Legislature(2017 - 2018)CAPITOL 106

03/10/2017 08:00 AM EDUCATION

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Audio Topic
08:03:18 AM Start
08:04:06 AM Confirmation Hearing(s): || University of Alaska Board of Regents
08:29:27 AM HB64
08:36:58 AM HB135
09:03:35 AM HB137
09:33:42 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearing: University of AK Board of TELECONFERENCED
Regents
+= HB 64 READING PROFICIENCY TASK FORCE; DYSLEXIA TELECONFERENCED
Moved CSHB 64(EDC) Out of Committee
*+ HB 135 SCHOOL CONSTRUCTION GRANT PROGRAM TELECONFERENCED
Heard & Held
-- Testimony <Invited/Public> --
*+ HB 137 ST. COUNCIL ON THE ARTS: PUBLIC CORP. TELECONFERENCED
Moved HB 137 Out of Committee
-- Public Testimony --
**Streamed live on AKL.tv**
            HB 135-SCHOOL CONSTRUCTION GRANT PROGRAM                                                                        
                                                                                                                                
8:36:58 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND  announced that the  next order of  business would                                                               
be  HOUSE BILL  NO.  135,  "An Act  relating  to school  district                                                               
participation in the school construction grant program."                                                                        
                                                                                                                                
8:37:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   DEAN   WESTLAKE,   Alaska   State   Legislature,                                                               
introduced HB  135 paraphrasing from a  prepared statement, which                                                               
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     HB 135  will allow  the Commissioner of  the Department                                                                    
     of  Education  to  grant   time  extensions  to  school                                                                    
     districts  raising their  percentage  share of  project                                                                    
     costs appropriated through  the "Educational facilities                                                                    
     maintenance and  construction fund" (as  outlined under                                                                    
     AS  14.11.008 "School  district participation  in grant                                                                    
     program" for appropriations made under AS 37.05.560).                                                                      
                                                                                                                                
     Currently, school  districts are required to  raise the                                                                    
     percentage share  of the total  project cost  within 3-                                                                    
     years of appropriation approval.                                                                                           
                                                                                                                                
     However,  since   the  adoption  of  the   3-year  time                                                                    
     constraint  in 1993,  multiple  projects have  required                                                                    
     more time to raise their required percentage share.                                                                        
                                                                                                                                
     The  more   recent  examples  of  projects   that  have                                                                    
     required  more  time  include,   but  not  limited  to,                                                                    
     projects  within  the   Yukon  Flats  School  District,                                                                    
     Northwest  Arctic   Borough  School   District,  Yupiit                                                                    
     School District and the  Kenai Peninsula Borough School                                                                    
     District.                                                                                                                  
                                                                                                                                
     According  to  the  Department  of  Education  &  Early                                                                    
     Development, the  3-year time lapse is  appropriate for                                                                    
     about  95%  of  approved projects.    However,  there's                                                                    
     about  5% of  the projects  that could  utilize a  time                                                                    
     extension  when  faced with  extenuating  circumstances                                                                    
     outside of the school districts' control.                                                                                  
                                                                                                                                
     The Kivalina Replacement School  project is one example                                                                    
     of why a provision for extensions is needed.                                                                               
                                                                                                                                
     In FY2015  the State  appropriated $48,958,120  for the                                                                    
     project  State  Share  funding, and  the  participating                                                                    
     share  amounted   to  $12,239,530,  for  a   total  EED                                                                    
     Recommended amount to $61,197,650.                                                                                         
                                                                                                                                
     However, the grant agreement has  not yet been executed                                                                    
     for reasons beyond the control  of both the Borough and                                                                    
     District.                                                                                                                  
                                                                                                                                
     First, for FY 2016 a  moratorium was placed on approval                                                                    
     of the  grant pending legislative consideration  of the                                                                    
     balance of  funding [does  it need  further explanation                                                                    
     on the moratorium?].                                                                                                       
                                                                                                                                
     Secondarily, the project cannot  begin until the access                                                                    
     road is  constructed as a  separate project.   The road                                                                    
     development is  proceeding in conjunction  with DOT/PF,                                                                    
     but  it is  not scheduled  to be  completed before  the                                                                    
     three-year deadline expires.                                                                                               
                                                                                                                                
     Without an  approved grant  agreement, it  is difficult                                                                    
     to  apply for  other  grant funds  that  could be  used                                                                    
     towards the local share.                                                                                                   
                                                                                                                                
     Furthermore, if the Borough  and School District cannot                                                                    
     apply  for  an extension,  there  is  potential that  a                                                                    
     critically  needed school  project might  be forced  to                                                                    
     forfeit  the previously  appropriated State  funds when                                                                    
     all that  is needed is  more time to  secure additional                                                                    
     matching sources.                                                                                                          
                                                                                                                                
     In  this  case, if  HB  135  is passed,  the  Northwest                                                                    
     Arctic   Borough  could   apply  in   writing  to   the                                                                    
     Commissioner  to   request  an   extension.     If  the                                                                    
     Commissioner  decided  that  the  project  demonstrated                                                                    
     good  cause to  for the  requested extension,  then the                                                                    
     Commissioner could grant one.                                                                                              
                                                                                                                                
REPRESENTATIVE  WESTLAKE named  projects that  fall within  the 5                                                               
percent  category,  which  are:    Tuluksak  School  improvement,                                                               
Hoonah  major  maintenance,   Arctic  Village  soil  remediation,                                                               
Kivalina replacement  school, and  Kachemak Selo new  K-12 school                                                               
facility.                                                                                                                       
                                                                                                                                
8:41:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSTON asked  what the  current balance  is for                                                               
the outstanding 5 percent, and how  many of the schools were part                                                               
of a judicial decision [Kasayulie v. State of Alaska].                                                                        
                                                                                                                                
REPRESENTATIVE   WESTLAKE   said   he   could   provide   further                                                               
information  regarding   the  outstanding   5  percent,   and  he                                                               
clarified Kivalina School was part of a lawsuit settlement.                                                                     
                                                                                                                                
REPRESENTATIVE  JOHNSTON  inquired  as to  whether  the  Kivalina                                                               
School project includes infrastructure  [access] to the school as                                                               
well as the school building.                                                                                                    
                                                                                                                                
REPRESENTATIVE  WESTLAKE  advised  a   separate  project  is  the                                                               
infrastructure   road  being   handled  by   the  Department   of                                                               
Transportation & Public Facilities (DOT&PF).                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP surmised that the  access road that is needed                                                               
has delayed the replacement of Kivalina School.                                                                                 
                                                                                                                                
REPRESENTATIVE  WESTLAKE  concurred and  said  the  road must  be                                                               
completed  prior  to  the  school being  rebuilt,  and  the  road                                                               
project is outside of the school district's control.                                                                            
                                                                                                                                
CHAIR  DRUMMOND questioned  whether construction  can begin  on a                                                               
school prior to having the local share in hand.                                                                                 
                                                                                                                                
REPRESENTATIVE  WESTLAKE deferred  comment  to the  mayor of  the                                                               
Northwest Arctic Borough.                                                                                                       
                                                                                                                                
8:43:56 AM                                                                                                                    
                                                                                                                                
ANNMARIE O'BRIEN,  PhD, Superintendent, Northwest  Arctic Borough                                                               
School Board  (NWABSD), stated support  for HB  135, paraphrasing                                                               
from  a  prepared  statement, which  read  as  follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     The   Northwest   Arctic    Borough   School   District                                                                    
     wholeheartedly   endorses  House   Bill  135,   a  bill                                                                    
     addressing    the   participation    in   the    school                                                                    
     construction  grant program  allowing the  Commissioner                                                                    
     of  Education  to  grant  an   extension  of  the  time                                                                    
     limitation  for  the  identification  of  the  required                                                                    
     local participating share of grant funding.                                                                                
                                                                                                                                
     Currently, the  statutes require  that the  local match                                                                    
     be  identified within  three years  of the  approval of                                                                    
     the legislative appropriation of  grant funding.  There                                                                    
     is no  provision for  the consideration  of exceptional                                                                    
     circumstances  that warrant  additional time  to secure                                                                    
     the match.   This bill recognizes  that such situations                                                                    
     may occur  from time  to time  and allows  Boroughs and                                                                    
     Districts to justify and  petition the Commissioner for                                                                    
     an extension.   Without such  an extension, there  is a                                                                    
     potential  that  a  critically  needed  school  project                                                                    
     might  be forced  to  forfeit  the State  appropriation                                                                    
     when  all  that  is  needed  is  more  time  to  secure                                                                    
     additional local funding sources.                                                                                          
                                                                                                                                
     The  existing State  regulations for  administration of                                                                    
     the  school  construction  grant  program  protect  the                                                                    
     State's  interests  and  assure   the  local  match  is                                                                    
     provided.   The  Department releases  grant funding  to                                                                    
     recipients  only  after specific  milestone  conditions                                                                    
     are met.   The  payments are a  percentage of  only the                                                                    
     State share of  the project amount and  in addition, 5%                                                                    
     of the state share is  withheld until the source of the                                                                    
     local match  is identified.   There is not a  danger of                                                                    
     the State over reimbursing a project.                                                                                      
                                                                                                                                
     Not  only is  the State  facing restricted  funding, so                                                                    
     are local governments.   Incorporating some flexibility                                                                    
     into  the provision  for local  match will  allow local                                                                    
     governments more time  to fund their share  of the cost                                                                    
     of a greatly needed school facility upgrade.                                                                               
                                                                                                                                
     Admittedly,  the Northwest  Arctic has  a project  that                                                                    
     would  benefit   from  this   bill  and   the  Kivalina                                                                    
     Replacement School project is  a perfect example of why                                                                    
     a provision for  exceptions is needed.   In April 2015,                                                                    
     the legislature appropriated  partial grant funding for                                                                    
     the  Kivalina Replacement  School.   At  that time  the                                                                    
     clock  started  ticking  to  secure  the  local  share.                                                                    
     However, the grant agreement has  not yet been executed                                                                    
     for several  reasons beyond the control  of the Borough                                                                    
     and District.   For FY 2016 a moratorium  was placed on                                                                    
     approval    of    the   grant    pending    legislative                                                                    
     consideration of the balance of funding.                                                                                   
                                                                                                                                
     Another  complication is  construction  of the  project                                                                    
     cannot begin until  an access road is  constructed as a                                                                    
     separate project.   The road development  is proceeding                                                                    
     in    conjunction    with   DOT/PF    [Department    of                                                                    
     Transportation  & Public  Facilities],  but  it is  not                                                                    
     scheduled   to  be   complete  before   the  three-year                                                                    
     deadline for  the match expires.   Without  an approved                                                                    
     grant  agreement, it  is difficult  to apply  for other                                                                    
     grant funds  that could  be used as  part of  the local                                                                    
     share.                                                                                                                     
                                                                                                                                
     House  Bill   135  will  delegate  to   the  Department                                                                    
     discretion  in  extraordinary  circumstances  to  allow                                                                    
     projects such  as Kivalina  Replacement School  to move                                                                    
     forward  without the  potential  of  having to  forfeit                                                                    
     appropriated funding, and to  continue managing risk to                                                                    
     the   State  and   local  entities   and  support   the                                                                    
     improvement of educational  conditions for the children                                                                    
     of Alaska.                                                                                                                 
                                                                                                                                
8:48:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSTON noted Northwest Arctic Borough School                                                                   
District (NWABSD) has been undergoing a methodical rebuilding of                                                                
the school  facilities begun in the  1990s or 2000, and  asked if                                                               
this is the final rebuild project.                                                                                              
                                                                                                                                
DR. O'BRIEN replied yes.                                                                                                        
                                                                                                                                
REPRESENTATIVE JOHNSTON  asked for the percentage  of the average                                                               
local participation match funding.                                                                                              
                                                                                                                                
DR. O'BRIEN replied the borough-required match is 20 percent.                                                                   
                                                                                                                                
CHAIR DRUMMOND expressed  concern that because of  the delay, the                                                               
project  will  cost  significantly  more,  and  thus  the  school                                                               
project, as well as school programs, may suffer.                                                                                
                                                                                                                                
DR.  O'BRIEN  said it's  hard  to  consider  the full  effect  of                                                               
inflation  on a  project that  has  been delayed.   However,  the                                                               
needs of the students attending  Kivalina School are paramount to                                                               
funding  issues.    The  school  is in  poor  condition  and  the                                                               
district makes the  best effort with the existing  facility.  She                                                               
pointed out as  the delay continues, energy  efficiencies and new                                                               
construction methods are becoming available.                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSTON  asked  for the  student  population  at                                                               
Kivalina School, and for the  number of students who graduated in                                                               
2016.                                                                                                                           
                                                                                                                                
DR. O'BRIEN  answered 160 students  are enrolled in  grades K-12,                                                               
and deferred response on the number of graduates.                                                                               
                                                                                                                                
CHAIR  DRUMMOND said  the legislature  has  been concerned  about                                                               
Kivalina School for  at least five years and asked  for an update                                                               
on the current project schedule.                                                                                                
                                                                                                                                
DR. O'BRIEN  said the  completion of  the road  is indeterminate,                                                               
but   once  construction   of  the   road  is   complete,  school                                                               
construction  can begin,  and that  is expected  to be  completed                                                               
within two years;  with the road construction  estimated at three                                                               
years,  a   five-year  timeframe  is  anticipated   in  the  best                                                               
circumstances.                                                                                                                  
                                                                                                                                
8:53:55 AM                                                                                                                    
                                                                                                                                
MIKE NAVARRE,  Mayor, Kenai Peninsula Borough,  said as currently                                                               
drafted,  HB  135 doesn't  directly  affect  the Kenai  Peninsula                                                               
Borough at  this time,  but he expressed  support for  the bill's                                                               
intent.  Mayor Navarre recalled  last year the borough received a                                                               
legislative grant in the amount of  $10 million to build a school                                                               
in  Kachemak Selo,  which is  a  small community  located at  the                                                               
terminus of  East End Road.   Access to  the school is  not legal                                                               
access because  of switchbacks and  the steep grade of  the road,                                                               
thus  the borough  is exploring  options  on where  to build  the                                                               
school.  The  bill would allow the commissioner,  for good cause,                                                               
to  provide some  flexibility [in  the school  construction grant                                                               
program] for issues such as  looking at school population trends.                                                               
Mayor Navarre  said additional flexibility  for good  cause makes                                                               
good sense.   Regarding the percentage of the match,  which is 35                                                               
percent for  the Kenai Peninsula  Borough, he cautioned  that due                                                               
to the economic  contraction and the fiscal  situation in Alaska,                                                               
the amount of  the match is a challenge for  local governments to                                                               
achieve.  He  noted the borough seeks to find  a successful model                                                               
that  can  be  applied  for all  local  governments  with  remote                                                               
schools  throughout the  state.   Mayor Navarre  related in  1991                                                               
there  was  a recommendation  to  relocate  Kivalina because  the                                                               
village was being eroded by the  ocean and the river; Kivalina is                                                               
the  best demonstrated  case  that  HB 135  may  prevent a  local                                                               
government from  rushing to find  the funds to preserve  a grant,                                                               
instead  of finding  the most  rational and  fiscally responsible                                                               
solutions.                                                                                                                      
                                                                                                                                
8:57:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSTON asked  the mayor if, given  a choice, the                                                               
borough would prefer  the $10 million designated  for the school,                                                               
for education, or for other capital projects.                                                                                   
                                                                                                                                
MR. NAVARRE responded that the  reality of budget priorities must                                                               
be faced.  He described  the existing student housing in Kachemak                                                               
Selo as deficient and inadequate,  and reluctantly suggested that                                                               
for  this community,  correspondence  education may  be the  best                                                               
option, or  perhaps a  change to  the grant in  order to  build a                                                               
multi-purpose  building   to  also  serve   as  a  school.     He                                                               
acknowledged funding education  is a dilemma for  the borough and                                                               
the state and expressed his support for education.                                                                              
                                                                                                                                
CHAIR DRUMMOND asked  if Kachemak Selo is located at  the head of                                                               
Kachemak Bay.                                                                                                                   
                                                                                                                                
MR. NAVARRE said  yes, adding the village is situated  at the end                                                               
of East End  Road and across tidal flats.   The village was built                                                               
in a  difficult area due  to its topography and  soil conditions;                                                               
in fact, to build a road would cost about $15 million.                                                                          
                                                                                                                                
CHAIR DRUMMOND surmised that busing is not an option.                                                                           
                                                                                                                                
MR. NAVARRE concurred and said  a gondola was considered but that                                                               
option was also ruled out - there are no easy options.                                                                          
                                                                                                                                
9:02:28 AM                                                                                                                    
                                                                                                                                
CHAIR  DRUMMOND,  after  ascertaining   no  one  else  wished  to                                                               
testify, closed public testimony on HB 135.                                                                                     
                                                                                                                                
[HB 135 was held over.]                                                                                                         
                                                                                                                                

Document Name Date/Time Subjects
CS HB64.pdf HEDC 3/10/2017 8:00:00 AM
HB 64
HB64 Fiscal Note LEG-COU-O2-23-17.pdf HEDC 3/10/2017 8:00:00 AM
HB 64
HB64 Letter of Support Council on Disabilities.pdf HEDC 3/10/2017 8:00:00 AM
HB 64
HB135A.PDF HEDC 3/10/2017 8:00:00 AM
HB 135
HB135 Sponsor Statement.pdf HEDC 3/10/2017 8:00:00 AM
HB 135
HB 135 Fiscal Note EED 3-03-17.pdf HEDC 3/10/2017 8:00:00 AM
HB 135
HB 135 Support Letter NWAB 2.24.17.PDF HEDC 3/10/2017 8:00:00 AM
HB 135
HB 135 Support Letter NWABSD 2.24.17.pdf HEDC 3/10/2017 8:00:00 AM
HB 135
HB 135 Participating Share Issue Examples.pdf HEDC 3/10/2017 8:00:00 AM
HB 135
HB137A.PDF HEDC 3/10/2017 8:00:00 AM
HB 137
HB137 Sponsor.pdf HEDC 3/10/2017 8:00:00 AM
HB 137
HB137 Supporting Document Brown.pdf HEDC 3/10/2017 8:00:00 AM
HB 137
HB137 Supporting Document Alaska Public Media.pdf HEDC 3/10/2017 8:00:00 AM
HB 137
HB 137 Fiscal Note EED 3-03-17.pdf HEDC 3/10/2017 8:00:00 AM
HB 137
HB137 Letter of Support Kawerak.pdf HEDC 3/10/2017 8:00:00 AM
HB 137