The Southern California Regional Airport Authority and Regionalization: Preliminary Findings From the SCAG Regional Airport Management Implementation Study

Steven P. Erie, Norman Emerson and Scott A. MacKenzie

Prepared for the October 12, 2006 meeting of the Southern California Regional Airport Authority Board

Remarks by Scott A. MacKenzie, Ph.D. Candidate, University of California, San Diego

Title

Thank you.

My name is Scott MacKenzie. I study politics at the University of California, San Diego and work for Professor Steven Erie in the Urban Studies and Planning Program. Steve wanted to be here today to share in your deliberations and present findings from our study. Regrettably, Steve is detained on business in San Diego today. Many of you know Norm Emerson, our other consultant for the project. Norm is also away on business.

It is an honor to be present at what will inevitably be an historic occasion for the Southern California region. The title of our presentation is “The Southern California Regional Airport Authority and Regionalization: Preliminary Findings From the SCAG Regional Airport Management Implementation Study.” Before I begin, I need to thank both management and staff at the Southern California Association of Governments, who gave us the opportunity to examine airport governance issues and recommend strategies for implementing an airport management structure for Southern California. SCAG has provided flexibility and much needed advice at various stages of the project. The project team, of course, bears total responsibility for any errors of interpretation or omission.

Overview

Today I will be presenting work from two recent studies commissioned by SCAG. The first study, completed in 2005, surveyed airport authorities around the country and identified appropriate organizational structures for a new Regional Airport Consortium for Southern California. I will summarize the scope of work for that study and then give a brief overview of the case study we prepared on the previous life of the Regional Airport Authority. We believe past experiences with regionalization reveal useful information about potential missteps and can inform the future work of the Board.

The second study is a work in progress. However, since history is unaccustomed to waiting on scholarship, we thought we would present preliminary findings from our survey of key regional stakeholders. These findings speak directly to issues of membership, mission and powers of the Regional Airport Authority. Our findings also yield insights into how decentralization is viewed in different parts of the SCAG region. I will conclude with a few remarks on the challenges and benefits of regionalization, as these are understood by those on the front lines of the region’s air capacity and ground access realities.

Regional Policy Context

Before I get to the findings, I want to talk briefly about the regional policy context.

We are all here today because we recognize the importance of airports to the economic vitality and quality of life in Southern California. In its most recent projections, SCAG predicts that air passenger demand in the six-county region will grow from 90 million to 170 million air passengers by the year 2030. The volume of air cargo is expected to increase from 2.8 million to 8.7 million tons over this same period. Clearly, the region does not yet have the ability to meet this demand. If we fail to address this gap, the tremendous economic spillover generated by increased airport traffic will not be realized.

Several solutions to the capacity problem have been proposed. Regionalization or decentralization – which involves reallocating current flights from constrained urban airports to inland facilities with excess capacity, as well as measures designed to encourage distribution of future flights to these facilities – is just the latest. In terms of sequence, however, decentralization is essentially Plan C. Plans A and B involved ambitious attempts to build or expand air capacity in Orange County and at LAX. These plans had the virtue of locating flights near the areas of greatest demand. Of course, these plans proved to be politically infeasible. In 2002, voters in Orange County rejected a proposal for a new airport at El Toro. In 2001, the City of Los Angeles, responding to political pressure from surrounding communities, agreed to cap the number of passengers served annually at LAX.

Plan C, decentralization, is the approach recommended by SCAG in its 2004 Regional Transportation Plan. This approach, which includes setting up a regional body to promote coordination among existing airports, has the advantage of having broad political appeal. The challenges include financing improvements at inland facilities, implementing ground access strategies to enable passengers to reach these facilities at low cost, and establishing coordination mechanisms linking airport operators, ground transportation providers and other key stakeholders.

Since we are talking about regionalization, I should also mention the current airport debates taking place in San Diego County. San Diego is part of the Southern California region. It relies heavily on L.A. infrastructure. What San Diego does or does not do with respect to expanding Lindbergh Field or securing joint-use at Miramar will impact airports in the SCAG region.

With that said, on to the findings from 2005.

2005 SCAG Regional Airport Management Study

This study was born of the realization that Southern California’s airport system is among the most decentralized and complex in the nation. The 10 major urban and suburban airports in the six-county region are operated by eight separate governing bodies – a bewildering array of municipal departments, county agencies and joint powers authorities. SCAG’s 2004 Regional Aviation Plan, the uncertain fate of the Regional Airport Authority, and proposed legislation to create a Southern California Regional Aviation Commission provided an appropriate set of circumstances for considering new governance, management, and coordination mechanisms for the region’s airport system.

Scope of Work

The scope of work for the 2005 study consisted of three important tasks. The first task was to identify leading approaches to governing and coordinating airport structures and related ground access systems. To do this, we looked at airport governance, ground access systems, and regional planning approaches in the 18 largest U.S. metropolitan areas (excluding Los Angeles). The final report summarizes these arrangements in table form and can be downloaded from the SCAG Web site (www.scag.ca.gov/aviation/).

Based on this research, we narrowed our focus to five governance exemplars. In selecting these cases, we were interested in certain standout features that were relevant to the SCAG region. New England, for example, was selected because it illustrates how utilization of secondary airports can be encouraged via an MOU agreement. One of the cases we studied was the then-dormant Southern California Regional Airport Authority.

The third task was to determine the most appropriate management system for the SCAG region. The obvious alternatives were: 1. a “structured” MOU among airport operators and other stakeholders that would provide flexibility, but also specific rules to ensure focus on basic tasks, 2. a reconstituted Southern California Regional Airport Authority with a revamped mission, bylaws and membership, and 3. a new JPA with a more inclusive membership and consensus-building voting rules. The final report recommends the MOU approach as the most desirable form for the proposed Regional Airport Consortium.

SCRAA: History and Lessons Learned

Well, history has once again triumphed over scholarship, and here we are, talking about a reconstituted Southern California Regional Airport Authority. In my next set of remarks, I will focus on the Authority’s previous life. The objective is not to provide an exhaustive narrative or analysis of what happened – the full case study is in the 2005 final report – but to highlight some key phases, point out a few problems with the existing structure and suggest several principles to guide the work of the Board going forward.

Historical Development

For the purposes of this presentation, the history of the Southern California Regional Airport Authority might be usefully divided into several phases:

Phase I began in 1985 with the signing of the original joint powers agreement between the City of Los Angeles, Los Angeles, Riverside and San Bernardino counties. SCAG was later granted ex-officio status. The agreement gave the Regional Airport Authority broad powers like eminent domain and operational authority. From 1985 to 1992, the Authority focused primarily on planning and served as an information forum. It completed airport feasibility and market share allocation studies. It provided the funding to develop the Regional Airport Demand Allocation Model used by SCAG to forecast and allocate air passenger and cargo demand.

In 1992, Orange County joined the Authority to achieve greater voice on regional aviation issues. The price of admitting Orange County was an amendment to the 1985 JPA that gave each member a contractual veto over Authority decisions. In contrast to Phase I, when regional aviation issues were rarely controversial, Phase II saw the emergence of intractable conflicts among the Authority’s voting members, including disputes over expansion of LAX and siting of a new airport at El Toro. Conflicting interests between jurisdictions and unilateral veto power both contributed to the Authority’s inactivity during much of this period.

During Phase III, the Authority was drawn directly into the region’s most controversial airport debates. In 2001, the Authority was revived by L.A. County officials interested in alternatives to unfettered expansion of LAX, including development of Palmdale and support for a new airport at El Toro. The use of the Authority by some members of the Board to oppose the LAX Master Plan led the City of Los Angeles to cease its participation. Rather than formally withdraw, the City simply failed to appoint its delegate to participate in the Authority’s deliberations.

Following the rejection by Orange County voters of a proposal for a new airport at El Toro, the Authority shifted its focus from developing new airports to planning for ground access. It endorsed an “airport without runways” high speed rail concept designed to connect Anaheim to airport facilities in the Inland Empire and, eventually, Las Vegas. This failed to appease officials from Orange and Riverside counties, whose nerves were still raw from recent airport development conflicts. By 2004, both counties had withdrawn their representatives, leaving the Authority without a quorum.

Diagnosing the Problem

This historical digression demonstrates that the Southern California Regional Airport Authority’s promise as a vehicle for regionalization has remained largely illusory. The obvious question is why.

It strikes me that the answer cannot simply be “irreconcilable differences.” There was and continues to be broad agreement on the importance of airports to the regional economy, the need for additional capacity to serve future demand and the importance of regional planning and decision-making. Moreover, the agreement by five counties and the City of Los Angeles to a JPA delegating important powers to a regional vehicle suggests that substantial political will can be mobilized behind comprehensive solutions.

Many of the disagreements that plagued the previous life of the Regional Airport Authority were disagreements over how to achieve goals that were widely shared. In particular, there were insoluble conflicts over the distribution of burdens and benefits. Why were members unable to find common ground, especially around decentralization and ground access? Several characteristics of the Authority’s structure and mission come to mind. First, the broad powers contained in the original JPA raised questions about the Authority’s intentions. Second, the unilateral veto possessed by voting members made it difficult to undertake collective decision-making. Finally, the perceived lack of responsiveness to local concerns and accountability led some members to withdraw their support and participation.

Lessons Learned

What lessons does the previous life of the Southern California Regional Airport Authority suggest going forward?

One lesson that emerges from past experience concerns the setting of priorities and framing of the agenda. Over its 20-year history, the Authority’s focus wandered from regional aviation planning to developing new airports to implementing high speed rail. With broad powers and an unclear mandate, the agenda of the organization was easily manipulated to serve short-term political interests at the expense of long-term regional objectives.

Related to setting priorities is the issue of “right-sizing” the mission. It will be important for the Board to specify to the satisfaction of key stakeholders what the Authority will and will not do. Ultimately, the powers of the organization will need to be changed to better reflect this mission.

Finally, the previous life of the Regional Airport Authority sheds light on the efficacy of three approaches to regional governance. The first approach involves no regional coordination. Under this approach, individual airports and affected communities battle fiercely to protect local prerogatives. Intra-regional competition between airports rather than coordinated action to share burdens and benefits is the main dynamic driving airport development. This is essentially the status quo situation in the SCAG region.

I have labeled the second approach regional leviathan, which describes the Regional Airport Authority in its most recent phases. I put the word “leviathan” in quotes because the broad powers in the JPA were tempered by a voting rule that virtually guaranteed they would never be used. Nevertheless, the Authority is perceived by many in the region to be a top-down solution capable of imposing its will on local governments that jealously guard their autonomy.

The third approach establishes coordination at the regional level and important zones of local autonomy. In comparative political analysis, we call this approach to governance consociationalism or power-sharing. Its essential features are three-fold: One, the distribution of powers between levels of government is well-defined and leaves important spheres of decision-making authority to local governments. Thus, what the regional entity will and will not do is precisely spelled out. Two, each constituency with a recognized interest – in this case, airport operators, ground transportation providers, air carriers, local and county jurisdictions – receives a seat at the table. Three, decision rules are set up to require broad consensus. This usually involves some version of proportional representation with supermajority voting rules to ensure that large constituencies do not dominate.

If you are looking for a larger principle or idea to organize discussions concerning changes to the current structure of the JPA or to differentiate the future work of the Regional Airport Authority from its past, this third approach might be it. While no particular set of governing arrangements by itself guarantees success, we feel that any approach that does not incorporate the essential features of power-sharing will ultimately fail.

2006 SCAG Regional Airport Management Implementation Study

I would like to move now to a discussion of the 2006 SCAG Regional Airport Management Implementation Study. We started this project in June before the Mayor of Los Angeles decided to revive the Regional Airport Authority. Fortunately, we had enough time to revise our survey questionnaire and other project documents so that our study could provide recommendations for implementing a regional management structure, be it the Authority or a newly-formed Regional Airport Consortium.

Scope of Work

The scope of work for the 2006 study consists of four main tasks. The first is to conduct a survey of key stakeholders in Southern California and around the country regarding appropriate methods for designing and implementing a regional airport management structure.

The second task is to complete case studies of comparable airport and transportation governance structures in the region and around the country. We will look more closely at the processes and structures for three of the 2005 study’s airport governance exemplars, focusing on the initiating roles played by local airport operators and the maneuvering of these models through the political process.

The third task will be to evaluate and recommend strategies for designing a new regional airport management structure. Much of what we do here will depend on what actions the Board takes in the coming weeks and months. Finally, we will be providing recommendations for structuring the implementation process, including a timeline with milestones to guide decision-making on organizational structure and policy implementation.

Tier 1 Stakeholders Survey – Purposes

Today, I want to share with you some of the work we have completed for the first task in our scope of work – the stakeholders survey. I will quickly run through the purposes of the survey, methods we used, list of contacts, and topics we covered, leaving more time to present our preliminary findings. If there is sufficient interest, I will return to these details later on.

The purpose of the survey was to collect information on the interests and concerns of Southern California’s major airport operators, ground transportation providers, air carriers, policy experts and other key stakeholders with respect to decentralization and other aviation issues. The data we collected will be instrumental in informing our recommendations for designing and implementing a new airport management structure for Southern California.

Tier 1 Stakeholders Survey – Methods

The methods for this project are qualitative. We developed a brief list of questions and administered these by telephone, in-person and, in a few cases, over e-mail. We conducted detailed interviews with former staff and Board members of the Regional Airport Authority. We were also able to meet with City of Los Angeles decision-makers and LAWA officials.

Tier 1 Stakeholders Survey – Contact List

Here is an abbreviated list of the organizations we targeted with the survey. The list includes all 10 of the commercial airports in the SCAG region, the transportation commissions in each of the six counties, federal, state and local transportation officials, former Regional Airport Authority officials, academic experts, consultants and air carriers.

I want to emphasize that these organizations are not the only ones with views relevant to regionalization. Given additional time and resources, we would certainly have liked to broaden the sample of organizations and officials we talked to. We did attempt to talk with those most likely to have knowledge about particular facilities in Southern California as well as regular contact with both elected officials and airport customers. Nevertheless, our sample is limited and the results need to be viewed in this light.

Tier 1 Stakeholders Survey – Topics

In the survey, we asked questions about the reconstitution of the Regional Airport Authority and the prospects for creating a Regional Airport Consortium. With respect to the Authority, respondents were asked about their views on restructuring that organization’s mission, membership and formal powers. We also asked about their interest in joining the Authority’s deliberations and what conditions they might have for doing so. With respect to the Consortium, we were interested in how respondents felt about the MOU and JPA forms, how issues of mission and membership might be resolved, and their interest in participating in such a forum. In addition to these focused questions, our discussions ranged across a variety of aviation-related issues of concern to airport operators and ground transportation providers across the SCAG region.

Preliminary Findings: SCRAA

Today, I will present our preliminary findings from the subset of questions we asked about reconstituting the Regional Airport Authority.

SCRAA Redux: Fear and Loathing?

Southern California’s airport operators and ground transportation providers view the decision to revive the Regional Airport Authority as a player in the region’s airport debates with cautious optimism. They understand the need for a regional entity to tackle decentralization and related aviation issues. They believe the Authority, properly structured, can make a positive contribution, but are skeptical that the organization will be able to solve the decentralization problem.

Southern California’s key stakeholders have generally adopted a “wait-and-see” approach to the Regional Airport Authority. Until issues surrounding the Authority’s mission, membership and organizational structure are satisfactorily resolved, few agencies will volunteer their time and resources.

SCRAA’s Mission

Defining precisely what the Authority will and will not do is likely to be the single-most important issue in re-designing the organization. Some respondents believe that an overly broad definition of its mission contributed to the Authority’s previous failures.

Most of Southern California’s airport operators and ground transportation providers think the Regional Airport Authority ought to address both air capacity and ground access issues. However, the Authority ought not to focus on ground access at the expense of air system planning.

Many of the region’s airport operators thought the Authority could address issues not directly related to decentralization. They suggested that the Authority might undertake additional activities, including: coordinating with SCAG on air system and ground access planning, serving as an interface with air carriers, organizing a lobbying presence at the state and national levels, and assisting in planning for local ground access projects.

SCRAA’s Membership

Southern California’s airport operators and ground transportation providers are interested in questions of representation, but feel these cannot be properly resolved until the Regional Airport Authority’s mission is better understood. Some faulted the current scheme of county-based representation, suggesting that sponsors of airports, not just counties ought to decide issues of interest to these facilities.

Most respondents felt that the Authority should take advantage of SCAG’s planning and programming expertise. They also thought that county transportation commissions, FAA and Caltrans officials, public interest agencies and representatives from the private sector might better serve in an advisory capacity.

One of the critical challenges in setting the Authority’s membership is to specify appropriate roles for both elected officials and technical staff. Several respondents argued against mixing elected officials and technical staff.

Who Will Join a Revived SCRAA?

Southern California’s airport operators, in particular smaller, fast-growing airports, expressed interest in participating in a regional forum like the Authority, whether they have direct representation or not. Operators are open to having direct representation on the Board, though final decisions about this rest with elected officials.

Stakeholders outside of L.A. County are concerned about the influence L.A. might wield inside the Authority. They do not want solutions imposed on them. Consistent with the wait-and-see approach, the level of participation will depend on the Authority’s ability to contribute to the missions (and bottom lines) of different airports and its effectiveness in carrying out the decentralization mandate.

SCRAA’s Powers

The broad powers contained in the joint powers agreement that created the Regional Airport Authority are poorly understood. Nor do many of those responsible for operating airports and other transportation agencies understand why the Authority failed during its last go-round. When informed about the current array of legal powers – including the ability to own and operate airports and influence local land use through eminent domain – operators in the region expressed concern about their implications for local autonomy. Alleviating the concerns of local officials will be a precondition for participation by airport operators in the SCAG region.

Sub-regional Perspectives

I would like to finish our presentation by briefly commenting on the perceived obstacles to decentralization and potential benefits of regional coordination as revealed by our survey. Let me emphasize again that we were able to speak with just a small number of stakeholders in each area. The challenges and benefits we identify do not constitute a complete list, nor are they necessarily the most important ones from a regional perspective. They were, however, cited by knowledgeable experts in the region and suggest certain opportunities. We hope this information can inform the Board’s deliberations as it attempts to define an agenda for the coming weeks and months.

Riverside County

Let me begin with Riverside County.

In speaking with members of the March Inland Port Airport Authority, it became clear that both legal constraints and infrastructure problems will limit the “regional” role of the March Inland Port Airport in the near term. First, it is important to note that development at March transcends airport infrastructure and really involves building an entire city from scratch. Second, March already operates under legal constraints that limit the number of flights it can offer. Finally, the airport has only recently been able to secure funding for roads and other critical on-site infrastructure.

On the plus side, stakeholders in Riverside County see several important benefits to regional coordination. They are interested in seeing a regional entity like the Regional Airport Authority serve as an interface with state and federal agencies. The Authority could also help facilities like March identify and secure funding for airport and ground access improvements. Finally, Riverside is interested in partnering with agencies like the Authority and SCAG to develop realistic air service demand projections that can inform their own development activities.

Orange County

The challenges to decentralization in Orange County are more long-term. Orange County has maintained an active political rivalry with Los Angeles. This rivalry often inhibits the effectiveness of regional organizations like the Authority. If the Authority is perceived to be dominated by Los Angeles or encroaches on functions already performed by organizations like the Orange County Transportation Authority, participation will be limited to “rear-guard” actions. Stakeholders here also worry about the “pass-through” status of the county. Trucks carrying cargo between the Mexican border and the Port of Los Angeles create traffic problems and impact the quality of roads and highways. Finally, the inability to meet the air passenger and cargo demand generated inside Orange County leaves stakeholders in a precarious position. The economic vitality of local economies will be dramatically impacted by decisions about airport infrastructure that the county has little control over.

Stakeholders in Orange County recognize the value of regional planning and have a vital stake in regional coordination. There is interest in participating in informal activities, such as the MOUs being considered by the county transportation commissions to share information and mitigate the impact of international trade. Political officials in Orange County are also likely to support a comprehensive ground access strategy that offers better access to LAX and facilities in the Inland communities.

San Bernardino County

In talking with those responsible for operating San Bernardino’s three main airports, as well as officials in county government and at the San Bernardino Associated Governments, we found great enthusiasm for regionalization. Here is where both the opportunities for coordination and the consequences of inaction are greatest. Airport operators in San Bernardino County are interested in partnering with LAWA to develop complementary air passenger and cargo services. Indeed, they will be closely monitoring both the activities of the Regional Airport Authority and signs from LAWA that indicate its intentions with respect to decentralization. San Bernardino stakeholders believe that the demand for international flights inside the county has been underestimated. Residents look forward to increased international offerings at Ontario.

The greatest challenge to increasing the “regional” role played by airports in San Bernardino County will be to persuade or provide incentives for air carriers to offer new services at these airports. Both airport operators and affected communities will also be looking to the Regional Airport Authority to help finance airport and ground access improvements, and mitigate the inevitable traffic and other externalities likely to emerge as Ontario and San Bernardino International increase their service levels.

Los Angeles County

The main challenges to decentralization in Los Angeles County arise from the constraints of a built-out environment. L.A. County’s commercial airports all face legal and physical constraints on their ability to expand existing service levels. Indeed, those responsible for operating Bob Hope and Long Beach airports do not necessarily see themselves as players in the decentralization discussion. They view themselves as status quo airports serving well-defined service areas that will be minimally impacted by what LAWA and other airports do.

While the precise “regional” role of smaller airports in the county is unclear, the benefits of regional coordination are not. Maintaining and upgrading air passenger and cargo services at L.A.’s constrained urban airports and in the outlying areas will be critical to assuring that the SCAG region remains competitive with other regions around the world. Locally, the county’s constrained urban airports will also be looking to the Regional Airport Authority for creative solutions to the traffic and noise concerns generated by airports.

San Diego?

Steve would be quite upset to learn that I had failed to mention in our presentation the possibility of including San Diego in the Regional Airport Authority’s ongoing discussions. San Diego has traditionally relied heavily on the L.A. airport system. Thirty percent of San Diego’s air passengers travel to airports in the SCAG region, primarily LAX. Two-thirds of the cargo generated in the County is physically trucked to LAX and Ontario. Like Orange County, San Diego has limited options for expanding air capacity. San Diego International is severely space-constrained and unlikely to add additional runways. On November 7, 2006, voters in San Diego County will decide whether to encourage the San Diego Regional Airport Authority to pursue negotiations with the U.S. Marine Corp. for joint use at Miramar. This initiative is likely to fail, leaving San Diego with even fewer opportunities for addressing its growing air passenger demand.

Including San Diego in the deliberations of the Regional Airport Authority is likely to benefit both regions. First, it broadens the coalition of interests served by the Authority. Diversifying the interests represented makes it less likely that any single constituency will dominate. Further, San Diego participation and support for Authority initiatives will enhance the ability of airports in the SCAG region to secure funding for airport improvement and ground access projects.

Sub-regional Implications

The implications we take from these sub-regional perspectives are straight-forward. First, there is broad-based consensus on the need for regional airport and ground access planning and decision-making. Stakeholders in the SCAG region appreciate the urgency of Southern California’s aviation challenges and are willing to share in deliberations and decision-making processes that address them.

Second, there is substantial interest alignment on decentralization. This is the great political and economic opportunity before the Regional Airport Authority. The challenge will be to: A. Build consensus around a concrete mission, B. Build an effective process for collective decision-making and, C. Use that process to structure a solution that equitably allocates burdens and benefits.

Third, the extensive interest in regional planning and decision-making among key stakeholders in the SCAG region means that there is plenty of work for the Authority to do. While focusing the Authority’s time and resources around large objectives will be important, the agenda need not be exclusively decentralization. The Authority will find friendly constituencies for a diverse array of programs and initiatives – such as lobbying for greater federal and state ground access monies – many of which can be achieved in the near term.

Conclusion

Let me wrap up our presentation with just a few final observations.

With broad interest alignment among important political jurisdictions in the SCAG region, the time is clearly ripe for implementing a comprehensive decentralization strategy.

With the Regional Airport Authority now back up and running, the clock is already ticking on how it will be viewed by those most affected by its work. In politics and government, perceptions usually matter. Those operating airports and ground transportation agencies will be closely watching the Authority’s next steps. Perceptions regarding the effectiveness of the Authority and the efficacy of decentralization will be formed sooner rather than later. Since the Authority will need the support and expertise of these organizations, it will need to build a reputation for success. Thus, what the Regional Airport Authority does in its first year of operation will affect what it will be able to do after that.

Last, we think our study will provide timely analysis and recommendations that can inform the Authority’s work and provide input into the 2008 SCAG Regional Transportation Plan. This time around, we hope that history will prove to be a little more cooperative.

Thank you.