It is necessary to secure the City Council's approval and authorization for the Mayor to execute this year's Federal Aviation Administration (FAA) Airport Improvement Program (AIP) Grants.  This year's Grants provide the entitlement and discretionary funding needed to undertake the engineering and construction for this year's project, which is the Rehabilitation of Runway 10L/28R, the Airport's main runway.  This project includes the removal and overlay of 8,500 feet of Runway 10L/28R, the removal of old Taxiway G, the installation of new runway edge lights and electrical cabling, and the installation of a runway temperature sensing system to assist with runway deicing operations.

This year's total grant allocation will be a combination of the Airport's annual Grant Entitlements, previous year Entitlement carryovers, and Discretionary Grant funding. While this year's Runway Rehabilitation Project is expected to be just over $8,000,000, the Airport and the FAA agreed to fund some of the project in last year's AIP Grant. Subsequently, just over $1,300,000 of the project is already under Grant and AIP funds for $1,189,000 have been secured toward the project's cost. This leaves approximately $6,750,000 of project cost to fund. Given the high priority of this project within the FAA Northwest Mountain Region, staff anticipates that the FAA will provide the Airport with a grant for approximately $6,055,000 prior to the start of construction. However, in the event the Grant funds should be delayed due to the timing of the Federal Budget issues, the Airport, with the help of the Finance Department, worked out a line of credit with US Bank to ensure that funding is available as needed. Given the long lead times needed by the airlines to adjust their reservation systems, the need to provide public announcements to the community to plan around the Summer weekend closures, and the great amount of planning required for this type of project, having a secondary financial funding source will allow this project to proceed as planned, regardless of the timing of Federal funds. This is a project that needs to be completed in order to ensure the long term viability of the Airport's main runway, and subsequently the economic well being of the community. Since the Airport may receive the Grant funds for this project in smaller individual Grants as each is released by the FAA, Council is being asked to authorize the Mayor to execute each Grant as it is received.

The City Council may:

• Approve the acceptance of this year's AIP Grants, authorizing the Mayor to execute each Grant offer; or
• Decline to approve the acceptance the this year's AIP Grants, and not complete the project at this time.

It is estimated that the costs of the engineering services and the construction for the Runway Rehabilitation Project will be approximately $8,000,000.  The AIP Grants will fund 90% of this cost ($7,200,000) and the Airport will provide a 10% local share match ($800,000). The source of the Airport's match is the Department's Passenger Facility Charge (PFC) capital fund.

Staff recommends that the City Council approve the acceptance of this year's AIP Grants and authorize the Mayor to execute each of the FAA AIP Grant allocations received this year by the Airport.