Sunday, July 21, 2013

For sale: University of Nebraska Foundation plane — unless the state snatches it first

For sale: 2002 turboprop airplane, Matterhorn white with toreador red stripes. One owner. 2,934 landings. Excellent condition. $2.15 million.

The University of Nebraska Foundation has put its Beechcraft King Air B200, manufactured in 2001, on the open market because the state’s lease ran out June 30 and the state opted not to sign a new one.

You might remember the controversy during the 2013 legislative session, when the Appropriations Committee first said it would not allow for deficit spending to buy the plane from the foundation, then changed its mind.

Then, when the issue got to the full Legislature, senators said they wanted to hold off on buying the plane and asked for a study to determine the best option for carrying the governor and other state agency personnel across the vast open spaces of Nebraska.

While the Legislature is conducting that study, the foundation offered a new $10,000-a-month lease to the state to continue using the plane, but no money has been set aside in the budget for that, so the plane will sit and wait for a buyer, NU Foundation spokeswoman Dorothy Endacott said.

“They debated it and ultimately have not made a decision,” she said. “We did not want to wait indefinitely, and so we’ve listed it with a broker.

The governor will use the state’s 1982 Piper Cheyenne when needed, as he did when he flew to Kearney recently to announce the location for the state’s new Veteran’s Home.

The foundation gave the state an exclusive opportunity to buy the plane last year, because the state was its biggest user.

Omaha Sen. Bob Krist, an Air Force veteran who is also a pilot, said it was unfortunate the plane now was on the market, because the foundation has taken advantage over the years of its partnership with the state.

“There was an investment from state money that went into the airplane, so I hope that if they do sell the airplane, that some of that money is recouped, in terms of what was spent by the state,” he said.

That amount, according to email from state Budget Administrator Gerry Oligmueller to the legislative fiscal office, is approximately $110,000 credited toward the purchase of the King Air.

Aircraft cost evaluator company Conklin and de Decker has analyzed preliminary information on the King Air and its use and told Krist the study needs to include life cycle costs of the plane and other analyses.

Krist said the evaluator indicated the cost of $2.165 million for the King Air seemed high. It was not based on a fair market value analysis, he said.

And there is missing information, he said, such as historical figures on the average flight passenger load. Knowing that would help the state decide what size airplane it would need.

“That’s something that would be critical to making the decision,” Krist said. “We have not been able to establish that load, nor have we been able to establish … (other) users of the airplane.”

If the state would be the only user, its use in the past few years may or may not make the purchase viable, he said.

In the 2011-12 fiscal year, the King Air was flown nearly 34,000 total miles. The University of Nebraska Foundation flew the greatest percentage of those miles — 57 percent. The governor flew 11,905 miles that year, or 35 percent of the miles flown.

The state-owned 1982 Piper Cheyenne airplane was flown 12,112 miles, with the governor flying 1,914 miles and the University of Nebraska Medical Center flying 2,568 miles. The 1977 Piper Navajo was flown 16,185 miles, mostly by the Department of Roads for aerial photos.

Total miles flown by all three planes that year was about 62,000 miles.

Ronnie Mitchell, Department of Aeronautics director, said 2012-13 flight information on the planes had not yet been compiled.

Krist said he would forward the Conklin evaluation to senators on the Executive Board and recommend that the board go forward with a cost benefit analysis, life cycle cost analysis, and fair market benefit analysis of all the options.

Once that report is done, which could take 45 days, the Executive Board could recommend whether any purchase or lease option should be chosen, what plane would be the best choice for the state and how much money to appropriate, he said.

The cost of the study should be less than $10,000, Krist said.

“When you are investing $3 million of taxpayer funds to buy a new airplane, or even the $2.2 million that the governor wanted to spend on the existing airplane, you owe it to the taxpayers to make sure that that’s the best investment for air travel that can be made,” he said. “That’s being a fiscally conservative state government.”

Krist said the Executive Board should decide soon on whether to proceed with the study.

Other states have had similar debates over the ownership of state airplanes, including Florida, Alaska, South Carolina and Kentucky.

Kansas, on the other hand, recently bought two new 2012 Cessna aircraft for $617,639 each and sold two older planes.

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