The Economic Cost of Aircraft Noise

The Impact of Noise on Sleep 

This is the second in a series of articles on the economic impact of aircraft noise.  The previous article presented strong evidence that concluded: 

·         For residential areas and other similarly noise sensitive land uses, noise impact becomes significant in urban areas when the DNL exceeds 55 dB.  

·         In suburban areas where the population density is between 1250 and 5000 inhabitants per square mile, noise impact becomes significant when the DNL exceeds 50 dB. 

·         And in rural areas where the population density is less than 1250 inhabitants per square mile, noise impact becomes significant when the DNL exceeds 45 dB.  

The air into which second-hand noise is emitted and on which it travels is a shared public good.  It belongs to no one person or group, but to everyone.  People, businesses, and organizations, therefore, do not have unlimited rights to broadcast noise as they please.  This is especially true when it comes to interruptions to nighttime noise, and its impact on sleep.   

As a pilot who works primarily at night, and “attempts” to sleep in the day, I am very familiar with sleep cycle interruptions.  Noise from vacuums, routine maintenance, and loud neighbors are all occupational hazards of “daytime” sleeping in hotels.  It’s goes with the job, but that is a choice I made.  However, when the Airport Board decides to build an airport near someone else’s backyard, they are making a decision that will affect the sleep cycle of hundreds of other people.   

In 1983, the FAA requested NASA Langley Research Center to review the literature on “state of the art” sleep interference research¹.  Here is what NASA found:

NASA’s Conclusions Concerning Arousal from Sleep: 

1.     The threshold level of a noise which will cause arousal from sleep depends on sleep stage and the age of the subject, among other things.  Noise levels which can cause sleep disturbance cover a range of 35 to 70 decibels.

2.     In a normal 8-hour sleep night, more time is spent in lighter stages of sleep in the last half than in the first half.  This implies that airport use restrictions limiting early morning flight from 3 a.m. to 7 a.m. are particularly important.  

3.      Little or no physiological adaptation to sleep interference from noise occurs.

4.      Psychological annoyance from the effects of sleep interference from aircraft noise is probably more significant than the direct physiological consequences. 

While the NASA study concluded that sleep arousal could cause a psychological annoyance, later studies have shown it’s much worse than that. In 2004, the World Health Organization (WHO) also looked at the effects of noise on sleep².  It concluded that, “[sleep disturbances], when chronic, can have persistent and permanent effects on mental and physical health of exposed people. Effects include:  

·         Reduction of sleep efficiency,

·         Increased number of arousals,

·         Decrease of rapid eye movement (REM) sleep [possibly affecting long-term memory and spatial orientation]

·         Decrease of slow wave sleep (Non-REM sleep [possibly affecting the energy restoration quality of sleep]

·         Decrease of total sleep time 

The WHO has concluded that there is a clear link between environmental noise (including aircraft noise) and insomnia. Insomnia is an experience of inadequate or poor quality sleep characterized by one or more of the following: difficulty falling asleep, difficulty maintaining sleep, waking up too early in the morning, non-refreshing sleep.   

Risk groups for having their sleep disturbed by noise include: 

·         Children

·         Shift workers

·         Elderly people (their sleep is more shallow)

·         Patients at intensive care units

·         Low-birth weight infant units

·         Residents and disabled persons in nursing homes

·         Women during pregnancy and menopausal periods 

So, there is ample evidence to suggest that aircraft noise will impact the sleep patterns of Oldham County citizens.  However, there are many variables—proximity to the airport, age, gender, number of occurrences, and the time of night—that make it difficult to put a definitive price tag on the cost of sleep disturbance.  Difficult, but not impossible. 

Bottom Line:  The exposure to aircraft noise constitutes a major annoyance, especially when it comes to sleep disruption.  For people living around airports, sleep disturbance is a major problem which will lead to a diminished quality of life. 

Sources 

1. Federal Aviation Administration.  “Aviation Noise Effects”, Federal Aviation Administration, Washington D.C., Mar 85. www.nonoise.org/library/ane/ane.htm]

2. World Health Organization. “Report on Night Noise Guidelines,” 6-7 December, 2004.  Geneva, Switzerland, www.euro.who.int.    

Aircraft Owners Want Tax Exemption Bill Passed!

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During its public meeting in November 2007, the Airport Board claimed that one of the economic benefits of an airport would be the tangible property taxes paid by aircraft owners to Oldham County. Indeed, the Kentucky Department of Revenue estimates that local governments collect about $2 million annually from property taxes imposed on privately owned aircraft. So, aircraft owners may actually help bring in needed revenue to Oldham County coffers. Or, maybe not.

In 2006 and 2007, Kentucky law makers introduced legislation designed to exempt private aircraft owners from paying property taxes on their airplanes! With a stroke of a pen, legislators would have cut $2 million in tax revenues from local governments! Fortunately, the proposed legislation died in committee. However, the same legislation was drafted again for 2008, and introduced on March 3rd, as House Bill 705.

If an aircraft taxation exemption bill passes, noncommercial aircraft will be removed from the personal property base, and local governments will have to figure out how to make up the difference, or reduce spending. Counties will have no option but to make up the difference. Here’s how it can be done:

According to the Kentucky Legislative Research Commission, the Kentucky Revised Statutes (KRS 132.010) allows local governments to adjust the compensating property tax rate to make up any reduction in taxable property, including personal property. That would most likely mean an increase in the personal property tax rate on other taxable property (cars, trucks, motorboats, for example), to make up the loss in tax revenue. In short, WE will make up the tax revenue lost when private aircraft are no longer taxed!

No one likes to pay taxes. Auto collectors and boating enthusiasts would like a tax exemption as well. So, how do we exempt one group without exempting others? Should it be determined by who has the better lobby?

The aircraft taxation exemption has strong support from the Aircraft Owners and Pilots Association, the Kentucky Aviation Association, and private pilots. Will they get this legislation passed? Is this smart legislation when the state is experiencing a $900 million dollar shortfall over the next two years? One thing that’s certain, if it passes, you and I will cover the deficit.

Perhaps it’s time to call your state representatives, Ernie Harris and David Osborne. Let them know how you feel about giving private aircraft owners a “special” interest group status, at the expense of other taxpayers.

The Economic Cost of Aircraft Noise

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This is the beginning of a series of articles on the economic impact of aircraft noise.  While our local government appears to be preoccupied with how much money an airport might generate, it will probably not factor in this cost.  However, NOA believes you have a right to know all the “hidden” costs of an airport.  And, there is definitely a cost related to aircraft noise. 

Regardless of which site is eventually selected for an airport, there will be Oldham County citizens who will live directly under the path of departing aircraft.  Some will live as close as a mile from the airport boundary!  And, aircraft departures will occur around-the-clock.  Make no mistake about it; there will be families who must cope with the constant sound of aircraft noise.  To these families, the economic cost of an airport will go beyond paying more taxes.  So, before we build an airport, let’s make a concerted effort to understand the true relationship between noise and the possible economic impact it may have on the citizens of Oldham County.  To do that, we must first determine what an acceptable level of noise is. 

The Federal Aviation Administration (FAA) uses the (decibel day-night level) DNL metric for assessing the noise in environmental assessments.  The FAA recommends a minimum criterion value of 65 DNL to assess impact in residential areas (FAA, 2000). And, they do not differentiate between urban, suburban or rural areas. 

In its assessment of noise annoyance, the consulting firm Schomer & Associates conducted extensive research to determine an acceptable noise threshold, based on a more universally recognized definition of aircraft noise, and the environment where one lives.  Doctor Paul Schomer is a nationally recognized expert in acoustics noise control.  His research concluded: 

1.  Nearly all agencies and boards, standards setting bodies, and international organizations use a DNL criterion value of 55 dB as the threshold for defining noise impact in urban residential areas. In fact, of this large number of agencies, boards, standards setting bodies, and international organizations, only the Department of Defense and the Federal Aviation Administration suggest a criterion value for DNL that is higher than 55 dB. 

2. The policies of FAA/DOD were developed in the 1970’s and earlier.  In contrast, most of the agencies and boards, standard setting bodies, and international organizations have established their policies after 1995. In particular, the World Health Organization recommendations (WHO, 1999) are based on over 25 years more worldwide research into noise effects than are the earlier FAA/DOD policies. 

3. Significant evidence exists to suggest that aircraft noise is more annoying than is road traffic noise for the same DNL level. 

4. No single DNL criterion is equally applicable to all residential situations and all types of residential communities. A sizeable number of agencies and boards, standards setting bodies, and international organizations recommend a DNL criterion value that is less than 55 dB as the threshold for defining noise impact in sparse suburban and rural residential areas. Rural areas require a criterion that is 10 dB lower than the criterion used in normal urban areas. 

5. For residential areas and other similarly noise sensitive land uses, noise impact becomes significant in urban areas when the DNL exceeds 55 dB. In suburban areas where the population density is between 1250 and 5000 inhabitants per square mile, noise impact becomes significant when the DNL exceeds 50 dB. And in rural areas where the population density is less than 1250 inhabitants per square mile, noise impact becomes significant when the DNL exceeds 45 dB. 

Source:  A White Paper: ASSESSMENT OF NOISE ANNOYANCE, April 22, 2001, Paul Schomer, Ph.D., P.E. Schomer and Associates, Inc. Champaign, IL 61821 

Clearly, the FAA is willing to let you be exposed to a larger degree of noise than what is acceptable to most other agencies.  But, why is it so important to determine the true threshold between acceptable and unacceptable noise exposure? 

That, my friends has to do with determining what amount of noise will distract your children, while they study at school, the amount of noise that will impact hospital patients during their recovery, and the amount of noise that will wake you up in the middle of the night!   

Not convinced?  Well, you will have to wait until the next article to see more evidence!

Read Beneath the Headlines…

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Any news reporter will tell you that the key to a good article is an eye catching headline.  It is designed to get the audience to read further.  However, the fact remains that many will read no further than the headlines.  We have become a nation of “news bytes” and “sound bytes.” 

If you picked up the February 21^st edition of the Oldham Era and read the headline, “All Airport Sites Are Eliminated,” perhaps you now believe the airport initiative is dead.  I regret to tell you that the airport initiative is very much alive.  I attended the same airport board meeting as Oldham Era staff writer, Elizabeth Troutman, and I’d like to offer my comments on what she wrote.  Ms. Troutman’s comments are in bold italics; mine are in normal font:

 All Airport Sites are Eliminated—No airport sites were eliminated.  The airport board simply withdrew their approval of the three sites recommended by the Entran Feasibility Study, pending further study.  When the board concludes that an airport will bring economic prosperity to the county (and they will), then all 17 sites surveyed by Entran will be re-opened for discussion.  This includes the Blakemore, Gathright, and Dawkins, sites.  I personally believe that the airport board will look for sites where landowners want to sell their property for an airport.  Currently, there are at least two sites available right now (I-71, and Eden Park), where property owners are happy to accommodate an airport.  However, you must consider that a downturn in the housing market might convince a property owner to sell his/her land to the first person who makes a reasonable offer. 

If an airport won’t generate revenue, board members say the FAA’s process to determine the possibility of developing an airport is futile—wasting time and grant money.  It is the Airport Board that accepted a $200,000 grant (taxpayer money) from the state of Kentucky Department of Aviation, to do an airport feasibility study.  It is the Airport Board that has spent $70,000 of this grant for Entran’s Feasibility Study.  It is the Airport Board that has needlessly spent money, and no one else.

Mr. Bob Sargis [airport board member] said he believes the airport board whisked ahead by tackling technical questions first, as required by the FAA.  Mr. Sargis is correct in that the board moved too quickly.  However, the FAA does not prohibit an airport board or a fiscal court from doing their homework prior to requesting a feasibility study.  The board should have done all the studies they are now calling for well before spending any grant money.  It’s like having an architect design a house for you before you even determine that you need or even want a new house! 

The board is collecting information on the public’s opinion of the project, which will be presented at a meeting March 6.  In order to conduct a professional opinion poll, one would have to contract an independent body, develop an unbiased set of questions, and then administer the poll.  This would cost several thousand dollars—money the airport board doesn’t have.

If the board members choose to return to the FAA process, they are required to launch a new feasibility study.  This statement is simply not true.  In the February Airport Board Meeting, the board made it very clear that they could only ask for refinements to the current Entran Study, since the board has a $200,000+ contract with Entran.  That money cannot be used to launch another study using another firm.  And, the airport board has no other source of funding a feasibility study.

There are a string of comments offered in Ms Troutman’s article from board members and even the Judge/Executive that appear to blame the current state of affairs on the FAA and the Kentucky Department of Aviation.  This is not true and unfair.  Each of these organizations has a set of rules for determining whether or not an airport should be built, and the Kentucky Revised Statutes clearly outlines the responsibilities of an airport board.  If the airport board and fiscal court didn’t like the rules, then steps should have been taken–prior to asking for the grant money—to resolve the local issues not addressed by state and federal authorities.  And, if the airport board did not wish to act like one, it should have remained as an airport committee.

My point is not to disparage Ms. Troutman’s article, but to inform you that some of her points could mislead the reader into believing that the airport initiative is all but dead.  Certainly, the Era’s choice of headline conveyed just that message.  But, it’s also important not to lay the blame for airport board’s current malaise at the feet of the FAA or the Kentucky Department of Aviation. 

Now, to get out of this jam, the airport board will look for money to do more studies.  And, it appears the Oldham County Economic Development Authority (OCEDA) may be willing to lend it to them.  Where does OCEDA get its funding?  Oldham County taxes–your tax money–of course!  If you don’t think your hard-earned money should go to doing a second economic impact study (the first one was shown during the November 2007 public forum), please contact:   

OCEDA Chairman
Dennis Johnson
Baptist Hospital Northeast
1025 New Moody Lane
LaGrange, KY 40031-9142
(502) 222-5388
djohnson1@BHSI.COM  

Jim Pearson

NOA Executive Director

Tax Loophole Created Just for Airports!

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More Tax Increases are Coming Your Way!

Each year, the county sets a tax rate on personal property. When collected, this revenue helps meet the county’s annual budget requirements. To ensure no county government can unreasonably tax its property owners, the State of Kentucky limits the amount of this county tax increase to 4% in any given year. If the county exceeds this 4% compensating tax rate, then the tax levy is subject to voter recall or reconsideration.

However, taxing personal property for the purpose of building and supporting an airport falls outside this limit.  So, the county can levy a separate property tax, just for a general aviation airport.

Here’s the exact Kentucky statute that creates this taxation loophole:

Kentucky Revised Statue, 183.134 Appropriations for airports — Bond issue, election, tax:

(5) Notwithstanding the limitations contained in KRS 132.023, any governmental unit which after March 21, 1968, levies a tax for aviation purposes under this chapter may exclude the tax from consideration in calculating the compensating tax rate as now or subsequently defined in KRS 132.010 or any amendments or other act substituted relating to that section.

Our elected officials must wisely use our tax money to pay for the needs and wants of the county.  When there’s a limited supply of money, not everything can be funded.  Which category does an airport fit into? That, is what you must decide.  As Mark Twain once said,

“The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”

You can stop the county tax man from levying taxes to pay for an airport that is not wanted by county residents, and certainly not needed.  Call your Judge/Executive and magistrates.  “JUST SAY NOA.”

Airport Lessons Learned in Shelby County…by Jim Ellis

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The residents of Oldham County are currently considering constructing a general aviation (GA) airport. Shelby County twice considered an airport, in 1998 and in 2005. In 2005, I was a member of the Shelby County Fiscal Court Airport Advisory Committee that reviewed information concerning the process of building and operating a GA airport. Here are some of my personal observations and experiences from that process.

Biggest lesson learned: “Truth-Proof” all relevant claims and statements. Everything must be verified for accuracy. Here are a few examples why:

a) In the early stages of the airport discussion, the Shelby County community was told that there was plenty of money available in the federal airport improvement program and that Shelby County “should get it before someone else did.” But when we contacted the Federal Aviation Authority (FAA) Memphis office that is in charge of airport planning in our area, that office said that such money was limited and discretionarily awarded, with GA airports at the bottom of the granting totem pole.

b) Claims were made that a Shelby GA airport would be self-sufficient when a certain number of aircraft were based there and we achieved a certain level of usage of the airport. The Committee received financial and operational information from 13 other Kentucky GA airports. What we found? Regardless of the number of aircraft based at the airports, regardless of the amount of aviation fuel sold and the profit on it, regardless of the number of hangars for rent and the rental amount charged, and regardless of the number of landings and departures, all the airports received supporting subsidies from outside sources. In short, we found that in every case, GA airports don’t fully pay their own way.

c) The Shelby airport was pitched as a tool to recruit new business and industry. But a Chamber of Commerce survey found that a local GA airport might enhance only 34% of surveyed businesses. A later local newspaper article reported even less support for an airport in this economic sector. Additionally, economic development was NOT a criterion for qualifying for the federal airport improvement program.

d) It was stated that airports increased property values around them. But the Committee received two statements from residents who had experienced the opposite. Meanwhile, Kentucky courts have held that an airport is not responsible for decreases in surrounding property values that were caused by the reasonable operations of the airport (Louisville & Jefferson County Air Bd. v Porter).

Another thing we found:  An airport board’s actual control of land use extends beyond its own property boundaries. The scope and power of an airport board is a major thing to consider.

At the end of the 2005 process in Shelby County, the proposed airport was deemed too costly for the county’s taxpayers and not pursued. I hope Oldham County’s deliberation of building and operating an airport will be as thorough as Shelby County’s consideration.

Thank you for your time,

Jim Ellis [signed]

737 Booker Pike

Shelbyville, KY 40065

502-647-2726

jmellis@shelbywireless.net

TAXES, TAXES, TAXES

Author’s Note:  This begins a series of articles on the relationship between taxes and airport funding.  My intent is to educate you on how our money is being used to meet an endless stream of aviation funding needs.  Thankfully, most are legitimate needs and will enhance the overall safety and efficiency of our country’s air transportation system.  However, some funding flows to “wants”, which serve a very small portion of our society. 

In 1765, Boston politician, James Otis, coined the phrase, “Taxation without representation is tyranny”.  If Mr. Otis were alive today, he would readily admit that taxation WITH representation ain’t so hot either! 

How does one pay for a $20 million dollar airport, and then sustain it?  The short answer is–taxes, taxes, and more taxes!  Yet, airport proponents are quick to point out that 95% of a $20 million dollar Oldham County Airport will be built with federal dollars—as if the government has the ability to earn money.  So, where did the government get those federal dollars?  Through taxes—and that’s our money!!  

 Airport proponents will quickly point out that airport money provided through the Federal Aviation Administration (FAA) is different.  It doesn’t come from the “general fund”—where your annual income taxes flow.  Actually, 19% of the FAA’s budget did come from the general fund in 2006.  Each year, Congress determines how much money from the general fund wil go to the FAA’s budget.  When money gets tight, Congress can reduce this extra subisdy.  But, let’s focus on the other 81% of the FAA’s annual budget for now.   

The FAA’s budget is met primarily through a mysterious lock-box, called the “Airport and Airway Trust Fund.”  This trust fund amounted to $11.8 billion dollars in 2006!  The Airport and Airway Trust Fund is used by the FAA to meet all the needs of the aviation community—from Atlanta’s Hartsfield-Jackson Airport, to Stuart Powell Field, in Danville, Kentucky.  It is also used to fund our nation’s Air Traffic Control System.  But, we’ll get back to that later.  Right now, I’m sure you want to know where the FAA got $11.8 billion dollars to put in the Airport and Airway Trust Fund. 

In 2006, nearly 85 % of the $11.8 billion came from taxes levied on individual passengers: the ticket tax, the flight segment tax, and taxes on international arrivals and departures*.  That’s right; every airline ticket you purchase includes a $4.50 tax levied on behalf of the Airport and Airway Trust Fund!  I think that’s fair—users of aviation should help pay for our national air transportation system.  However, I also think we should demand that this money is wisely spent.  And that, my friends takes us back to the state of our declining air traffic control system. 

It is no secret that our nation’s air traffic control system is in desperate need of upgrading.  If you are a frequent flyer, then you have witnessed first-hand the chronic delays on the ground and in the air.  It’s not my intent to list the reasons for these delays, but they are more frequent now than at any other time in airline history.  The FAA is trying to address these issues through the “Next Generation Air Transportation System Integrated National Plan” (NexGen), a program that the FAA estimates will cost taxpayers more than $22 billion dollars!  Rest assured, this estimate is low; it will cost much, much more.  Do you want to guess where the money will come from?   

You’re right! NexGen funding will most likely come from the Airport and Airway Trust Fund.  NexGen, along with critical upgrades to major airport hubs, will put a huge strain on the trust fund’s ability to pay for all these crucial improvements.   

So, what does all this have to do with building a little airport in Oldham County? 

Again, it comes down to priorities.  Where would you like your taxes spent?  An Oldham County Airport—like all airports—will rely on the same trust fund to pay for its construction and upgrades.  It all comes down to whether or not you think we need to spend money on building  another airport that will compete for a piece of the trust fund, or improve upon our current airports and air traffic control system.   

Can’t we do it all?  Yes, we can–by increasing taxes!!  Is that what we want?  I believe Ronald Reagan spoke for most of us when he said,

“We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.”   

By now, you are questioning whether or not you can really make any difference in the never ending battle against increased taxation.  Unless we are willing at the grassroots level to help curb our local government’s spending habits, then we allow the overall tax burden to grow.  Unless we are willing to raise our voices, then we will give our local representatives the green light to continue raising taxes for projects they want, but do not need.  My friends, it’s time to pick up the telephone and make a few calls.  Otherwise, the old saying will continue to be true: 

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest amount of hissing.” 

Folks, it’s time to start hissing!  Call your Judge/Executive Murner and your magistrate today; tell them you don’t want an airport, and the tax burden it will bring to Oldham County!!

 *Seven percent of trust fund money comes from taxes on all aircraft fuel sales—from passenger air carriers to private aircraft.  In 2006, the tax on general aviation fuel was .19 cents a gallon.  Taxes on cargo amounted to 4% and interest on the trust fund generated 4%. 

(Sources for this article came from Congressional Budget Testimony on the Status of the Airport and Airway Trust Fund, before the Senate Finance Committee, July 12, 2007)

Show Me the Money

Funding Facts from the FAA 

The following letter is a response by the Federal Aviation Administration to questions by the Shelby County Airport Committee, about how a general aviation airport might be paid for.  Mr. Tommy DuPree is an airport program manager with the FAA’s Memphis Airport District Office, and provides the FAA’s response on July 20, 2005.  His responses will be in red.  While this report was written in response to questions from the Shelby County Airport Advisory Committee, the information also applies to the proposed Oldham County Airport. 

Most importantly, the letter clearly states that federal funding is never guaranteed at the 95% level.  What’s more, funding for hangars, fueling stations, and other support equipment is limited to a maximum of $150,000 annually, and not guaranteed either.  NOA comments are included to provide clarity.   

Dear Mr. DuPree: 

The Fiscal Court of Shelby County Kentucky is considering whether or not to form an airport board. To gather facts on this issue, the Fiscal Court established an Airport Advisory Committee (the Committee). Thank you for the information that you have already given the Committee in phone calls over the past three months. The Committee is nearing the end of its task. A few loose ends need to be addressed. Thank you for agreeing, in a phone conversation on July 6, to give written comments, on behalf of the FAA, to the following questions. The Committee has been told that an airport could qualify for 95% funding from federal sources to pay for the construction, including land purchases, of a new general aviation airport. There are other airports in Kentucky that have or may apply for similar federal funding.

 Question #1:

Would you please describe the process by which the county would be reimbursed for land acquisitions for an airport and when the payments would be received by the county?  

The first step would always be a site selection study, and thence an environmental assessment (FAA Order 5050.4A Airport Environmental Handbook) of the site indicated by such a study. The site selection process would entail determining whether the indicated site meets FAA’s Order 5090.3C (National Plan of Integrated Airport Systems (NPIAS)).  Once those requirements have been met, the planning agency initiating the proposed airport can petition the FAA to be included in the NPIAS and for federal funding under the Airports Improvement Program (AIP) for land acquisition. 

 NOA COMMENT:  Oldham County Airport Board has  submitted a request to the FAA for inclusion into the NPIAS and was approved.  This request included documentation of the forecast demand (number of aircraft based and flight operations activity) provided by the Entran study.  We believe these forecasts were highly inflated.

It is FAA policy that prior to issuing of federal grants for land acquisition, the requesting agency have in-place some type of negotiated settlement for the requested land purchase.   

NOA ANALYSIS:  As of January, 2008, The Airport Board has not publicly reported on the status of negotiations for land acquisition.  However, the fact that Magistrate Rick Rash has recused himself from further airport debate causes concern.  While we believe Mr. Rash has acted correctly, his recusal indicates the Airport Board may be looking at an airport site that was not one of the three sites recommended by the Entran Feasibility Study—namely the proposed Interstate-71 Airport site.  Property at the Interstate-71 is owned by Kim Rash, the brother of Magistrate Rick Rash.  Entran did list this site as the 3^rd most expensive place to build. 

Given that this would be a new airport, funding would have be in the form of discretionary funding authorized under AIP. Your request for funding would be evaluated and competing with all other aviation needs inKentucky and nationally for limited discretionary funds. There is no funding guarantee, and even if approved for funding, there might not be enough to fund the entire project at 95% federal. 

Question #2:

For what can federal construction grants be used?  

Under the current AIP, and your projected scenario, construction for a new airport would be by discretionary funding and thereby having limitations on what items of development are eligible.  For instance, only runway, taxiways, apron, and applicable marking and lighting would be eligible until a useable landing surface (grass/paved) is in-place.  Once a landing surface is established, then said airport would be eligible to receive its NP [non-primary entitlement] funding; which normally equals $150,000 per year, but is always based on FAA’s annual appropriation. Items such as fuel farms and terminals would be eligible, but using NP dollars only. Discretionary dollars are still limited as previously stated. 

Question #3:

If Shelby County were to qualify for federal funding, would 95% of the cost of the airport construction be paid by federal money?  

 Not necessarily, this would be subject to the availability of funds. AIP funding is always subject to the availability of funds. State, local, or private funding might be required in excess of federal funding.  Phasing of project is one option that would allow as much participation under AIP as possible. 

Question #4:

If Shelby County qualified for a 95% federal contribution, can there be any reimbursement for the 2 ½ % contribution from local sources? 

Federal grants cannot be used for reimbursement of the sponsors 2 ½% if funded at 95% level.  If sponsor does not want to use direct funding of its share, the AIP does allow for in-kind services to account a sponsor’s share, as well as land donations. These types of arrangements would first need FAA approval. For instance, If the sponsor had the capability of small construction skills with its own forces(not hired labor and/or other forces), then the sponsor could quantify the dollar amount of said service, and use this as its share of the project/grant amount.  Land donation is a little more complicated but say the runway project costs $1,000,0000, including the land. The land costs would at a minimum need to be appraised at $25,000, given local share of such a grant. Of course this methodof finance assumes the sponsor has bought the land with its own funds. 

NOA ANALYSIS:  The Oldham County Airport Board may try to use the I-71 property—owned by Kim Rash—as its 2.5% contribution.  We believe the owner is receptive to selling the property for this purpose.  Funds for purchasing this property could come from borrowing, private investors, tax levy, or the issuance of bonds.  However, a bond issuance would require a ballot initiative—that means you would get to vote! We do not believe the fiscal court will allow a bond issuance. 

Question #5:

Under a typical airport construction schedule, what types and amounts of payments from federal sources could Shelby County expect; and, what would be the approximate time between the time of application for funding and when the payment would be received by the county.  

Please reference responses to 1 and 2 above. Again, this would be a new airport, and therefore funding would be totally discretionary until a useable landing surface has been established.  Thence the airport would begin receiving its NP dollars. If all federal requirements, i.e., siting and environmental are met, funding using discretionary would still have to compete nationally and at this time we could not give an acceptable guestimate when your request would be affirmed. It would all bebased on where your particular airport stood relative to other airport projects and the amount of appropriation given AIP under a given year. 

Question #6:

Even if Shelby County were to qualify for federal funding, is the funding mandatory or discretionary?  

As previously stated, the funding would most likely be discretionary. 

Question #7:

Could there be a scenario where the federal monies would less than 95% participation? 

Yes. Funding through the FAA’s AIP is always based upon the availability of funding. For Instance, if there is a request theoretically for $1,000,000, and all we have available is $750,000, the remainder would be funded by the sponsorthrough their funding mechanisms. If on the other hand, a project can be broken into useable units to coincide with the FAA’s available funding, the remainder may be funded in a future year. Again, the remainder would compete nationally again as if it was the whole project.   

Question #8:

Could a general aviation airport be built in Shelby County without federal monies?    

Yes. Public-use airports can be funded without federal dollars.However, if an airport is planning on being open to the public and eligible for future federal funding, there is a set of special conditions and federal guidelines that said airport must adhere to. I have attached a copy.  

Question #9:

If some federal funding were spent on construction of a general aviation airport in Shelby County, can the airport board permanently stop all efforts to construct an airport?  

The use of local funds is all ways your option for improvement of the airport, regardless of federal participation. Most  improvement projects will go way above the NP dollars that you may receive annually. Therefore, if federaldiscretionary dollars are not available and/or secured, local participation through any means would have to be secured.  If federal funds are allocated for development of an airport, federal grant assurances and conditions are made apart thereof. One of those would be the completion and operation of the airport within a specified period of time. If issues arise or that may arise after commencement of construction, the sponsor notifies the FAA promptly. Please reference attached assurances and conditions. 

Question #10:

The Committee has been told that there are yearly grants available, after construction of an airport, for $150,000, presently for the next three years.  If the federal contribution to the airport is at the 95% level, can the $150,000 grants be used for anything other than new construction? 

The annual NP dollars can be used for routine maintenance and operation of the airfield. Salaries and vehicles for personnel would not be eligible. Such requests should be coordinated in advance for FAA eligibility determination. 

Question #11:

If the federal contribution to the airport is less than 95%, can the $150,000 grants be used to pay for the original construction of the airport? 

 If the FAA’s initial participation is less than 95% and local funding is used to make said difference, once it begins receiving NP dollars, the airport can reimburse itself for its share above its normal 2 ½ % participation.   

Question #12:

Can any federal monies be used to pay the interest charges incurred by local funding sources? 

Interest costs from financing costs are not eligible for reimbursement under AIP.

 NOA ANALYSIS:  This is a critical statement.  In order for the airport to generate revenue, it must quickly achieve operational status.  Simply having a runway surface doesn’t produce revenue.  There must be hangars, tie downs, and the availability of fuel.  So, it is highly likely that the Airport Board would accelerate construction by borrowing money.  Any interest costs would most probably be paid for by the taxpayer.   

Question #13:

The Committee has been told that there is a requirement that a new airport be a 30 minutes or more automotive drive time from existing general aviation airports, see FAA Order 5090.3C.Can FAA Order 5090.3C be waived?  

Requirements of Order 5090.3C cannot be waived.

The Powers of an Airport Board

THE POWERS OF AN AIRPORT BOARD, AND HOW THEY RAISE MONEY FOR AN AIRPORT.

 Airport Boards are primarily governed by Kentucky Revised Statutes.  Once appointed by the Fiscal Court, the board is tasked with bringing the concept of an airport into reality.  While you may hear that the Airport Board is only a fact finding board, the reality is that they have very broad and sweeping powers.   The following sections come directly from Kentucky Revised Statute, chapter 183 (aviation).  Please, read these paragraphs carefully! 

183.133 Purpose, duties and powers of the board — Rules and regulations,publication — Enforcement — Promotion of facilities. 

(1) The purpose of the board shall be to establish, maintain, operate, and expand necessary, desirable or appropriate airport and air navigation facilities. It shall have the duty and such powers as may be necessary, or desirable to promote and develop aviation, including air transportation, airports and air navigation facilities.

(2) The board shall establish and fix reasonable rates, charges and fees for the use of the landing area, ramps and other common aviation facilities. In fixing such rates,charges or fees the board may take into consideration, among other factors, the total capital investment by the board or other local or state governmental authority, the revenue needed properly to maintain such facilities, the revenue needed properly to expand the airport and its facilities, the portion of the facilities utilized by the licensee or contracting party and its customers and the volume and type of business conducted. Any party aggrieved by the rates, charges or fees may appeal from the action of the board to the Circuit Court of the county within which the board operates, within ninety (90) days from the date that the board finally publishes such rates, charges or fees and gives notice of same to the contracting party or licensee.  The Circuit Court may hear evidence and determine whether or not the rates,charges or fees are, or are not, reasonable in amount. Appeal from the judgment of the Circuit Court may be prosecuted as any other civil appeal.

(3) The board shall likewise have power, from time to time, to fix rates, charges or fees by contract, or by publishing general rates, charges or fees for commercial vendors,concessionaires or other persons for the use or occupancy of terminal or other ground use facilities, under such terms or conditions as it may deem to be in thebest interest of maintaining, operating or expanding necessary airport or air navigation facilities, and the public use thereof.

(4) The board may acquire by contract, lease, purchase, gift, condemnation or otherwise any real or personal property, or rights therein, necessary for establishing, operating or expanding airports and air navigation facilities. The board may erect, equip,operate and maintain on such property, buildings and equipment necessary,desirable or appropriate for airport or air navigation facilities. The board may dispose of any real or personal property, or rights therein, which, in the opinion of the board are no longer needed for operating or expanding the airport or air navigation facilities.

(5) The board or any other governmental unit may by resolution reciting that the property is needed for airport or air navigation purposes direct the condemnation of any property, including navigation or other easements. The procedure for condemnation shall conform to the procedures set out in the Eminent Domain Actof Kentucky. [ NOA Note:  In 1986, there was a Kentucky Supreme Court decision, Bernard versus Russell County Airport Board, that made this power subordinate to a single governing body’s power—such as our fiscal court].

(6) The board or any other governmental unit may from time to time make, adopt and enforce such rules, regulations and ordinances as it may find necessary, desirable or appropriate for carrying into effect the purposes of this chapter, including those relating to the operation and control of the airport, airport facilities or air navigation facilities owned or operated by such board or such other governmental unit. All rules, regulations and ordinances adopted pursuant to this section shall be published according to the provisions of KRS 424.130, and the board or other governmental unit adopting them shall keep a permanent record of such rules, regulations and ordinances available for public inspection, on the airport premises. Prosecution for aviolation of any rule, regulation or ordinance adopted pursuant to this section shall be in the District Court of any county within which the airport is located.

(7) Any board may engage in activities to promote, encourage or develop the use of airports or air navigation facilities under its control and any board which has members thereof appointed by the Governor shall be assisted in such activities bythe state Cabinet for Economic Development if it requests such assistance from thecabinet.

Effective: July 15, 1986History: Amended 1986 Ky. Acts ch. 347, sec. 2, effective July 15, 1986. — Amended1976 (1st Extra. Sess.) Ky. Acts ch. 14, sec. 171, effective January 2, 1978. —Amended 1976 Ky. Acts ch. 140, sec. 86. — Amended 1970 Ky. Acts ch. 244, sec. 1.— Amended 1964 Ky. Acts ch. 134, sec. 6. — Created 1960 Ky. Acts ch. 179, sec. 33. 

Kentucky Revised Statute:  183.135 Power to borrow money.

The board may borrow money on its own credit in anticipation of revenue to be derived from taxes, appropriations, or other income. For these purposes, the board may pledge the taxes, appropriations, or income anticipated. The board may pledge the airport and facilities, or any interest in the airport and its facilities, or contract for service from the airport or its facilities, as security for moneys borrowed.

Effective: July 15, 1996History: Amended 1996 Ky. Acts ch. 274, sec. 44, effective July 15, 1996. — Amended1968 Ky. Acts ch. 83, sec. 2. — Created 1960 Ky. Acts ch. 179, sec. 35. 

Kentucky Revised Statute:  183.134 Appropriations for airports — Bond issue, election, tax.

(1) In order to provide money for the purchase of property necessary for the establishment or expansion of airports and to construct, equip, and maintain buildings necessary, desirable, or appropriate for airport purposes, or to acquire rights or interests or contracts for services, the legislative body of any governmental unit owning in whole or part any airport or operating an airport, or having any rightsor interests in an airport or contracts for services from an airport, may make an annual appropriation from its general fund; or the governmental unit may make an annual levy to collect a tax on taxable property situated in the governmental unit for airport development. Any appropriation shall be made by the legislative body in amounts, in proportion and upon terms as the legislative body may determine. All funds derived from an appropriation or tax shall be turned over to the airport board, if any, for the purpose of carrying out the duties and powers of the board.

(2) Whenever a governmental unit deems it necessary to acquire, construct, maintain,expand, finance, or improve any airport facilities or air navigation facilities or rights or interests in any facilities, or to contract for services from the facilities, or for anyor all of these purposes, and the annual funds raised from other sources are not sufficient to accomplish the purpose, the governmental unit shall make a careful estimate of the amount of money required for the purpose and shall certify to the proper tax levying authority the fact that an election for an issue of bonds for aviation purposes shall be held, together with the amount of money for which bonds shall be issued and the purpose to which the proceeds shall be applied. The taxing authority shall then adopt an ordinance or resolution submitting to the qualified voters of the district the question as to whether bonds shall be issued for the purpose. The question shall be so framed that the voter may by his vote answer “For” or “Against.”

(3) The ordinance or resolution shall fix the time the bonds shall run and, if a serial issue, the amount to mature at each time. It shall limit the rate of interest to be permitted on the bonds and the total amount of bonds to be issued, and shall provide for the levy of a tax to pay the interest and to create a sinking fund to retire them attheir maturity.

(4) The election shall be held at a time fixed in the ordinance or resolution, not less than fifteen (15) nor more than thirty (30) days from the time the certificate of the governmental unit is filed with the tax levying authority, and reasonable notice of the election shall be given. The election shall be conducted and carried out in the governmental unit district in all respects as required by the general election laws,and shall be held by the same officers as required by the general election laws. The expense of the election shall be paid by the fiscal court except where the election is held in a district embracing a city of the first five (5) classes, in which case the cost of the election shall be paid by the governing body of the city.

(5) Not withstanding the limitations contained in KRS 132.023, any governmental unit which after March 21, 1968, levies a tax for aviation purposes under this chapter may exclude the tax from consideration in calculating the compensating tax rate as now or subsequently defined in KRS 132.010 or any amendments or other actsubstituted relating to that section.

Effective: July 15, 1996History: Amended 1996 Ky. Acts ch. 274, sec. 43, effective July 15, 1996. — Amended1980 Ky. Acts ch. 188, sec. 137, effective July 15, 1980. — Amended 1968 Ky. Actsch. 83, sec. 1. — Amended 1964 Ky. Acts ch. 134, sec. 7. — Created 1960 Ky. Acts

ch. 179, sec. 34.