City Airport Staff Wants $500,000 Airport Addition

Last Tuesday the Manhattan City Commission voted to Direct City
Administration to pursue a new agreement with Midwest Air Traffic Control
Services, Inc. for air traffic control services as a non-Federal Contract
Air Traffic Control Tower.
CITY COMMISSION AGENDA MEMO
November 8, 1999
FROM: Kenneth A. Black, Airport Director
MEETING:November 16, 1999
SUBJECT: Airport Air Traffic Control Tower Contract
PRESENTER: Kenneth A. Black, Airport Director
BACKGROUND
Current Situation
The air traffic control tower at Manhattan Regional Airport has been in
operation since 1989.  It operates seven days a week from 8:00 a.m. to 6:00
p.m.  Midwest Air Traffic Control (ATC) Services, Inc based in Olathe,
Kansas, has provided the control tower facility and it serves as the
contractor for air traffic control services.  Two air traffic controllers
are employed in the Manhattan facility. This facility is known as a
non-Federal Contract Tower in the air traffic control industry and it has
operated without an air traffic control incident during the past ten years.
The primary functions of the air traffic control tower are to safely
separate air traffic within five miles of the airport, control aircraft and
vehicles operating on runways and taxiways, and it provides information on
request to pilots within radio range of the control tower.  The air traffic
controllers in Manhattan also augment the automated surface observation
system on the airport to maintain the flow of weather information to
aviators and the National Weather Service.  The air traffic control tower
at Manhattan is not radar equipped.  However, the Kansas City Air Route
Traffic Control Center routinely "hands-off" aircraft operating under
instrument flight rules to the Manhattan facility for final approach and
landing.
The presence of the air traffic control tower not only enhances aviation
safety but it has allowed air carrier and corporate aircraft to operate at
the Airport unimpeded.  Many of these aircraft would not be able to use
Manhattan Regional Airport for insurance reasons without the presence of a
control tower.  The Midwest ATC controllers work overtime when requested to
support "after hours" jet charters.  These charters support Fort Riley and
Kansas State University.
Another positive associated with the Manhattan facility is the existence of
controlled airspace around the airport.  Because Manhattan has an
operational air traffic control tower, the airspace within a five mile
radius of the airport is considered controlled airspace.  Controlled
airspace enhances safety.
When the air traffic control tower is closed, pilots are required to report
their positions relative to the Airport both in the air and on the ground.
These reports assist pilots as they maintain visual separation from one
another.  This kind of activity is considered uncontrolled because there is
no air traffic controller present to act in that capacity.  This practice
is legal, safe, and effective when the air traffic is relatively light.
The current contract with Midwest ATC expires on December 31, 1999.  When
the contract was renewed in 1994, Midwest ATC agreed to maintain the cost
of services at the original 1989 rate.  In 1997, the contract was amended
to add weather observation and augmentation services because the National
Weather Service and the Federal Aviation Administration activated the
Automated Surface Observation System to replace human weather observers who
had been at the airport since the 1950s.  The reliability of the new system
was not 100% at the time and often hourly weather reports were found
missing.  So, the presence of the air traffic controllers significantly
enhanced the continuity of aviation weather reporting that was necessary
for pilots to operate on the Airport.
The current annual contract cost is $85,587.  For the year 2000 budget,
that cost has been increased to $100,000 in anticipation of a new contract
with Midwest ATC.  In October, Midwest ATC verbally estimated that their
price for continuing non-Federal Contract Tower service at Manhattan would
increase to $115,200 per year.
Federal Contract Tower Program
The Federal Aviation Administration has contracted low-activity towers
since fiscal year 1983.  The program started out with two Federal Contract
Towers and expanded to include seven additional Federal Contract Towers as
part of a pilot program.  After the successful completion of the pilot
program, it grew to include 17 Federal Contract Towers by fiscal year 1987.
 During this period, Federal Aviation Administration program analyses
revealed that significant cost savings could be realized if air traffic
control services at Federal Aviation Administration Level I towers were
provided by contract controllers.  The Federal Aviation Administration then
developed a program master plan, which was approved by the then Acting
Administrator, on April 20, 1989.  The program was expanded to include 27
locations by the end of fiscal year 1992.  Today, the program includes 165
Federal Contract Towers nationwide.
Federal Aviation Administration Level I tower operational costs average
approximately $450,000, compared to $250,000 for the average Federal
Contract Tower.  The difference of $200,000 per converted tower represents
cost savings available to the Federal Aviation Administration after
up-front conversion costs are paid.
The Federal Aviation Administration continues to review new tower locations
for inclusion in the Federal Contract Tower Program.  Airports are
evaluated for tower establishment or discontinuance in accordance with
Federal Aviation Administration Regulation “Establishment and
Discontinuance Criteria for Airport Traffic Control Tower Facilities,” 14
C.F.R, Part 170.
Establishment and discontinuance criteria compare present value of tower
benefits with the present value of tower costs over a 15-year life cycle.
The Federal Aviation Administration considers an airport a viable candidate
for inclusion in the Federal Contract Tower Program when, in addition to
having a control tower structure meeting current building standards, the
location has a Benefit/Cost ratio of 1.0 or greater.
Benefits of tower operation are reductions in accidents (collisions in the
air or on the ground and other accidents, such as wheels-up landings) and
increased efficiency (reduced flying time resulting from expedited flow of
air traffic).  Benefits are estimated on numerous factors including the
number of aircraft operations and the number of passenger enplanements.
Costs consist of investment expenses (one-time costs of facilities,
equipment, and operational startup) and recurring annual expenses
(operating staff, maintenance, expendable equipment, supplies, and leased
services).
The Federal Aviation Administration contracts with state or local
authorities to operate low-activity control towers.  Contracting
authorities are required to provide air traffic control services in
accordance with Federal Aviation Regulations and Federal Aviation
Administration directives.  The Federal Aviation Administration quality
assurance program assures compliance because contract controllers are
required to be Federal Aviation Administration certified.  They are subject
to Federal Aviation Administration in-flight and facility evaluations.
On-site facility evaluations are scheduled biannually in accordance with
Federal Aviation Administration Order 7010.1 and they are conducted by
Federal Aviation Administration headquarters or regional Air Traffic
personnel in the same manner as those conducted at Federal Aviation
Administration staffed facilities.  This ensures that the operators are
providing the highest degree of quality service to the users in accordance
with existing Federal Aviation Administration regulations, policies, and
practices.
The Federal Contract Tower Program is funded from Federal Aviation
Administration operations appropriations.  The funding takes into account
tower operating costs, drug testing costs, and Department of Labor wage
rate determinations.
In the spring of this year, the Federal Aviation Administration launched
the Federal Contract Tower Cost-Sharing Program which was funded at $6
million for fiscal year 1999.  The start of the new program was coupled
with a call for airports to begin applying for this new program.
The program provides an opportunity for non-Federal contract towers that
fall below the 1.0-benefit/cost ratio to receive some Federal Aviation
Administration funds based on their individual benefit/cost ratio.  Both
the House and Senate recommended that the cost-sharing program be funded at
$5 million in fiscal year 2000, which began October 1, 1999.  Currently,
there are approximately 40 non-Federal towers nationwide.
DISCUSSION
In August 1999, the Federal Aviation Administration sent City
Administration a Contract Airport Traffic Control Tower Operating Agreement
for review and signature (see Enclosure 1).  The terms of this initial
agreement and City Administration's capabilities to meet these terms (in
italics) are addressed as follows:
The City shall provide an airport traffic control tower structure.
This new structure should be part of a snow removal equip. bldg.  The tower
portion of the bldg. is not eligible for Federal funding under current law.
2. The City shall furnish utilities to the tower facility.
The City currently furnishes utilities to the existing tower facility.
3. The City shall provide and maintain all air traffic control operational
equipment located or presently installed in the tower facility.
This equipment should be purchased using the same bond issue for the new
building. Local technical support is available for maintenance of the
equipment.
4. The City shall be responsible for the operation and maintenance of all
airfield equipment.
The City has always been responsible for the operation and maintenance of
all airfield equipment.
5. The City shall enter into a Letter of Agreement with the contractor's
local representative specifically for the purpose of providing an airport
point-of-contact and procedures to follow to ensure a timely response to
requests for maintenance of the tower facility.
This is not an issue.  The Airport foreman will serve as the
point-of-contact.
6. The City shall hold the Federal government harmless and indemnify the
Federal government for damages the contractor inflicts.  The Federal
Aviation Administration will not be financially liable for the actions of
the contractor regardless of the dollar amount.
This condition already exists in several grant agreements between the City
and the Federal government.
7. The City should recognize that the Federal government's ability to
provide a contract is contingent upon the appropriation of adequate funds
from year to year.
This situation is acceptable to City Administration.  Other Federal
Contract Towers have continued to operate under continuing budget
resolutions passed by Congress.
On October 1, 1999, the Federal Aviation Administration's Manager for the
Contract Tower Branch asked that the City of Manhattan respond with its
intent to participate in the Federal Contract Tower program by November 1,
1999 (see Enclosure 2).  City Administration requested and received a
30-day extension to respond to the letter.  Shortly thereafter, Congressman
Ryun's staff was successful in pressing the Federal Aviation Administration
for the Manhattan Benefit/Cost ratio.  The Federal Aviation
Administration's analysis indicates that the Benefit/Cost ratio is 0.46
(see Enclosure 3).  That is to say, that the Federal government's share of
the cost is 46% and the City's cost share is 54%.  The primary reason for
that number stems from the Federal Aviation Administration requirement to
use four air traffic controllers in every Federal Contract Tower regardless
of the hours of operation.  This requirement drives the average annual
facility cost to be $250,000.  If the current annual facility cost for
Manhattan of $89,000 for a 10-hour daily operation were used instead, then
the City's Benefit/Cost ratio would be above 1.0.
Using a Benefit/Cost ratio of 0.46 with a projected annual cost of $250,000
results in the City's cost share for the control tower to be approximately
$135,000.  However, City Administration has been advised by Midwest ATC
that their bid for the Manhattan Federal Contract Tower is $190,000 for
fiscal years 2000 & 2003.  On that basis, the City's annual cost share for
a Federal Contract Tower should be $102,600.  Compare this cost with the
Midwest ATC proposal of $115,200 annually for a new non-Federal Contract
Tower contract with the City of Manhattan.
Entering the Federal Contract Tower program should stabilize future costs
and enhance safety at the Airport.  Once Midwest ATC is awarded the Central
Region contract, then they may be able to negotiate with the Federal
Aviation Administration to reduce the number of working controllers from
four to three.  Failing that, they could encourage the Federal Aviation
Administration to increase the hours of operation above 10-hours daily.
The addition of more controllers at Manhattan will reduce the workload and
it will provide a check and balance system for the controllers' actions in
the control tower.
The year 2000 Airport budget can be adjusted to absorb a $2,600 increase
for a Federal Contract Tower.  It would be difficult to absorb a $15,200
increase in the budget for a non-Federal Contract Tower.  It is the opinion
of City Administration that pursuing entry into the Federal Contract Tower
program should stabilize costs in this functional area and it should also
improve air traffic control safety at Manhattan Regional Airport.  Action
on this item should bring about activation of the contract on or about May
1, 2000.  In the interim, Midwest ATC has verbally agreed to continue air
traffic control services between January 1, 2000, and May 1, 2000, for a
fee of $33,582.14 or $8,395.53 per month.
ALTERNATIVES
It appears the Commission has the following alternatives concerning the
issue at hand.  The Commission may:
Authorize the Mayor to execute the Contract Airport Traffic Control Tower
Operating Agreement with the United States Government and to execute an
amendment to the City's existing Air Traffic Control Tower Agreement with
Midwest Air Traffic Control Services, Inc. for air traffic control services
between January 1, 2000, and May 1, 2000, for a fixed fee of $33,582.14.
Direct City Administration to pursue a new agreement with Midwest Air
Traffic Control Services, Inc. for air traffic control services as a
non-Federal Contract Air Traffic Control Tower.
Direct City Administration to solicit bids from air traffic control
companies nationwide to provide and operate a non-Federal Contract Air
Traffic Control Tower facility at Manhattan Regional Airport.
Table the issue.
RECOMMENDATION
City Administration recommends the City Commission authorize the Mayor to
execute the Contract Airport Traffic Control Tower Operating Agreement with
the United States Government and to execute an amendment to the City's
existing Air Traffic Control Tower Agreement with Midwest Air Traffic
Control Services, Inc. for air traffic control services between January 1,
2000, and May 1, 2000, for a fixed fee of $33,582.14.  Entering the Federal
Contract Tower Program should stabilize costs in this functional area and
it should also improve air traffic control safety at Manhattan Regional
Airport.
POSSIBLE MOTION
Authorize the Mayor to execute the Contract Airport Traffic Control Tower
Operating Agreement with the United States Government and to execute an
amendment to the City's existing Air Traffic Control Tower Agreement with
Midwest Air Traffic Control Services, Inc. for air traffic control services
between January 1, 2000, and May 1, 2000, for a fixed fee of $33,582.14.

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