Legislature(2011 - 2012)BELTZ 105 (TSBldg)
02/06/2012 08:00 AM Senate EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| SB182 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 182 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 182-PUPIL TRANSPORTATION FUNDING
8:03:52 AM
CO-CHAIR THOMAS announced the consideration of SB 182.
8:04:41 AM
EDRA MORLEDGE, staff to Senator Kevin Meyer, Alaska State
Legislature, Juneau, said beginning July 1, Fiscal Year 2013
(FY13), pupil transportation grants would be based on actual
audited pupil expenses with annual Consumer Price Index (CPI)
adjustments. She said the bill aligned pupil transportation
funding with the amounts agreed to in contracts and eliminated
the need for districts to subsidize their pupil transportation
grants with foundation funding.
8:06:19 AM
MS. MORLEDGE said SB 182-Section 1 identified modifications for
the pupil transportation funding provided by the state to the
amount reported in audited fiscal statement as actual cost, as
adjusted for inflation, effective beginning FY13. She said
Section 2 provided for an annual inflation adjustment based on
changes to the Anchorage CPI, Section 3 repealed the current
funding based on per-pupil to an actual cost mechanism and
Section 4 provided an adjustment in funding levels for FY12.
8:07:18 AM
CO-CHAIR MEYER asked to clarify that transportation
reimbursement funding would go from a per-pupil means to actual
costs negotiated with local bus companies.
MS. MORLEDGE answered correct.
CO-CHAIR MEYER asked if there were a limited amount of pupil
transportation companies in Alaska.
MS. MORLEDGE answered correct.
CO-CHAIR MEYER asked if school districts could negotiate
separate contracts.
MS. MORLEDGE answered yes. She said districts could negotiate
various things in their contract and there was very little
control over districts' transportation contracts.
CO-CHAIR MEYER asked if the bill reverted back to a previous way
of funding pupil transportation.
MS. MORLEDGE answered not necessarily. She said in 2004, the
Department of Education and Early Development (DEED) allowed
transportation negotiations to be handled directly by the
districts. She said districts were funded based on a flat-rate
amount per student as reimbursement costs with a built-in CPI
adjustment.
CO-CHAIR THOMAS asked to clarify that a district's audited
financial statement would be reviewed annually with a CPI
adjustment applied to it.
MS. MORLEDGE answered yes.
8:11:03 AM
STEVE KALMES, Director of Transportation, Anchorage School
District, Anchorage, said the district anticipated a $2.2
million budget shortfall next year. He said over six million
passenger trips and three million miles were traveled annually.
He said higher fuel prices have contributed to increased costs.
He noted that the current transportation contract was negotiated
in 2006 with at a base fuel rate of $2.50 per gallon. He noted
that 2006 gasoline was approximately $2.35 per gallon and the
current price was $3.72 per gallon. He said the district was
reimbursing their transportation contractor approximately $1.00
per gallon. He said prices for supplies, equipment and buses had
also increased from 3 percent to 10 percent on an annual basis.
He said additional cost increases were attributed to $500,000
spent on busing homeless students and expenses associated with
transporting students to other schools due to the No Child Left
Behind (NCLB) Act.
He said the district had been frugal and focused on providing
home-to-school service with no transportation provided for
charter schools or optional programs. He said activity busing
was not included in the contracted transportation agreement. He
said larger buses added to the fleet had increased passenger
capacity to carry more students per vehicle.
8:13:58 AM
MR. KALMES said the average life of buses had been extended from
10 years to 15 years of age in an attempt to avoid the cost of
purchasing new equipment. He said contract negotiations in 2016
with MV Transportation could require 178 buses to be replaced.
He supported the move away from the per-student allocation
reimbursement model and was hopeful that the new transportation
funding scheme would allow for periodic adjustments.
8:15:11 AM
CO-CHAIR MEYER asked what the requirement was for providing
student transportation.
MR. KALMES answered that transportation was provided to regular
students who live more than 1.5 miles away, students who live in
an area that was determined to be hazardous, special needs
students, homeless students and alternate school transportation
required from NCLB.
CO-CHAIR MEYER asked to verify that the current funding was not
adequate.
MR. KALMES answered that the district anticipated a shortfall of
$2 million in FY12 and $2.2 million in FY13.
8:16:53 AM
CO-CHAIR MEYER asked if bus driver and mechanic wages were
included in the reimbursement.
MR. KALMES answered that funds for all operational costs were
included except for capital costs.
8:17:10 AM
SENATOR DAVIS asked how many buses the district owned.
MR. KALMES answered that the district operated 40 percent of the
transportation service with 121 buses.
SENATOR DAVIS asked if bus transportation contracts favored the
district some years and the contractors in other years.
8:18:03 AM
MR. KALMES answered that limited competition for busing
contractors had a negative impact in negotiations. He said the
district's contract had been aligned with Mat-Su and Fairbanks
to attract larger transportation companies with more competitive
bids.
8:20:15 AM
SENATOR STEVENS asked if Anchorage was unique in transporting
pupils with district owned buses and contractor owned buses.
MR. KALMES answered correct.
SENATOR STEVENS asked if the district hired its own drivers.
MR. KALMES answered correct.
SENATOR STEVENS asked how the district's busing costs compared
to the contracted operator's cost.
MR. KALMES answered that the district was comparable in costs
per student. He said it was beneficial to operate a percentage
of busing service to avoid a contract operator monopoly.
8:21:39 AM
SENATOR STEVENS asked if Anchorage was the only district with
its own buses in the state.
MR. KALMES answered that the district was the only mixed
transportation operation with the exception of a few small
district operated systems.
8:22:06 AM
PETE LEWIS, Superintendent, Fairbanks North Star Borough School
District, Fairbanks, said the district's operating fund was
supporting pupil transportation and over $2 million would be
required to make up the difference in FY13. He said a
transportation funding adjustment would allow the district to
keep operating dollars to support its classrooms.
8:22:56 AM
CO-CHAIR THOMAS asked if the district had a split operation with
district owned buses and contract transportation owned buses. He
also asked what impact the higher fuel costs had on the
district.
MR. LEWIS answered that all of the buses were owned by the
contract operator. He said Fairbanks had special needs due to
the extreme winter weather conditions which required covered bus
storage and extra insulation to keep bus interior temperatures
above 39 degrees. He said the district faced additional costs
due to homeless student and NCLB needs.
8:24:54 AM
DAVE JONES, Assistant Superintendent, Kenai Peninsula Borough
School District, Soldotna, said the district contracted all of
its transportation and had joined the Anchorage coalition in
negotiating five year contracts, but decided to operate
independently with its own one year agreement. He said a Request
For Proposal (RFP) was announced with the hope to attract
additional vendors. He said the district was operating with a
transportation budget deficit of $750,000 for FY12 and classroom
money had to be diverted to transporting students. He said the
bill would help the district redirect money back to the
classroom.
8:27:44 AM
SENATOR STEVENS commented that the bill would continue separate
district based negotiations. He asked if there was a way to
bring oversight and control back to the negotiating system.
8:28:35 AM
MR. JONES answered that DEED should be responsible for
transportation contract negotiations. He said the department's
involvement could attract additional vendors.
8:29:54 AM
JOHN ALCANTRA, Government Relations, National Education
Association-Alaska, Anchorage, said many districts were
operating with transportation budget deficits with money taken
directly from classrooms to cover costs. He said teachers had
been laid off due to a reduction in general fund dollars for
classrooms. He said he hoped the legislature realized the cause
of the state's $3.7 billion surplus and diverted additional
transportation funds due to rising gas prices. He said the
districts faced a combined $10 million shortfall for
transportation funding in FY13.
8:32:21 AM
AMY LUJAN, Executive Director, Alaska Association of School
Business Officials (ALASBO), Juneau, said a change to district
pupil transportation reimbursements was necessary and justified.
She said the current mechanism did not sufficiently take into
account actual cost increases. She said additional
transportation data gathering would be required by the districts
and ALASBO could assist.
8:33:49 AM
CO-CHAIR MEYER asked if ALASBO surveyed the districts for
transportation costs.
MS. LUJAN answered no. She said the districts were surveyed
without the knowledge that data would be used for drafting new
reimbursement legislation. She said additional data gathering
would be required.
SENATOR STEVENS commented that he was concerned with the
independent contract negotiations done by each district. He
asked how to improve contract negotiating consistency throughout
the state.
MS. LUJAN answered that without DEED oversight, she had
difficulty negotiating pupil transportation contracts when she
was an administrator at Kuspuk and Nome school districts.
8:35:33 AM
SENATOR STEVENS asked if there was a concern with independent
district negotiations not getting the best deal.
MS. LUJAN answered yes.
CO-CHAIR MEYER asked if contracts should be done through DEED
with guidelines.
8:36:03 AM
MS. LUJAN answered that DEED should provide some assistance with
contract negotiations.
8:36:51 AM
ANNE KILKENNY, representing herself, Mat-Su Borough, Wasilla,
said the bill created teaching jobs by putting money back into
the district's general fund. She said increased transportation
expenses may cost the district up to 40 teaching jobs. She said
the projected transportation funding shortfall ranged from $3.3
million to $4.2 million. She recommended that annual funding
adjustments be tied to the price of oil or a gallon of gas
rather than the Anchorage CPI. She said formula driven funding
does not work. She said a task force should be formed to review
pupil transportation funding and agreed with Senator Stevens for
DEED oversight.
8:40:56 AM
CO-CHAIR MEYER said he would like to hear from the Mat-Su Valley
School District administration for comments on their pupil
transportation costs.
8:41:51 AM
ELIZABETH NUDELMAN, Director, School Finance, Department of
Education and Early Development, Juneau, said the bill sets
funding rates for FY12 and a second time for FY13 and ensuing
years.
She said the FY12 fiscal note was derived from the new per
student factors being multiplied by the current preliminary
Average Daily Membership (ADM) estimate. She said the
calculation created an $8 million estimated supplemental for
FY12.
8:44:30 AM
MS. NUDELMAN said the bill addressed FY13 and ensuing years by
taking the school districts' FY12 audited transportation
expenditures plus annual CPI adjustments. She said FY12
expenditures were being calculated and would be completed by
June. She said the FY13 fiscal note increase of $19.9 million
was calculated by multiplying audited expenditures from 2011 by
26 percent plus a 3.2 percent CPI adjustment. She said the 26
percent increase was based on recent contract increases in
larger Alaska school districts.
8:45:57 AM
CO-CHAIR MEYER commented that he favored transportation
reimbursements based on actual costs. He said each district was
unique and the current per pupil method may not be capturing the
accurate costs. He said the fiscal note was large and asked if
EED favored a cost or pupil based reimbursement program.
8:47:49 AM
MS. NUDELMAN answered that the costs in the fiscal note could be
lower when actual expenses were confirmed. She said the state
currently spends approximately $64 million on pupil
transportation. She said the $8 million supplemental
appropriation in the bill would bring FY12 spending to $72
million. She said if all the state did was add the current 3.2
percent CPI to the FY12 expenditure, pupil transportation
spending would be $74 million in FY 13. She said a supplemental
appropriation plus CPI increase for the current per-pupil
program or the bill's cost formulated funding would both be in
the range to address increased transportation costs.
8:49:31 AM
CO-CHAIR MEYER asked to verify that the bill would have an
average $10 million annual increase over the current per pupil
method.
MS. NUDELMAN answered no. She said FY13 would increase by $19.9
million.
8:50:57 AM
CO-CHAIR MEYER commented that the committee's focus was on
coming up with the best policy for pupil transportation and
coming forward with a funding amount that the Finance Committee
would support.
8:51:19 AM
SENATOR STEVENS commented that he was worried about the lack of
contract DEED oversight. He said districts required negotiating
assistance. He said an audit was not enough and asked the
department to come forward with recommendations.
8:53:34 AM
CO-CHAIR MEYER commented that districts required contract
guidance.
CO-CHAIR THOMAS said the $19.9 million increase for FY13
included the $8 million supplemental appropriation that
addressed FY12's deficit. He suggested ALASBO be involved with
DEED for oversight. He said good analysis on the policy of what
takes place with pupil transportation versus strictly examining
expenses would be beneficial.
8:55:25 AM
SENATOR DAVIS said DEED endured cutbacks in previous years and
the ability to support additional transportation oversight may
be difficult. She said she supported change and asked the
department to come forward with recommendations. She said she
was bothered by the department not taking a stance to correct
the transportation funding situation.
MS. NUDELMAN answered that she recognized transporting children
to schools was an important program for Alaska. She said costs
continue to rise and a solution could be found.
8:57:13 AM
CO-CHAIR MEYER asked DEED to offer a solution when SB 182 was
brought back for consideration.
8:57:28 AM
CO-CHAIR MEYER stated he would hold SB 182 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Sponsor Statement SB182.pdf |
SEDC 2/6/2012 8:00:00 AM |
SB 182 |
| SB 182 Sectional Analysis.pdf |
SEDC 2/6/2012 8:00:00 AM |
SB 182 |
| Compiled Transportation Information 2011-11-14.pdf |
SEDC 2/6/2012 8:00:00 AM |
Survey Data |
| SB182-EED-ESS-2-3-2012.pdf |
SEDC 2/6/2012 8:00:00 AM |
SB 182 |