Challenger Center falls short on funds

Posted: Thursday, April 03, 2003

The Challenger Learning Center of Alaska in Kenai could be running short of operating funds in a matter of a few months as grant monies on which it depends so heavily dry up, Kenai Mayor John Williams told the Kenai Peninsula Borough Assembly on Tuesday.

The center's board of directors is looking anywhere it can, including the borough, for new sources of funding, Williams said.

"There is a pending cash-flow problem out on the horizon," he said, speaking as a private citizen and member of the board.

He told the assembly that future federal grants "are always a question," and that private industry grants are running out and may not be renewed owing to the stumbling economy. The same impediment attends private individual donations.

Williams said the board has asked U.S. Sen. Ted Stevens' office to include a continuing operational grant in the 2004-05 federal budget, but there is no guarantee such a grant would be forthcoming. Stevens has just one year left on his term as chair of the powerful Senate Appropriations Committee, Williams said.

"Sen. Stevens has said time and time again with all of these programs that we need to look for ways to fund them and support them at home rather than from the federal government, and he's very candid about that," Williams said.

He said he wanted to make the public aware of financial problems facing the center in the hope it would launch discussions among assembly members and the general public that might lead to a solution.

An idea under discussion by the center's board is creation of a boroughwide service area that could levy a property tax to help meet operational expenses, he said. A tenth-mill property tax would raise about $400,000 a year and cost the owner of a $150,000 home $15 a year, according to Jeff Sinz, borough finance director.

Williams also said a quid-pro-quo for borough residents would be that students in the Kenai Peninsula Borough School District would be able to attend center programs and use the facilities free of charge.

The board believes technical difficulties with a service area might be overcome, but he said he has yet to discuss the idea with the borough's legal counsel, Colette Thompson, who is on vacation.

The center itself and its programs are owned by Alaska Challenger Center for Space Science Technology Inc., a nonprofit corporation. The center rents the land on which it sits from the city of Kenai for $1 a year.

The center's fiscal year 2003 budget, which runs July 1, 2002, to June 30, 2003, concurrent with the borough's annual budget, is expected to see total income of $729,300 and expenses of $694,371 for a $34,929 surplus. Of that, $25,000 is set aside for a capital budget and reserve for repairs.

However, of the $729,300 income, some $488,000 comes from grants that are drying up or are expected to, largely due to the poor economy, Williams said. The economy may well challenge the future of cash donations and in-kind contributions that account for another $71,000 in the current budget, according to information Williams provided to the assembly.

The Challenger Center, one of 51 such facilities around the country, was ballyhooed as a boon to education and the local economy. In all, $9.5 million has been invested so far, 82 percent from federal appropriations, Williams said.

Since the doors opened in April 2000, some 17,169 students from 151 schools in 25 different state school districts have participated in center programs, "flying" nearly 500 simulated space missions, Williams said.

He said 393 teachers have trained in the center's curriculum, 722 students in 40 different classrooms have benefited from the center's distance-learning capability, and 3,835 students have attended center camps and workshops.

Educators from the center have visited 19 schools and 2,250 students statewide as part of the center's outreach program, and the center has conducted summer camps in Fairbanks, Juneau, Palmer, Anchorage and Kenai, he said.

Asked how other centers around the nation are funded, Williams said funding takes many forms.

"Some are owned by school districts, some are owned and operated by private foundations, some are owned and operated by universities and major corporations," he said.

Williams noted that the board had discussed proposing an ordinance that would have tapped borough education funds, but discovered that a provision of the Alaska Constitution prohibits funding a private entity with public funds. Whether that prohibition also would prevent creation of a service area is not yet clear.

"On the surface, for all intents and purposes, it is a public entity," Williams said. "What makes it not a public entity is the fact that it is being operated by a private nonprofit corporation."

The Challenger Learning Center building was constructed with public money and is fully paid for. It sits on public land acquired through a trade with the state, serves a public purpose in educating children and even is attached to the fiber optic system that links peninsula schools. All that makes the center a "public entity," despite its actual legal status, Williams said.

"It does, in fact, represent a very public operation," he said.

Construction of a dormitory facility is under way to provide beds for students who often bed down in sleeping bags on the center's floor, Williams said. The addition will include a kitchen, additional classroom facilities, Internet services and a distance-learning studio, he said. When completed later this year, it, too, will be debt free.

Assembly member Chris Moss of Homer asked where the operational plan went wrong and why the center is now facing a shortfall in operational funds.

"I think to say it went wrong is a misnomer. A lot of it lies with the condition of the economy. Many of our major supporters are no longer funding and helping to support the center. We have operated on some major grants that are no longer available to us.

"For example, we secured a $285,000 Indian education grant that is no longer available. We were given a million dollars through NASA to operate; the last of that grant is running out. Whether or not we will be able to obtain another one, I'm not sure.

"British Petroleum gave us $250,000 to help run the center," he said. "British Petroleum is no longer making those kinds of grants in the state."

Williams said the center also received around $60,000 from ConocoPhillips that it used to fund its "School Bus To Space" program.

"We are not at all sure that those kinds of grants can be made available. Again, conditions of the economy are severely limiting our major contributors from making those kinds of contributions anymore," he said.

Asked by assembly member Paul Fischer of Kasilof whether the center might consider doubling its fees to school districts beyond the Kenai Peninsula, Williams said school districts around the state are tightening their belts because of state funding cuts and were unlikely to send students to the center if the costs rose too high.

Williams went on to say the center is key to a developing educational opportunity, what he called the "golden triangle" of facilities that could draw students and others to the borough. He said he saw the Challenger Learning Center as a hub linking the Seward SeaLife Center and the future Alaska Islands and Ocean Center being built by the U.S. Fish and Wildlife Service in Homer.

"What we envision is a triangle of educational opportunities ... that would use the Challenger Center as the focal point," he said.

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