Funding Des Moines Airport

[jnmeade]

The manager of the Des Moines Airport says he needs a new terminal and other upgrades to the tune of $500 million. He can cover $300 million, so needs $200 million more which he hopes to raise by increasing the PFC from $4.50 to $8.50 if Congress approves.

http://www.desmoinesregister.com/st...4001/?utm_medium=email&utm_source=govdelivery

What can't Des Moines raise money on their own? Can't they impose a passenger tax themselves? Are there federal limits on how another layer of government can raise funds for airport improvement?

 

[Flyingfanatic]

Sounds similar to what we are going through in Kansas City. New billion dollar terminal, privately funded with no taxpayer money. Suuuuurrrrrreeeee.

 

[midwestpa24]

What can't Des Moines raise money on their own? Can't they impose a passenger tax themselves? Are there federal limits on how another layer of government can raise funds for airport improvement?

To answer you last question, yes there are federal limits. Airports must apply and get approved to charge PFCs, and the current limit is $4.50 per passenger, a number that hasn't changed in decades. Airports have been asking Congress for an increase for as long as I've worked in the industry, but the airline lobby has fought it successfully every time. Meanwhile the airlines are free to charge whatever new fuel surcharge, bag fee, or seat fee they can come up with.

 

[jnmeade]

Can't the airports charge other fees not related to PFC?

 

[midwestpa24]

Can't the airports charge other fees not related to PFC?

Airports do have other sources of revenue, such as space leases and parking fees. Space leases are somewhat limited to what airlines and other vendors will pay for. Charge too much and watch tenants leave. If parking fees get too high, passengers will find ways to park off site. Every revenue source has it's limits. The PFC increase would be an easy way to generate more revenue, but it has been capped at the same amount for decades with no adjustment for inflation.

 

[Getonit]

I am thinking the original poster is more concerned with the cost of the new terminal. I find that a lot of these are gold plated taj majals that don't have the proper cost/benefit analysis done. In addition to the purchase price now you have to maintain a $500 million facility. Just because the federal dumberment is paying for a lot doesn't make it right. Our kids are being burdened with too much debt. It has to stop somewhere.

 

[jnmeade]

No, I wasn't particularly concerned about the cost of the new terminal. That is a question worthy of investigation. I was simply curious as to the sources of income for an airport and figured some members probably have experience and could "learn me" a bit on it.

 

[weilke]

Maybe they can move that white elephant of a terminal from Huntsville,AL to Des Moines ?

 

[midwestpa24]

I will add, DSM's passenger numbers have doubled in the last few years, and most of their carriers have moved from regional jets to mainline Boeings and Airbuses. I recently flew out of their terminal, and it was easy to see the boarding areas and concessionaires are not setup for the number of people in and out of the terminal.

The airport did abandon the previous manager's vision of moving the terminal to the other side of the airport in favor of the current strategy to improve upon and expand the existing location. That change saved hundreds of millions. As for the cost, you have to realize its a government project which means take the cost to build it privately, double it, then add 10%. That isn't necessarily due to greed or corruption, but the regulation and oversight required in a government project that push the costs up. And it still will be built by the lowest bidder.

 

[Norman]

Given the frequency with which the "Geese" prefer to migrate whether from JFK to LAX or to Disney World is it any wonder pax are seeking the least expensive way to travel there? It is costly to move a family of four cross country. Sure, airports need funding, but politics gets involved in every decision to raise airline fees or passenger fares taxes (that's what they really are) imposed by airports. They need funding, but compared to the US Highways and interstate highways imposed imposed on trucks they pale. The rate of inflation, most of which is unannounced by our federal government has eaten up profits of those who transport consumer goods. In the long run we all end up paying for it.

 

[denverpilot]

That isn't necessarily due to greed or corruption, but the regulation and oversight required in a government project that push the costs up.

It's always a crack up when I see that government overseeing itself drives the cost of government up. LOL. It's kinda brilliant, though, in a "good gub'mint jobs" sort of way.

 

[midwestpa24]

It's always a crack up when I see that government overseeing itself drives the cost of government up. LOL. It's kinda brilliant, though, in a "good gub'mint jobs" sort of way.

A lot of it comes from Congress. There are numerous laws that govern government funded projects that increase cost and complexity. Here are just a few:

• Davis Bacon Wage Rates: Sets minimum wages for all workers on a federal funded project. These rates are often 1.5-2x or higher than the normal going rate for certain disciplines. Plus this law requires payrolls to be certified and additional oversight to ensure that employees are being paid the appropriate amounts.
• Buy American: Requires all products and raw materials on a federal project be American made. While that sounds good, it does drive the cost up quite a bit, plus once again the certification and paperwork required to prove the products are American (think of TSO vs non-TSO equipment).
• Federal specifications: There are federal specifications for everything, from steel to concrete, paint, etc. These are often extremely stringent, and sometimes comical specifications that require special mixtures or suppliers and are more expensive than products used in everyday projects. Plus again, the paperwork and certifications.

We in government hate how difficult and expensive it is to accomplish projects. Contractors hate it too, and mark up their prices for the headache of dealing with the paperwork and bureaucracy on these projects. That is why private citizens can accomplish the same projects for much cheaper.

 

[aftCG]

Sound like they should figure out how to build a $300 million terminal