Legislature(2017 - 2018)BUTROVICH 205

03/26/2018 08:00 AM Senate EDUCATION

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Audio Topic
07:59:14 AM Start
07:59:32 AM Confirmation Hearings: Professional Teaching Practices Commission
08:14:09 AM SB216
09:03:18 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Testimony <Invited and Public> --
Consideration of Governor's Appointees
+ Professional Teaching Practices Commission: TELECONFERENCED
- Diane Kardash
- Phillip Graham
- Kent Runion
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
         SB 216-SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS                                                                     
8:14:09 AM                                                                                                                    
CHAIR STEVENS  announced the consideration  of SB 216  and stated                                                               
his intention to hear and hold the bill.                                                                                        
8:15:46 AM                                                                                                                    
SENATOR VON  IMHOF, Alaska State  Legislature, sponsor of  SB 216                                                               
said  that  when she  served  on  the Anchorage  School  District                                                               
board,  they  did a  consolidation  study  of the  60  elementary                                                               
schools. When  they looked at  consolidating schools  with excess                                                               
capacity with nearby  schools, they saw the cost  savings was not                                                               
there because  of the  school size  cost factor.  The calculation                                                               
would go  down as  a school's average  daily membership  went up.                                                               
Districts  who may  want  to consolidate  schools  find that  any                                                               
savings  through reduced  labor  and operating  costs are  offset                                                               
through the reduced income a  district receives when students are                                                               
absorbed into a larger school due  to the drop in the school size                                                               
factor calculation.                                                                                                             
8:17:12 AM                                                                                                                    
SENATOR VON  IMHOF said the  Anchorage School  District abandoned                                                               
the idea at  that point. This fall Anchorage  did a comprehensive                                                               
presentation to  the legislature. One  topic proposed was  a step                                                               
down or  hold harmless for a  few years to allow  the district to                                                               
keep revenue  at the same  level for  a period of  time, allowing                                                               
for  the district  to  plan for  school  consolidation without  a                                                               
sudden drop  in what may be  hundreds of thousands of  dollars if                                                               
not millions  for a  particular school.  They studied  the issue,                                                               
working  with many  senators and  school districts,  and found  a                                                               
compromise that allows for districts  that want to consolidate to                                                               
maintain their  school size cost  factor for the two  schools for                                                               
two full years and  then the third year it will  be 66 percent of                                                               
the original  cost. The fourth  year will  be 33 percent  and for                                                               
the fifth year, it will be the new school size cost factor.                                                                     
8:18:35 AM                                                                                                                    
SENATOR  VON IMHOF  said the  goal of  the bill  in this  time of                                                               
budge reductions  and revenue deficits is  to encourage districts                                                               
to  utilize existing  infrastructure.  The legislature  suspended                                                               
the  reimbursement factor  to maintenance  and upgrades  and even                                                               
building  new  schools.  That's another  hardship  districts  are                                                               
facing.  They  are  trying  to  find  ways  to  utilize  existing                                                               
infrastructure to its highest capacity.                                                                                         
8:19:33 AM                                                                                                                    
JONATHAN  KING, Staff,  Senator Natasha  von Imhof,  Alaska State                                                               
Legislature, presented SB 216. He  drew the committee's attention                                                               
to the  Alaska's School Size  Factor Adjustment AS  14.17.150 (a)                                                               
chart  in his  presentation.  The  issue is  that  as a  school's                                                               
average  daily membership  goes up,  the value  of students  goes                                                               
down in  terms of the state  funding formula. At a  small school,                                                               
one student  can be  worth twice  as much or  even four  times as                                                               
much as  a student in a  very large school. If  districts combine                                                               
two  schools  or redistribute  students  to  other schools,  that                                                               
brings  the average  daily membership  in the  other schools  up.                                                               
Those students count less for funding.                                                                                          
8:21:02 AM                                                                                                                    
MR. KING  presented a slide  that showed the distribution  of all                                                               
the schools in Anchorage with the following caption:                                                                            
     A school district is evaluating  whether to combine the                                                                    
     two schools  in green  on the left  to create  a single                                                                    
     school  in an  existing building.  The smaller  schools                                                                    
     have  a  combined  population of  1,533  students  with                                                                    
     individual  School   Factor  between  1.05   and  1.06.                                                                    
     Combined state  aid excluding intensives is  $11.8M per                                                                    
     year.  When combined,  the red  dot, the  school factor                                                                    
     drops to  0.95 and state aid  is $10.6M; a 10%  drop in                                                                    
     funding.  In addition,  the district  would lose  up to                                                                    
     $0.27M in  local funding match.  Unless the  savings of                                                                    
     combining schools is greater  than $1.47M there's a net                                                                    
     operational  loss  to   the  district  associated  with                                                                    
He  said the  district  receives  less in  this  scenario on  the                                                               
presumption that  it costs less to  run one school than  two. The                                                               
hurdle  to   save  with  consolidation  is   $1.47  million.  The                                                               
districts  say they  save by  reducing some  support staff  and a                                                               
principal. They still need all  the teachers. The operating costs                                                               
are less, but their buses need  to drive farther because they are                                                               
serving  a larger  area. Districts  have said  their savings  are                                                               
less  than what  they lose  in  funding. It  is a  net loss.  The                                                               
intent is  to provide a transition  between pre-consolidation and                                                               
post-consolidation over the course of  four years. That gives the                                                               
districts  time  to  find the  efficiencies  necessary  for  cost                                                               
8:24:09 AM                                                                                                                    
MR. KING spoke to what the bill does:                                                                                           
     Section   1   removes    a   disincentive   to   school                                                                  
        • Four-year transition period for consolidating                                                                         
        • Years 1 and 2 preserve 100% pre-consolidation per                                                                     
          student funding                                                                                                       
        • Year 3 provides  standard funding  plus  66%  of                                                                      
          pre/post difference                                                                                                   
        • Year 4 provides  standard funding  plus  33%  of                                                                      
          pre/post difference                                                                                                   
        • After Year 4  provide standard  funding  per  AS                                                                      
     In addition, Section 1 includes  a number of provisions                                                                    
     designed to put  sideboards around districts' abilities                                                                    
     to  take inappropriate  advantage of  the consolidation                                                                    
MR. KING pointed  out that there are no intrinsic  changes to the                                                               
school  funding   formula  itself.   They  are  creating   a  new                                                               
subsection within  statute that  would allow school  districts to                                                               
take advantage of consolidation in a transitional manner.                                                                       
8:26:01 AM                                                                                                                    
SENATOR VON IMHOF  said schools cannot be  consolidated more than                                                               
once  in  five  years.  Districts  cannot  consolidate  and  then                                                               
unconsolidate  and then  consolidate  and  then unconsolidate  in                                                               
order  to get  this  increased  rate. That  is  an  example of  a                                                               
8:26:25 AM                                                                                                                    
MR. KING spoke to what the bill does not do:                                                                                    
     Section 1                                                                                                                
     The Bill does not:                                                                                                         
        • Change the school size formula (AS 14.17.450);                                                                        
        • Change state aid calculations (AS 14.17.410) for                                                                      
          any school or district that is not involved in a                                                                      
        • Encourage districts to close  schools in  single                                                                      
          school communities;                                                                                                   
        • Encourage districts to build new schools for the                                                                      
          purposes of consolidating existing schools;                                                                           
        • Allow schools to reopen and reconsolidate schools                                                                     
          in order to take inappropriate advantage of the                                                                       
          consolidation transition.                                                                                             
8:27:39 AM                                                                                                                    
MR. KING spoke to what the bill does:                                                                                           
     Section 2  provides an  incentive for  single community                                                                  
     schools to  fully utilize the  capacity of  K-12 school                                                                    
     buildings in rural Alaska.                                                                                                 
        • Corrects a provision in AS 14.17.905 where                                                                            
          communities  with  a   single  K-12  schools  lose                                                                    
          funding when their  average daily membership (ADM)                                                                    
          exceeds  425  even  when the  facility's  capacity                                                                    
          exceeds 425.                                                                                                          
     Under   the   current   provision,  schools   in   this                                                                    
     circumstance  are treated  as 2  facilities when  their                                                                    
     ADM is 425 and below, but  when they reach 426 they are                                                                    
     treated  at one  facility  for  funding purposes.  This                                                                    
     switch  lowers state  aid by  hundreds of  thousands of                                                                    
     dollars  and  could  increase the  incentive  to  build                                                                    
     another facility to recapture lost funding.                                                                                
8:28:56 AM                                                                                                                    
SENATOR VON IMHOF said that  during their research for this bill,                                                               
they ran across a community in  this situation, which is why they                                                               
brought up  this section.  The purpose  is to  disincentivize the                                                               
community   to  build   another   school.   This  community   and                                                               
potentially others like  it do have capacity above  425, but this                                                               
bill shines a  light on this issue. It will  behoove the state to                                                               
continue  funding at  the lower  size  of 425  rather than  build                                                               
another school.  The school  that is  there now  is fine  and has                                                               
8:30:08 AM                                                                                                                    
SENATOR  HUGHES asked  if there  are any  communities where  they                                                               
have  K-12 separated  because if  they are  in one  building they                                                               
would exceed  425. In  other words, could  this provision  help a                                                               
community decide to consolidate K-12 under one roof.                                                                            
8:30:31 AM                                                                                                                    
SENATOR VON  IMHOF said that  is possible  if one school  has the                                                               
capacity to hold  all the students. This bill  has the sideboards                                                               
where  a new  school cannot  necessarily be  built. The  question                                                               
remains  whether  a  new  wing could  be  built.  As  communities                                                               
reassess their situation, they will  look at unique circumstances                                                               
to come up with good solutions.                                                                                                 
8:31:08 AM                                                                                                                    
CHAIR STEVENS  said Alaska has its  ups and downs. He  asked what                                                               
would happens if  there were a sudden increase  in population. He                                                               
asked  if closed  schools can  be reengaged  and what  happens to                                                               
closed schools.                                                                                                                 
8:31:45 AM                                                                                                                    
SENATOR  VON IMHOF  said, to  answer the  second question  first,                                                               
each school will have its own  unique story. Depending on how old                                                               
the school is, where it is located,  a school might be given to a                                                               
charter  school,  it might  be  demolished  and repurposed  to  a                                                               
developer to  build houses in  a neighborhood. A school  could be                                                               
leased  out. Any  and all  of  those options  are available.  The                                                               
district, the board, and building  committee will decide that. If                                                               
there is  a significant uptick in  population, that is a  new set                                                               
of issues to address at that  time. The question is will the bill                                                               
create  unintended consequences  where they  lack the  ability to                                                               
accommodate students.  They don't know where  the population will                                                               
settle. Each  community will have its  own story and its  own way                                                               
to fix  that. Maybe at that  point they would so  flush with cash                                                               
they can build a new school.                                                                                                    
8:34:16 AM                                                                                                                    
SENATOR HUGHES referred to the  scenario where the district would                                                               
lose  $1.47 million  by consolidating  two  schools. That  abrupt                                                               
loss would be  difficult to handle and there  would be additional                                                               
busing costs,  so there would be  no net saving to  the district.                                                               
She asked,  to play devil's  advocate, how the district  would be                                                               
better able  to handle the  loss in the  fourth year than  in the                                                               
first year.                                                                                                                     
8:35:44 AM                                                                                                                    
MR. KING  said that is  a question they hoped  invited testifiers                                                               
would  be able  to address.  The genesis  of the  bill came  from                                                               
school districts.  The structure  reflects what they  proposed to                                                               
them. Yes, they will have  to find additional efficiencies. There                                                               
is no guarantee  that by year four or five  that school districts                                                               
will not be in a net loss  position. They are trying to give them                                                               
a reasonable  certainty that they  can attempt a  transition. The                                                               
districts  will  have  to  find  those savings.  It  will  be  an                                                               
individual district decision to do  the calculation and decide if                                                               
it makes sense.                                                                                                                 
8:37:10 AM                                                                                                                    
SENATOR HUGHES said  she wants this to work and  wants to provide                                                               
the chance.  She looks  forward to  hearing from  testifiers that                                                               
they can do this.                                                                                                               
8:37:39 AM                                                                                                                    
SENATOR  GIESSEL  asked why  a  school  district would  not  have                                                               
planned for  contingencies before consolidating a  school, like a                                                               
business would if  it were going to  consolidate sales locations.                                                               
She asked why it would take five years to make that adjustment.                                                                 
8:38:12 AM                                                                                                                    
SENATOR VON  IMHOF responded that  they initially asked  for five                                                               
years then  dropped it to  four. Some  schools will be  harder to                                                               
dispose of or  be more difficult to repurpose than  others. It is                                                               
a compromise.  It is  not an  abrupt funding  drop at  year four.                                                               
They want  some schools  off the capital  bonding list.  Some are                                                               
very old and  inefficient. It may not take them  four years. Four                                                               
years with  a stepdown is  a fair compromise based  on everything                                                               
they heard.                                                                                                                     
8:39:23 AM                                                                                                                    
SENATOR  BEGICH said  the Augenblick  study  [Review of  Alaska's                                                               
School Funding Program prepared  for the Alaska State Legislature                                                               
by Augenblick,  Palaich and Associates]  identified that  the cap                                                               
was  a disincentive  for consolidation.  He asked  if the  bill's                                                               
intent is  that there not  be a dramatic  loss of income  so that                                                               
the transition can be made.                                                                                                     
8:39:55 AM                                                                                                                    
SENATOR VON IMHOF responded yes.                                                                                                
8:39:59 AM                                                                                                                    
SENATOR BEGICH asked if anyone is opposing the bill.                                                                            
8:40:10 AM                                                                                                                    
MR.  KING said  no one  has come  forward yet.  The response  has                                                               
ranged  from being  glad that  someone is  tackling this  to this                                                               
doesn't affect us and we are not opposed.                                                                                       
8:40:34 AM                                                                                                                    
SENATOR  BEGICH said  he  understands  that Superintendent  [Rob]                                                               
Picou [of  Lower Yukon School  District] would benefit  from this                                                               
bill with a school that has capacity beyond the 425.                                                                            
8:41:51 AM                                                                                                                    
MR. KING  presented Consolidation  Example 2 for  five elementary                                                               
schools with  1,720 students and  $15.1 million in state  aid. If                                                               
the  district consolidates  five schools  into four  schools, the                                                               
effect of  school size factor  means that under  current statute,                                                               
state  aid  will  be  $14.42  million  for  the  same  number  of                                                               
students. With the  loss of local funding, $798,000  is the total                                                               
loss.  Taking  into  account  cost   savings,  the  net  loss  of                                                               
consolidation is $500,000.                                                                                                      
8:44:53 AM                                                                                                                    
MR. KING  showed that after  five years,  the state aid  would go                                                               
from  $15.07 million  to $14.42  million per  year for  the 1,720                                                               
students, a savings of $.65 million for the state.                                                                              
8:46:08 AM                                                                                                                    
CHAIR  STEVENS said  they  had been  talking  about finances  and                                                               
economics,  but  he asked  what  impact  the  bill will  have  on                                                               
students.  He  would appreciate  hearing  the  answer at  another                                                               
8:46:35 AM                                                                                                                    
DEENA BISHOP,  Ph.D., Superintendent, Anchorage  School District,                                                               
supported SB 216. She said  she was superintendent of the fastest                                                               
growing school  district. During her  tenure in Mat-Su,  over ten                                                               
new  buildings were  built. She  understands funding  formula and                                                               
school size factor  very well. Building a new  school created new                                                               
revenue. The opposite  happens when a building  is taken offline.                                                               
She quoted  from the  sponsor statement  that inside  the funding                                                               
formula is a school size  factor, which currently disincentivizes                                                               
school districts  from consolidating because they  would abruptly                                                               
lose revenue  from the state.  In the Anchorage  School District,                                                               
they   are  working   diligently   to   identify  and   implement                                                               
efficiencies.  The  costliest  issue   in  education  relates  to                                                               
staffing  and  compensation. While  the  need  for teachers  will                                                               
continue, a smaller support staff  will be necessary by combining                                                               
student  populations, along  with  the capital  costs of  ongoing                                                               
operations   with   schools,   it   makes  sense   to   allow   a                                                               
"deratcheting" of the formula.                                                                                                  
8:48:47 AM                                                                                                                    
DR.  BISHOP  said  the  immediate   loss  is  difficult  to  sell                                                               
internally  and externally.  They  are taking  off-line a  school                                                               
that has  a tradition  of educating children  in a  community. In                                                               
order to  work with a community,  they need an incentive  to move                                                               
forward.  Within the  four years  proposed in  the bill,  they do                                                               
look for  additional efficiencies. They  are going to  figure out                                                               
how  to  combine  staff and  share  resources  with  occupational                                                               
therapists  and speech  therapists.  The teachers  will still  be                                                               
there.  All  the additional  supports  will  change. The  primary                                                               
thing in Anchorage  is that 40 percent of the  schools were built                                                               
in the 40s,  50s, and 60s. They are embarking  on the useful life                                                               
of a  building without selling  new bonds.  They are on  a hiatus                                                               
till 2020 for school bonding.  This bill isn't just for Anchorage                                                               
or Lower  Yukon. It is  supportive of efficiencies in  the entire                                                               
state. If  Anchorage did  need to  redo these  facilities knowing                                                               
they  are undercapacity,  they will  need  major maintenance  and                                                               
capital costs  to keep them  safe and running for  students. They                                                               
would  do this  by asking  voters  to pass  bonds locally,  which                                                               
would impact local taxes. They  would impact capital construction                                                               
in  the entire  state.  They  are simply  asking  for  a time  to                                                               
reevaluate  where they  are to  provide the  best education  they                                                               
8:51:27 AM                                                                                                                    
DR.  BISHOP  said she  does  not  see  the quality  of  education                                                               
decreasing.   Finding    efficiencies   and    working   together                                                               
collaboratively   is   exciting.   They  would   like   time   to                                                               
consolidate. They would  need time to sell that  to the community                                                               
and have  them understand  that it would  actually save  in their                                                               
personal taxes  as well. This  is a good  thing for the  state of                                                               
Alaska as  well as the  Anchorage community.  The bill is  a win-                                                               
8:52:27 AM                                                                                                                    
SENATOR BEGICH  said last  year when  considering SB  96, Senator                                                               
Hughes  produced a  list of  underutilized schools  in Anchorage.                                                               
Many of  them are in his  district, which has some  of the poorer                                                               
parts  of Anchorage  and many  of the  older buildings.  The east                                                               
side of his district has fewer  vehicles per house than any other                                                               
part  of  Anchorage,  so  there  are  significant  transportation                                                               
issues.  He  asked   if  she  would  consider   factors  such  as                                                               
transportation and poverty rates when consolidating schools.                                                                    
8:53:45 AM                                                                                                                    
DR.  BISHOP  said yes,  they  are  doing another  [consolidation]                                                               
study. Some  indicators are schools  where affordable  housing is                                                               
present.  Those   schools,  especially  some  of   their  walking                                                               
schools, are not set to be  the most efficient to close. They are                                                               
looking  at an  equity issue  in the  Anchorage School  District.                                                               
They are keeping an eye  on student outcomes and achievement. The                                                               
preliminary work  is not just  going after the oldest  schools or                                                               
schools in  lower socioeconomic  areas that  maybe need  the most                                                               
capital. They  will continue to  take care of  Anchorage schools.                                                               
With over  100 buildings,  they could  have a  school and  bond a                                                               
year and it would take 100  years to renovate. She spoke with the                                                               
assembly and  school board  and assured them  that the  look into                                                               
this  is more  than simply  economics. It  also involves  student                                                               
8:55:22 AM                                                                                                                    
SENATOR BEGICH asked if she would  provide a copy of the study to                                                               
the committee.                                                                                                                  
8:55:38 AM                                                                                                                    
DR. BISHOP  said it will be  delivered to the school  board April                                                               
26.  It  will  be public  then  and  they  will  send it  to  the                                                               
8:56:04 AM                                                                                                                    
SENATOR HUGHES  said that  for consolidating  elementary schools,                                                               
parents would  be concerned about  the change in the  busing. She                                                               
asked if she  is confident that kindergarteners  or first graders                                                               
will not have long bus rides.                                                                                                   
8:56:50 AM                                                                                                                    
DR.  BISHOP said  she is  100 percent  confident that  elementary                                                               
schools will not increase their busing time.                                                                                    
8:57:25 AM                                                                                                                    
DAVID NEES,  Representing Self, suggested  changes to SB  216. He                                                               
said this is  one factor they looked at in  the House Sustainable                                                               
Education Task Force.  When the McDowell group  did their report,                                                               
they were concerned  about schools with under  100 students. They                                                               
set the formula up to benefit  schools under 100, but the schools                                                               
above  100, the  last  four  numbers on  the  school size  factor                                                               
chart, gained money. They incentivized  school districts to build                                                               
schools between  150 and up to  750. There is a  detriment to any                                                               
above 750.  In the  Anchorage School District,  a lot  of schools                                                               
are between  250-400 students. They  will get more money  if they                                                               
have  under 250  students and  less if  they have  over 750.  The                                                               
districts game the  system. Anchorage is turning  the King Career                                                               
Center turning  into a  high school because  it gains  the school                                                               
district a  $1,000,000. He  likes the  idea of  consolidating. In                                                               
the formula  they should look at  equity per student in  the last                                                               
four tables  to get rid of  the problem of people  deciding which                                                               
school should be  at 50 percent capacity and which  one at 90. In                                                               
2001  the McDowell  Group said  the idea  behind the  school size                                                               
formula factor was to help  schools with under 100 students. They                                                               
suggested looking at that factor  again for any school above 100.                                                               
Changing the last four school  size formula factors from the 150-                                                               
250 to 150-750 factor will do exactly the same thing.                                                                           
9:00:10 AM                                                                                                                    
KATHLEEN PLUNKETT,  Clerk, Anchorage  School Board,  supported SB
216.  She said  Anchorage has  been reviewing  efficiencies since                                                               
she  has been  on the  board because  that is  best for  students                                                               
because  it  means they  can  put  more towards  their  students.                                                               
Talking about  changing schools and school  boundaries requires a                                                               
huge community dialogue. People are  near and dear to the schools                                                               
they belong to. It can be done.  It is more efficient in the long                                                               
run for  the school district,  their local community,  and state.                                                               
King Career  Center becoming a  high school is good  for students                                                               
because they can  stay for a full  day with no bus  time. That is                                                               
their goal. What is best for students.                                                                                          
ACTING CHAIR COGHILL held SB 216 in committee.                                                                                  

Document Name Date/Time Subjects
PTPC_Confirmation_Packet_26March2018.pdf SEDC 3/26/2018 8:00:00 AM
Confirmation Hearing - Professional Teaching Practices Commission - March 26, 2018
SB216_School Consolidation_Presentation_SEDC_26March2018.pdf SEDC 3/26/2018 8:00:00 AM
SB 216
SB216_SchoolConsolidation_BillPacket_26March2018.pdf SEDC 3/26/2018 8:00:00 AM
SB 216