Exempted Projects. Notwithstanding anything herein to the contrary, each of the parties hereto hereby agrees and acknowledges that with respect to each of thx Xxxxpted Projects:
Exempted Projects. During the normal course of operations, an airport must undertake capital projects to keep the airport running. Those projects may include small capital outlay, equipment purchases, vehicle projects and major capital projects. Under a residual ratemaking methodology, an airport has little or no discretionary cash. Therefore, the airport must ensure that the absolutely necessary projects are exempted from airline review. Under a residual ratemaking methodology, such exemptions may include: • Small capital outlay up to a certain dollar amount annually. • Capital projects that have low construction costs such as $1 million and low operating expenses. To avoid an airport breaking down large projects into smaller components, there is typically an annual aggregate limit, in addition to the per-project limit. • Capital projects with a majority of costs funded by an FAA grant or other grants. • Capital projects to meet the requirements of federal, state or local agencies. • Capital projects to settle claims as mandated by the court. • Capital projects related to safety and security. Other exemptions may include: • Capital projects that are not anticipated to increase airline rates and charges. The airlines are not in favor of this item because an airport may use this exemption to fund a non-airline project such as a parking garage or hotel. Even if such projects are anticipated to break even or generate a small profit, the airlines are unwilling to take on the additional risks. • Special facility or airline-funded facility. When an airline agrees to fund a separate facility without increasing rates for other airlines, other airlines may not have the right to veto the facility. However, due to airline competition concerns, this clause is seldom seen in an airline agreement. • Capacity project to accommodate an airline request. Similarly, this is a clause the airport often raises to ensure capacity, though the airlines often deny it. If the airlines do not offer residual protection to an airport, the capital review section may not exist in the airline agreement. Even if a section is included, many other items are exempted from airline review, such as projects in non-airline cost centers.
Exempted Projects. Notwithstanding the foregoing, certain Capital Expenditures will not require a Signatory Airline Consultation Process and will be excluded from a Majority in Interest Vote as follows:
Exempted Projects. ARDOT’s Cultural Resources staff shall conduct an examination of preliminary project plans or requests and determine if the project (or activities) constitutes an exempted undertaking under Stipulation V.B and Appendix A or Appendix B of the Agreement.
