CITY COUNCIL STAFF REPORT
DATE: AUGUST 26, 2026 CONSENT CALENDAR
SUBJECT: ACCEPTANCE OF THE FEDERAL AVIATION ADMINISTRATION (FAA) AIRPORT INFRASTRUCTURE GRANT (AIG), GRANT NO. 03-06-0181- 073-2026, FOR THE FUNDING OF THE AIRPORT BAGGAGE HANDLING
SYSTEM IN-LINE SCREENING PROJECT AND AIRPORT
IMPROVEMENT PROGRAM (AIP) GRANT NO. 03-06-0181-074-2026
FOR FUNDING TO EQUIP AIRPORT VEHICLES WITH VEHICLE
MOVEMENT AREA TRANSMITTERS (VMAT) FOR THE PALM SPRINGS
INTERNATIONAL AIRPORT
FROM: Scott C. Stiles, City Manager
BY: Airport
SUMMARY:
Authorize the acceptance of Federal Aviation Administration (FAA) Airport Infrastructure Grant (AIG) No. 03-06-0181-073-2026 for the Baggage Handling System In-Line Screening Project and Airport Improvement Program (AIP) grant No. 03-06-0181-074- 2026 for funding to equip airport vehicles with Vehicle Movement Area Transmitters (VMAT) at the Palm Springs International Airport (Airport).
RECOMMENDATION:
1) Approve acceptance of Federal Aviation Administration (FAA) Airport Infrastructure Grant (AIG) No. 03-06-0181-073-2026 up to $10,500,000 for the new Baggage Handling System In-Line Screening Project at the Palm Springs International Airport (Airport).
2) Approve acceptance of Federal Aviation Administration (FAA) Airport Improvement Program (AIP) Grant No. 03-06-0181-074-2026 up to $142,510 to equip airport vehicles with Vehicle Movement Area Transmitters (VMAT) at the Palm Springs International Airport (Airport).
3) Authorize the City Manager or designee to execute all necessary grant documents.
BACKGROUND:
Palm Springs International Airport (Airport) relies on the Federal Aviation Administration’s
City Council Staff Report
August 26, 2026 -- Page 2
Acceptance of FAA Grants for Palm Springs International Airport funding for aviation-specific qualifying capital improvement projects. To qualify for utilization of the FAA grant funds, the Airport must demonstrate projects that have justifiable aviation needs and align with FAA project funding criteria for safety and/or capacity.
During the fourth quarter of the Federal Fiscal Year, the FAA accepts applications from airports for consideration of unspent Airport Infrastructure Grant funding that could be allocated to airport improvement projects.
The Bipartisan Infrastructure Law Airport Infrastructure Grant (BIL AIG) was created as part of the Infrastructure Investment and Jobs Act. The program provides $14.5 billion in total funding over five years, starting in FY 2022. The program is part of a larger $25 billion investment in the National Airspace System, with approximately $20 billion specifically designated for airport infrastructure improvements administered by FAA's Office of Airports. FY 2026 is the final year the Airport will receive BIL AIG funding.
The new Airport Baggage Handling System (BHS) has been modeled to accommodate projected passenger levels over the next 20 years in alignment with the Airport’s recently revised Master Plan and is designed to handle increased volumes and oversized luggage while complying with Transportation Security Administration (TSA) screening requirements.
On July 9, 2025, the City Council approved the award of construction contract to Swinerton Builders in the amount of $77,208,000 for the construction of the new Airport BHS project. The funding of the project is initially comprised of four grants and Airport funds as reflected in Table 1.
Table 1
The FAA’s contractor, uAvionix, completed the installation of a Surface Awareness System in the Air Traffic Control Tower (ATCT) on May 18, 2026. The system detects Automated Dependent Surveillance-Broadcast (ADS-B) transmission from aircraft and vehicles equipped with a transmitter. The Airport does not have Vehicle Movement Area Transmitters (VMAT) equipped on any vehicles. Equipping VMAT on vehicles gives ATCT a tool to improve situational awareness on runways, taxiways, and other airport surface movement areas.
In 2023, the FAA established a “zero serious close calls” goal, addressing a vital safety concern for airport operators. The FAA issued a Program Guidance Letter (PGL) 24-01 on October 2, 2024. It clarifies how airports can use Airport Improvement Program (AIP) FY 25 AT P
3-06-0181-070-2025
FY 25 AIG
3-06-0181-071-2025
FY 25 AIP
3-06-0181-072-2025
FY 25 OT A
T SA Airport Funds T OT AL
Federal S hare Percentage 95.00% 90.66% 90.66% 95.00%
Approximate Grant Amount 6,000,000.00$ 21,552,776.00$ 7,963,213.00$ 24,184,932.24$ 59,700,921.24$ Local Match 315,789.00$ 2,220,416.00$ 820,388.00$ 1,272,891.17$ 15,669,594.59$ 20,299,078.76$ City Council Staff Report
August 26, 2026 -- Page 3
Acceptance of FAA Grants for Palm Springs International Airport funds to install Vehicle Movement Area Transmitters (VMAT) and Runway Incursion Warning Systems (RIWS) on ground vehicles.
STAFF ANALYSIS:
The Airport submitted an application for approximately $10,500,000 through the FAA's Bipartisan Infrastructure Law (BIL) Airport Infrastructure Grant (AIG) program for the Airport Baggage Handling System (BHS) project. Of this amount, approximately $5,501,525 represents the Airport's anticipated FY 2026 AIG entitlement funding. The remaining amount reflects the project's local share and positions the Airport to receive additional discretionary AIG funding should funds become available from prior year allocations that are not utilized by other airports. While the Airport is not guaranteed these additional funds, any supplemental AIG funding awarded would reduce the amount of Airport funds required for the BHS project.
Passenger Facility Charges (PFCs) are a federally authorized fee collected from airline passengers to fund FAA-approved airport projects. The PFC fee is $4.50 per flight with a cap of $18 per round trip collected by the airlines and remitted to the Airport. The Palm Springs International Airport’s Airport Use and Lease Agreement (AULA) with the airlines requires the Airport to consult with the airlines on any proposed projects exceeding $1 million dollars. After reviewing the Airport Baggage Handling System (BHS) project with the airlines, the Airport received an affirmative vote from the airlines in support of the BHS Project and to use PFCs as a source of funding.
After consultation with and a vote by the airlines, on May 12, 2026, the Airport submitted an application to use PFCs in the amount of up to $17,437,011. The additional FAA AIG grant and the PFCs are reflected in Table 2.
Table 2
The appropriations process for the FAA’s Airport Terminal Program (ATP), Airport Improvement Program (AIP), and Airport Infrastructure Grant (AIG) program starts with the FAA’s receipt of airport applications for projects like the Palm Springs International Airport Baggage Handling System. FAA reviews all applications and notifies airports of the discretionary grant amounts that should be anticipated. The competitive discretionary funding program administered by the FAA aims to provide financial assistance to airports for various infrastructure projects, including the construction or renovation of airport terminals. These unspent AIG funds become available from prior year appropriations that are not utilized by other airports and are not guaranteed.
Once applications are approved and funds appropriated, a grant acceptance agreement is sent to the airport for signature by duly authorized officers. Given the discretionary FY 25 AT P
3-06-0181-070-2025
FY 25 AIG
3-06-0181-071-2025
FY 25 AIP
3-06-0181-072-2025
FY 25 OT A
T SA
FY 26 AIG
3-06-0181-073-2026 PFC FUNDS AIR POR T FUNDS T OT AL
Federal S hare Percentage 95.00% 90.66% 90.66% 95.00% 90.66% Approximate Grant Amount 6,000,000.00$ 21,552,776.00$ 7,963,213.00$ 22,535,157.00$ 10,500,000.00$ 68,551,146.00$ Local Match 315,789.00$ 2,220,416.00$ 820,388.00$ 1,186,060.87$ 552,632.00$ 14,437,011.00$ 5,485,916.13$ 25,018,213.00$ City Council Staff Report
August 26, 2026 -- Page 4
Acceptance of FAA Grants for Palm Springs International Airport nature of these grants, an expedited return of the agreement is required; hence, Staff is seeking City Council authorization at this time to accept the grants, once received.
Staff is recommending City Council approve the acceptance of FAA AIG Grant No. 03- 06-0181-073-2026 in an amount of up to $10,500,000 to be applied to the Airport BHS Project, and approve the acceptance of the FAA AIP Grant No. 03-06-0181-074-2026 in an amount up to $142,510 to be used to equip airport vehicles that operate in the airport surface movement area with VMAT.
ENVIRONMENTAL ASSESSMENT:
In accordance with the California Environmental Quality Act (“CEQA”) Guidelines Section 15301 “Existing Facilities”, Class 1 projects consist of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public structures, facilities, mechanical equipment or topographical features involving negligible or no expansion of existing or former use. The Airport BHS Project will continue to utilize existing utilities such as water, sewer, electricity and does not result in an increase of more than 10,000 square feet of building expansion. The Airport BHS Project area has been heavily disturbed by previous airport-related activities and consists of the existing baggage handling system area and three existing baggage carousels. All areas within the Airport BHS Project area have been paved over or built upon. Therefore, Staff has determined that the Baggage Handling System In-Line Screening Project, Airport Project PSP-04, is considered categorically exempt from CEQA.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with City Council Strategic Plan Broad Goal of Infrastructure and Facilities, and also supports the Airport’s 2025-2029 Strategic Plan’s Strategic Priorities for Operational Excellence.
FISCAL IMPACT:
The Airport BHS Project represents a total investment of approximately $93,569,359 with funding sourced through multiple federal grant programs, Passenger Facility Charges, and local Airport funds. This new FAA AIG grant of up to $10,500,000 will be applied to the Airport BHS Project.
To offset local costs, the Airport will utilize Passenger Facility Charges (PFCs) of up to $14,437,011, which will reduce the Airport Funds contribution to approximately $5,485,916.13.
Funding for the Airport BHS Project is phased across Fiscal Years 2025-26 and 2026-27 to align with construction milestones and ensure effective cash flow management.
City Council Staff Report
August 26, 2026 -- Page 5
Acceptance of FAA Grants for Palm Springs International Airport The Airport Improvement Program grant of up to $142,510 would be used to equip airport vehicles with Vehicle Movement Area Transmitters at the Airport.
REVIEWED BY:
Interim Executive Director of Aviation: Victoria Carpenter City Attorney: Geremy Holm
City Manager: Scott Stiles
ATTACHMENTS:
None.