Bailout to small airports spurs FAA clawback

When the fed­er­al gov­ern­ment dis­tri­but­ed $10 bil­lion in stimulus money to air­ports financially hob­bled by the co­ro­na­vi­rus pan­dem­ic, some $18 mil­lion was set a­side for the Brai­nerd Lakes Regional Airport.

That's en­ough to keep the cen­tral Min­ne­so­ta air­port — with 22,000 pas­sen­ger boardings a year — op­er­at­ing for the next 18 years, well be­yond the expected eco­nom­ic fall­out from the COVID-19 out­break.

The Brainerd airport's grant through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act was second in the state only to the Minneapolis-St. Paul International Airport, which received $125 million.

"I was sur­prised. The whole com­muni­ty was," said Steve Wright, di­rec­tor of the Brai­nerd Lakes Regional Airport.

The way the federal grants were calculated has left some airport officials nationwide befuddled.

As re­ports sur­faced over the past month questioning the lar­gesse afforded to some airports, funding was subsequently capped by the Federal Aviation Administration (FAA) to cover four years of operating expenses. Beyond that, airports can apply for the rest of the grant.

So that leaves the Brainerd airport with $4 million in CARES Act funds, with the caveat that officials may apply for the remaining $14 million over the next four years for worthy projects.

But the way the stimulus money was dispersed to more than 3,000 airports across the country has prompted some pointed criticism toward Congress and the FAA.

"It's obscene how the government failed to come up with a proper way to distribute the money," said Rep. Steve Cohen, a Tennessee Democrat whose district includes the Memphis International Airport, a big cargo hub for locally based FedEx.

Cohen was shocked when he discovered that the Memphis airport, which serves some 4.6 million passengers a year, received about $1 million less than the $26 million given to the far-smaller McGhee Tyson Airport in Knoxville.

Cohen, a senior member of the House Transportation and Infrastructure's Subcommittee on Aviation, fired off a letter to the head of the FAA, calling for the agency to fix "a severe funding flaw."

Cohen didn't mention the Brainerd airport in his missive. But he did note that Devils Lake Regional Airport in North Dakota got about $17 million, enough to sustain its current operations for 50 years, and that the Mason City Municipal Airport in Iowa, which initially was granted $17.5 million, could operate on that windfall for 29 years.

After learning the amount of the initial grant, Mason City Airport Manager David Sims said "it took some time to process and validate the information; of course it wasn't expected."

With the FAA's recent tweak, Mason City's airport will get $2.4 million to cover operating expenses over the next four years.

Sims said there's some misunderstanding about the stimulus funds: "It's not just a blank check."

The grants are intended to support airports' continuing operations and replace lost revenue tied to the precipitous decline in passenger traffic and other airport business due to the COVID-19 public health emergency. The funds may be used for airport capital projects, operating expenses such as payroll and utilities, and debt payments.

In distributing grants to airports nationwide, the FAA said in a statement that it deployed a "multipart formula" that permitted stimulus funds to be "allocated among the largest number of eligible airports possible."

Oregon-based consultant Mark Sixel said about 60 smaller airports across the country with little debt and cash on hand — including Brainerd — benefited from a flaw in the FAA's funding formula. As a result, the FAA is "clawing back" some $233 million it had originally designated to these airports, he said.

While the FAA did not confirm that amount, it said an "anomaly might occur" when "using any large data set and formula."

Cohen called the methodology "absurd."

"This reflects poorly on Congress, and it reflects poorly on government," Cohen said. "It's not the airports' fault. The funding formula was totally flawed."

Wright said there may be projects at the Brainerd airport that could bolster its standing as an economic engine for central Minnesota.