Legislature(1999 - 2000)
03/27/2000 01:34 PM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
March 27, 2000
1:34 p.m.
MEMBERS PRESENT
Senator Mike Miller, Chairman
Senator Pete Kelly, Vice-Chairman
Senator Gary Wilken
Senator Kim Elton
MEMBERS ABSENT
Senator Drue Pearce
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 191(FIN)
"An Act relating to charter schools."
-HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
HB 191 - No previous Senate action.
WITNESS REGISTER
Representative Fred Dyson
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Sponsor of HB 191
Wes Kelly
Chief of Staff to Representative Dyson
Alaska State Capitol
Juneau, Alaska 99081-1182
POSITION STATEMENT: Answered questions about HB 191
Bruce Johnson
Deputy Commissioner
Department of Education and Early Development
801 W 10th St., Ste. 200
Juneau, Alaska 99801-1894
POSITION STATEMENT: Commented on HB 191
Carol Comeau
Anchorage School District
PO Box 196614
Anchorage, Alaska 99519
POSITION STATEMENT: Commented on HB 191
Annie Keep-Barnes
5933 Old Valdez Trail
Salcha, Alaska 99714
POSITION STATEMENT: Supports HB 191
Kitty Mathers
173 Snowy Owl Lane
Fairbanks, Alaska 99712
POSITION STATEMENT: Supports HB 191
Mika Mack
322 Ketchikan Ave.
Fairbanks, Alaska 99701
POSITION STATEMENT: Supports HB 191
Gail McCann
532 Lee Drive
Fairbanks, Alaska 99709
POSITION STATEMENT: Supports HB 191
Jody Vanderbilt
2690 Talkeetna
Fairbanks, Alaska 99701
POSITION STATEMENT: Supports HB 191
Rachel Stinson
PO Box 74958
Fairbanks, Alaska 99707
POSITION STATEMENT: Supports HB 191
Alison Seymour
PO Box 82155
Fairbanks, Alaska 99708
POSITION STATEMENT: Supports HB 191
Susan Faulkner
PO Box 83855
Fairbanks, Alaska 99708
POSITION STATEMENT: Supports HB 191
Terri Austin
1318 Polar Drive
Fairbanks, Alaska 99712
POSITION STATEMENT: Supports HB 191
ACTION NARRATIVE
TAPE 00-13, SIDE A
Number 001
CHAIRMAN MILLER called the Senate Health, Education and Social
Services (HESS) Committee to order at 1:34 p.m. Present were
Senators Pete Kelly, Wilken, Elton and Chairman Miller. The first
order of business to come before the committee was HB 191.
HB 191-CHARTER SCHOOLS
REPRESENTATIVE FRED DYSON, sponsor of HB 191, gave the following
explanation of the proposed committee substitute. The Alaska
charter school bill passed prior to his election to the
Legislature. Former Representative Bettye Davis believed the
original law would not work and would need to be revisited. People
who have spent a lot of time working with charter schools say that
Alaska's law is one of the weakest in the nation.
The proposed committee substitute does four things. It doubles the
allowable number of schools and removes the geographical
distribution. It extends the contract period and the sunset date.
Charter schools that want to buy commercial real estate, or those
schools that rent and need significant improvements to meet school
standards, will benefit from longer term contracts.
Third, the bill answers the question of where the money goes that
the charter schools do not get. Most school districts receive
about $7,000 to $8,000 per student while charter schools receive
about $3500 per student or less. HB 191 requires schools to
perform accounting procedures to let the charter schools know where
the money they do not get goes and to give them some idea of the
cost of services that they may choose. The Anchorage and Fairbanks
school districts have maintained they cannot produce those figures.
He is convinced they cannot and it would be an undue burden on them
to show that kind of accounting detail. The Anchorage and
Fairbanks school districts can account for how much special
education costs district wide, but they cannot break that number
down by school. The same applies to all kinds of other special
services.
Fourth, HB 191 also allows charter schools to locate into
commercial space that may not meet school fire safety standards
with the approval of the fire marshall. Because a charter school
may have a much smaller number of students, the rigid school
building safety standards may not be necessary in order to operate
safely.
REPRESENTATIVE DYSON summarized by saying there is an immense
amount of enthusiasm for charter schools in Alaska. There is quite
a bit of interest in Native language schools and a school in
Anchorage wants to teach Mandarin.
Number 475
SENATOR WILKEN moved to adopt Version W as the working draft of the
committee. There being no objection, the motion carried.
SENATOR WILKEN asked Representative Dyson to explain the new
language on page 2, line 11, which reads, "including the itemized
costs of administrative or other services to be provided."
REPRESENTATIVE DYSON said he worked with the Anchorage School
District for 1+ years on that provision. The disctrict was
concerned that itemizing costs would require every employee to keep
tabs on everything they do. Representative Dyson said it is not his
intention to require school districts to keep the kind of detail an
attorney would, for example, to track billable hours. When school
districts sit down with a charter school to negotiate a contract,
he wants the district to be able to tell the charter school group
that if it takes special education students, funds will flow to the
school for those students. During the negotiations, the charter
schools want to know what the cost of accepting or foregoing
certain responsibilities is.
WES KELLER, Chief of Staff to Representative Dyson, added that the
Juneau School District includes an itemization that is not too
detailed but gives a brief outline of where the money comes from
and where it goes.
SENATOR WILKEN stated that the expectation today might not be for
a detailed itemization, but over the years it will increase and add
to the burden of school districts to set up a different "profit
center." He also expressed concern about language beginning on
line 29 which reads, "in this paragraph, operating cost savings
means the estimated value of educational or related services
provided by the district to all schools in the district that are
not provided to the charter school." He asked how that value is to
be quantified and how that can ever be structured at any level
other than the local school board level. He pointed out if the
Anchorage School District wants to offer Mandarin, it can do so but
it needs to put up its money so as to not detract from other
efforts across the state to provide general education. He
expressed concern that in these days of tight K-12 money, this bill
seems to broaden the requirements and includes a new part which is
very expensive per student. He emphasized that his concern is with
the limited dollars that need to be spread around.
Number 772
REPRESENTATIVE DYSON responded that if Senator Wilken's concern is
that charter schools themselves are expensive, they actually cost
less per student than other schools.
SENATOR WILKEN said as he understands the history of the issue, the
deal struck in 1996 was that the State monies are to be directed to
charter schools. Anything over and above that - the Mandarin
school example - is a local option. He said he interprets this
bill as saying the local option is not being funded therefore the
legislature needs to tell the school boards what to fund in regard
to charter schools.
REPRESENTATIVE DYSON disagreed and said that people in the charter
school community look at the amount of money that they get per
student and notice that all they get is the State share. He does
not believe that is true as the districts get money from the State,
the federal government and a local contribution. The district
takes its administrative costs and special program costs out of
that pot and then the remainder is distributed to all of the
schools in the district, including charter schools.
SENATOR WILKEN asked if, by law, that number has to be at least
equal to the State's contribution to that district per student.
REPRESENTATIVE DYSON said he did not know.
SENATOR WILKEN repeated that he believes the law says the school
districts must spend x amount on charter schools and that amount
should not be less than the State's share for that district. He
said he would check to see if he is correct.
Number 932
SENATOR PETE KELLY noted that is the amount allocated for the
charter school in Fairbanks.
SENATOR ELTON referred to page 2, line 11, and asked what other
services should be provided. He noted that phrase could include
pupil transportation costs and computer training.
REPRESENTATIVE DYSON noted libraries and interscholastic sports
would also be included.
SENATOR ELTON indicated the problem he has with that language is
that when a charter school signs a contract, especially one with a
certain life span, it is difficult to anticipate what some of the
other services might be. He always assumed that contracts between
charter schools and districts will always say the contract can be
reopened for unanticipated events or expenses. He asked how long
a typical contract is for.
MR. KELLER said contracts are typically for five years.
SENATOR ELTON maintained that it is difficult enough for a school
to figure out what is going to happen next year with student
enrollment, so to require that costs of administrative and other
services be itemized for five years will not work.
REPRESENTATIVE DYSON pointed out contracts are reviewed and renewed
each year. He stated when a charter school committee approaches a
district to figure out if it can operate a school, it needs a clear
idea of the numbers.
SENATOR ELTON said he understands the need for firm numbers but he
is not sure why the standard should be higher for charter schools
than for public schools which also deal with uncertainties on a
year by year basis.
REPRESENTATIVE DYSON replied that most public schools are in public
school buildings. They do not have to maintain a building and pay
for utilities. Some charter schools have purchased buildings, many
have leased buildings and some are renting them. If the cost of
fuel increases for a public school, the district will pay the
heating bill but that is not the case for a charter school.
MR. KELLER explained that those things were included in the bill
because the sponsor thought it would be valuable for school boards
to answer questions related to what the value of the charter school
is.
Number 1164
SENATOR ELTON noted there is as much danger in locking the charter
school into agreed upon costs for other services as locking the
district in. He said he understands the special problems of a
charter school when it is not located in a district building but it
is asking a lot to request a charter school and school district to
sit down and anticipate what some of the other administrative costs
are going to be over the course of the contract. He does not
believe it is good for either the district or the charter school.
REPRESENTATIVE DYSON replied that he removed two paragraphs from
the bill that addressed itemizing costs. He noted one charter
school that operates in a shopping mall in Anchorage uses the
public library and does not need snow plowing services from the
school district. That charter school is looking at ways to get
more money back because it needs to determine whether it can afford
its lease.
SENATOR ELTON said that is his point. If a landlord adds a service
down the road that the charter school has already charged the
district for, the charter school is locked in.
REPRESENTATIVE DYSON maintained that the charter school groups he
knows are sophisticated enough to spell those things out when they
enter into lease contracts so that there will be no surprises in
terms of their property leases.
SENATOR PETE KELLY asked if there are two provisions in which
increased dollars will be going to the charter schools: one in the
amount of savings to the district and the second in the local
contribution.
MR. KELLER's response was inaudible.
SENATOR PETE KELLY asked whether the committee substitute contains
a provision allowing the district to take administrative costs. He
explained he was informed by some charter school people that one of
the versions allows the district to keep a portion of the
administrative costs.
REPRESENTATIVE DYSON said it has always been his intent to allow a
district to charge for its cost of administration. Most of the
districts spend quite a bit of time trying to help charter schools
and they should be paid for that.
SENATOR PETE KELLY asked if the provision is in the committee
substitute or in statute.
MR. KELLER said he was under the impression it was a district by
district decision. He stated that Anchorage has a set percentage
for administrative costs.
REPRESENTATIVE DYSON noted this bill makes no changes to that.
Number 1414
SENATOR WILKEN clarified that he was mistaken and the statute does
not say the school board must give the state allocation per student
to the charter school. He asked how the estimated value of
educational related services will be determined without burdening
school districts.
REPRESENTATIVE DYSON said, according to Deputy Commissioner Rick
Cross, every enterprise, particularly schools, ought to have this
kind of information at their fingertips. It is very difficult to
manage any enterprise without knowing what it costs to provide a
service.
SENATOR WILKEN maintained that the phrase "estimated value or
related services" will set up a war during every budget cycle to
decide who is estimating what. He thought section 14 will create
big problems for both school districts and charter schools.
Number 1544
REPRESENTATIVE DYSON said when he started down this road three
years ago, he would have told school districts to keep track of
what it costs to do business and he would have called a school a
"cost center." The districts do not capture costs that way. When
charter schools come to the table, they cannot audit the districts'
books. If a charter school wants a library, the district sets the
amount.
SENATOR WILKEN said, "I am trying to reconcile, on page 3, line 9,
section (e) - the new section, with the existing section (a). Let's
see if I can read this right. Section (a) says to me 'the school
boards shall provide an annual program budget for the charter
schools and that budget will be no less than the amount generated
by the students' - and we talked a little bit about that - 'minus
indirect administrative costs' and so that seems to be a shall -
student equals some money, determined by generation minus the
amount of money to take to administer that student. But then if we
go to - and that could go up and down, of course. But then if we
go to (e) - (e) says to me what we're going to do - it says 'must
include' - so line 10, it says, 'charter school budget must
include' - and the next three lines say to me, you can be no lower
than - take all your students in the district divided by the number
of students - or divide it into the number of dollars and the
charter school can be no less than that amount. So while we've
allowed in (a) for it to go up, (e) says you can't go below the
average across the whole school district. So, are those two in
conflict? Maybe the first question is, am I reading (e) right?"
MR. KELLER said, "...I'm going to start with the intent of that
section and the intent of that section is to make sure that some of
the contribution in excess of the 4 mills gets distributed to the
charter schools. And again, this is a matter of assurance to the
charter schools that they are getting their fair share. We looked
for the best wording that we could come up with and we got the
advice, some advice here from Eddie Jeans and he suggested this
wording. As to the conflict, I don't see it. I mean it is no less
than in one place and then they add to that. I don't see the
conflict, you know, it may be that."
SENATOR WILKEN noted under the organization and operation of a
charter school it says, "a local school board may exempt a charter
school from other local school district requirements if an
exemption is set out in the contract." He stated a charter school
could tell a school district it wants one thing and not another
during the negotiation process to define the charter school. He
said in order for the school to be approved by the local elected
officials, it becomes a lean and mean charter school. Therefore a
lean and mean charter school is put in place but section (e)
requires the district to fund it at the average of that school
district's dollars per student. He said the charter school's
funding would never go below the average of the district.
MR. KELLER asked if Senator Wilken was referring to the existing
section (3) to AS 14.03.260.
SENATOR WILKEN noted AS 14.03.260 has sections (a) through (d) and
HB 191 will add section (e). He explained that section (a) under
funding for charter schools speaks to the amount generated by
students enrolled in a charter school, less administrative costs -
the revenue side. Section (e) speaks to the expense side. If
section (e) is enacted, a district can never spend less than the
average per student in the charter school than the average spent
across the total district. He said if it says something about 4
mills, he does not read that.
REPRESENTATIVE DYSON said he was speaking to local revenues on line
11.
SENATOR WILKEN suggested that area be worked on further. He noted
he does not have any problem with the intent of the legislation but
he does not want to detract from general K-12 at a time of short
dollars and he does not want to burden school boards with a lot of
administrative things that are difficult for them to do. He said
he certainly does not want to mandate the amount that districts
must spend on charter schools.
CHAIRMAN MILLER asked Bruce Johnson to testify.
BRUCE JOHNSON, Deputy Commissioner of the Department of Education
and Early Development (DOEE), stated DOEE and the State Board of
Education are on record in support of school choice, specifically
as it relates to the charter school law that is in place and the
proposed changes. At the State Board meeting in the Spring of
1998, the Board indicated an interest in lifting the cap on the
current number of charter schools allowed as well as the geographic
distribution. The Board wanted to ensure that educational programs
are based on State standards and agrees the sunset provision of
2005 should be removed. They wanted to clarify that charter
schools receive local revenues in excess of required local
contribution as well as the State determined basic need. In doing
that, they recognized that we are moving beyond a pilot and a field
test with charter schools and that charter schools have become
institutionalized in our state, therefore DOEE needs to be
involved. DOEE prepared a fiscal note which is absolutely
essential to ensure that charter schools get off to a good start
and that DOEE is able to provide technical assistance to the
founders and staff of the charter schools.
Number 1949
SENATOR WILKEN asked Mr. Johnson to comment on section (e) on page
3.
DEPUTY COMMISSIONER JOHNSON said he was not privy to the
conversations that occurred with Eddy Jeans.
SENATOR ELTON asked how the allocation of costs in the 70-30
formula is applied to charter schools. He asked if that
requirement applies to the district only or whether it gets to the
contract level.
DEPUTY COMMISSIONER JOHNSON said it is his understanding that the
formula applies at the district level, not the individual school
level.
CHAIRMAN MILLER took teleconference testimony.
MS. CAROL COMEAU, Anchorage School District Assistant
Superintendent for Instruction, stated support for lifting the cap
on the number of charter schools in the State as well as the
geographic restrictions because they are a hindrance to a number of
districts. She noted the Anchorage School District has questions
about the intent of Section 2, line 11, including the itemized
costs of administrative or other services to be provided. She
noted that if she had to record the time she spends on charter
schools and multiply the hours by the number of students in charter
schools, charter schools would be paying back the district more
than the district is taking for the indirect cost rate for her
services. She noted the time she spends varies depending on the
charter school and the issues. She asked for more information on
Section 2, as well as Section 4. She questioned what the sponsor
means by "operating cost savings" because not all of the schools in
the district receive community school services or pupil
transportation services. She noted the Anchorage School District
has no problem with Section 3 because it already works very closely
with the fire inspectors and fire marshall. As long as a facility
meets the occupancy code for the number of students, the district
can be flexible about housing in a non-district facility. She
stated the Anchorage School District has questions about comparing
the indirect cost rate (Section 4) at 2.4, which is the amount
costed out for next year. She believes the school board will want
to review and discuss that section further.
CHAIRMAN MILLER said it is his intent to take testimony today and
then hold the bill until Wednesday so that some of the questions
raised can be answered.
SENATOR PETE KELLY asked Ms. Keep-Barnes to reiterate the concerns
she expressed to him at a constituent meeting to the committee,
specifically her concern about administrative costs.
MS. ANNIE KEEP-BARNES, a founder of the Chinook Charter School,
said Chinook was the first elementary charter school in Alaska.
She expressed strong support for HB 191. The bill will help
charter schools to survive. Chinook is doing everything it can to
make its school a place where different learning strategies and
ideas are tested and where parents are active partners. She noted
these changes can be made without forcing institutional changes
throughout the school district. Chinook has been in operation for
four years. It is open to all public school children in the
Fairbanks North Star Borough. It offers an opportunity for middle
school students to continue school through the eighth grade.
Chinook parents are still finding that no matter how hard they
work, the school board will always see the charter school as an
add-on to an already strained budget. Charter schools only get an
amount equal to basic needs which only covers salaries. She
pointed out HB 191 will make a difference of $59,000 for Chinook
Charter School. The school district would charge a 5+ percent
administrative cost off of the top of Chinook's budget which will
be a sizeable amount.
Number 2295
MS. KITTY MATHERS testified in favor of HB 191 and, in particular,
Section 4. Teachers and parents have actively worked with the
school board to get a "piece of the pie" which has been a
frustrating process.
MS. MIKA MACK stated the Chinook School is large with a population
of 95 students, but the school board views those students as less
important. Parents do a lot of the maintenance work, provide
supplies, and provide after school activities at no expense to the
school district. Chinook does not receive funds for special needs
students even though some attend the school.
TAPE 00-13, SIDE B
MS. GAIL MCCANN, a parent of a Chinook Charter School student,
stated support for HB 191. She said she would particularly like to
see the itemized cost accounting put into place because it is a
basic business practice. She noted that Chinook Charter School has
to fight an uphill battle for every penny it gets and it only gets
the amount required by the state. Parents are subsidizing the
school in every way they can and they need the legislature's help.
She asked legislators to pass HB 191 and to provide full funding
for all public schools.
MS. JODY VANDERBILT, a parent of two Chinook Charter School
students, stated strong support for HB 191. One of her children
who struggled in public school is now a very good student at
Chinook. Charter schools need more stable funding. HB 191 is a
huge step in the right direction.
MS. RACHEL STINSON stated support for charter schools and HB 191.
She has three children who have attended Chinook Charter School
since it was founded. To continue to function, charter schools
need complete funding from the state or they need a mandate
demanding local school boards to give them a specific portion of
discretionary funds.
MS. ALISON SEYMOUR, a parent of two students at Chinook Charter
School, said the state passed the charter school law in order to
provide for alternatives and innovations in education at a time
when it was widely determined that something different needed to be
done in the field of education. Chinook Charter School focusses on
academics with a Montessori learning approach; any "frills" are
provided by parents. Sending her children to a typical public
school would cost the state considerably more. Chinook Charter
School can no longer employ a reading tutor which her children
need.
Number 2129
MS. SUSAN FAULKNER, a parent of two students at Chinook Charter
School, stated strong support for HB 191. She has been repeatedly
frustrated by the funding situation - it seems that public money
does not follow her children from public school to the charter
school. She strongly believes that a public school should be
supported by public money. Charter schools need to ensure they are
entitled to the state, federal and local funding as other public
schools are.
MS. TERRI AUSTIN, a co-founder and teacher at Chinook, strongly
supports HB 191 and encourages the committee to pass it as is. The
first year Chinook was founded she was astounded at the amount of
time it took to create a charter school. This year she is again
astounded at how much time it is taking from teaching. She would
love to see the funding issue cleared up so that the teachers at
Chinook can truly focus on teaching rather than funding sources.
MR. CARL ROSE, Executive Director of the Association of Alaska
School Boards (AASB), said AASB has supported charter schools since
the inception of the pilot program. AASB has asked that start up
costs be addressed to ensure that local determination at the school
board level is maintained. AASB supports lifting the cap on
charter schools and the geographical requirement and the extension
from five to ten years. AASB is concerned, however, that some of
the requirements will have a chilling effect on the approval
process in light of the funding problems that K-12 education is
facing. Operating cost savings and the estimated value of
educational services are unknown quantities and school districts
are at a point where anything that entails a risk to go forward is
less likely to be approved. AASB has worked hard with
Representative Dyson's staff to put together a bill to serve the
needs of present charter schools, but placing further requirements
on school boards with the current funding problems will have a
negative effect on the approval process.
Number 1966
MR. JOHN CYR, President of the National Education Association -
Alaska, said NEA was supportive of the first charter school bill
and it supports HB 191. NEA finds is interesting that charter
school advocates feel they are fighting for what they see as their
share of the educational dollar when every public school is
fighting for more dollars for education. The key problem is the
amount of funding provided for K-12 education. The issue of
itemized accounting is an interesting one - the same argument was
made during the debate on SB 36. School districts said they were
unable to break out the amount of administrative or other costs.
NEA sees accounting of monies on the local level as a major problem
that the legislature needs to determine because it is apparent that
districts cannot or will not account for how dollars are spent for
each individual child in each school.
There being no further testimony, CHAIRMAN MILLER noted his intent
to hold HB 191 until the next meeting on Wednesday so that the
sponsor can work with the committee members who have raised
concerns. He then adjourned the meeting at 2:35 p.m.
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