Earlier this evening, I watched with interest the discussion that occurred on Monday surrounding consideration of the 6th Penny Tax Ballot resolution. I apologize that I was not in attendance at that meeting to answer some of the concerns that Councilman Laybourn raised regarding the Airport Board's request. While I understand that a vote has already been taken on the resolution, I still feel it is important to address the Councilman's concerns as he, like all other citizens, will be voting on the ballot for ultimate approval. I apologize if some of my numbers are not absolutely specific as I am at home without the benefit of my files. However, I will be unable to answer questions in writing for the next couple of days so it was important to me to get an answer out as soon as possible.
1) Is the Airport Board's request to rehabilitate the existing terminal or to design a new terminal?
I sincerely appreciate Councilman Segrave's willingness to offer an answer to this question. Officially, the Airport is looking towards the design of a new terminal. In late 2007, the Airport Board and the State of Wyoming funded a $150,000 feasibility study to look at 4 options to address the future concerns of terminal use at the Cheyenne Regional Airport. Those four options were:
1) Rehabilitate the existing terminal
2) Tear down the existing terminal and construct a new terminal in the existing location
3) Construct a new terminal at the location previously designated west of the Great Lakes facility
4) Evaluate other locations throughout Airport property for the construction of a new facility
Early on in the study process, it became quite clear that options 1 and 2 were simply not feasible options. In theory, it is never absolutely impossible to rehabilitate a facility. However, in the case of the existing terminal, the type of needs that need to be addressed cannot be solved either efficiently or completely by a rehabilitation alone. I will address this more later.
Thus, attention turned towards the construction of a new terminal. After looking at approximately 4-6 sites on airport property, two sites were chosen as preferred sites. The first is in an adjacent location to the existing facility, only more centrally located to mitigate and eliminate parking issues and provide sufficient means for expansion ability. The second site is located immediately west of Great Lakes Airlines, behind the former US Fish and Wildlife facility. Both sites provide ample room for future expansion ability without having to relocate and both sites mitigate the "bubble" issue that occurs as a result of increases in national security levels. Again, I will address this more in a moment.
2) Mr. Laybourn raised concerns over the fact that the Airport is seeking money for a planning document with no guarantee that the facility would be constructed and that the Airport would be seeking money under future sixth penny ballots for construction.
There are two distinctly separate issues here. One issue deals with stewardship and integrity and one issue deals with intent. I will deal with the integrity issue first.
When the Airport Board was formed in 1981, they started with less than $50,000 in assets and were subsidized operationally through the general fund of the city. Throughout the course of the Board's existence, the ultimate goal has been, and will continue to be, to make the Airport as self sustaining as possible. If my memory serves me correctly, 2003 marked the first time in the Board's then 22 year history that they were no longer on the City's books for a general fund operating subsidy. However, self sustaining does not necessarily mean that an entity never needs any help, whether it be from a municipality, tenant or bank. The entity can simply operate day to day, on its own, without any need for additional operational funding. However, when it comes to significant capital development/improvement projects, the Airport continues to need financial assistance, in some cases, to move forward. One of Airport Administration's greatest strengths has always been the ability to take whatever funding was available to them and utilize that funding to get even more funding. In this way, the Airport has been one of the most efficient and beneficial users of city funds, at least from a total cost perspective. From 2001 to 2005, the Airport received somewhere in the vicinity of 600,000 in local tax dollars through both the 6th Penny and 5th Penny programs. This money was utilized to accomplish over 20 million dollars in capital improvements. In other words, for every dollar contributed by the taxpayers of Cheyenne and Laramie County, over $30 in capital development was conducted at the Airport. While 2001-2005 were exceptional and quite above normal due to the significant runway project, that number has always, to the best of my knowledge, been at least a 10-1 ratio. So, what does all of this have to do with the question at hand about integrity? The Airport does not ask for significant funding very often. However, when we do, it is for a need that is vital to the ongoing success and future viability of the Airport. If I felt that the Airport could make do without a new terminal for the next 10-20 years, I would never consider putting either the Airport Board or I in a position where we would, in essence, be lying to the voting public AND the elected officials about the importance of a new terminal simply to get a design complete. However, I can tell you without a hesitation or doubt that our Airport is in need of a new terminal and the need will only magnify in the next 10-15 years.
As far as whether or not the Airport will seek funding under future six penny ballots if approved for the design under this one, I can tell you that that has always been the plan. As you may recall, the Airport's original request for the ballot was $8.5 million dollars. That amount was based upon a construction cost of approximately 10-11 million dollars. However, as the size of the ballot continued to grow, it became apparent that now was not the right time to try and get the entire project funded, especially when we, unlike other projects such as the rec center, DID have the ability to effectively phase the project through a design phase and construction phase. As such, the decision was made to reduce the request to a design only cost of $1.5 million dollars. Which brings me to the next question:
3) What will the terminal cost?
Ah yes, the multi-million dollar question and the other primary reason for deciding to reduce to a design only request. Unlike runway and other pavement projects on an Airport, the ability to determine the amount of a terminal facility eligible for Federal and State funding is far more difficult. In a nutshell, only those portions of a terminal facility that are necessary and non revenue producing are eligible for Federal and State grant funding. The remaining must be funded through other means. Unfortunately, while a conceptual design is enough to get a fairly rough idea of the cost of a new facility, it is not specific enough to determine Federally eligible percentages. As such, a complete design is necessary to truly determine what is needed from the local community.
As far as the current estimated cost goes, the two final sites have two different costs:
Site 1, the site adjacent to the existing facility, has a lower cost of approximately 10-11 million dollars. The lower cost is due to the fact that much of the infrastructure is already in place. While this is the preferred site for numerous reasons, the Airport has recently started investigating the feasibility of this site with specific respect to the historical significance of both the admin building and the existing paint shop and have come to find out that it may never be a realistic location due to the inability to remove existing structures.
Site 2, adjacent to Great Lakes, is slowly emerging as the likely site. This site carries an estimated cost of 13-15 million dollars due to, as mentioned above, the need to install new infrastructure, primarily in the form of pavement which has become quite expensive.
Here is where the beauty of the design request comes into play. Technically, a design request is fully eligible, at 98% of the cost, for both Federal and State funding. This means that a 1.5 million dollar design would be funded at a rate of 1,470,000 leaving only 30,000 to be funded locally. However, if that was done now, the terminal would have to be started in two years and that, quite frankly, is impossible. However, funding the entire project up front through local means removes the two year restriction but does not remove the eligibility. At the time that the facility is ready to go to construction, assuming a reasonable timeframe (ie less than 15 years), the 1.4 million dollars that would have been eligible for the design will come back in the form of a pre paid local match towards construction, thus reducing the local funding needed at that time. The design that the Airport has in mind would work on either site.
4) What is the problem with the existing terminal?
There are two very common misconceptions that I have heard regarding the Airport's reasoning behind constructing a new terminal. The first is that the Airport is building a new terminal because they say that there just isn't enough room in the existing terminal. While this is true in ONE area of the existing terminal, the rest of the terminal, from a size vs. usage standpoint, is adequate. Unfortunately, an Airport terminal is far more than simply the number of bodies that can fit in the building footprint. Here is a brief summary of why the need for a new terminal:
1) Parking, Parking, Parking - The Airport has ample, albeit poorly located and laid out, short term and long term parking for patrons of Airport businesses and the Airline, based on existing scheduled Denver service and existing load factors (how full the planes are on average) of 30 - 40%. However, as was blatantly obvious at Christmas, the margin to absorb any sort of increase is simply not there. At Christmas, load factors spiked and one of the Xtra Airways 737 charters came in and the Airport was quickly out of parking with people parking in the Avenues. I guarantee that our community lost at least half a dozen patrons as a result of that inconvenience. Furthermore, if we are successful in ever attracting a second air carrier of ANY kind, where are those additional people going to park?
2) Location, Location, Location - The existing location of the terminal facility does not provide any long term expansion options with respect to increasing the size of the facility as it is boxed in by parking on one side and the old tower on the other. Additionally, its proximity to 8th Avenue and the insufficient parking referenced in #1 make it extremely challenging in the event of national security increases. To put this in perspective, restricting parking within 75 feet of the terminal would eliminate all short term parking from consideration. Restricting parking within 300 feet of the terminal, as was done in the wake of September 11th, removes all but approximately 60 of the Airport's 250-300 spaces, as well as having an impact, in theory, on 8th Avenue.
3) Insufficient HVAC systems - Anyone who has spent any time in our terminal can attest to the fact that it can get immensely hot in the summer and quite cold in the winter. Heat in the facility is provided through two circulating hot water heaters at each end of the building and there is no air conditioning. The Airport has evaluated putting in Air conditioning somehow, however since the building is not vented at all, you can imagine both the challenge and the cost that this poses.
4) Insufficient Security Holding Area - Since our terminal was built and constructed in the early 1960s, no thought was ever given to people beyond the security checkpoint since, back then, you could go and come as you please. However, as we all know, times have changed. In today's society, once you are past screening, you are either getting on the plane or you better have a GREAT reason for leaving security. Our security area is only designed to hold approximately 30 people. This is plenty of size for existing regularly scheduled air carriers but grossly inadequate for scheduled charter aircraft or the possibility of the new regional jets. Additionally, there are no amenities past the screening checkpoint such as restrooms, vending machines, etc.
5) Interior expansion ability - The Airport is constantly seeking new carriers to come in and serve the Cheyenne market. Recently, we have looked at ways to step up these efforts. However, if we were to get a new carrier to commit tomorrow, we have no place inside to put them. While we have worked out a deal with the TSA to subdivide their space, it is far from an attractive option.
6) Efficieny of design as a whole - The split level design of the terminal is an immensely inefficient use of space. Airports are able to sustain terminal operations through efficient use of space. Open spaces can be filled with amenities, advertisements or other tenants. Restrooms should be centrally located to allow clear sightlines. Our terminal, while listed in the 18,000 is probably closer to 12,000 square feet usable simple due to inefficiency.
The other common misconception is that the Airport is requesting a new terminal facility under the facade that it will lend itself to bringing in new air service. This statement couldn't be farther from the truth. The statement that I have said all along and I will continue to say is this: A new terminal will not guarantee the arrival of new air service. However, an insufficient terminal can result in not only the prohibiting of new air service, but also the departure of existing air service. This is not to say that we are in an environment where I believe that the departure of Great Lakes is imminent. Far from it. However, if the Airport and community officials were extremely successful in landing a new carrier, it is entirely possible that that carrier could be gone within a year because the existing facility, both in design and layout, cannot handle the influx of passengers that a new carrier would bring, thus resulting in low load factors and revenues and, ultimately, abandonment of the market.
I can tell you that I have hear numerous questions regarding the Airport's request throughout the community. In an effort to address these, the Airport has spent the last several months working on a new website layout that includes a very prominent page on the 6th Penny request and answers many of the questions that I have heard. The site will also allow residents to pose questions that are not addressed. As soon as the sight is up and running, I will do my best to get that information out to the public. While it is still under construction, feel free to check out the progress at www.cheyenneairport.com. I am also planning to put a copy of the feasibility study on the site.
I hope this helps to answer some of your questions. As I said in the beginning, I will be out of touch via email for the next several days, but you are welcome to drop me an email with any additional questions that you may have or give the office a call at 634-7071 and I will get back too you as soon as I can.
Sincerely,
David S. Haring, C.M.
Airport Manager
Cheyenne Regional Airport
