KU Endowment pays to purchase planes

Company that sold a jet ‘time-share’ to KU is owned by endowment committee member

photo by: Contributed photo

Kansas University's new Cessna Citation CJ4 business jet. The plane was delivered to KU Dec. 23, 2014, and replaces the university's Cessna Citation Bravo, which KU had been using 17 years.

Taxpayers fund the operation of Kansas University’s aircraft, but the planes themselves have been purchased with private donations from the Kansas University Endowment Association, the independent, non-profit fundraising organization for KU.

In December 2014, for example, KU bought a Cessna Citation CJ4 business jet with $8.1 million from the association. The jet replaced a Cessna Citation Bravo purchased in 1997 for $4 million. The CJ4 jet is hangared at the Lawrence Municipal Airport.

In 2013, KU used a $290,000 gift from the endowment association to buy a 25 percent share in a Phenom 100 jet from Executive AirShare, a Kansas City-based company co-owned by Bob Taylor, an endowment trustee and executive committee member. The shared ownership is often called “fractional ownership.”

KU purchased shares in planes from Executive AirShare twice without seeking bids. Officials say they were not required to seek them.

The Phenom 100 replaced a 50-percent share KU owned in a cheaper turbo-propelled King Air plane, also owned by Taylor’s company.

Executive AirShare hangars the Phenom 100 for KU at the Charles B. Wheeler Downtown Airport in Kansas City, Mo.

The share of the Phenom 100 entitles KU officials to fly on other aircraft owned by Executive AirShare. According to the company website: “As an Executive AirShare fractional jet owner, you receive more than just access to a private aircraft for a set amount of time each year. You get select access to the entire fleet of planes. It’s like having your own private fleet of elite, luxury aircraft at your disposal.”

KU officials and medical staff made 491 flights and spent $3.1 million on flights on the KU owned jets and made 620 flights and spend $1.7 million on flights on the Executive AirShare planes between July 1, 2009 and Sept. 30, 2014, according to records provided by KU. They made another 123 flights on state owned planes at a cost of $171,321.

Another owner of the of the Phenom 100 is IMA Financial Group, whose president is Kurt D. Watson. Watson, like Taylor, is a member of KU endowment’s executive committee.

KU first purchased a share in a plane owned by Taylor’s Executive AirShare in 2007.

That year, one of the university’s two planes was aging, and university officials told the endowment association they needed donor money to buy a new plane, KU Endowment President Dale Seuferling said.

After exploring the purchase of a new plane, officials decided against requesting bids or issuing a request for proposals to buy one. Instead the university and endowment association officials agreed the university should purchase a share in a plane from Executive AirShare, Seuferling said.

Taylor, founder of the company, made a formal presentation to his fellow trustees at an endowment executive committee meeting to persuade them to give money to KU to buy a 50-percent share in a King Air turbo-propeller five-seat plane, he said. At the time, Taylor was not a member of the executive committee and therefore was not among those who would make the decision, Taylor said.

The contract that KU signed requires KU to pay Executive AirShare for fuel, use of its pilots and KU’s share of maintenance, insurance and storage.

Those costs are reflected in a per-flying-hour charge. Depending on the size of a plane and whether it is a turbo-prop or jet, the cost per flying hour ranges from $1,000 to about $2,800.

Seuferling said one of the reasons the university did not seek bids in the search for a new plane was the university decided against using a charter service. With an owned plane, Seuferling said: “You control the safety standards, and you can set the safety standards much higher than if you chartered.”

KU student-athletes use charter airlines for games, and records provided by KU show that KU officials took 43 charter flights over the five year period reviewed.

KU officials also believe Executive AirShare is a unique company that offers a service that no one else does in the area, Seuferling said. That allows the university to opt out of issuing an RFP or seeking bids.

However, Executive AirShare is not the only fractional ownership aviation company in the area. NetJets, a subsidiary of Berkshire Hathaway, which rents and sells fractional ownerships in planes and flies to 11,500 airports worldwide, has operated out of Hetrick Air Services at the Lawrence airport for at least a decade and also from the Kansas City downtown airport and the Wichita airport, a company spokeswoman said.

“If we have customers who want to fly in and out of Lawrence or Wichita, or anywhere else in Kansas … we will take them where they need to go,” NetJets spokeswoman Chris Herbert said.

Seuferling said that even though no bids were issued, KU officials calculated that using NetJet services would be more costly, and KU agreed to purchase a share in Executive AirShare’s turbo-prop plane.

Five years later in 2012, the university decided to reorganize its aviation services, according to university records and budgets.

The university had four employees, three pilots and one flight coordinator, handling the KU jet. One of the pilots left, and to replace him the university hired Jeff Long, who had been working for Taylor and Executive AirShare in Kansas City.

Long, a retired Air Force major, is in charge of the university’s two KU jet pilots and the flight scheduler. He makes $127,600. His wife, Allison Long, is accounting operations manager for the endowment association.

When Long became director, the university already was in talks with Executive AirShare about buying a share in a new jet, Long said in an interview.

With Long’s support the university decided to purchase a share in a Phenom 100 and sent a request to the endowment association for the money. The Phenom 100 jet has one fewer seat than the turbo plane but costs about $300 more an hour to fly, according to KU responses to questions from the Journal-World. The endowment agreed it was a good deal and gave the university $290,000 for a share of the new jet.

This time Taylor, who now was on the endowment’s executive committee, said he did not try to persuade the university to buy a share in the jet.

Long said it was important that KU stay with Executive AirShare rather than go with another company because they are “a known quantity” and are safer than say charter companies

“They are a partner,” said Long, a former KU athlete and current president of the K Club, whose mission is to preserve the traditions of KU athletics. “We know how they operate and how they maintain their aircraft.”

Correction: Dale Seuferling was quoted incorrectly in the original version as saying charter planes are not safe and their pilots are not well trained.
Seuferling said in an interview with regard to buying a plane or using charters that it was preferable to buy because: “You control the safety standards, and you can set the safety standards much higher than if you chartered.”

Four-part coverage of KU plane ownership and usage