By Liying Gu and Nena Adrienne
The Strategic Planning and Performance Management Working Group hosted the eighth webinar in the Best Practice Forum series on Sept. 27 focusing on Capital Program Management. The attendance at this webinar was particularly high with over 70 airport representatives on the call to listen to two presentations by three speakers.
Judy M. Ross, deputy aviation director, planning, environmental and capital management division of the city of Phoenix Aviation Department, explained the capital planning process at the Phoenix Sky Harbor International Airport and stated that this process can be scalable to smaller airports depending on the complexity of the program. Their capital program consists of three long-term visions: communication and collaboration; defined capital planning process; and financially-feasible capital program. The program aimed to be communicative between divisions and departments, and encourage collaboration between them. To enable everyone to understand how the process works, the Capital Improvement Handbook was created as a guide to the whole process. Education on the process is through classes at implementation and at regular intervals. Periodic reviews of the processes and forums take place to make improvements. The software system used make 95 percent of the process electronic.
The second presentation was jointly made by Don Arthur and Sharon Sarmiento, who are both principals of the Unison Consulting. Arthur’s presentation focused on capital improvement program financial planning and in particular affordability analysis. Affordability analysis is described as what amount of capital cost is affordable – so the airport can meet its financial obligations while funding its capital program. The amount of capital costs an airport can afford depends on rates and charges methodology, cash flow and debt capacity. Sarmiento’s presentation focused on economic analysis as required by OMB and FAA. Economic analysis answers the question whether it makes sense to implement the project – do the benefits of the project outweigh the costs. According to Sarmiento, economic analysis differs from financial analysis as benefits and costs are defined more broadly, considering benefits and costs to all users and not just the airport.
Contact ACI-NA’s Liying Gu for more information.