Legislature(2011 - 2012)BELTZ 105 (TSBldg)
02/24/2012 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
8:03:43 AM
CO-CHAIR MEYER announced the consideration of SB 182.
8:04:39 AM
SENATOR FRENCH joined the meeting.
8:05:07 AM
CO-CHAIR THOMAS moved to adopt the committee substitute (CS) for
SB 182, labeled 27-LS1283\E as the working document.
CO-CHAIR MEYER objected for the purposes of discussion.
EDRA MORLEDGE, Staff for Senator Meyer, Alaska State
Legislature, said the CS for SB 182 did several things to
address the rising costs of pupil transportation. She said the
bill would recalibrate the per-pupil amount given for pupil
transportation programs to school districts. She said the
current per-pupil program would be changed to a reimbursable
program which would be based upon actual annual financial audits
that were reported to the Department of Education and Early
Development (DEED). She said the CS would also provide DEED with
oversight required to control the school districts' pupil
transportation program costs.
8:06:53 AM
MS. MORLEDGE said Section 1 in the original bill established the
reimbursable program to begin in Fiscal Year 2013 (FY13). She
said the CS would change the program to begin in Fiscal Year
2014 (FY14) to allow for a second year to transition into the
reimbursable program.
She said Section 2(e) would add authority for DEED to regulate
the Request-For-Proposals (RFP) program. She said DEED would
have the authority to adopt regulations to provide for the
oversight and support to school districts to achieve a safe and
cost-effective student transportation system.
She said there were no changes made to Section 3. She said
Section 4 established the per-pupil amounts for Fiscal Year 2012
(FY12) and FY13. She said per-student amounts were based upon
figures districts reported as their actual projected costs. She
noted that a 3.2 percent increase for the second year was based
upon the Consumer Price Index (CPI).
8:08:48 AM
CO-CHAIR MEYER asked if the intent was to get all of the schools
on the same schedule to allow DEED to do an RFP to receive
additional competitive bids for statewide transportation.
MS. MORLEDGE answered yes.
CO-CHAIR MEYER asked if the intent was to continue with the
current per-pupil reimbursement program for the next two years
and transition to an actual cost program in subsequent years.
MS. MORLEDGE answered correct. She said the next two years would
be based upon the school districts' annual financial audits. She
said DEED's RFP process would allow contracts to include
allowable additions that districts would have to fund in other
ways.
CO-CHAIR MEYER asked if the intent was to get DEED more involved
based upon specific guidelines and specify what the state and
school districts would pay for additional transportation
requirements.
MS. MORLEDGE answered correct.
8:10:38 AM
CO-CHAIR MEYER asked if the per-pupil rates for the next two
years were based upon a survey.
MS. MORLEDGE answered yes. She said a comprehensive survey was
conducted by the Alaska Association of School Business
Officials.
CO-CHAIR MEYER asked if any of the districts' per-student
amounts went down.
MS. MORLEDGE answered no.
CO-CHAIR MEYER asked if the per-pupil transportation costs had
gone up in all of the school districts.
MS. MORLEDGE answered yes. She said costs had gone up
significantly.
CO-CHAIR MEYER commented that the whole intent of the committee
was to try and get a handle on the transportation costs and
control them.
CO-CHAIR THOMAS said many transportation issues were relatively
complex and would not be solved due to unique transportation
methods that would discourage companies from bidding. He said
language in the bill was loose enough to allow for unique
transportation situations to enable companies to bid on a wider
number of schools.
8:12:49 AM
CO-CHAIR MEYER asked to verify in Section 4 that the primary
goal was to do per-student amounts for the larger schools.
MS. MORLEDGE answered correct.
CO-CHAIR MEYER replied that some small schools required students
to be flown in.
MS. MORLEDGE responded that some students in Pelican required a
boat to attend school.
CO-CHAIR MEYER replied that receiving bids from an RFP would not
occur in some communities due to unique transportation
requirements.
SENATOR STEVENS asked if seven school districts accounted for 90
percent of the students being transported.
MS. MORLEDGE said yes.
CO-CHAIR MEYER responded that the intent was to encourage
additional bids from a larger sampling area. He said another
goal was to have standardized student transportation throughout
the state.
MS. MORLEDGE answered correct.
CO-CHAIR MEYER asked if DEED was going back to the student
transportation process that was used in 2003.
MS. MORLEDGE answered correct.
CO-CHAIR MEYER replied that the process prior to 2004 was done
for quite a while.
MS. MORLEDGE answered yes.
CO-CHAIR MEYER said the state had gone full circle regarding a
centralized pupil transportation program.
SENATOR STEVENS said he would like to hear from DEED on how they
intend to deal with the RFP process.
8:15:24 AM
DEENA PARAMO, Superintendent, Mat-Su Borough School District,
Palmer, said the district spanned 25,000 square miles, an area
larger than West Virginia. She said the district had 44 schools
with an enrollment of approximately 17,330 students.
She said the district supported the retrospective expense
reimbursement model that was proposed in SB 182. She said the
bill recognized that school districts' transportation operations
were unique and allowed for the individualization required to
address the vast differences. She said the bill focused solely
on home-to-school pupil transportation and provided adequate
visibility of transportation expenditures for all districts.
She said the district was a good steward of tax payer funds and
issued an extremely detailed competitive bid to ensure that the
best possible transportation value was obtained. She said the
district was forced to find operational monies to support
student transportation. She said the district's current
transportation contract did not include a fuel escalator clause
in order to avoid the risk of higher fuel prices. She noted that
the current five year contract would save the district $11
million.
8:19:23 AM
MS. PARAMO said the district continued to seek ways to reduce
costs. She said the district operated two less routes and added
291 students versus the prior year. She said the district was
engaged in a competitive route optimization study that was
designed to decrease the number of busses and routes. She said
negotiations with the district's transportation contractor
continued in an effort to reduce operating costs by evaluating
the advantage of a possible second terminal, route consolidation
and other operational efficiencies. She said the district was
investigating possible changes to school schedules for
additional cost savings.
She said the district entered the first year of a five year
contract and the single largest cost increase was caused by AS
23.10.065(b) which mandated public bus school drivers be paid
200 percent of the minimum wage when contracts were renewed. She
said the new contract included language that required the
average age of the fleet not exceed 10 years and no bus be older
than 12 years. She noted that two digital cameras were now
required on each bus to ensure safety and proper student
behavior.
8:22:08 AM
CO-CHAIR MEYER asked if the Mat-Su School District's expenses
went up 27 percent.
MS. PARAMO answered correct.
CO-CHAIR MEYER responded that costs had gone up for all school
districts and the Mat-Su District's increase was not unusual.
SENATOR FRENCH asked to clarify the Mat-Su School District's
field trip transportation numbers for students.
MS. PARAMO answered that only home-to-school and special
education routes would be reimbursable by the state. She noted
that field trips would not be reimbursable.
SENATOR FRENCH asked why the district had four times the amount
of field trips versus regular education routes.
MS. PARAMO answered that home-to-school routes were operated
under the guidance of a route optimization system. She said
field trips and daily inter-school bussing were less efficient
due to fewer students being transferred per bus. She noted that
inter-school bussing students to one location paid off by
reducing program cost and staffing by allowing for a single
class for multiple schools.
8:25:42 AM
SENATOR FRENCH responded that it looked like five times as many
field trips occurred versus regular school trips.
MS. PARAMO replied that inter-school bussing occurred daily
between schools.
8:27:02 AM
PETE LEWIS, Superintendent, Fairbanks North Star Borough School
District, Fairbanks, said the district was using school
operating funds to support transportation and next year's
deficit projection was over $2 million. He said SB 182 would
help alleviate the short fall that was covered by school
operating funds.
8:28:07 AM
ELIZABETH NUDELMAN, Director, School Finance, Department of
Education and Early Development, Juneau, said SB 182 addressed
the pupil transportation system via AS 14.09.010. She said the
current system dated back to 2003 when the "accountable system"
was replaced with an "unaccountable system" and the per-student
funding mechanism was established to constrain costs.
She said in 2003, DEED testified that previous attempts to
control costs by working with school districts to align contract
bid periods and promote competition did not substantially lower
costs. She said the per-student cost constraint system replaced
DEED's statutory and regulatory authority for the program's
components regarding contracts, number of routes, allowable
expenditures and other elements. She said the current law also
deleted the statutory language specifically designating the
pupil transportation program as "to and from" school
transportation. She said DEED's pupil transportation staff
position and funding were eliminated in 2004.
She said for eight years the current mechanism controlled costs
for pupil transportation and noted that one CPI increase
occurred in 2009. She said the current expenditures reported by
districts reflected newly signed five year contracts for 2012
through 2016; Anchorage, Mat-Su, Fairbanks, Kodiak and
Ketchikan. She said contracts had varying levels of service from
one district to the next due to unconstrained regulation. She
said the program constraint was moved from allowable costs to
the per-student funding mechanism.
She said SB 182 included language that directed DEED to adopt
regulations to provide oversight and support for a safe and cost
effective student transportation system. She said DEED
envisioned a framework that included the addition of a staff
position to assist districts with the RFP process and monitor
allowable costs. She said student transportation was a valuable
program to the state of Alaska and DEED was working hard to
ensure students were transported to school in a safe manner.
8:31:15 AM
LES MORSE, Deputy Commissioner, Department of Education and
Early Development, Juneau, said DEED understood the concerns
about cost containment and the intent of SB 182 by the bill's
sponsor. He noted that Commissioner Mike Hanley was truly
concerned about student transportation cost containment.
He said various transportation funding models had been used and
SB 182 was similar to the previous model that allowed DEED to be
involved with the districts. He noted that DEED could not make
guarantees due to historical outcomes from previous
transportation funding models.
He noted that the administration would have some concerns on a
supplemental for the current year's formula program. He said
DEED would address the administration's supplemental funding
issues when SB 182 was brought before the Senate Finance
Committee.
8:33:08 AM
CO-CHAIR MEYER responded that he appreciated DEED's comments. He
said he was unsure if DEED truly supported SB 182. He noted that
funding student transportation via the Base Student Allocation
(BSA) formula was difficult due to higher fuel prices. He said
SB 182 would provide a method to get a better handle on all of
the transportation expenses. He asked if DEED was in support of
controlling costs as well.
MR. MORSE answered yes. He said DEED understood the intent of SB
182 and noted there would continue to be challenges along the
way. He said DEED would strive to make SB 182 very effective in
terms of cost containment.
8:35:00 AM
CO-CHAIR MEYER asked if an updated fiscal note was presented.
MS. NUDELMAN answered that a new fiscal note had not been
formally prepared for the committee. She said the 2013 fiscal
note would be approximately $10 million less than the survey
results and the the CPI for the out-years would be
proportionally less. She said SB 182 would recalculate costs for
the June 30, 2013 financial statement audit and noted that
actual costs were currently unknown.
SENATOR STEVENS commented that he was more comfortable with DEED
being directly involved with pupil transportation. He noted SB
182 would focus on larger districts and would affectively
abandon smaller districts. He asked how DEED would address
transportation for smaller communities.
MS. NUDELMAN answered that DEED would expect to be able to
support all districts under the same set of circumstances. She
said DEED would be able to provide smaller districts with the
specific help needed.
8:38:10 AM
SENATOR STEVENS asked how program auditing would work through
DEED.
MS. NUDELMAN answered that the audited financial statements
would provide DEED with a record for overall results.
CO-CHAIR THOMAS commented on a previous statement that noted
student funding had gone from an accountable to an unaccountable
system and the negative connotations associated with
unaccountability. He asked if SB 182 would move student
transportation back to a more accountable system.
MS. NUDELMAN answered that the accountability terms were simply
associated with calculating transportation funding. She said
DEED used a funding calculation and the school districts were
the stewards of the programs. She said the state was fortunate
to have strong professionals in districts that addressed pupil
transportation. She said SB 182 would simply return
transportation oversight back to DEED.
CO-CHAIR THOMAS asked if the more accountable system was similar
to what was previously administered prior to 2003.
MS. NUDELMAN answered yes.
CO-CHAIR MEYER commented that his intent was to go to a more
accountable system with program uniformity throughout the state.
8:41:43 AM
SENATOR FRENCH asked what was the state spending per year for
pupil transportation.
MS. NUDLEMAN answered that the state spent $62 million for 2012.
SENATOR FRENCH asked what changes we made after 2003 and what
the current status was.
MS. NUDLEMAN said the impetus to change student transportation
funding was based upon rapid growth in the five years prior to
2003.
SENATOR FRENCH asked what funding method was used prior to 2003.
MS. NUDLEMAN answered that reimbursable grants were used to fund
pupil transportation and were not BSA based. She said DEED would
approve routes and purchases. She said a school district would
submit a report and DEED would send them a check. She noted that
pupil transportation was separate from education programs.
SENATOR FRENCH replied if the receipt reimbursement method was
used prior to 2003.
MS. NUDLEMAN answered yes.
SENATOR FRENCH asked what happened after 2003.
MS. NUDLEMAN answered that the law changed and whatever
districts were spending on pupil transportation was divided by
the average daily membership for each district. She said if a
district was spending $800 per average membership that became
the district's rate. She said each year DEED multiplied a
district's rate by their average daily membership and sent them
a check.
SENATOR FRENCH asked if that form of funding persisted until
today.
MS. NUDLEMAN answered correct.
SENATOR FRENCH asked if we were going back to a system that was
more like the receipt reimbursement method.
MS. NUDLEMAN answered correct.
8:44:30 AM
SENATOR STEVENS asked if districts had to use other funds to pay
for transportation prior to 2003.
MS. NUDLEMAN answered no. She said districts received 100
percent reimbursement prior to 2003. She noted that per-student
allotment funding covered school districts for 100 percent
reimbursement during the five years after 2003. She said
districts had used other funds to cover deficits during the last
three to five years.
CO-CHAIR MEYER asked if SB 182 would require DEED to add staff.
MS. NUDLEMAN answered yes. She said DEED anticipated adding a
position to assist districts.
CO-CHAIR MEYER commented that he did not have a problem with
adding an individual to save money in the long run. He said the
Finance Committee would look closely at the approximate $64
million required to fund student transportation and the
justification to add a program administer.
8:47:27 AM
CO-CHAIR THOMAS responded that the Finance Committee would
require expert explanation on the approximate $64 million
required for transportation.
CO-CHAIR THOMAS moved to report CSSB 182( ), version E, from the
committee with individual recommendations, forth coming fiscal
note(s) and letter of intent.
8:48:19 AM
CO-CHAIR MEYER said seeing no objection, CSSB 182(EDC) moved
from the Senate Education Standing Committee. [The assumption
was that Co-Chair Meyer removed his objection.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| Matsu SB 182 Testimony.pdf |
SEDC 2/24/2012 8:00:00 AM |
SB 182 |
| Work Draft 2.22.12.pdf |
SEDC 2/24/2012 8:00:00 AM |
CSSB 182 (EDC) |
| Changes to CSSB 182.pdf |
SEDC 2/24/2012 8:00:00 AM |
SB 182 |
| SB 182 Letter of Intent.pdf |
SEDC 2/24/2012 8:00:00 AM |
SB 182 |
| FW SB 182.msg |
SEDC 2/24/2012 8:00:00 AM |
SB 182 |
| Public testimony on SB182.msg |
SEDC 2/24/2012 8:00:00 AM |
SB 182 |