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 funding needed to undertake the engineering, planning, and construction projects at the Airport. As required by the FAA, the Grant offer is based on the estimated amounts for construction and engineering for these projects. This year's projects include the Hillside Obstruction Removal and Straightening of Taxiway "A" East, the purchase of a New Runway Broom for snow removal, and the Pre-design and Survey Costs for the Taxiway "G" Relocation project scheduled for next year.

Typically, the annual AIP Grant projects are funded with a single FAA Grant. However, since the Federal Transportation Appropriations Bill has not passed for 2010, the FAA funding for this year has been subjected to a prorated amount authorized by the Continuing Resolutions that Congress has passed to keep the Federal Government operating. Subsequently, the annual grant allocations are impacted and the Airport will receive this year's grant funds in multiple, smaller amounts. The first FAA AIP Grant allocation was announced on March 2, 2010 for the amount of $1,488,484. However, the FAA's window of opportunity to accept the first Grant allocation lasted only until March 15, and the March 2 Grant announcement did not provide enough time for staff to bring the Grant to Council until the March 22, 2010 meeting. Subsequently, after staff discussions with City Administration and the City Attorney's office, the Deputy Mayor signed the Grant offer so that the first allocation was not put at risk. The FAA Airports District Office in Helena, which administers the grant offers, was advised that the City's acceptance of the Grant was contingent on the City Council's approval of the Grant offer at the March 22, 2010 Council meeting.

Instead of accepting the first allocation of this year's Grant, the Airport could wait and see if another Continuing Resolution or FAA funding bill was put in place to subsequently fully fund the annual entitlement amount.  However, if that did not happen during this fiscal year, the first AIP allocation would be forfeited forever and the Airport would have to wait until next year to receive any further Federal funding.  If no additional Federal funding becomes available this year, the first allocation of $1,488,484 would not be enough to complete this year's scheduled projects, however, the first allocation could at least be used to pay for the engineering design work for this year's projects and the balance could then be rolled forward and combined with a future grant offer.

The City Council may:

• Approve the acceptance of this year's AIP Grants; or
• Decline to approve the acceptance of this year's AIP Grants, and not complete the associated projects.

The total estimated costs for the engineering services and construction associated with this year's Grants are $3,133,652. The combined Grants, once all are received, will fund 95% of this cost ($2,976,969) and the City will be required to provide a 5% local match ($156,853). The first Grant allocation will be $1,488,484 with a local share amount of $78,342. Additional Grants are expected later this Spring, but that is contingent upon the future actions of Congress. The source of the City's match is the Department's Capital fund.

Staff recommends that the City Council approve the acceptance of this year's multiple grants and provide the authorization for the Mayor's execution of the first AIP Grant allocation of $1,488,484, as well as any additional AIP Grants received this year as part of the $2,976,969 of the annual FAA AIP Grant entitlements for the Airport.