Airports Division Eastern Region New Performance Metrics for the Airport Improvement Program (AIP)

1. Federal Aviation Administration Airports Division Eastern Region New Performance Metricsfor the Airport Improvement Program (AIP) Presentation to: 32nd Annual Airports Conference Hershey, PA Presented by: Tom Felix Manager Planning/Programming Branch Airports Division, Eastern Region Date: March 4, 2009

2. Agenda • What’s changing and why? • What does this mean for airport sponsors? • What does this mean for the ACIP process? • What does this mean for AIP grant administration?

3. Fiscal Accountability

4. Fiscal Accountability • White House Office of Management and Budget (OMB) • General Accountability Office (GAO) • U.S. Dept. of Transportation Office of the Inspector General (OIG) • External auditors

5. Fiscal Accountability

6. Fiscal Accountability

7. Fiscal Accountability

8. Key Stakeholders • Airports • Airlines and other aviation system users • Traveling public • Neighboring and impacted communities • State aeronautical agencies • Elected and appointed officials (Federal, state and local) • Congressional oversight committees • Other units within the FAA (e.g., Air Traffic Organization, Runway Safety Office, Flight Standards, Flight Procedures) • Federal and state environmental resource agencies (e.g., EPA, Corps of Engineers, etc.) • Federal oversight agencies and departments (GAO, OIG, OMB)

9. AIP Performance Metrics • Continuous focus on fiscal accountability • Continuous focus on timely conversion of Airport & Airway Trust Fund resources into airport improvements (safety, capacity and efficiency). • Previously had limited ability to efficiently monitor rates of actual drawdown of Treasury funds. • Have previously had to rely solely on “output”-type metrics to evaluate AIP performance: • Percentage of grants based on bids • Timely programming of grants • Grant closeout within four years of appropriation • Minimize inventory of open grants • Ensure no grant stay inactive for 18 (or even 12) months

10. Closure of Four-Year-Old Grants Eastern Region

11. Grants Inactive > 18 Months Eastern Region

12. Upcoming Changes in AIP Performance Metrics • These are all important policies, and will continue in force. • However…

13. Upcoming Changes in AIP Performance Metrics (cont’d) • We now have the ability to monitor rates of actual drawdown: • Nationally • By region • By ADO • By state • By sponsor • By grant • Because drawdown rates should mirror project implementation, this metric provides a far more useful indicator of how swiftly the funds are being converted to useful infrastructure.

14. Upcoming Changes in AIP Performance Metrics (cont’d) • Where do the expenditure rate goals come from? • The White House Office of Management and Budget (OMB) established outlay rates (or “liquidation goals”) for Airport Improvement Program (AIP) funds: • By end of year in which appropriated, disburse 18% of funds • By end of 1st year after appropriation, disburse 60% • By end of 2nd year after appropriation, disburse 81% • By end of 3rd year after appropriation, disburse 91% • By end of 4th year after appropriation, disburse 96% • After the 4th year, all funds should be fully disbursed and the grants closed. (This is the source of the requirement that grants four years and older be closed.)

15. Target Expenditure of AIP Grant Funds

16. OMB target for year of approp. – 82% 81% 71% 65% 52% 47% 44% OMB target for 1st year – 40% 42% 42% 40% 38% 34% 31% 28% 25% OMB target for 2nd year – 19% 23% 21% 21% 20% 20% 19% 17% 16% OMB target for 3rd year – 9% 10% 10% 9% 9% 8% 8% 8% 8% 7% 7% 7% 10/1 10/31 11/30 12/31 1/31 2/28 3/31 4/30 5/31 6/30 7/31 8/31 9/30 Tracking Progress 100% 90% Not included in new performance metric 80% 70% 60% 50% 40% 30% 20% 10% 0%

17. Application at the National Level (Single Grant Year)

18. Application at the Regional Level (Multiple Grant Years)

19. Application at the National Level (Multiple Grant Years)

20. FAA’s Internal Data Interface

21. FAA’s Internal Data Interface (cont’d)

22. FAA’s Internal Data Interface (cont’d)

23. FAA’s Internal Data Interface (cont’d)

24. Benefits of the New Metric • Significantly better indicator of actual conversion of Trust Fund resources into useful aviation infrastructure. Money sitting in the Trust Fund isn’t helping the system. • Helps articulate why the underlying policies are in place (e.g., why grants must be closed after four years). • Allows us to ask the right questions (e.g., why isn’t a project being implemented as swiftly as expected?) • Allows us to identify where resources are being used most effectively, and to make better decisions about where to focus future resources. • Helps communicate AIP performance to decision-makers to improve program competitiveness during challenging budgeting periods.

25. Three Questions We Know You’ll Want to Ask • Does this mean the other goals go away?The other goals remain as policies, and we will still have a closeout requirement. However, as long as we meet the new drawdown-based goal, then beginning in FY-2009 we won’t have to report on the other metrics in quite as much detail. • So, we just need to draw down our grants faster?No! The rate of drawdown should never be greater than actual progress on the grant. The point is, once we award a grant, we expect projects to be implemented swiftly, because the goal is to convert the funds into useful infrastructure. However, progress should be steady and drawdowns should occur monthly (or at least quarterly). • What should sponsors and their consultants do differently?All existing policies remain in effect, and even this new metric will be run in parallel with the existing metrics in FY-2008. However, sponsors and consultants should recognize that this will become an area of greater scrutiny, and recognize that the FAA will be focusing more on projects that are ready to move swiftly into implementation.

26. What Should Sponsors Be Doing Differently? • Recognize that this is an area of increasing scrutiny. • Recognize that the ADO will ask about this if a particular grant is not meeting the criteria. • Before seeking AIP funds for a particular project, consider the project schedule and ensure there is nothing that could impede swift implementation. • Maintain a clear mechanism for tracking and reporting grant drawdowns.

27. Fiscal Accountability

28. Federal Aviation Administration Thank you! Questions?