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Ryan Johnson, Published January 05 2013

NDSU leasing plane despite directive to sell

BISMARCK – North Dakota State University is still leasing an airplane from the NDSU Development Foundation, and Rep. Jeff Delzer, R-Underwood, said legislators may look at new policies to end the practice if the plane isn’t sold soon.

The issue of the $2.3 million 1991 Beechcraft King Air B200 that NDSU has leased since July 2007 for quarterly payments of $80,730 came up during a recent study into state-owned and state-leased aircraft headed up by the interim Government Services Committee.

Committee Chairman Delzer said its work resulted in House Bill 1033 that would establish a central aircraft management system of state-owned planes overseen by the Department of Transportation, similar in some ways to the motor vehicle Fleet Services already offered by the DOT.

He said the bill would exempt the NDSU plane because lawmakers were told the plane was for sale, making it unnecessary to include.

“We would hope that gets taken care of,” he said. “We didn’t put anything in the bill, but we would hope that that doesn’t continue.”

NDSU spokeswoman Laura McDaniel said the plane was listed on the worldwide market from May 16 to Oct. 4, and one offer was received and accepted. The prospective buyer later rescinded the offer, she said, and NDSU continues to lease the plane and rent it out as part of a charter pool.

“We will reassess when market conditions are more favorable,” she said.

Several other state agencies also are exempted in HB 1033 because of “sound reasoning,” Delzer said, mainly because the pool of aircraft that would be created under the legislation would only include planes primarily used for transporting passengers.

Exemptions include a 2007 Cessna 206 owned by the Highway Patrol used for search and rescue operations and enforcement, and planes used for research by the Game and Fish Department and airport safety inspections by the Aeronautics Commission.

The bill also would exempt all entities under the control of the state Board of Higher Education, a point Delzer said was necessary because the pool shouldn’t include the 72 aircraft owned by the University of North Dakota and the additional 56 planes owned by the UND Aerospace Foundation that are primarily used for flight training.

Delzer said he and several other lawmakers are “not happy” about the NDSU plane and the “way exorbitant” cost the university pays for it, and he said the issue will likely come up in committee meetings and legislative hearings – even if it isn’t included in this legislation.

“It’s not part of the bill because we had hoped it would be taken care of before that,” he said. “And I don’t know how you would put that in the bill when you have the UND aerospace center that you can’t put in the bill.”

The Government Services Committee study found NDSU uses non-general fund money to pay for leasing its plane and primarily uses it to fly university personnel and higher education officials across the state.

Low use – just 69 flight hours during fiscal year 2011 – and high fixed costs such as certifications and insurance added up to a cost of $5,677 per flight hour. That was well above the other eight state-owned aircraft in the study.

If the plane isn’t sold soon, Delzer said legislators could try to address the issue through the budget process or send a message to the state Board of Higher Education that it needed to end the practice.

Rep. Ed Gruchalla, D-Fargo, who also served on the committee, said HB 1033 aims to consolidate aircraft now being owned, maintained and flown by state agencies to transport people.

Creating a unified system and opening up the planes to be leased by other agencies could lower the overall costs per flight hour and help replace aging planes with newer equipment, he said.

He said other than the relatively high costs of NDSU’s plane, the study found the state already was doing a good job of running an efficient fleet of aircraft. He said the small number of vehicles that would be included in the new pool under the legislation means the overall savings to the state likely would be slim.

“Most of the planes were very low cost, and we couldn’t find any abuses anywhere,” Gruchalla said. “It sounds like they’re being very frugal.”

Delzer said it’s a good time to consider the idea of a centralized aircraft system, an idea a legislative committee sent to lawmakers in the early 1980s only to have the bill not pass the Legislature in 1983.

“Conditions have changed considerably since the ’80s, though, and we figured it was time to look at it again,” he said.

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Readers can reach Forum reporter Ryan Johnson at (701) 241-5587