BayBlog

After pocketing almost $40 Million in fees, the airport consultants have submitted a benefit-cost analysis (BCA) to the Federal Aviation Administration. A draft BCA submitted a year ago was rejected by FAA. The BCA is a requirement for FAA funding if the project is for increasing aviation capacity. The long-term benefits, adjusted by discounting for inflation and uncertainty, must exceed the long-term costs.

The consultants estimated costs and benefits of a “Baseline Case” (the old airport) and the “Project Alternative” (the new airport). The Baseline Case for all BCA’s is defined by FAA as “…action compatible with the specified project objectives that would be pursued in the absence of a major initiative”. For this BCA, FAA required “the improvement of the existing airport to meet full FAA Runway Safety Area standards on the existing runway length” plus other nominal improvements over 30 years.

The resulting BCA finds $82 million in net costs, and only $12.7 Million in aviation-related benefits. These benefits are mostly from future Sector Plan, beach and Walton County passengers who would be closer to the new airport, and from the good fortune that West Bay is six miles closer to Atlanta and Dallas. The BCA passenger forecasts show only 106 additional passengers per day (TWO additional regional jets or ONE additional 737) at the new airport versus the old by year 2038.

Using real-estate benefits such as sale of the airport, future industrial leases of 1700 acres of airport land, and dubious value of the mitigation land, net benefits exceed costs by $41 Million over the 30 years.

Conclusion? Taken at face value, the BCA confirms this is a land deal, not an airport deal.

Should we (and FAA) take the analysis at face value? Maybe not. FAA has set different conditions for different studies.

In the Environmental Impact Statement, FAA said at least two modifications of the present airport met its regulations and extended the runway without requiring a tunnel for State Road 390. In the BCA, consultants declare the runway must be shortened if a $65 Million tunnel is not built. They also say there “is a very real risk” the tunnel could not be built, contradicting a Base Case “that would be pursued”. Avoiding the tunnel would likely eliminate the net benefits.

Several other assumptions in the BCA produce questionable benefits. FAA’s BCA rules also ignore the $40 Million already spent that wipe out the net benefits in advance.

E-mail records show the fallback plan, if FAA rejects this BCA, is to return to the “safety” argument and avoid benefit-cost analysis entirely.

Every taxpayer should look at how the airport land deal is unfolding “at no cost”, and the scrambling that goes on among the consultants, FAA, St. Joe, and the airport staff looking for elusive benefits. I have placed the BCA public records and more comments to the FAA on the internet here.

This entry was posted on Tuesday, January 16th, 2007 at 6:21 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.