Old folks know numbers matter. Invest your savings at 8% over 30 years, retire early. Invest at 1%, retire at 75 and hang on.
The FAA too knows this. It requires airport sponsors to calculate a project “benefit-cost” ratio and test the key assumptions and conclusions before seeking FAA grants.
Unfortunately, the County seems unwilling to test its Kimley-Horn [KH] runway extension assumptions. Perhaps leery of what testing will show.
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Looking the Other Way
The KH Study says a Palomar 900-foot runway extension produces about two and a half as much revenue over 20 years as it costs. The FAA benefit-cost ratio is 2.5 to 1.
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As Blog #46 detailed, the KH Study shows added revenues due to the extension will be less than 1, not 2.5 times greater. Why? Natural growth not runway-extension-induced-growth accounts for most future Palomar revenues.
Prior to the September Board of Supervisors Kimley Study review, I sent a letter to the Board noting the 2.5 ratio was wrong. A Kimley rep spoke at the Board meeting.
Kimley explained why I was wrong. Right? No. No Kimley comment on the benefit-cost ratio of less than 1 v. 2.5 analysis. The sound of silence. Actually, the sound of acquiescence.
Instead, Kimley said two things. First, Kimley experts are adroit. Second, the runway extension will create wonderful jobs and tax benefits.
Kimley forgets that well paid experts can be myopic. Not even the top financial cop got it right in 2008. Alan Greenspan, the then well-respected Chairman of the Federal Reserve, never saw the financial crash coming.
Moreover, the FAA Airport Analysis Benefit-Cost Analysis Guidance views the KH financial approach skeptically. “Macroeconomic impacts accruing to a community as a result of an airport project are difficult to quantify and frequently represent transfers from other regions.” [See, p. 4, §2.3, FAA Office of Aviation Policy & Plans.]
Ignoring Reality: What Else is Wrong with the Kimley Numbers?
We are told from childhood history repeats itself. The Board could have tested the Kimley analysis by asking how well Palomar experts performed previously.
In the last decade, Palomar rebuilt its runways; enlarged hangar space, built a larger passenger terminal with a new customs facility to encourage cross border traffic, increased aviation fuel storage capacity, relocated and enlarged its parking, and improved taxiways.
County also analyzed those improvement economic benefits. What were they? Were the projections accurate? Kimley does not tell us. The supervisors do not ask. No doubt the County predicted great economic benefits after mid 2000 Palomar improvements.
But according to the County annual financial statements, Palomar Airport operations lost money over the last few years. And Palomar aircraft operations (landings and takeoffs) dropped from about 290,000 to 150,000.
Will County & Kimley Produce Runway Extension Study Records?
In August and September 2013, I asked the County for records that support the August 1, 2013 Kimley Study recommendations. The County produced little and stated the County had produced “all records in its possession.”
The County response is odd. By the County-Kimley contract terms, the County owns and is entitled to the records and information Kimley used to produce a 400+ page report and collect $700,000+ in fees.
Are we to believe that a report recommending the County spend $25 million on a Palomar west end runway safety system and $69 million on a 900-foot runway and taxiway extension is not supported and the key assumptions have not been tested?
