Legislature(1997 - 1998)
03/21/1997 09:05 AM Senate HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 11 SCHOOL DEBT REIMBURSEMENT
CHAIRMAN WILKEN introduced SB 11 as the next order of business
before the committee. The committee took a brief at ease and
Chairman Wilken announced that SB 58 would not be taken up today.
Chairman Wilken noted that there is an amendment for SB 11.
Number 580
BRETT HUBER , Staff to Senator Halford, noted that Senator Halford
had provided the committee with an amendment for consideration.
The amendment is a result of testimony and committee discussion
during the last hearing of SB 11. The amendment changes the date
of reactivation of the school bond debt reimbursement program from
July 1, 1995 instead of July 1, 1997. The amendment also changes
the reimbursement level from 50 to 70 percent which applies to
future funding that receives authorization and local voter
approval. The amendment broadens the qualification criteria for
DOE to improve the projects which includes a reduction in school
districts' operating costs because of the project or facilities
that require modification/rehabilitation to improve the
instructional program. Mr. Huber pointed out that adoption of this
amendment would allow the Mat-Su three school package approved by
local voters in 1995 as well as the Anchorage package scheduled for
April for the reimbursement program.
TAPE 97-31, SIDE B
CHAIRMAN WILKEN noted that SB 11 would be held for a committee
substitute to include these changes. Mr. Morgan is present to
discuss the overhead charge from DOE.
SENATOR WARD moved to adopt the amendment which reads as follows:
Page 3, line 30:
Delete " 1997 "
Insert " 1995 "
Page 4, line 7:
Delete " 50 "
Insert " 70 "
Page 4, line 10
Delete " 1997 "
Insert " 1995 "
Page 5, line 26, following "enrollment;":
Delete "or"
Insert "[OR]"
Page 5, line 28, following "codes":
Insert ";
(C) operating costs that would be reduced by the
project;
or
(D) facilities that require modification or
rehabilitation for the purpose of improving the
instructional program "
Page 5, line 29:
Delete "takes effect July 1, 1997"
Insert "is retroactive to July 1, 1995"
Page 5, following line 29:
Insert a new bill section to read:
" *Sec. 6. This Act takes effect immediately under AS
01.10.070(c)."
CHAIRMAN WILKEN noted that the reimbursement level has bounced
around. He believed that it would be best to make the percentage
75 and discussed that with Senator Halford. Chairman Wilken asked
if Mr. Huber and Senator Halford had discussed that issue. BRETT
HUBER said that he had talked with Senator Halford about that
issue. Senator Halford is not opposed to that idea, that is a
policy call. CHAIRMAN WILKEN requested that Mr. Huber notify
Senator Halford that was discussed and requested that it be
included in the forthcoming CS.
MIKE MORGAN , Facilities Manager for the Department of Education,
explained that as districts apply for reimbursement of the
principle the district has paid on bonds, the interest the district
paid, and for any fees associated with the bonds. When the
department includes that in the budget request for the year, the
department adds the overhead amount to that district's request.
There are no reductions in the request of the district. Mr. Morgan
clarified that as long as the Legislature fully funds the requests
of districts, the district receives 100 percent. If there is a
reduction in funding, that is not taken from the districts.
With regard to the amendment, Mr. Morgan noted that the amendment
was in response to a suggestion by the department. Mr. Morgan
noted that as written, the amendment has language saying "if a
district can demonstrate an operating cost reduction". Therefore
if a district shows that it can save $1,000 per year with a
project, but the cost of the project is $12 million the department
would have to approve that project. On the grant side, there are
statute provisions that specify that the grant should be reviewed
and in the best interest of the state. There is an opportunity for
abuse.
BRETT HUBER said that portion of the amendment was included per the
department's testimony at the last hearing. Mr. Morgan's point
makes sense, as the criteria is broadened and the percentage of
state funding is increased; those are issues to review.
CHAIRMAN WILKEN asked if there was any objection to the amendment.
Hearing none, the amendment was adopted. SB 11 was held for the
pending committee substitute. Chairman Wilken realized there were
witnesses via teleconference for SB 11.
LARRY WIGET , Director of Government Relations for the Anchorage
School District, supported SB 11 and the amendment. This Spring
Anchorage voters will be asked to approve a bond for capital
construction in the amount of $24,593,000. Currently, there is no
debt reimbursement if these bonds pass and changing the effective
date to July 1, 1995 would include these bonds. Mr. Wiget said
that a state to local match provides an incentive for voters to
approve bonds, enables districts to stretch dollars to cover much
needed school construction and demands public accountability.
BOB DOYLE , Finance Director for the Mat-Su School District,
supported the amendment. Mr. Doyle indicated the need for
assurance that the Legislature is committed to funding SB 11 and
the intent of debt reimbursement. Next year, Mat-Su expects 12,606
students. Mat-Su is the third largest district in the state with
an annual growth of seven percent over the last 20 years. Mr.
Doyle emphasized that the Mat-Su district is growing at two percent
per year which equates to 250 students per year. Therefore, the
district would need to build a new elementary school every two
years in order to house those students, but that has not been done.
Mat-Su has 1,000 students that are taught in portables and the
majority of the schools are over capacity. Mr. Doyle pointed out
that three necessary schools were approved by voters and are
awaiting legislative support. Mr. Doyle discussed some of the
projects included in the six year capital improvement program for
Mat-Su.
BETH MCKIBBEN , the Mat-Su Borough Planning Department, said that
the Mat-Su Borough is one of the fastest growing areas in the
state. Between 1990 and 1996, Mat-Su's population increased by
11,076 which is a 4.7 percent annual increase, the highest annual
growth rate in Alaska. Since 1990, the Meadow Lakes population has
increased by 2,311 with an annual average growth rate of 13.1
percent. Palmer has increased by 7.9 percent annually, Big Lake by
7.3 percent annually, and Butte by 3 percent. Ms. McKibben said
that those communities are four of the fastest growing areas in
Alaska.
CHARLES HUGGINS , parent and school board member, noted that most in
the Mat-Su district were pleased with the 50-50 proposition, and
even more pleased with the 70-30 proposition. Mr. Huggins informed
the committee that the elementary school in Big Lake has a capacity
of 500 which increased to 723 students this year. This increase
resulted in the need for portables and an increase in staffing.
Mr. Huggins stressed that accommodating that increase in students
is challenging. There have been some special sessions with the
community in order to determine how to reduce those numbers, but
that is disruptive. The public questions why new schools cannot be
built. Mr. Huggins echoed Ms. McKibben's comments that Meadow Lake
is one of the fastest growing areas in Alaska and there is not even
an elementary school in that community. Mr. Huggins discussed the
situation in the Talkeetna School where the ceiling in one room is
covered with visqueen that connects to a hose in order to evacuate
the incoming water. The amendment heads in a positive direction
for that situation. Also the community is reviewing year-round
schooling in order to accommodate the population.
Number 412
BARBARA LACHER , Mayor of Wasilla, believed that the ease with which
the amendment was adopted would indicate the ease with which the
forthcoming CS would be reported out of committee. Mayor Lacher
hoped that when the bill is before the entire Legislature, there
will be a commitment to funding in the short term as well as the
long term. Mayor Lacher was pleased with the consideration of the
increased percentage. Mayor Lacher informed the committee that
increasing the percentage from 50 to 70 percent would save the
average homeowner $100 per year and over a 20 year bond repayment
that would result in a savings of $2,000 per year. Mayor Lacher
said that the Mat-Su Borough would help with this legislation.
CHAIRMAN WILKEN requested that Mr. Morgan submit some written
testimony regarding over head charges in order that the testimony
could be sent to some of the school districts.
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