Legislature(2015 - 2016)SENATE FINANCE 532
02/11/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Aerospace Corporation Overview; Administrative Order 271 | |
| Overview: University of Alaska Fy 16 Budget | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
February 11, 2015
9:01 a.m.
9:01:51 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Craig Campbell, President and Chief Executive Officer,
Alaska Aerospace Corporation, Department of Military and
Veterans Affairs; Patrick Gamble, President, University of
Alaska, and Chair, Board of the Alaska Aerospace
Corporation.
SUMMARY
PRESENTATION: ALASKA AEROSPACE CORPORATION OVERVIEW;
ADMINISTRATIVE ORDER 271
OVERVIEW: UNIVERSITY OF ALASKA FY 16 BUDGET
^PRESENTATION: ALASKA AEROSPACE CORPORATION OVERVIEW;
ADMINISTRATIVE ORDER 271
9:03:43 AM
CRAIG CAMPBELL, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
ALASKA AEROSPACE CORPORATION (AAC), DEPARTMENT OF MILITARY
AND VETERANS AFFAIRS, discussed the presentation "Alaska
Legislative 2015 Overview Presentation," (copy on file). He
stated that the last year had been very dynamic for the
corporation. He hoped the committee would recognize that it
had some innovative ways to change the corporation, given
the challenging fiscal climate. He wanted to answer
questions regarding the accident that had happened the
previous August, the subsequent re-build, and future plans.
Mr. Campbell looked at slide 2, "FY 2015 Budget Changes":
•New Launch Contract secured
•New Global Imaging Distribution Contract secured
•$2.0 Million Reduction (25 percent) in General Funds
•Deleted 3 vacant PCN's
•Huntsville Virtual Office established
•Received $2.4 Million in deferred maintenance funds
Mr. Campbell detailed that AAC was under contract with
Miltec Corporation for a second launch of the failed
mission. There had been no date chosen, and AAC was
aggressively working on a rebuild of the launch site.
During the year, AAC had also completed a contract with
BlackBridge for global imaging distribution. BlackBridge
had a constellation of five rapid-eye satellites in polar
orbit that imaged the world, and was the only company that
could provide full coverage of the state without cloud
cover. He added that AAC was the distributer of the imaging
data worldwide.
Mr. Campbell specified that there was an individual hired
on contract for AAC's virtual office in Huntsville, who had
extensive experience and had good connections with NASA and
the U.S. Department of Defense, and was developing a new
business market with the Huntsville market.
Mr. Campbell spoke to the deferred maintenance funds
received the previous year, which were used for basic
renovation and much-needed repairs. He relayed that until
two years previously, AAC had not received any deferred
maintenance funds, so some facilities had been in need of
repair.
9:06:16 AM
Mr. Campbell highlighted slide 3, "FY 2016 Budget
Highlights":
•Eliminate $4.2 Million General Funds for operations
and sustainment
•Return $22.0 Million in capital fund appropriation
for medium-lift
•Complete Launch Facility Rebuild with Insurance Funds
•Complete Launch Pad 3 Environmental Assessment
•Pending Executive Branch Approval, complete medium-
lift project with remaining $3.0 Million in previously
appropriated capital funds
•Proceed in collaboration with Lockheed Martin, ASRC,
and the University of Alaska in developing an
Aerospace Integration Complex to support a diversified
aerospace industry in Alaska
•Reduce 10 PCN's
•Expand BlackBridge satellite imaging services
•Expand commercial launcher capabilities
•Provide contract Range Services at non-Federal
spaceports in the U.S.
•Initiate transition process of AAC to a privatized
non-state company
Mr. Campbell conveyed his excitement for the coming year,
and asked the committee's support for the governor's budget
request. He stated that AAC was in concurrence with the
governor in reducing its GF by $4.2 million. He had asked
for AAC to retain budget authorization for $11 million,
with the $4.2 million in GF to be shifted to receipts. He
clarified that the switch would allow AAC to earn the
funds. He pointed that the total budget would reflect an
increase but the $4.2 million in GF would remain zero.
Mr. Campbell discussed the environmental assessment pending
for Launch Pad 3, and specified that the Federal Aviation
Administration (FAA) was about to release its final
determination on the assessment. He discussed the various
activities that would be consolidated under the
collaborative Aerospace Integration Complex. He noted that
he did not plan on any position reductions beyond the ten
that were listed on the slide. He discussed the potential
revenue generation from providing contract range services
to other airports.
Mr. Campbell asked the committee to focus on the last
bullet of the slide, which pertained to initiating a
transition of AAC to a privatized non-state company. He
relayed that he had conversations with the governor's chief
of staff Jim Whitaker, and had been working to identify how
to keep AAC as a value to the state. He did not support
shutting down AAC; and referred to investment that had been
made in the corporation, as well as the job opportunities
it offered. He did not think an outright sale would
generate significant revenues, or even recover the cost of
state investment to date. For these reasons, the
corporation was starting a process to privatize AAC and
create value that would provide a return on investment in
the future. He clarified that privatization of AAC was a
new concept that had only been developed in the previous
week. He reiterated that he had been working with the
executive branch to determine the boundaries, and thought
there was concurrence that a privatization plan was the
right answer for AAC in the future.
Co-Chair MacKinnon asked Mr. Campbell to use specific
language rather than acronyms. Mr. Campbell agreed.
Mr. Campbell continued that when he had mentioned PCNs he
had been referring to personnel control numbers or
personnel in the company. He reiterated that AAC would be
reducing by 10 positions through retirement, vacancy and
attrition rather than layoffs. He was unsure what changes
would result from an ongoing conversation on privatization,
and thought the discussion might change how AAC was
organized.
Vice-Chair Micciche asked if anyone from the private sector
had expressed interest in a partnership with AAC or a
purchase of its facility.
Mr. Campbell stated that there had been no interest in the
purchase of AAC or any of its facilities.
9:13:25 AM
Vice-Chair Micciche asked if Mr. Campbell had witnessed any
excitement from other entities regarding the possibilities
engendered through privatization. He wondered if a
partnership would be advantageous.
Mr. Campbell had not received any expressions of interest,
and thought the aerospace market was very small in the
United States, and posited that no aerospace companies that
he knew of were interested in owning a launch complex. He
added that there were only four launch complexes (that
launched rockets into orbit) including three federal
facilities and the Kodiak Launch Complex (KLC). He had no
indication that any of the facilities wanted to convert
into a private operation at the current time. He suggested
that the privatization of AAC would be a hybrid model under
which the operations side would develop business and
utilize KLC, and selling for a value return for the state
would be evaluated at a later date. He thought selling AAC
was a longer term proposition, and the corporation's
assessment was that putting AAC on the market would lead to
a disappointing response.
Mr. Campbell looked at slide 4, "SMDC August Launch":
•Advanced Hypersonic Weapon Test Flight
•Aborted Launch August 25, 2014
•Rocket Destroyed shortly after Lift-off -Safety
measures worked properly
•SMDC Investigation Clears KLC of any issues
pertaining to the failure!
•Damage was fully contained on AAC property
•Damaged Facilities
•Launch Support Structure
•Integrated Processing Facility
•Spacecraft and Assembly Transfer Facility
•Minor damage to Payload Processing Facility
•Minor damage to Rocket Motor Storage Facility
•Estimated Damage Repair Costs
•$29.7 million
•Facilities Fully Insured
•Clean-up of rocket and payload debris mostly complete
•Demolition and clean-up of severely damaged
facilities underway
•Rebuild design completed and rebuild contracts are
being issued
•Rebuild to be completed by October 1, 2015
Mr. Campbell pointed out the fourth bullet point and
highlighted that the command that had owned the rocket and
payload had completed an investigation and found no fault
with the KLC. He continued that AAC had been paying in to
the state insurance pool since it started, and had put in a
claim to rebuild the facility for completion in October
2015.
9:16:32 AM
Mr. Campbell highlighted slide 5, "Medium Lift Request For
Proposals":
•In the FY2013 budget, the Legislature approved, $25.0
Million capital funds to support developing medium-
lift in Alaska
•Legislation specifically stated that the $25.0
Million in state funding was for infrastructure
development specifically for medium payload
launches
•Medium payloads weight in excess of 4,000 pounds
•The $25.0 million was "gated" into three phases:
•Phase One = $3.0 Million for design,
engineering, infrastructure prep, and
environmental work
•Phase Two = $10.0 Million for
infrastructure development, which could not
be spent until a firm contract was signed
with a launch provider for medium class
launches
•Phase Three = $12.0 Million for
construction which can not be spent until
any additional funding is raised to complete
construction of a medium lift facility
•Estimated cost for a new medium-lift complex at
Kodiak was estimated to be no less than $125.0
Million.
•All funds above the state $25.0 Million would
require private/commercial funding
Mr. Campbell described medium lift as a controversial
topic. He discussed interest from the Orbital Sciences
Corporation and Lockheed Martin to do medium lift. At the
time, the rockets being considered (Lockheed Martin's
Athena III rocket and Orbital Sciences' Antares rocket)
were fairly large. He relayed that neither company found
the financing that would allow them to profitably sell the
rockets. He had seen other movements in the industry,
including international rockets of smaller size but with
ability to launch a medium sized satellite.
Mr. Campbell turned to slide 6, "Medium Lift Request For
Proposals - Continued":
•In September 2014 staff developed a Request For
Proposal offering $21.0 Million of the $25.0 Million
in a competitive source selection to provide
commercial launch services for delivering medium class
payloads into orbit from the Kodiak Launch Complex
•Proposers must:
•Describe how the $21.0 Million state funding
would be used
•Identify the Offeror Infrastructure Requirements
•Identify the Offeror Infrastructure Investment
•Guarantee three medium class launches from KLC
by 2020
•Proposals were delivered on November 25, 2014
•Four proposals were submitted
•Evaluation of proposals was completed by AAC staff
and oral interviews were held on December 9, 2014
•On December 12, 2015, Lockheed Martin was selected
for their Athena IIS medium lift rocket proposal
•An "Intent to Award a Contract" notice has been
issued to Lockheed Martin.
•Contract negotiations have started, with initial
estimates for medium-lift between $3.0 and $6.0
Million
•AAC plans to use only the Phase I $3.0 Million of the
$25.0 Million appropriation, plus other existing
Federal funding for medium-lift construction
Mr. Campbell elaborated that the Lockheed Martin Athena IIS
model rocket (that was selected in the competitive source
selection) was larger than the Athena I, and had increased
payload capability from additional engines to give it the
medium lift capability and ability to be launched from the
existing launch pad.
Mr. Campbell spoke to slide 7, "Administrative Order 271":
•Governor Walker issued AO 271 on December 26, 2014
•Specified to halt to the maximum extent possible
discretionary expenditure on six "Projects"
•Kodiak Launch Complex was listed as one of the
projects
•Alaska Aerospace Corporation legal counsel reviewed
and determined the only "project" currently being
pursued by AAC was the medium lift RFP process
•AAC has suspended further actions on medium lift
pending approval to proceed by the Executive branch
•AAC has advised the administration that the remaining
$22.0 million is available to be returned to the state
•AAC has requested the governor approve AAC to
complete the contract negotiations with Lockheed
Martin, not to exceed $3.0 million of the $25.0
million appropriation
Mr. Campbell turned to slide 8, "Medium Lift RFP," which
showed an artist's rendition of what the Athena IIS would
look like on the existing AAC launch site. He confirmed
that AAC was on hold, pending approval of the executive
branch to proceed. He pointed out that the rocket being
considered was thin but with a fairly large payload. He
discussed features of the launch structure and boost
capability.
Mr. Campbell spoke to slide 9, "Launch Pad 3 -Environmental
Assessment":
•An Environmental Assessment (EA) is being conducted
for medium lift operations from the Kodiak Launch
Complex
•The Federal Aviation Administration (FAA) is the
sponsor of the EA
•A draft EA was released for public review September
15, 2014
•A public hearing was conducted in Kodiak on October
7, 2014
•The FAA is reviewing public comments
•54 written comments were received
•20 people testified
•FAA determination expected in early 2015
•AAC has a potential customer interested in conducting
west coast launches from Alaska and building LP-3 in
the future
Mr. Campbell stated that an environmental assessment was
being conducted for a new launch pad, and he was expecting
a determination within the next two months.
9:20:15 AM
Mr. Campbell highlighted slide 10, "Geospatial Imaging Data
Distribution Contract":
•To diversify AAC, in May 2014 senior staff initiated
discussion with BlackBridge for potential distribution
rights for imaging data from the RapidEye imaging
constellation
•RapidEye is a constellation of five polar orbiting
satellites that collect five meter imaging data for
commercial sales
•The AAC Board of Directors approved Resolution #14-03
at the August board meeting authorizing negotiation
for a new business venture in Geospatial Data and
Satellite Imaging Sales and Distribution
•A contract was signed on October 2, 2014 for
distribution rights of BlackBridge Alaska imaging data
•AAC has completed initial orientation with
BlackBridge and has a staff member dedicated to
BlackBridge sales of Alaska imaging
· This contract was a significant step in diversifying
AAC with an emphasis on commercial markets
· AAC has initiated discussions with BlackBridge to
expand the contract to include data downlink
services
•AAC is also working to secure launch services for the
next generation of RapidEye satellites, expected to be
launched in the 2018/2020 timeframe
Mr. Campbell pointed out that the geospatial imaging data
distribution contract referenced on slide 10 was the first
step for AAC in diversifying the company away from solely
rocket launch activities. He thought one problem the
corporation had created for itself was focusing only on
launching small rockets from Kodiak. He referred to the
original intent of AAC as written in statute; and clarified
that the corporation was not designed to be a launch
complex, but rather focused aerospace development and
working closely with the University.
Mr. Campbell directed attention to the bottom of slide 10,
and noted that the next step in diversification was
possibly expanding the data distribution contract to
include data downlink services. Further, AAC was working to
secure launch services for the next generation of RapidEye
satellites.
Senator Dunleavy referred to the bottom of slide 9, and
asked if the potential customer was interested in
underwriting the entire cost of building launch pad 3 (LP-
3).
Mr. Campbell clarified that AAC had a potential customer
that wanted to launch from Kodiak sometime in the future,
and AAC had not yet discussed the financing arrangement. He
could not say if the customer expected AAC to pay for LP-3,
expected to pay for it themselves, or collaboratively
finance the project.
Senator Dunleavy asked if it was the goal of AAC that the
customer underwrite the entire cost of LP-3.
Mr. Campbell stated that his goal was to privatize AAC and
no longer return to the state to request funding to expand
the business.
Senator Bishop commented that the potential contract
expansion with BlackBridge was intriguing. He referred to
state mapping with the Alaska Division of Geological and
Geophysical Surveys (DGGS) and thought there could be
synergy between it and the potential expansion project.
Mr. Campbell stated that AAC was hoping for such synergy,
and furthered that RapidEye and BlackBridge had a very good
product. He thought the state would be purchasing some of
the product. He discussed how the imaging product would
work in Alaska for private industry as well as government.
9:22:59 AM
Mr. Campbell discussed slide 11, "Dragon Tracking":
•AAC has a contract to track the Dragon capsule during
missions to the International Space Station (ISS)
•AAC has tracked the Dragon on all five of its
missions to the ISS
•Last tracking mission was last month, January 2015
Mr. Campbell added that AAC would continue tracking the
Dragon capsule, and that the corporation was using its
facilities for activities other than rocket launches from
Kodiak.
Mr. Campbell addressed slide 12, "Range Safety and
Telemetry System (RSTS)";
•The RSTS is a sophisticated telemetry tracking system
that provides range safety during the launch and
telemetry downlink capability to collect data from the
launch vehicle
•There are at least three companies in the United
States that offer range safety and/or telemetry
services worldwide
•AAC has determined that separating the RSTS out from
the KLC range and creating a separate business unit
for RSTS operations is a viable option
•Discussions are currently underway with other service
providers to develop a plan for marketing RSTS
services and providing more cost-effective range and
telemetry services at KLC for future launches
Mr. Campbell explained that the Range Safety and Telemetry
System (RSTS) was used by AAC to track launches from
Kodiak. He reminded the committee that AAC had gone three
years without a launch, and the system was unused for that
period of time. He reported no launches for 2015, which
would be another year of the system not being used. He
explained that the RSTS was made of equipment that could be
used anywhere in the world, and AAC had started to talk
with other providers of range services as to how the system
could be used elsewhere to create additional revenue. He
reported discussions with two companies as to how the
system could be utilized, and emphasized the deterioration
that was possible when systems lie dormant.
9:24:21 AM
Mr. Campbell highlighted slide 13, "International Business
Development Initiatives":
•The international launch market has expanded in the
past decade
•Numerous foreign companies now offer both rocket and
satellite services
•Eighty percent of the U.S. commercial satellite
market is launched overseas
•The only U.S. competitor for KLC polar launches is
Vandenberg AFB, a Federal military installation
•Wyoming Aerospace conducted a study for AAC which
identified significant opportunity for international
business
•AAC has initiated coordination with the State
Department for International Traffic In Arms
Regulation (ITAR) approval to conduct foreign launches
•Three markets are being pursued for commercial
launches:
•Japan -Epsilon rocket
•Italy -Vega rocket
•Israel -Shavit rocket
Mr. Campbell discussed the new initiative that AAC was
taking in the international launch market. He relayed that
the corporation had hired a consultant who had identified
that the three rockets listed on the bottom of the slide
(in Japan, Italy, and Israel) were all solid-fuel small
launches which were looking for commercial opportunities.
All three rockets were launching from their native
countries, but as they expanded in the commercial market,
may need additional range capability. He furthered that AAC
was entering discussions with the three entities about the
potential of using KLC as an overflow facility should the
commercial market expand to a level that the capacity could
not be met in their own country. He thought AAC would get
very few foreign launches, but considered that an
established relationship as an overflow facility would
create some income.
Senator Dunleavy wondered why such a large portion (80
percent) of the U.S. commercial satellite market was
launched overseas.
Mr. Campbell replied that the U.S. had raised the cost of
launch to an unacceptable level for the commercial market.
He noted that Cape Canaveral and Vandenberg Air Force Base
(both federal facilities) were utilized as primary launch
sites, predominantly using very large rockets. He furthered
that the commercial satellite industry had changed; and had
much smaller satellites for imaging, communications,
navigation, and weather. The U.S. did not have the type of
facilities for the satellites to meet the cost for making a
profit. He added that AAC was looking at the Vega rocket
(from Italy) and Epsilon rocket (from Japan), because they
were lower cost rockets. If the rockets could be attracted
to Kodiak for launch, the commercial satellite company
could get a low-cost rocket at a low-cost launch facility.
Senator Dunleavy asked if the majority of overseas launch
sites were private or government owned.
Mr. Campbell stated that the sites were all government
owned.
9:26:46 AM
Mr. Campbell discussed slide 14, "Unmanned Aircraft Systems
(UAS) Initiatives":
•For the past six years AAC has pursued acquisition of
the Global Hawk Unmanned Aircraft System (UAS) from
the U.S. Air Force for commercial use in Alaska
•Initial concept was to acquire three Global Hawks and
operate from Eielson AFB
•Primary projected customers were state and Federal
agencies
•Peak 3, an Alaskan firm, was hired in 2014 to do a
comprehensive analysis of the financial feasibility of
AAC acquiring and operating the Global Hawk
•Conclusion of the study found that the acquisition
and operating costs probably could not be recovered by
the projected customer revenue base
•Decision was made in June 2014 to cease further
pursuit of the Global Hawk
•AAC is a partner with the University of Alaska in the
FAA UAS Pan-Pacific Test Site.
•AAC has identified KLC as a test location for UAS
operations
•AAC is discussing with the University staff means for
AAC to become the commercial entity for UAS operations
beyond the research, test, and development stages.
Mr. Campbell noted that AAC had been working on unmanned
aircraft systems for a number of years. He directed
attention to the picture in the upper right corner of slide
14, depicting the large unmanned aircraft Global Hawk. The
system was very expensive to operate.
Mr. Campbell spoke to slide 15, "AAC Composite Revenue
History":
•Federal Grants=$150,646,770 (43 percent)
•Launch Revenues=$146,325,065 (41 percent)
•State Investment=$58,627,566 (16 percent)
•Total =$355,599,401
Figures reflect all revenues from 1993 through June
30, 2014
Mr. Campbell referred to comments in the media which had
alleged that AAC had never made any money. He did not
understand the allegation and stated that if depreciation
was not considered, there was a number of years in which
AAC had made money. He mentioned a problem in 2012, and
stated that AAC had operated for a dozen years with its own
cash flow and had never before come to the state with a
funding request. He stated that the slide reflected a
composite picture of revenue as of June 2014.
Mr. Campbell emphasized that he considered the $58 million
in state investment to be a lot of money, but did not think
it was fair to say that because of the investment the AAC
had not generated any money. He revealed that the
corporation had generated almost $300 million in funding.
He referred to a launch in Kodiak in August of 2014, and
pointed out that about $250 thousand was spent on rental
cars in the area. Close to $1 million had been spent on
hotel and restaurant sales in a 90-day period. He thought
AAC was capable of being a revenue generator for the state.
He qualified that the last few days had not demonstrated
the capability, but wanted to recognize AACs successes.
9:29:28 AM
Senator Dunleavy asked about AACs corresponding operations
and maintenance costs.
Mr. Campbell stated that payroll, utilities, and rent was
approximately $6 million per year.
Vice-Chair Micciche referred to the aborted launch that
took place in August 2015. He thought it was unusual that
KLC was not found to be at fault, yet the entity launching
the rocket was not responsible for any damage to the
facility. He wondered if both parties in a launch agreement
were contractually held harmless.
Mr. Campbell stated that AAC was receiving the rebuild
funding from the insurance company, and was unsure as to
whether there would be a claim against any other party. He
thought the information could be clarified by the risk
management department.
Co-Chair MacKinnon clarified that AAC would continue
forward, and the state's internal risk management would be
making a claim with the federal government and trying to
resolve issues from an insurance perspective.
Mr. Campbell understood the process was as Co-Chair
MacKinnon described.
Vice-Chair Micciche wondered about the impact and future
cost of $29 million [estimated damage repair cost] coming
out of the state insurance pool. He thought it might change
the state's risk profile.
Mr. Campbell was not sure of the impact, and thought the
question of future costs and risk management was best
answered by the Department of Administration and risk
management.
9:31:52 AM
Co-Chair MacKinnon thought that Vice-Chair Micciche had
raised a great question, and stated that the committee
would author a letter on the subject.
Vice-Chair Micciche thought perhaps the committee and AAC
might have different definitions of the phrase "generating
revenues." He wondered if launch fees were sufficient to
cover the state, considering the risk of a launch failure.
Mr. Campbell stated that AAC made a profit from the fees
charged for a launch, and the profit covered the ability to
pay for insurance and fees for each year. He qualified that
a launch was a profitable operation, but more were needed.
Senator Dunleavy asked for clarification about the $6
million in annual maintenance and operations.
Mr. Campbell affirmed that the $6 million included the cost
of payroll (for approximately 40 employees), electricity to
run the sites, the lease cost for offices, and
administrative fees paid to the state.
Mr. Campbell discussed slide 16, "State of Alaska Funding
Snapshot":
•SFY 2013 -$8.0M State Funding (Includes 100%
Sustainment Funding)
•SFY 2014 -$8.0M State Funding *Provided a launch
services contract is signed by 31 March 2013
•SFY 2015 -$6.0M -Approved State funding
•SFY 2016 -$0.0M -Governor's budget request
Mr. Campbell highlighted slide 17, "FY 14 Through FY 16
Operating Budget," pointing out the middle column of
governor's budget and request for GF and the total of GF
and other funds. He clarified that the difference of $4.2
million between the two years would be moved into AAC
receipts.
9:34:29 AM
Mr. Campbell looked at slide 18, "Federal Funding Pursuit":
•The Federal government provides nearly $1.0 Billion
in operations and sustainment funding for the Federal
ranges at Vandenberg AFB and Cape Canaveral
•The Federal government does not provide this type of
funding to non-Federal spaceports
•This year, Senators Murkowski and Begich, along with
co-sponsorship from the Virginia delegation, included
in the Defense Appropriations Bill $10.0 Million for
non-Federal spaceports that support the National Space
Policy with capability to place satellites into orbit.
KLC and MARS are the only two facilities that
currently have that capability
•Final action on the Federal FY2015 Omnibus
Appropriations Bill included $6.0 Million for non-
Federal Spaceports that launch government mission into
orbit supporting the National Security program
•AAC expects to receive up to $3.0 Million from the
Federal (Air Force) government in 2015, specifically
for operational support of potential national security
launches into polar orbit from the Kodiak Launch
Complex
Mr. Campbell relayed that AAC had been working hard with
the congressional delegation for the three previous years
to get federal funding to support the aerospace operations
of non-federal space ports. He highlighted the first bullet
on slide 18 to emphasize that non-federal space ports
launch for the federal government. He continued that AAC
had made the argument that for equity purposes, if the
federal government expected a launch facility to be
available for its use, it needed to provide some funding.
The corporation anticipated approximately $3 million in
federal funds to come to the state later in the year.
Mr. Campbell discussed slide 19, "Conclusion":
Alaska Aerospace Corporation is rapidly changing from
a state-owned corporation, wholly dependent on
government launches and state funding, to a
diversified aerospace corporation which has a mix of
commercial and government operations in a variety of
aerospace related businesses and no longer dependent
on state funding.
The new AAC leadership team can not change what
happened in the past. However, we have already made
significant changes which are showing a positive
impact on the corporation, future business potential,
and the ability to continue operating.
We are working with the Administration on a transition
plan which retains the market viability of AAC, while
minimizing requirements for state operations and
sustainment funding.
For FY2016, AAC requests no state general funds.
With Executive and Legislative support, we are
committed to making AAC a viable industry in Alaska,
independent of state funding. We request your support!
Mr. Campbell relayed that he had made a commitment to
change AAC - the corporation would not operate as it had in
the past, it would not be dependent upon state dollars, and
it would create a diversified aerospace business. He
pointed out that AAC had accomplished much of the
commitment; and highlighted diversification, reduced need
for state dollars, and steps towards privatization. He was
pleased to lead the company and mentioned his support of
the board and board chairman Pat Gamble. He asked for the
committee's support of AAC's budget request.
Senator Dunleavy asked who owned the Mid-Atlantic Regional
Space port (MARS) facility.
Mr. Campbell responded that MARS was owned by the
commonwealth of Virginia, and was co-located with the
federal NASA Wallops flight facility.
9:36:42 AM
Co-Chair MacKinnon communicated that she had been tasked
with authoring a letter requesting additional information
pertaining to the AAC insurance claim. She let the
committee know that she would distribute the letter and
wondered if there was any other information that members
wished to be conveyed.
Senator Dunleavy asked about the failed rocket launch, and
wondered if it was commonplace that facilities were damaged
during an aborted rocket lunch.
Mr. Campbell reflected that historical rocket failures had
generally happened farther from the facility than the KLC
rocket failure. He qualified that 75 days after the KLC
rocket launch failure, the Antares rocket (launching to go
to the ISS) suffered from nearly identical circumstances at
the MARS site. The rocket had traveled under 500 feet after
having engine malfunction and falling straight back upon
the launch facility. He was unable to provide statistics,
but emphasized that within 75 days the same circumstance
[rocket failures close to launch facilities] had occurred
twice.
Senator Dunleavy asked if the incident at KLC was a launch
failure in combination with a decision to destroy the
rocket.
Mr. Campbell explained that KLC had a range safety and
telemetry system which had tracked the rocket from liftoff.
He specified that there were safety boundaries observed by
a federal official known as a Mission Flight Control
Officer (MFCO), which if exceeded or approached, would
result in destruction of the rocket. The investigation had
revealed the rocket had not had a payload or rocket
problem, but rather the external blanket that peeled off
the body of the rocket had caused something to happen with
one of the thrusters, which in turn caused the rocket to
swerve off course and ultimately be destroyed by the MFCO.
9:39:24 AM
Co-Chair MacKinnon asked if Mr. Gamble had any comments
about the AAC.
PATRICK GAMBLE, PRESIDENT, UNIVERSITY OF ALASKA, AND CHAIR,
BOARD OF THE ALASKA AEROSPACE CORPORATION, commented that
the AAC board had two roles: the hiring and firing of
personnel, and determining the vision of the future of the
corporation. Without resolving the vision of the state, AAC
was not sure of its vision. He queried whether AAC was just
a business deal, or was Alaska "an aerospace state" which
was investing and committing and growing across a wide
spectrum of aerospace investments. He thought it was
important for the vision to become clearer; so that the
issues of risk, investment, and organizational construct
would resolve. He discussed models that the state could
consider, with privatization being the newest model gaining
the most attention. He emphasized that privatization was
not the only model that could be in the future, especially
depending upon what the legislature would like to see
considered. He expressed that the attitude of the board was
that there was more happening at KLC currently (with regard
to its future) than in the entire history of the site.
Mr. Gamble thought the uniqueness of Alaska's geographical
position had much to do with the increased activity. He
discussed the surge of commercial space for the industry
and the positive attributes of AAC that corresponded to the
market needs. He emphasized the corporation's ability for a
low-cost rapid turnaround launch capability that was
attractive to a number of potential customers. He suggested
that AAC, in the current market, could be viewed almost as
a start-up company; one that had a great product and had
demonstrated its ability to customers to be cheap,
reliable, and safe.
Mr. Gamble stressed that AAC had a geophysical position
that was unlike the other launch sites that were previously
mentioned, and thought AAC and KLC were very important for
polar orbits. He mentioned other sites that operated at
greater cost. He thought that if AAC signed a contract with
Lockheed Martin, it would be a huge commitment in terms of
polar launches, and would bring more business to the
corporation. He thought it was probable that clusters of
customers would form after AAC secured a major customer who
would "break trail" for smaller companies that could settle
in Alaska or partner with larger companies. He thought the
priority for AAC was to get through the next two years, at
which time there would be increased commercial success. The
board was comprised of individuals who had extensive
experience in the industry. He was confident, yet concerned
about the budget realities being considered by the
legislature.
Mr. Gamble thought the board would be discussing
privatization with Mr. Campbell. He reiterated that the
activities of the following two years would be significant
in determining the future success of the corporation. He
shared that Mr. Campbell intended to propose to the board
that AAC zero its budget immediately rather than after two
years as planned. He suggested that the idea was considered
a "preemptive surrender" by some AAC board members. He
thought it was possible, from a business perspective, to
invest while simultaneously cutting back and reducing. He
expressed confidence about having Lockheed Martin as a
customer.
Co-Chair MacKinnon clarified that the budget issue being
faced by the legislature concerned FY 15 as well as FY 16.
She clarified that AAC had been cutting $2 million from its
budget, rather than $2 thousand.
9:46:47 AM
Vice-Chair Micciche referred to the AAC budget request and
asked if there was an over-supply of launch capacity. He
wondered at what point a determination could be made that
KLC was unable to generate interest from customers in the
near future. He asked wondered what sort of information
might precipitate the decision to cease operations.
Mr. Campbell clarified that the $3 million request was
money that was previously appropriated, and AAC was merely
asking for the funds to be released. There was no new
appropriation being requested for medium lift. He furthered
that the $4.2 million requested was not state funds, but
rather an authorization request so that AAC could have the
ability to receive the money through aerospace receipts. He
summarized that AAC was asking for zero state funds for the
FY 16 budget.
Mr. Campbell addressed Vice-Chair Micciche's question about
the point to consider ceasing operations. He thought the
topic was for discussion between himself and the board, and
would result in the board concluding that he had not been
able to generate sufficient business to indicate success.
He shared that he currently had non-disclosure agreements
with a dozen different companies, including the federal
government, to discuss services through Kodiak (and Alaska)
including and beyond rocket launch services. He was
optimistic about the future of AAC as described by Mr.
Gamble, and mentioned the recent contract signed with
BlackBridge as an example. He thought it was important to
communicate that Alaska was an aerospace state; while
recognizing that the state could not contribute
financially, but without discouraging business. He
discussed the repercussions of ongoing proposals and talks
about shutting down KLC.
9:50:15 AM
Vice-Chair Micciche thought that Mr. Campbell had made an
important statement, and expressed appreciation for the
answer to his question. He wanted to clarify that the board
was focused upon moving forward, with the realization that
if AAC was not able to follow through with diversification
and other plans, it would be recognized and action would be
taken.
Senator Olson asked what the AAC vision was ten years
previously. He wondered if producing profit for the state,
providing a societal service, or advancing intellectual
knowledge were part of the original plan.
Mr. Campbell thought that the vision of AAC had changed
over time. The legislation that initially established AAC
was designed with close ties to the university, to engage
in business development marketing, and perhaps the
operation of the Poker Flat Research Range [the largest
land-based rocket research range in the world and the only
high-latitude rocket range in the United States, located in
the Interior]. He thought the vision had changed rapidly in
the late 1980s and early 1990s, as the country changed.
Mr. Campbell recounted that former U.S. Senator Ted Stevens
saw the need for missile defense and the capability of a
larger launch facility that would need to have polar
capability, and had identified Alaska as the location. The
vision had changed into an aerospace company that would
provide the lift (from KLC) for the federal government and
commercial business, as well as providing other aerospace
opportunities. Consequently, AAC had ended up focusing
primarily on KLC. In the mid-1990s, the commercial market
for satellites had collapsed in the U.S. because of the
high cost of launch, and much of the business had gone
overseas. At that time the commercialization of AAC had
suffered a setback, and it had ended up being very
dependent upon just federal government launches. He
referred to former Senator Ted Stevens' vision to provide
launch capability from Alaska for polar orbit, as well as
providing a diversified economy in aerospace in additional
locations than Kodiak. He mentioned the integration
facility that AAC was discussing with Lockheed Martin, and
thought it would provide some more business in Anchorage
and support work in Fairbanks. He discussed additional
diversification opportunities in the state, and thought
that was the intent of Senator Stevens.
9:53:48 AM
Senator Olson mentioned other launch sites, and noted that
many or most were federal facilities. He commented on the
financial prowess of the federal government, and thought
the state was disadvantaged by not having the same benefit.
He thought Alaska was present as an aerospace state, but
did not envision success in the long run due to financial
constraints.
Mr. Campbell thought that Senator Olson's premise was not
incorrect, and observed that AAC could survive on the
earnings of KLC and expect to have enough launches for
Alaska to be a profitable aerospace state. He considered
that launches were but part of the portfolio that AAC
should provide. He continued that if the federal government
was identifying KLC as a launch facility for federal space
missions, it should be partnering with the state to make
sure KLC was available and provide some funding for
operations and sustainment.
Mr. Campbell discussed diversification of AAC and suggested
that if KLC had one launch per year, federal funding,
diversified work with unmanned aircraft systems, data
downlinking, and other services, Alaska could be a very
profitable aerospace state. He remarked on the competitive
advantages of KLC, stating that the only competitive U.S.
facility was Vandenberg Air Force Base. He illustrated an
example of the Vandenberg site, in which a commercial
launch was postponed for a national security mission,
resulting in deferred revenue. Conversely, the federal
government could not usurp launches at KLC, and customers
would benefit. He reiterated that launches would not be the
mainstay of business for AAC, but were a valuable
commercial service niche for the country.
9:56:56 AM
Senator Dunleavy commented on the drastically low price of
oil and the resultant economic impact. He suggested that
the state needed to separate its hobbies from its money-
making ventures.
Mr. Campbell agreed with Senator Dunleavy, and reiterated
that AAC was requesting no state funding and asking for
flexibility for the board to make decisions in order to
move towards diversification and profitability.
Co-Chair Kelly discussed economic diversification and
suggested that opportunities for such were frequently not
well timed. He used an analogy to suggest that AAC was
important for future development.
Senator Bishop concurred with Co-Chair Kelly.
Co-Chair MacKinnon thanked Mr. Campbell and Mr. Gamble for
their presentation.
9:59:30 AM
AT EASE
10:01:47 AM
RECONVENED
^OVERVIEW: UNIVERSITY OF ALASKA FY 16 BUDGET
PATRICK GAMBLE, PRESIDENT, UNIVERSITY OF ALASKA (UA), AND
CHAIR, BOARD OF THE ALASKA AEROSPACE CORPORATION discussed
the PowerPoint, "FY16 Budget Overview" (copy on file).
Mr. Gamble discussed slide 4, "Top Level Organizational
Chart," and noted that the University was in a period of
turnover. He directed attention to position titles listed
in red; highlighting new board members and vacant
leadership positions including the University of Alaska
Southeast (UAS) chancellor, the UA vice president for
Academic Affairs and Research, the University of Alaska
Anchorage (UAA) provost, and his own position as UA
president. He discussed the importance of continuity
despite the impending change in leadership.
10:04:18 AM
Mr. Gamble looked at slide 5, "Shaping Alaska's Future":
A strong university system is essential to a healthy
and growing economy and way of life.
That strength is measured by:
• The number and quality of our graduates at
every level
• Our results in meeting the workforce and
research needs of Alaska
• Our partnership with others in tackling the
state's challenges and opportunities
Mr. Gamble referred to a set of guiding principles which
would allow for continuity, contained a document entitled
"Shaping Alaska's Future" (copy not on file) as well as
listed on slide 5. He clarified that the slide was an
overview of ongoing themes, and it was expected that the
themes would be used as a guide through the transition
period.
10:04:37 AM
Mr. Gamble discussed slide 6, "FY 16 - FY 18 Budget
Strategy":
Focused on a core, continuing to deliver best ever
results, building a reputation for excellence.
• Student experience, retention, and success
• Data-driven decision making, program and
training prioritization, meeting Alaska's
business requirements
• Research and partnerships to enhance Alaska's
communities and economic growth
Mr. Gamble stated that normally the University briefed the
finance committees on incremental budgets, but currently
there were no budget increments to discuss. He stated that
the capital budget was greatly reduced from the governor's
proposed budget.
Mr. Gamble wanted to discuss how the University would be
getting through the following three years. He strongly
emphasized that the University was in the workforce
development business, and it was an important component of
the overall budget strategy.
Mr. Gamble highlighted the importance of research to the
university system and the state. He pointed out that
research funding not only came from the federal government,
but also came from the state.
Mr. Gamble addressed slide 7, "'The Core' and the FY16
Budget":
Our core programs, those where demand is high and the
university demonstrates strength, are essential to
continue meeting state and student needs.
• Workforce Development
• Research and Development
• Cultural Scholarship and Preservation
• Community and Industry Partnerships
Mr. Gamble pondered that the University was the keeper of a
large portion of the cultural preservation of the state,
and did not foresee a change in that arena due to budget
cuts. He mentioned diversification, and companies that
might want to hire Alaskans. He used an example from the
previous presentation by the Alaska Aerospace Corporation
as to how a partnership with the University could work.
10:08:49 AM
Mr. Gamble looked at slide 8, "Recognize and Maintain
Results":
Graduation rate nearly 12 percent higher than FY10
Degrees and certificates awarded in FY14 at an all-
time high - up 31 percent from FY10
• Engineering degrees up 25 percent from FY10
• Degrees in high-demand job areas up 22 percent
• Teacher education degrees up 27 percent since
FY10
Received more than $650 million in competitive
research grants since FY10 - $118 M in FY14 alone
Mr. Gamble thought that budget language did not always
reflect the relationships between line items that might
have unintended consequences if cut. He discussed the
connections between programs that grew as a budget
decreased. He mentioned increased graduation rates,
academic advising, and other methods that would connect
output to priorities. He added that the University had a
list of priorities that went beyond what was shown on the
slide.
Mr. Gamble discussed slide 9, "Preserve and Enhance
Reputation":
• UA percentage of total degrees that are STEM, 6th in
the U.S for public institutions.
• UAA 2015 list of the best online programs for
master's degrees in education.
• UAA ranked by US News and World Report in the top 5
percent out of 1421 institutions in the Western
Region.
• UAA Experimental Economics ranked 10th in the
nation.
• UAS 2015 list Best Online Teaching Degrees.
• UAF Homeland Security and Emergency Management
(HSEM) program, ranked as 2nd in the US for
affordability of program and 5th in the US for quality
of program.
• UAF research publications and citations on Arctic
research top not only the nation, but are also number
one in the world
Mr. Gamble discussed the reputation of the University and
its role in success. He thought reputation was an important
factor in hiring good faculty and garnering funding for
research. He discussed the University's positive
reputation.
10:11:43 AM
Vice-Chair Micciche noticed a growing proportion of Alaska-
educated engineers and technicians. He thought the product
was impressive. He asked if the state had investigated the
university system as a profit center and an international
service provider, and as a means to off-set in-state costs.
Mr. Gamble thought there was great potential, as yet
unlocked, for the University to be an international service
provider. He thought that UAA and UAF had set up a
commercialization and intellectual property organization
that would allow the University to take a share of profits
that would come from the research and development. He used
the example of an algorithm developed by a faculty member
that could be sold for profit. He thought the number of
submissions for patents that had been submitted by the two
schools was impressive, and recounted that each had
received money for a share in the product.
Mr. Gamble recounted that the University had started
programs in the past without knowledge of the potential
return on investment. He elaborated that future
considerations for new programs would always include an
evaluation of whether a program would add value and whether
it would break even, since it was no longer possible to
subsidize programs with GF.
10:15:17 AM
Mr. Gamble addressed slide 10, "How to Strengthen the
Core?"
Address the higher education paradigm shift:
• keep building value and showing accountability
• balance tuition and fees
• compete, stay relevant, embrace institutional
academic excellence, and student service
Establish partnerships:
• State of Alaska, federal government, commercial
businesses
• K-12 schools; other universities
• private industry
Build an institutional reputation for excellence:
• college and workforce ready students, excellent
faculty, and robust research dollars
• earn a well-deserved seat at the academic table
with peers
Mr. Gamble qualified that the slide addressed the
University's "niche." He thought that Alaska's geography
contributed greatly to the University's strength. He wanted
the University to maintain its excellence without
disassembling during the fiscal crisis.
President Gamble displayed slide 11, "'Niches' = Aim
Points":
• Research for Alaska's needs
• Fisheries, Seafood and Maritime Initiative (FSMI)
• Alaska's largest workforce
• Arctic Policy
• An Aerospace State
• Health Sciences
• Geo Sciences
• Land grant initiative
Mr. Gamble pointed out that the University was formally
introducing the land grant initiative to the legislature in
the current legislative session.
10:17:07 AM
Senator Hoffman referred to slide 10, and felt that the
tuition and fees had attracted attention over the recent
years. He asked about strengthening the core of the
University, and asked Mr. Gamble to expand on the bullet
point "balance tuition and fees." He wondered what the
concept meant to the average student that was attending the
University.
Mr. Gamble commented that the University could not solve
its financial problems by raising tuition. He discussed the
tuition increase from the previous year, which was the
smallest increase in over 10 years. He reported that the
University was looking at a small increase in the current
year, but it was not expected that increasing budget
shortfalls would be solved on the backs of the students. He
thought that students needed to have a stake in the period
of financial hardship as well. He thought a 5 percent
tuition increase was not as low as some other states, and
compared it to other tuition change scenarios, both higher
and lower.
Co-Chair MacKinnon queried where Alaska's tuition ranked
against the other states.
President Gamble discussed the group of states included in
the Western Interstate Commission for Higher Education
(WICHE) and the regional differences in other states. He
estimated that the University was 75 percent lower than the
average of its peer universities in the WICHE group. He
estimated that the University was perhaps slightly below
average in terms of total fees.
Co-Chair MacKinnon considered that Mr. Gamble had used two
different sets of criteria in his answer. She wondered how
University tuition compared to all other states.
Mr. Gamble estimated that the University's tuition was
perhaps fourth from the lowest in the U.S. He stated that
Alaska had gone up somewhat in the ranking, but now certain
states such as North Dakota were subsidizing more.
10:21:24 AM
Co-Chair MacKinnon wondered if the presentation reflected
President Obama's proposal to provide free community
college education. She wondered if the proposal would drive
up costs for students, and if the federal government would
be carrying student loans for the program.
Mr. Gamble replied that there were no current details
pertaining to that impact. He furthered that the UA tuition
was charged at the same rate for the two-year and four-year
colleges. He thought it would be a wonderful goal to cut
the cost of Alaska's two-year programs in half, and thought
it would attract a lot more students.
Co-Chair MacKinnon expressed concern that if there was
federal funding for higher education and a corresponding
belief that the education would be free, would it end up
causing a raise in the cost.
President Gamble agreed that there would a be price tag
associated with that proposal. He hoped that the proposal
would lead to a higher graduation rate.
10:24:26 AM
Mr. Gamble addressed slide 12, "The Model: Eliminate Cost +
Generate Revenue":
• Prioritize and reallocate resources
• Space utilization: reduce leased space, consolidate
• Long-term facility management plan… Sightlines,
university building fund, land grant initiative
• Control energy use
• System-level collaborations … IT
• Commercialization
• Investment opportunities…unmanned aerial systems,
alternative energy, arctic research, climate research,
fisheries, oceans, space physics, and public-private
• Enroll and retain more students
Mr. Gamble commented that there was currently a sense of
urgency with regard to driving down costs and generating
revenue, and thought that it tended to drive things more so
than advanced thinking. He highlighted collaboration
between the three universities in the UA system, and
emphasized the leadership group made of the chancellors and
provosts of each unit. He recounted that the University had
been able to move forward on a number of initiatives that
had never gained traction in the years past. He discussed
the necessity of the University paying for its own
utilities, which would be a significant additional cost.
Mr. Gamble mentioned that a number of companies that had
wanted to partner with the University and commercialize. He
highlighted that the University was internationally
renowned for the number of published and cited articles
pertaining to the Arctic. He reiterated his point about
dismantling positive achievements of the University as an
unintended consequence of budget savings. He added that it
was important to preserve the goal of enrolling and
retaining more students.
Senator Bishop thought the University was doing a great
job, and discussed programs that were full and
collaborating on the use of resources.
Mr. Gamble highlighted slide 13, "Challenges":
• "Readiness"
• "The Core"
• Communicating a positive message of quality and
excellence while rightsizing staff, faculty, programs
and departments
• Aging infrastructure
• Meeting the terms, expectations of public and
private partners
• Preserving an essential ability to invest
Mr. Gamble asserted that Alaska did not have a standard for
readiness for higher education. He thought most other
states had a definition of readiness, and reported that the
University was working with the state to identify the
meaning of college or workforce readiness.
10:28:13 AM
Mr. Gamble thought that some Alaskan high school graduates
were not ready at a level to enter a union apprenticeship
program after high school. He considered the issue was
important in order to reach goals of the University in
fisheries, mining, and skill sets for the North Slope. He
thought alignment with K-12 education would be an advantage
for students of all kinds.
Mr. Gamble thought that the University needed to maintain a
positive message. He discussed downsizing facilities and
the importance of receiving community feedback. He
commented that although there was aging infrastructure,
deferred maintenance was still a top priority. He pointed
out that the University utilized deferred maintenance funds
as soon as they were received.
Mr. Gamble continued to discuss slide 13, and alleged that
from a business point of view, the most difficult task was
to identify future opportunities for investment.
Senator Hoffman looked at the last three points of slide
13. He referred to programs in health and science which
provided essential services for public and private
partnerships. He asked about the future of the Alaska
Native Science and Engineering Program (ANSEP), WICHE, and
the WWAMI program [a cooperative program of the University
Of Washington School of Medicine and the states of
Washington, Wyoming, Alaska, Montana, and Idaho] in the
context of the last three points on the slide.
Mr. Gamble opined that ANSEP, WICHE, and WWAMI were core
programs, and were essential to the reputation of the
university system.
Co-Chair MacKinnon asked if Mr. Gamble was anticipating an
increase or decrease in the operating budget for the
University.
10:33:21 AM
President Gamble addressed slide 14, "UA view of the FY16
Operating Budget; Short-term Challenges and Long-term
Implications." He qualified that the information on the
slide was assembled by the University rather than by the
Legislative Finance Division (LFD). He continued that LFD
documents looked at appropriations through a particular
lens, and the University viewed it differently. He
identified a decrement of $43 million from the governor's
proposed budget, and stated that the amount was the target
for cuts throughout the three universities in the UA
system. He identified the shortfall as the near-term
problem, and specified that the long-term problem was the
declining GF baseline. He estimated that the University
would continue to get reductions.
Co-Chair MacKinnon thought that the slide was confusing to
the general public since every other department presented a
baseline budget from the appropriation number provided by
the department. She wanted to see what the University had
received the previous year; and how the current budget
request would be an increase, decrease, or flat-funded. She
acknowledged Chancellor John Pugh and Chancellor Brian
Rogers were in attendance.
10:36:11 AM
Co-Chair MacKinnon remarked on the position vacancies that
had been discussed earlier in the presentation. The
committee was interested in whether recurring costs were
being removed from the budget, or if they were positions
being held in the budget from past appropriations.
Co-Chair MacKinnon asked if Mr. Gamble wanted to comment on
the recent closure of the child care facility at UAA. She
had heard about the recent closure in the media.
Mr. Gamble directed attention to the 4.6 percent reduction
in GF in FY 15, and recounted that the University had to
cover a $28.4 million budget shortfall, which had increased
to $42.9 million the following fiscal year. He explained
that the cuts were necessary to account for the budget
shortfall. He reiterated that the University focused on the
amount of decrement to work with rather than the funding
amount in any given budget cycle.
Mr. Gamble discussed the employee authorizations at the
University, stating that of 4,900 authorizations, there
were approximately 4,500 total employees. He continued that
the number of staff was decreasing, the number of faculty
was being reduced, and some programs had begun to close.
Mr. Gamble addressed the child care center closure,
indicating that he wanted the matter to be dealt with
entirely as a campus issue. He thought the issues were
clear, and discussed the lack of accreditation of the
academic program associated with the center. He thought
there was more to the issue than was immediately apparent.
Co-Chair MacKinnon expressed appreciation for Mr. Gamble's
presence at the meeting.
ADJOURNMENT
10:40:30 AM
The meeting was adjourned at 10:40 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 021115 UofA FY16 Budget Overview.pdf |
SFIN 2/11/2015 9:00:00 AM |
Budget |
| AK_Aerospace_Complex-OMB.pdf |
SFIN 2/11/2015 9:00:00 AM |
Administrative Order 271 |
| Alaska Aerospace Corporation 2 11 15 Presentation (2).pdf |
SFIN 2/11/2015 9:00:00 AM |
Administrative Order 271 |