CHAMPAIGN — Parkland College trustees have approved a three-year operations agreement with a Champaign company to manage its new pilot-training program, set to start next August.
Under the contract with defense contractor Riverside Research, Parkland will supervise the program and maintain full academic control, while Riverside oversees operations such as plane maintenance, flight scheduling and dispatch, and compliance with Federal Aviation Administration regulations, officials said.
Parkland will reimburse Riverside for expenses and pay the firm a 2 percent fee for fuel and other operating costs and an 8 percent fee for personnel costs — for a total fee of almost $75,000 the first year and more in succeeding years, if enrollment projections hold.
Officials hope to enroll 90 students in the program next fall and increase that figure by 30 students a year.
Parkland's board approved the agreement Tuesday on a 6-0 vote, subject to final negotiations with Riverside. The company, which is based in New York and opened a Champaign office in 2009, is comfortable with most provisions but is still reviewing language on indemnity, said Parkland board attorney Tracy Nugent.
Last month the Parkland board approved an agreement with the University of Illinois to assume academic and oversight responsibilities for the UI's Institute of Aviation. The college had been exploring the possibility ever since the UI indicated it would close the institute in August 2014.
Parkland will lease the institute's facilities, which include classrooms and offices, at Willard Airport in Savoy for $1 a year for three years. The college also will have use of the institute's aircraft, possibly taking over ownership of the fleet in the future. The two schools are still working out an agreement for use of the planes and facilities, said Chris Randalls, Parkland's chief financial officer.
The UI and Parkland will develop a "pathway program" for students interested in transferring to the university to obtain aviation-related four-year degrees. Parkland will also offer private and commercial pilot-training certificates.
Under the agreement approved Tuesday, Riverside will hire up to eight full-time and two part-time employees, including an operations manager now working at the UI and three full-time flight instructors, officials said.
But Parkland will hire more part-time flight instructors and handle the bulk of the aviation instruction, Randalls said.
The college will develop the curriculum, supervise grading and hire a "chief pilot," essentially a department chair for the program, who will oversee flight instructors hired by both Riverside and Parkland, said Kris Young, vice president for academic services.
"It's our curriculum, it's our degree," Young said.
Parkland is leery of taking on too many full-time instructors until the program gets established, to mitigate financial risk, Young said.
Randalls said Parkland is insulated from risk for the first three years because of payments from the university. The UI has already transferred $250,000 to Parkland, which is being used to market the program to potential students. The money comes from a pot of about $3 million the UI uses to support aircraft maintenance and other costs associated with the aviation program.
The UI has agreed to upgrade the aircraft fleet of 30 planes and transfer half of the remaining funds to Parkland by next August. Any amount remaining after August 2015 will also be transferred to Parkland.
If the program is successful, Parkland can assume full financial responsibility at that point, Randalls said. If it isn't, "we haven't lost anything," he said.
The contract with Riverside shows expenses of about $1.62 million and revenue of $1.77 million in 2014-15, for a surplus of $159,205. That money will be put toward an ongoing maintenance fund, he said.
"There are no guarantees," Randalls said. "The big risk is that we have trouble recruiting students and we just can't make it sustainable. It's an expensive program. We need enrollment to make it viable."
For the first year, Young expects most students will be UI students currently taking aviation classes or community residents "who just always wanted to learn how to fly" but couldn't easily take a pilot-training course at the university.
In future years the college hopes to draw more students from outside the area who want to be commercial pilots, using the "cache" of its partnership with the UI as a recruiting tool.
The UI currently has 91 students in flight-training courses — five aviation majors and the rest undergraduates in other colleges who want to learn how to fly, said Tom Emanuel, interim director of the Institute of Aviation. He believes many will continue with Parkland's program. The institute at one time had 220 students, he said.
Course fees haven't been approved yet, but Parkland officials said they will be comparable with those now charged by the UI, roughly $4,400 to $7,000 per course above base tuition. A student at Parkland who takes a full load of aviation courses and completes the program in two years would pay an estimated $19,729 in course fees annually, plus $109 per credit hour in tutition, officials said.
Trustee Bonnie Kelley noted that the profile of the aviation students will be different from other Parkland students, because of the high cost, and worried that aviation might drain money from other programs. Randalls said aviation is designed to be self-sustaining.
Board Chairman Tom Bennett asked how Parkland can make the program work if the UI couldn't. Administrators said Parkland's costs per student are lower, the college is more flexible, and aviation is a better "mission fit" for Parkland.
Board member Lin Warfel noted a growing pilot shortage, which could improve job prospects for beginning pilots.
"Parkland's all about jobs," Warfel said.