A Close Look at Spaceport America’s FY 2017 Budget Request
WhiteKnightTwo visited Spaceport America for the first time in three years on Wednesday. Below, you can see a full-scale model of SpaceShipTwo on the ramp. (Credit: Virgin Galactic)
Attention New Mexicans!
Have you been wondering exactly what Spaceport America costs to operate? Curious about what officials spend money on? Anxious to know what this is going to cost you in the fiscal year ahead? Dying to learn how much anchor tenant Virgin Galactic is contributing to the budget?
Well, look no further. Parabolic Arc has the spaceport’s budget request for FY 2017, which begins on July 1. There’s a full description of spending and projected revenues right after the break.
SPACEPORT AMERICA
Proposed FY 2017 Budget
| CATEGORY | AMOUNT | ||
| Personnel (20) |
$1,739,700 | ||
| Exempt Positions (3) | $267,700 | ||
| Executive Director | |||
| Chief Financial Officer | |||
| General Counsel | |||
| Permanent Positions (6) | $391,800 | ||
| Aerospace Operations (2) | |||
| Marketing & Sales (1) | |||
| Maintenance & Ground Operations (1) | |||
| Administrative Operations (2) | |||
| Term Positions (11) | $662,900 | ||
| Aerospace Operations (2) | |||
| Maintenance & Ground Operations (4) | |||
| Marketing & Sales (3) | |||
| IT Operations (2) | |||
| Contractual | $2,362,100 | ||
| Protective Services | $1,800,000 | ||
| 24/7 Fire Protection | |||
| 24/7 Armed Security Protection | |||
| 24/7 Emergency Medical | |||
| Other Contracts | $562,100 | ||
| Audit | |||
| Environmental (NEPA Compliance) | |||
| Legal | |||
| Other Expenses | $2,297,100 | ||
| Facilities Maintenance | $668,000 | ||
| Rent: Land/Office Space/Ranchers | $375,900 | ||
| Utilities — Electricity | $275,000 | ||
| DoIT Communications | $210,300 | ||
| Property Insurance | $ 179,500 | ||
| Supplies | $94,000 | ||
| Equipment | $67,000 | ||
| State Vehicles | $60,400 | ||
| Employee Travel Out of State | $60,000 | ||
| Employee Training | $56,200 | ||
| Building/Structures | $50,000 | ||
| Equipment Rentals | $48,200 | ||
| Advertising | $45,500 | ||
| Miscellaneous (postage, subscriptions, etc.) | $39,200 | ||
| Printing/Photos | $25,800 | ||
| IT Equipment/Maintenance | $25,400 | ||
| Employee travel in state | $ 11,400 | ||
| Board Travel | $5,100 | ||
| TOTAL: | $6,398,900 | ||
So, there are a few takeaways here:
- Sixty-five percent of the $6.4 million budget — $4.16 million — is spent just staffing the spaceport. That figure includes nearly $2.4 million for 20 staff positions plus another $1.8 million for full-time fire, EMT and security serious at the remote site.
- The full-time onsite fire and EMS services are required because the nearest services are an hour away in Truth or Consequences and are all volunteer.
- The authority is budgeting $668,000 for facilities maintenance alone for a spaceport that is not being utilized for its primary purpose — spaceflight — by its anchor tenant. That amount is in addition to the cost of five staff positions devoted to maintenance & operations.
- Virgin Galactic and SpaceX are tenants of the facility, with other customers using it for periodic suborbital launches, commercial and film shoots, and other purposes. The spaceport authority is making an active effort to increase the number of tenants and users.
OK, now that we have looked at expenditures, let’s examine the spaceport authority’s revenue projections for the coming fiscal year.
SPACEPORT AMERICA
Projected FY 2017 Revenues
| SOURCE |
AMOUNT |
| Virgin Galactic Facilities Lease & Ground Rent | $1,030,000 |
| Virgin Galactic User Fees | $600,000 |
| Excess Pledged Revenue | $585,000 |
| Utilities | $167,000 |
| Special Events* | $750,000 |
| Other Aerospace Customers* | $680,000 |
| Tourism / Merchandising* | $150,000 |
| Sponsorships * | $174,000 |
| Subtotal: | $4,136,000 |
| New Mexico General Fund Plus Special Appropriation | $2,262,000 |
| Total: | $6,398,000 |
*NOTE: NMSA revenue is based on aggressive marketing and fully functioning spaceport
The revenue estimates appear rather optimistic. How? Let us count the ways:
- The $600,000 in Virgin Galactic user fees will only appear if the company actually uses Spaceport America for spaceflights between July 1, 2016 and June 30, 2017. If the testing of the second SpaceShipTwo takes the entire fiscal year, and Virgin continues to conduct those tests in Mojave, Calif., the spaceport authority will have a significant hole in its budget.
- Virgin Galactic is set to roll out SpaceShipTwo No. 2 on Feb. 19. The company is not talking about its flight test schedule, so it remains unclear when it will move operations down to New Mexico and begin revenue flights.
- Much depends upon all those little asterisks (*) . A total of $1.75 million, to be precise. That’s 42.4 percent of the expected revenue subtotal of nearly $4.14 million. Without “aggressive marketing and a fully functioning spaceport,” that number could shrink. On the other hand, spaceport officials could always bring in more money than expected.
Revenues account for 64.4 percent of the total projected budget. Spaceport officials are seeking an additional $2.26 million from the state government to help fund operations. That figure includes $462,500 in general funds and a $1.8 million special appropriation.
The figure is higher than the $456,000 in state funding the authority has sought in previous years. Officials say the additional funds are required because tax bonds used to fund operations are expiring, the savings account has been depleted, and anchor tenant Virgin Galactic is not yet flying.
Officials are describing FY 2017 as a bridge year. They expect state funding to diminish in 2018 as Virgin Galactic begins to fly and its annual lease payment triples from $1 million to $3 million. The authority also expects that its increased marketing efforts will start paying off with more revenues from tenants and users.
If Virgin Galactic user fees and other revenues fail to meet projections for FY 2027, the spaceport authority would be required to seek additional funding from a state government whose own revenues are being hit hard by the sharp decline in oil prices. There is already a lot of frustration and impatience in Sante Fe over delays with the $225 million taxpayer-funded projects.
UPDATE: I should have mentioned that the $585,000 in excess revenues is coming from taxpayers in Dona Ana and Sierra counties. Voters agreed to increase county use taxes to support construction of the spaceport. The excess revenues are what is left over after paying off bonds that were sold to finance construction.
This amount brings total taxpayer support just for operations to just under $2.85 million for FY 2017.
State Sen. Lee Cotter (R-Las Cruces) wants to end this practice of local residents subsidizing operations. He said this was never the intent of the original tax.
22 responses to “A Close Look at Spaceport America’s FY 2017 Budget Request”
Leave a Reply
You must be logged in to post a comment.
It is time for Sir Richard Branson to invest some of his money for
Spaceport America. New Mexico should form a partnership with Virgin
Galactic to get additional funds. Taxpayers in Southern New Mexico are
tired of shouldering the burden of this non-productive facility – a
real money pit. Enough is enough!
They have a contract, and as long as Virgin is paying its lease and rent fees, there’s really nothing else they are obligated to do. I’m sure New Mexico would like them to start flying as soon as possible, but such pressure could end up backfiring. A rushed flight test program would likely raise the prospects of a fatal accident in New Mexico with passengers. And that would bad in the long run.
Can or will Blue ever fly from Spaceport America? It’s sounds like building an airport when you have only one carrier and no planes yet.
I don’t know. I suppose it’s possible. On the other hand, Blue would want to give their passengers a different experience than Virgin Galactic. They’d be wanting to be looking out the window at something different.
Their current location in west Texas is far more remote than Spaceport America. Plus it would require Jeff Bezos to allow a fair number of outsiders on his ranch where he is also doing R&D. I see him looking for another location when he starts offering passenger service.
BO has committed to infrastructure at KSC/CCAFS. While most of that is linked to their efforts to “mee too” SpaceX with an orbital booster, I haven’t seen anything where they wouldn’t do sub-orbital shots with New Shepard from there. Its hard to tell with Bezos.
Right now SA is not set up for big VTVL vehicles. The pads would need major build out and WSMR is still a PITA to work with. Probably nothing Bezos’ people can’t smooth out if they came to “town”…
New Mexico State Senator John Arthur Smith has proposed a bill in 2016 that would allow liquor to be sold at all spaceport authority facilities by authorizing a governmental liquor license. I assume Spaceport America can’t operate without booze for its visitors.
http://www.nmlegis.gov/Sess…
“Another Round at Spaceport Bar”
http://ecx.images-amazon.co…
It would be a good place to have intergalactic keggers 🙂
It makes sense in expanding the sorts of events you could book for the spaceport. As long as people are drinking responsibly, it’s probably OK. But, it’s a long drive at night on an unlit two-lane road with any number of desert creatures that could jump out in front of you.
mostly big brown cows . . .
Seems like a good idea. I wouldn’t get on that thing without a few drinks myself…
The New Mexico Space Authority has hired a new CFO for Spaceport America
this month. Mr. De Gregorio just graduated from the University of New
Mexico. His previous work experience is inflated. He was an Executive
Assistant to the Area General Manager of the Kor Group, a privately held real estate development and management
firm with investments primarily in hotels and multi-family real estate.It does not seem to be a management
position. He was only a “Business Management Professional” at the
Renewable Energy Division of Sandia National Laboratory.
Why would the Authority hire this seemingly inexperienced person as a CFO -strange. However he has a lot of degrees.
Here are some details on his job experience.
http://www.zoominfo.com/p/Z… is Linkedin data
https://www.linkedin.com/in…
http://spaceportamerica.com…
Instead of having a hiring freeze, Spaceport America just hired Rosa Bañuelos for its Business Development department as a Brand Communicator.
https://www.linkedin.com/in…
https://twitter.com/Spacepo…^google|twcamp^serp|twgr^author
Instead of investing in cash strapped Spaceport America Sir Richard Branson has bought a new Swiss Chalet in Verbier, perched high in the Swiss Alps. Here is a video.
https://www.youtube.com/wat…
The marketing seems to be consumer orientated when what they need is someone with good network contacts in the aerospace industry. This should be positioned more as a high tech industrial park than someplace for tourists. I could understand folks coming to gawk at the rich and famous when/if they start flying but until then they could be better focusing their efforts on industrial startups or firms looking for an isolated place to test systems.
Also, based on the experience of those it has hired, it looks like it is on its way to becoming an expensive movie set.
New Mexico taxpayers have spent $218.5 million to build
Spaceport America in
southern New Mexico. If Sir Richard Branson wants to pull up stakes to
move to Dubai or Mojave, Virgin Galactic’s would only have to pay a
motley $1.5-$2 million in claw backs. No more money should be expended
until the claw back is increased substantially.
Doug – By the way did Virgin Galactic WhiteKnightTwo fix the defects in the wings, variously described as cracks or
imperfections? I assume they fixed them.
Yes. They addressed them.
The government invested nothing and the Solar Buzz (Facebook/SolarBuzz1) is operational and taking passengers every day. It uses only the sun for fuel. http://krqe.com/2016/01/28/…
Laughing Gas as a fuel is a hoax. So is welfare for the rich. Sierra County did that and just got poorer.
ALL Economic Development funds have been misappropriated from the impoverished towns in Sierra County to pay off cronies of the governor. If you’re not a crony of the governor, there will be no benefit from the $pacePork.
Why spend $50 to see empty buildings and listen to empty promises for 4 hours?
Celebrate the sun in T or C with a fun ride on the world’s only Solar Buzz!
The joke’s on you! Laughing gas isn’t fuel – it’s oxidizer. Ha ha!
$275K for electricity? That seems a bit on the high side for a facility just sitting there not doing much. A solar farm on-site might be a better option for the short term. Over $2k/month in printing costs? Wow! Why do staff need to be traveling so much? What does “DoIT” communications cover? for $210K it better be gold plated.
The P&L looks like what an MBA would come up with, very top heavy. The NM taxpayers should be madder than hell.
a quarter of a billion dollars paid by some of the poorest people in America – for a whole lot of nothing