04/20/2018 01:30 PM House FINANCE

CS FOR SENATE BILL NO. 216(FIN)                                                                                               
                                                                                                                                
     "An Act  relating to the  calculation of state  aid for                                                                    
     schools    that    consolidate;   relating    to    the                                                                    
     determination of  the number of schools  in a district;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
1:35:31 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster shared  that  the bill  had  been heard  on                                                                    
Wednesday, April  18. He  asked the  sponsor to  address the                                                                    
committee.                                                                                                                      
                                                                                                                                
SENATOR NATASHA  VON IMHOF, SPONSOR, introduced  herself and                                                                    
was available for questions.                                                                                                    
                                                                                                                                
Representative   Guttenberg   had   a   question   for   the                                                                    
department.                                                                                                                     
                                                                                                                                
1:37:27 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  discussed  that the  Village  of                                                                    
Rampart  school  had been  shut  down  when enrollment  fell                                                                    
below  the minimum  daily requirement.  He  detailed that  a                                                                    
dynamic new leader had brought  people back to the community                                                                    
and  the school  had  been reopened.  He  noted that  school                                                                    
attendance  was   based  on  October  attendance   data.  He                                                                    
remarked  that the  Yukon Koyukuk  School District  was huge                                                                    
geographically. He  asked what support had  been provided to                                                                    
the school  to help it  reopen, hire teachers, and  fill the                                                                    
fuel tank, prior to October.  He observed that the situation                                                                    
was unique, and he hoped it did not happen again.                                                                               
                                                                                                                                
ELWIN  BLACKWELL,  SCHOOL   FINANCE  MANAGE,  DEPARTMENT  OF                                                                    
EDUCATION AND EARLY DEVELOPMENT  (DEED), answered there were                                                                    
schools  that  closed from  time  to  time that  were  later                                                                    
reopened. One of  the larger issues with  the Rampart school                                                                    
was that it had been  closed for approximately 15 years. The                                                                    
department did  not have any  additional funding  outside of                                                                    
the  foundation  formula  to  put  towards  opening  up  the                                                                    
school.  When  a district  notified  DEED  of its  plans  to                                                                    
reopen  a school,  the district  assured the  department the                                                                    
school   would  have   at  least   10  ADM   [average  daily                                                                    
membership] for  the count period. Once  the department went                                                                    
through the count period if a  school had 10 ADM, the school                                                                    
went  through the  school size  adjustment  and it  received                                                                    
money  through the  foundation program.  The district  would                                                                    
have  the  opportunity   to  ask  for  an   advance  on  its                                                                    
foundation  funding   in  order  to  cover   expenses  while                                                                    
waiting.  The department  trued  up the  information in  the                                                                    
last three months  of the year based on  the October counts.                                                                    
He  reiterated that  a school  could ask  for money  upfront                                                                    
with the anticipation  it would receive more  money later in                                                                    
the school year.  He noted it had happened one  time that he                                                                    
could recall.                                                                                                                   
                                                                                                                                
Representative  Guttenberg  stated  the bill  dealt  with  a                                                                    
similar situation in Anchorage,  the largest school district                                                                    
in  Alaska.  He  referenced the  smallest  school  districts                                                                    
without any  resources. He was  trying to understand  it. He                                                                    
relayed he had represented  numerous schools along the Yukon                                                                    
[River] down to the coast. He  spoke to trying to figure out                                                                    
what was available for districts  without any resources that                                                                    
had to  start hiring  in July  and filled  the fuel  tank by                                                                    
barge once in the summer.                                                                                                       
                                                                                                                                
1:40:52 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked for verification that  the only                                                                    
single-school  school district  the  bill  pertained to  was                                                                    
Hooper Bay.                                                                                                                     
                                                                                                                                
SANA  EFIRD, DEPUTY  COMMISSIONER,  DEPARTMENT OF  EDUCATION                                                                    
AND   EARLY   DEVELOPMENT,   replied  in   the   affirmative                                                                    
pertaining to Section 2.                                                                                                        
                                                                                                                                
Representative Wilson  referenced how division was  done for                                                                    
[a  community with  an ADM  of greater  than] 425  students.                                                                    
She wondered if  the division would be grades  K-8 and 9-12.                                                                    
She asked  how the division  would be determined  for Hooper                                                                    
Bay.                                                                                                                            
                                                                                                                                
Mr. Blackwell replied  that under Section 2 the  K-6 ADM and                                                                    
7-12 ADM  populations would each  be run through  the school                                                                    
size adjustment to end up  with two adjustments for a single                                                                    
facility.                                                                                                                       
                                                                                                                                
Representative Wilson  assumed it pertained to  the $386,300                                                                    
in Fiscal Note  3 [OMB Component Number  2804]. She wondered                                                                    
when a  school was divided  whether it was possible  for one                                                                    
to fall  under a smaller  school category. She did  not know                                                                    
how the 425  was divided. She explained there  was a portion                                                                    
for  smaller schools,  but one  school under  discussion was                                                                    
not small. She  remarked that the school  was dinged because                                                                    
there were  over 400 students.  She thought it  was positive                                                                    
that one school  had been built instead of  two, meaning the                                                                    
district could  make more  money. She asked  if the  size of                                                                    
the school went through the formula as if it was two.                                                                           
                                                                                                                                
Mr.  Blackwell answered  in  the  affirmative. He  explained                                                                    
that  under  the  foundation formula,  a  community  with  a                                                                    
single facility  housing 101  to 425 ADM  ended up  with two                                                                    
adjustments.   He  detailed   the   community  received   an                                                                    
adjustment  on K-6  and 7-12.  In  the case  of Hooper  Bay,                                                                    
under the  same statute if  a community went above  425 ADM,                                                                    
each  facility received  a single  adjustment. Once  the 425                                                                    
mark  was exceeded,  the community  received one  adjustment                                                                    
instead of two. The bill would help fix the problem.                                                                            
                                                                                                                                
Representative  Wilson  asked  for verification  it  [Hooper                                                                    
Bay] was the only school in the predicament.                                                                                    
                                                                                                                                
Mr.  Blackwell answered  in  the  affirmative. Currently  it                                                                    
[Hooper  Bay] was  the only  school with  an ADM  above 425,                                                                    
with a single school in a community.                                                                                            
                                                                                                                                
Co-Chair Seaton referenced testimony  from the previous bill                                                                    
hearing. He detailed there was  a provision under subsection                                                                    
(l)  specifying  that  a  district   could  not  reopen  and                                                                    
reconsolidate  a school  that had  been consolidated  within                                                                    
the past seven years. He  asked for verification that it was                                                                    
not the bill's  intention to have closed  schools reopen and                                                                    
then close to count as reconsolidated numbers.                                                                                  
                                                                                                                                
Senator von Imhof answered in  the affirmative. She detailed                                                                    
there  was  a  provision   specifying  a  school  could  not                                                                    
consolidate  and reopen  within a  seven-year period.  Under                                                                    
extenuating circumstances, a district  may apply to DEED for                                                                    
approval to reopen a school.                                                                                                    
                                                                                                                                
1:45:05 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara did  not see any negative  attributes of the                                                                    
bill.  He  surmised  that  schools  that  could  consolidate                                                                    
currently -  it was  mostly an  issue impacting  Anchorage -                                                                    
would receive a smaller  penalty for consolidating and there                                                                    
would be  no cost  to other school  districts. He  asked for                                                                    
verification  there would  be no  detriment to  other school                                                                    
districts.                                                                                                                      
                                                                                                                                
Ms. Efird  answered in the  affirmative. She  explained that                                                                    
the option was voluntary, and  the department had no problem                                                                    
with the bill.                                                                                                                  
                                                                                                                                
Vice-Chair  Gara  reviewed the  two  fiscal  notes from  the                                                                    
Department  of Education  and Early  Development. The  first                                                                    
note from  DEED showed  no fiscal  impact on  the foundation                                                                    
program [OMB  Component Number 141]. The  second fiscal note                                                                    
(OMB  Component  Number  2804) from  DEED  included  a  fund                                                                    
capitalization  of grants  and benefits  of $386,300  to the                                                                    
Public Education Fund.                                                                                                          
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT  CSSB  216(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
There being NO OBJECTION, CSSB  216(FIN) was REPORTED out of                                                                    
committee  with  a  "no recommendation"  recommendation  and                                                                    
with  one  previously  published  fiscal  impact  note:  FN3                                                                    
(EED); and one previously published zero note: FN4 (EED).                                                                       
                                                                                                                                
1:47:29 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:49:34 PM                                                                                                                    
RECONVENED