV has two parallel runways (18L/36R and 18R/36L). Table C-22 provides data on airfield and terminal facilities at HSV. SOURCE: FAA data, airport staff, and air carrier schedule information Page C-41

Appendix C-5 Huntsville International Airport Case Study Table C-22. HSV Airfield and Terminal Facilities Runway 18L/36R 10,006 ft. x 150 ft. grooved asphalt Runway 15R/33L 12,600 ft. x 150 ft. grooved asphalt Taxiways Full length parallel to each runway Multiple connector taxiways Aprons Air Carrier 1550 ft. x 900 ft. Air Cargo 2900 ft. x 550 ft. General Aviation 1300 ft. x 650 ft. Acreage 7,178 acres Perimeter fencing, gates 14 miles of 6 ft. chain link fence 32 access gates, 10 proximity card swipe Terminal: ticket counters 6 terminal ticket counters, 32 ticketing positions Gates and hold rooms 14 gates, 10 passenger hold areas, 12 loading bridges Public space Checked baggage Security Screening Pre-screening: Queuing for Screening: 1,758 sq. ft. Security Screening: 4,287 sq. ft. Public Waiting: 7,234 sq. ft. Baggage Claim: 39,148 sq. ft. Terminal Lobby: 9,750 sq. ft. Retail: 1,572 sq. ft. Post-screening: Screening: 1,175 sq. ft. Hold Rooms: 26,000 sq. ft. Retail: 1,150 sq. ft. Three baggage carousels Passenger screening – 3 lanes (footprint for 4) Checked baggage – 3 EDS; 8 ETDs SOURCE: Airport staff Page C-42

Appendix C-5 Huntsville International Airport Case Study HSV has a single full service fixed-base operator (FBO) and a range of services/amenities. Information regarding services and amenities available to aircraft operators and passengers is provided in Table C-23 Table C-23. HSV Services and Amenities for Aircraft Operators and Passengers Full Service FBOs Signature Flight Support Specialized Aviation Service Operations (SASO) Fitzgerald Flight Academy (Flight Instruction), C- Cubed Avionics, Skyline Aviation (Aircraft Maintenance), Signature Flight Support (Aircraft Charters) Aviation fuel Jet A Fuel and 100 LL avgas provided by Signature All fuel is dispensed by mobile fuel trucks Fuel is stored in tanks owned by Airport Authority Any other fuel providers: None Terminal Retail Concessions Pre-Security: one news and gift; one restaurant; hotel Post-Security: one news and gift; food court with three vendors Terminal Operating Hours 24 hours Car Rental 5 on airport 1off airport Source: Airport staff Table C-24 summarizes the organization and staffing of the Airport. HSV has a full time staff of 104, with no part-time hourly staff. Page C-43

Appendix C-5 Huntsville International Airport Case Study Table C-24. HSV Departments and Staffing Levels Department Staff Positions Administration 15 Facilities 22 Operations 29 Capital Improvements 4 Public Safety 20 Marketing 3 JetPlex Industrial Park 1 International Intermodal Center 10 Source: Airport Staff General Observations HSV benefits from leasing commercial-industrial property and operating a multimodal freight transportation facility, which account for 18.7 percent of its operating revenue. This revenue helps HSV cover the costs of compliance with regulatory requirements. HSV is similar to the other small-hub airport included in the case studies – Santa Barbara Municipal Airport (SBA) in this respect. HSV has spent substantial sums on security requirements. HSV had to redesign and rebuild a portion of the terminal to accommodate meeters and greeters after security rules were changed to limit access to the gates by ticketed passengers. The total cost of the project was $23 million, due to the extensive work required. HSV’s public safety budget has also increased substantially, as discussed below – from $1,416,167 per year before 9/11 to $2,301,420 currently. HSV added 3 Public Safety Officers to deal with federal security requirements. In addition to operational costs of new security requirement, TSA is increasing the number of inspections, reviews and audits, which in turn requires HSV staff to spend more time on administrative matters related to security. FAA/DOT Requirements Vehicle Operations on the Airfield – In 2002, the FAA issued AC 150/5210-20, Ground Vehicle Operations on Airports. In 2008, the FAA issued Change 1 to the AC. The AC addresses, among other things, vehicle access control, vehicle inspection and driver training. Page C-44

Appendix C-5 Huntsville International Airport Case Study HSV reports initial expenses of $40,000 to comply with vehicle access requirements, and average recurring costs of $20,000. Ninety-five percent of HSV’s initial costs were funded with an AIP grant, and HSV funded the balance with PFCs. HSV’s recurring costs include staffing, software subscriptions and upgrades. HSV’s initial costs are 80 percent higher than the average cost of $22,227 reported in the survey. HSV’s recurring costs are 79 percent higher than the average cost of $11,144 reported in the survey. HSV reported one-time (initial) costs of $57,000 to comply with new requirements for vehicle inspection. HSV reported recurring costs associated with vehicle inspection compliance to average $3,000 annually. HSV’s initial costs are over 12 times higher than the survey sample average cost of $4,517. Its recurring costs are 19 percent of the survey sample average of $16,200 HSV reported initial costs of $40,000 to modify its driver training curriculum to meet new FAA requirements. FAA provided $36,000 (90 percent) toward the cost of this project in an AIP grant. HSV funded the balance with PFCs. HSV’s costs were more than six times higher than the average cost of $6,459 reported in the survey. Part 139 Requirements – In 2004, the FAA amended 14 CFR Part 139 governing Airport Operating Certificates. The primary purpose of the amendment was to require airports with scheduled service from aircraft with 10-30 seats to obtain a certificate. However, the amendment included modification to the certificate classification system and new requirements for existing certificate holders. HSV held a Part 139 certificate in 2004. HSV incurred limited expenses in complying with the Part 139 amendments. No revisions to ARFF policy, procedures, equipment or facilities were required. No modifications to HSV’s perimeter fencing or its snow and ice control plan were undertaken. The revisions to the HSV’s Airport Certification Manual cost approximately $5,000. For HSV, the most costly requirement was the change in the pavement deicing agent adopted by the FAA. HSV currently spends $30,000 on average per year on pavement deicing compounds. Before the change, it spent on average $20,000 per year. HSV’s experience is consistent with the majority of survey participants with respect to the modified requirements for ARFF and fencing. Only 29 percent of responding airports reported expenditures to comply with ARFF requirements; thirty one percent reported modifications to perimeter fencing. HSV’s cost to modify its certification manual was almost two times higher than the average cost of $2,602 reported in the survey. Because HSV included the cost of deicing materials in its estimate of incremental recurring cost of complying with the new requirements for snow and ice control plans, its results are not comparable with the survey results. In 2006 and 2009, the FAA issued updates to AC 150/5210-17, Programs for Training of Aircraft Rescue and Firefighting Personnel. HSV reported initial costs of $12,000 to comply with the new training requirements. HSV also reported that the time required for training doubled from two days to four days. HSV’s initial costs are 3 ½ times higher than the average cost of $3,383 reported in the survey. Part 139 also requires certificated airports to maintain Airport Emergency Plans (AEPs). In 2010, FAA issued Change 1 to AC 150/5200-31C, Airport Emergency Plan. HSV modified its AEP at an initial cost of $6,000. HSV reported recurring costs associated with updates to the AEP to average $1,000 annually. HSV’s costs for the initial AEP modification are 34 percent higher than the survey sample average cost of $4,490. Its recurring costs are 15 percent higher than the survey sample average of $867. Page C-45

Appendix C-5 Huntsville International Airport Case Study DBE Requirements – In 2000 and 2003, the Department of Transportation amended 49 CFR Part 26, which governs participation by Disadvantaged Business Enterprises (DBEs) in DOT funded projects (DBE project participation). In 2005, the Department of Transportation amended 49 CFR Part 23, which governs participation by DBEs in airport concessions. HSV reported initial costs of $26,367 and recurring costs of $7,210 for compliance with DOT’s new airport concession DBE requirements. Initial and recurring costs for compliance with the new DBE project participation requirements were $19,183 and $16,305 respectively. HSV’s initial and recurring costs were almost three times higher and more than double, respectively, than the survey sample average costs of $7,620 and $2,900 for compliance with the new concession DBE requirements. The Airport’s costs for complying with the new DBE project participation requirements were almost two times higher, and almost 1 ½ times higher, respectively, than the survey sample averages of $11,000 for both initial and recurring costs of compliance. HSV’s costs were the highest reported for recurring costs of compliance with the changes to both rules. Its initial cost of compliance with the new DBE project participation requirements was also the highest reported. Further HSV reported only internal costs, not costs for outside attorneys or consultants. Whether other airports included costs of outside attorneys or consultants is unknown. If they did, and HSV’s outside costs were added, the disparity would be even more. Airfield Layout, Design and Standards – During the study period, FAA issued approximately 43 regulatory or compliance documents relating to airfield layout, design, equipment, facilities and operations. For small airports, potentially costly requirements included new requirements for runway protection zones (RPZ), runway safety areas (RSA) and signage and markings. HSV did not modify either RPZs or RSAs. In the case of RPZs, HSV is in the majority, with only 13 percent of responding airports reporting RPZ modifications to comply with the new FAA standards. In the case of RSA’s HSV is in the minority. 61 percent of responding airports reported executing RSA projects to meet the new standards. HSV did revise its airfield signage and markings, however. The initial cost of the project was $347,102. HSV received an AIP grant for 95 percent of the project cost ($329,747). It financed the balance with PFCs. HSV’s cost is more than three times higher than the average cost of $90,003 reported in the survey. PFC Requirements – During the study period, FAA adopted two requirements for additional documentation in support of PFC applications (PFC Update 50-06 and PFC Update 59-09). HSV did not report incurring any costs to comply with the new requirements. HSV is in the majority of airports for both requirements. Only 27% of airports reported incurring costs to comply with PFC Update 50-06. Thirty-four percent reported incurring costs to comply with PFC Update 59-09. Consulting and Engineering Services – In 2005, the FAA issued AC 150/5100-14D, Architectural, Engineering and Planning Consultant Services for Airport Grant Projects, establishing new requirements for consultant selection on AIP-funded projects. Since 2005 HSV has completed seven consultant selections resulting in an additional estimated cost of $105,000 or $15,000 per selection. HSV’s costs are approximately 10 percent of the average cost of $157,500 reported in the survey. Environmental Requirements HSV reported the following expenditures to comply with environmentally-related compliance criteria: • Planning and development – Environmental Assessment; Environmental Site Assessments Page C-46

Appendix C-5 Huntsville International Airport Case Study • Water Resources – Spill Prevention Control and Countermeasure Plan (includes above-ground storage tanks, refuelers,) During the study period, impacts were minimal in the following key areas: • Waste Management • Water resource management – Pesticide and herbicide application Planning and Development, Environmental Assessment – HSV conducted an environmental assessment (EA) under the National Environmental Policy Act (NEPA) in support of a runway extension during the study period. HSV spent approximately $61,211.00 for the EA. The review included an archeological and cultural assessment of an old barn on the affected property and a threatened and endangered species review of a rare wild potato plant. Neither study produced results requiring mitigation or preventing the project. The threatened and endangered species study added six months to the preparation and processing time of the EA. In contrast, HSV undertook wetland mitigation required through the NEPA process. The cost to HSV was $180,000. The costs of the EA and mitigation were financed with a combination of AIP discretionary funds, PFCs and state funds. HSV’s cost of the EA is close to the survey sample average cost of $59,602. HSV’s mitigation costs are almost twice the survey sample average of $92,500. Planning and Development, Environmental Site Assessments – HSV conducted multiple environmental site assessments (ESAs) for land acquired during the study period. The average cost of the ESAs was $11,500. HSV is spending $20,000 for an ongoing cleanup from an underground storage tank leak on one of the parcels. HSV’s cost per ESA is 69 percent of the survey sample average cost of $16,750. The mitigation cost of $20,000 is equal to the survey sample average. Water Resource Management, Spill Prevention, Control and Countermeasure Plan – HSV maintains a spill prevention, control and countermeasure plan (SPCC Plan). HSV was required to update the plan twice in the last four years – once to include a new emergency generator in the plan and once to update emergency contact information. The required SPCC annual training includes approximately 75 employees. HSV estimates it expends $9,000 in labor costs to fulfill the annual training requirements. HSV’s training costs are the highest reported in the survey, and they are 4.7 times higher than the survey sample average of $1,902. Water Resource Management, Above-Ground Storage Tanks, Mobile Refuelers – The Airport owns the aircraft fuel tanks at HSV. Airport management stated this arrangement simplified compliance issues and eliminated compliance issues related to spills. HSV also required tenants to give up use of skid tanks to reduce risk and costs of spills. Although this policy is relatively novel, HSV’s proactive approach is an option for small airports to consider to minimize potential compliance costs related to tenant spills. HSV staff spends approximately five hours per month on inspection of tanks and pumps, at an annual cost of $12,000 HSV was required to construct spill containment for its mobile refueler parking area. The construction costs were $209,485.00. Page C-47

Appendix C-5 Huntsville International Airport Case Study The survey did not include specific questions about the costs of mandatory inspections. HSV’s cost for the mobile refueler spill containment is more than four times higher than the survey sample average cost of $50,000. Other Agency Permits – wildlife management – HSV spent $95,000 for a wildlife hazard assessment. It does not have an approved wildlife hazard management plan and spends $1,000 per year in recurring costs on wildlife hazard management. The survey did not include specific questions on the cost of FAA requirements for wildlife hazard plans and assessments. Security Requirements The case study focused on four areas: • Cost of security equipment and facilities • TSA reimbursement for facilities, equipment or space • Additional employee or other operating costs • Passenger and baggage screening requirements Security Equipment and Facilities – HSV installed a physical access control system at a cost of $4.3 million. Recurring costs for operating the system are $250,000. HSV received an AIP grant for the initial installation in the amount of $4,085,000 (95 percent). The Airport used PFCs to pay for its local five percent share ($215,000). HSV’s initial costs were the highest reported in the survey and are almost eight times higher than the average cost of $538,137 reported in the survey. TSA Reimbursement for Facilities, Equipment or Space – TSA pays for office space and break rooms at HSV. TSA employees pay directly for automobile parking. HSV receives no reimbursement for screening space. HSV estimates it loses $325,946 annually on the space it provides to TSA without charge. Additional Employees or Operating Costs – HSV’s public safety budget increased from $1,416,167 prior to 9/11 to $2,301,420 today. HSV attributes most of the cost increase to compliance with TSA requirements. TSA has provided compensation under the law enforcement officer (LEO) Support Program, but it has advised HSV that payments will not increase. HSV noted it went for six months without receiving LEO Support Program payments. HSV employees also spend a substantial amount of time supporting TSA investigations, evaluations and audits. The frequency and intensity of these reviews is increasing. HSV employees are involved in the examination phase of these reviews and must also devote time to responding to the findings and conclusions in the reports generated by the reviews. HSV management considers the support for TSA reviews to be the most significant recurring security compliance cost incurred by the Airport. Passenger and Baggage Screening Requirements – As a result in the change in rules that limits access to the gate concourse of the passenger terminal to ticketed passengers, HSV spent $23 million to reconfigure the passenger screening check-point. The cost was so high because HSV had to add public waiting space for meeters and greeters. Before the rule change, meeters and greeters could proceed through the passenger checkpoint by showing proper identification and submitting to the screening protocol. There Page C-48

Appendix C-5 Huntsville International Airport Case Study was ample space for meeters and greeters in the gate area. Once meeters and greeters were prohibited from passing through the screening check-point, there was not adequate waiting space for meeters and greeters prior to entering the checkpoint. The project also added space for two additional screening lanes; this resulted in three operational screening lanes and space for a fourth. The project was funded by FAA Entitlement ($16,596,499), PFC ($1,096,850) and HMCAA ($5,433,401) for a total of $23,126,750. HSV’s costs were the highest reported in the survey and were 36 times higher than the average reported cost of $637,377 HSV is currently negotiating with TSA on the installation of an automated in-line checked baggage screening system. HSV estimates the cost of the project would be $14 million. To date HSV and TSA have been unable to agree on how initial installation costs and operating and maintenance costs will be allocated between the Airport and TSA HSV does not have customs and immigration facilities in the terminal. Occupational Safety and Health Requirements HSV has a voluntary occupational safety and health program. HSV did not report adding staff dedicated to occupational safety and health compliance. HSV’s response is consistent with a substantial majority of the Phase 1 survey responses. Only nine percent of airports reported adding dedicated staff. HSV contractors do not separate the costs of occupational safety and health compliance from other costs in their bids or in their billing. Other Compliance Requirements In discussing the overall cost of federal requirements to small airports, HSV noted that changes in policies can lead to substantial costs for small airport. HSV offered as an example a recent audit of HSVs affirmative action programs and compliance with the Fair Labor Standards Act conducted by the U.S. Department of Labor (DOL). In response to the audit findings, HSV had to prepare a new affirmative action plan and to reclassify some employee positions from salaried to hourly positions eligible for overtime. HSV’s affirmative action program and its position classifications were based on recommendations of expert consultants and had been in place for many years without objection from the DOL. Findings and Key Considerations As a small hub airport, HSV has a larger staff than the non-hub airports included in the case studies. Its staff is also larger than Santa Barbara International Airport, the other small hub case study airport. However, HSV’s status also brings additional levels of activity and additional complexity. Therefore federal compliance can put a strain on airport staff resources just as it does for non-hub airports. HSV has been constrained in adding staff to meet federal requirements. The one exception is in the Department of Public Safety, where budgets grew by 62.5 percent to comply with new operational security requirements introduced after 9/11. HSV has not been able to add staff to handle the additional administrative work-load associated with TSA requirements and operations at the Airport. HSV benefits from owning a successful industrial park and successful multimodal cargo transportation center, like the other small hub airport (Santa Barbara Municipal) included in the case Page C-49

Appendix C-5 Huntsville International Airport Case Study studies. However, most small airports do not have a comparable revenue stream independent of airport operations. HSV management considers compliance with security requirements to be its most costly continuing (recurring) requirement. Security facilities and equipment also represented HSV’s most costly capital development requirements. Table C-25 summarizes the regulatory compliance costs reported by HSV. As noted previously, many requirements included in the survey were satisfied using Airport staff during normal business hours. For many requirements, HSV was able to estimate the amount of staff time spent and assign a cost to the time. Even in cases where HSV could not develop an estimate, the time spent by individual staff members on regulatory compliance is time that these individuals cannot devote to other operational or administrative duties. The time spent on compliance matters thus represents an opportunity cost to the airport. Table C-25. Summary of Regulatory Cost Impacts to HSV Compared with the average costs of compliance requirements reported in the survey, it appears that HSV is more impacted by federal requirements than other small airports. Eleven out of 17 of HSV’s costs that could be compared are above the survey sample average costs. For two security items, HSV reported the highest costs in the survey. HSV also had the highest DBE compliance costs. Initial Costs Recurring Costs FAA/DOT Requirements $571,358 $164,514 Environmental Requirements $484,265 Security Requirements $27,300,000 $21,000 $885,253 OSHA Requirements Total Costs $28,355,623 $1,070,767 Federal Funds Received1 $21,314,036 $0 State Funds Received1 $12,060 $0 1 Federal and state funds received for environmental projects estimated by Unison Page C-50