Legislative Program Review and Investigations Committee

Digest

Bradley International Airport

Vision/Mission

Findings

• DOT does not have a formal vision statement specific to Bradley International Airport.
• DOT's mission statement for Bradley International Airport is focused on safety, efficiency, and convenience - implying a view of Bradley as transportation facility.
• DOT's dollar-driven mindset limits investments and slows growth at Bradley International Airport.

Recommendations

1. Bradley International Airport should in consultation with its stakeholders develop a vision statement that defines the airport in terms of its purpose.

2. Bradley International Airport should in consultation with its stakeholders develop a mission statement that encourages policies aimed at promoting economic development as well as efficiency, effectiveness, safety, and convenience.

3. Proposed capital projects for Bradley International Airport must be evaluated using the risk/return approach of financial analysis relevant to a business enterprise.

1993 Master Plan Implementation

Findings

• The delay in completing the terminal expansion project at Bradley can in large part be attributed to DOT's lack of action between 1994 and 1996.
• The delay increased the project's construction costs.
• The delay increased cost of borrowing money to pay for the project.
• The delay prolonged the inconvenience of customers forced to use a functionally obsolete terminal.
• The delay reduced potential airport revenues by causing fewer gates to be available than airlines were willing to pay for and use.
• The delay limited revenues and inconvenienced customers by allowing the development of a shortage of on-airport parking spaces during peak travel periods.

Recommendations

4. There must be recognition by those with authority over Bradley International Airport that it is a business enterprise operating in a competitive environment and proposed capital projects must be implemented in a timely manner.

5. Bradley International Airport's leadership shall review all policies and procedures imposed on requests from the airport to implement capital projects and modify, directly or through legislation, the policies and procedures found to be inconsistent with the operation of a business enterprise, or unnecessary given Bradley's reliance on the Enterprise Fund.

Planning Capacity

Findings

• DOT has insufficient resources and expertise to address non-airside planning activities, particularly those associated with strategic business planning.
• DOT's commitment to ongoing strategic business planning has not been institutionalized.

Recommendations

6. Bradley International Airport shall be statutorily required to develop and periodically update strategic and business plans.

7. Bradley International Airport should increase its staff resources to assure an in-house presence and the expertise needed to coordinate the development of strategic business plans and measure their performance on an ongoing basis.

Management and Operations

Findings

• Bradley devotes sufficient resources to safety, security and airside operations
• Bradley compares well with other cities in terms of the number of favorable destinations
• Bradley lacks a comprehensive, persistently applied strategy to obtain international service
• The addition of Southwest Airlines has helped Bradley reduce its average air fares to more competitive levels and increased passenger flow through the airport
• Bradley's food concessions generate more revenue per passenger than other airports, but because of required vendor payments, not because of wide selection and value pricing to the customer
• Bradley has not sought financing for major improvements or expansion of passenger facilities in more than 15 years, choosing instead to pursue a maintenance strategy over a build and grow approach.
• Bradley does not have a strategic or business plan
• Bradley has taken a passive approach to economic development, working with external parties only when approached for assistance

Management and Operations - Constraints

Findings

• Bradley does not have a business development approach in its management and operations and is not organizationally structured to carry out such an approach.
• Bradley does not devote the staffing and resources needed to business development, nor does it have staff with the knowledge, skills, and experience to implement such an approach.
• Bradley has no goals and objectives targeted at airport growth, nor any measures for tracking them.
• Bradley's passenger growth in the 1990s was positive but sluggish, behind the increases in the state's overall economy. Only in 1999 and 2000 has growth picked up substantially, due to introduction of Southwest Airlines service, resulting in lower fares at Bradley.
• Bradley's enabling legislation, creating it as enterprise fund, intends that Bradley operate differently than other state agencies, dependent on it own revenues for capital improvements and operations.
• Despite intent of legislation, Bradley is operated like any other DOT unit, with the same department- and state-imposed constraints on budget increases, hiring freezes, bonding approvals, contractor and consultant selection procedures, and contracts and lease agreements.
• Bradley is operated like a transportation facility and not a business. It does not view itself in competition with other airports in the region for passengers, business development, or funding.
• Bradley's key decisions are made offsite. Most other airport management teams are located on airport.
• Bradley's operations are process-oriented -- assuring proper policies and procedures are followed - and not results-oriented. Bradley management is used to functioning in this environment, and has not sought to change these process-directed constraints.
• Bradley marketing is in need of significant resources. It has allocated too many responsibilities to the marketing director; they cannot be successfully accomplished by one person.
• Bradley has begun a practice of gauging customer satisfaction, but it needs to focus on what customers want and work that into its business practices and facility development.

Recommendation

8. Bradley International Airport shall be reorganized to add a business development approach. It shall establish a business development division in its organizational structure. The division shall be headed by a director of business development with knowledge, background, and skills in economic development and business expansion. The business development division shall be responsible for non-airside operations including: retail and concessions; on- and off-airport economic development; airline and passenger development; contract negotiation; airline and lease agreements; marketing and public affairs; community affairs; and customer relations. (See Appendix E for proposed organizational chart.)

Bradley shall establish a planning and project development division. It shall have responsibility for coordinating development of the airport's master plan, strategic and business plans, and their implementation.

Bradley should significantly upgrade the resources (both in number of qualified personnel and financial resources) allocated to perform the duties involved in business and economic development, marketing, and planning and project development.

All staff included in the Bradley Enterprise Fund and who spend half time or greater on Bradley functions shall be located at Bradley International Airport.

Bradley management and staff shall operate in an entrepreneurial fashion, where they can respond quickly, and seize opportunities for growth. To do that, Bradley shall be exempted from compliance with the following:

• legislative authorization in order to issue revenue bonds;
• state-imposed budget guidelines or hiring freezes;
• DOT internal selection processes for contractor and consultant selection;
• DOT and state procurement procedures for purchasing; and
• DOT and state personnel functions for top management positions including development of position descriptions and selection of candidates.

Further, the indentures for any new bond issuance should not require bond commission approval each time capital improvement funds are expended for Bradley.

Bradley shall establish goals and objectives for growth, infusing a competitive approach to running the airport.

Governance

Findings

• A change in the governance structure of Bradley International Airport will be necessary to ensure a business perspective would be added to the operation of the airport.
• None of the governance structures considered -- advisory board, executive board, independent state agency, or quasi-public authority - totally met the objective of providing a business focus and direction to Bradley without introducing new issues or failing to solve all existing problems.
• A strong executive board approach presented the most workable solution to providing a business perspective and minimizing several problems associated with ensuring the present workforce that its jobs will be protected and benefits preserved, as a transition from one management structure to another takes place.

Recommendations

9. A Board of Directors shall be established to oversee the operations of Bradley International Airport.

10. Composition. The board shall be composed of seven prominent and experienced leaders of business and industry crucial to Connecticut and Bradley's regional service area. All members shall be appointed by the Governor, and shall be approved by the General Assembly. The governor shall appoint the chairperson of the board from among the business and industry members. Members shall be appointed for four-year staggered terms. The commissioners of the Department of Transportation and the Department of Economic and Community Development shall be ex officio, voting members. A member of the board shall be eligible for reappointment. No member may have a financial interest in the airport or its concessions. Each member of the board before entering upon his or her duties shall take and subscribe the oath or affirmation required by article XI, section 1, of the State Constitution. A member who misses three consecutive meetings shall be deemed to have resigned from the board, and the Governor shall immediately make a new appointment to fill the vacancy.

11. Purpose. The purpose of the board shall be to set a direction for Bradley International Airport that will establish it as a competitive, thriving, enterprise, driving the economic development of the region.

12. Transition period. The commissioner of the Department of Transportation shall be the chief administrative officer of Bradley International Airport, reporting directly to the Board of Directors, until not later than January 1, 2003. By January 1, 2003, the board shall develop a job description for a Bradley International Airport chief executive officer. The qualifications may include, but not be limited to, experience in airport administration, finance and budgeting, planning, and business development.

13. Powers and duties. The Board of Directors shall have the following powers and duties:

• Adopt a mission and vision for Bradley International Airport;
• Approve the operating and capital budget for Bradley International Airport and monitor the airport's indebtedness;
• Approve all airport policies and procedures;
• Employ staff and consultants as necessary to oversee and manage Bradley International Airport;
• Establish goals and objectives for the airport and for key management staff, and track performance;
• Establish and implement by June 1, 2002, an organizational structure for Bradley International Airport that at a minimum includes divisions for operations, finance, business development, and planning and project development, each of which shall be headed by a director.
• Direct the development and implementation of Bradley International Airport's master, layout, strategic, business, marketing, and customer service plans;
• Approve all airport contracts and use agreements whose value exceeds $100,000;
• Direct commercial development for the airport;
• Direct the economic development focus, including seeking out and promoting grant and loan incentives for businesses to locate or expand within the Bradley International Airport service area;
• Direct efforts to maximize revenue production; and
• Periodically review all policies and procedures that impact Bradley operations and where constraints are identified that hamper Bradley's ability to act quickly, or prevent growth opportunities, the board shall seek an exemption to compliance.

14. Employees. All current employees assigned to Bradley International Airport shall remain employed under the same working conditions, privileges, and rights as currently exist. Any newly authorized position filled after October 1, 2001, that is funded under the Bradley Enterprise Fund and reports directly to the Board of Directors or to a position that reports directly to the board, shall be under the sole purview of the board, and the board shall decide the duties, skills, qualifications, and salary level of the position and shall select the candidate to fill the position. Such newly authorized positions or filled vacancies shall not be considered classified service positions and the holders shall serve at the will of the board.

15. Administrative functions. Administrative functions such as payroll and benefits, shall continue to be performed at the Department of Transportation, which may submit for reimbursement from the Enterprise Fund the costs for performing such services.

16. Bradley Airport Community Commission. There shall be established the Bradley Airport Community Commission to address issues of concern to local communities surrounding the airport. The membership and appointment of the commission shall be as currently constituted in Section 15-101r(b) of the Connecticut General Statutes, except that one member shall also be a member of the Bradley International Airport Board of Directors. Sections 15-101r and 15-101s of the C.G.S. shall be revised to include the following powers and duties:

• provide advice to the Board of Directors and Bradley management staff on project development, including the airport master plan;
• provide advice to ensure the airport development meets the social, environmental, and community needs and concerns -- including noise and traffic -- of the surrounding towns, the region, and the state; and
• provide a forum for addressing the issues, needs and concerns of the users of the airport and the general public.

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