Legislature(2017 - 2018)CAPITOL 106

02/21/2018 08:30 AM EDUCATION

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         HB 212-REAA & SMALL MUNI SCHOOL DISTRICT FUND                                                                      
8:31:20 AM                                                                                                                    
CHAIR DRUMMOND announced  that the first order  of business would                                                               
be HOUSE  BILL NO. 212,  "An Act  relating to funding  for school                                                               
construction and major maintenance;  and relating to the regional                                                               
educational attendance  area and small municipal  school district                                                               
8:32:13 AM                                                                                                                    
REPRESENTATIVE  NEAL FOSTER,  Alaska State  Legislature, speaking                                                               
as  prime  sponsor,  stated  that  this  bill  would  expand  the                                                               
Regional  Education Attendance  Area and  Small Municipal  School                                                               
District Fund  to include major  maintenance.  Currently  it only                                                               
provides  funds for  new school  construction.   This bill  would                                                               
help reduce deterioration of schools  and save the state millions                                                               
of dollars  for full school replacement  costs since preventative                                                               
maintenance would be  done.  He indicated that  the Coalition for                                                               
Education Equity is comprised of  several rural school districts.                                                               
The CEE has been heavily involved with the Kasayulie case.                                                                      
8:33:43 AM                                                                                                                    
JANE  PIERSON, Staff,  Representative Neal  Foster, Alaska  State                                                               
Legislature, stated that HB 212 would  expand the use of funds in                                                               
the  Regional   Education  Attendance   Area  (REAA)   and  small                                                               
municipal school  district fund  to include major  maintenance in                                                               
addition to new school construction.                                                                                            
MS.  PIERSON  explained that  the  bill  had three  sections,  as                                                               
follows:    Section 1  would  add  a  new  subsection (f)  to  AS                                                               
14.11.013, which  would add the  requirement that  the Department                                                               
of  Education create  two lists  to be  updated annually  for the                                                               
capital  improvement  grant schedule.    One  list would  be  for                                                               
projects funded  for the REAA  fund and  the second list  for all                                                               
other  projects.     Section  2  of  the  bill   would  amend  AS                                                               
14.11.030(a) to  allow costs  for major maintenance  to be  to an                                                               
allowable use  in the  REAA fund.   Section 3  of the  bill would                                                               
amend  AS  14.11.035, Report  on  school  construction and  major                                                               
maintenance  funding,  which  would remove  outdated  references,                                                               
clarify  the timeframe  on annual  submission  and would  include                                                               
major maintenance funding under HB 212 to the report.                                                                           
8:34:36 AM                                                                                                                    
MS.   PIERSON  explained   that  the   school  construction   and                                                               
maintenance  grant programs  were the  only significant  programs                                                               
that  provide funding  for new  construction renovation  or major                                                               
maintenance  for  schools  in  our  communities  without  bonding                                                               
capacity.   A  healthy continued  grant program  for construction                                                               
when needed and ongoing major  maintenance would provide a vetted                                                               
solution  for  the funding  of  high  priority major  maintenance                                                               
needs, including boilers, roofs,  and other important systems for                                                               
our schools.   The program  has been a  major success.   The REAA                                                               
and  small  school  district  funds  are  available  for  funding                                                               
projects  and school  construction grants  (indis.) have  greatly                                                               
reduced the number of schools on the list.                                                                                      
MS. PIERSON  said that  since 2014,  when the  legislature passed                                                               
Senate Bill  64 placing a  moratorium on approving  projects that                                                               
are  funded  by debt  reimbursement  authorized  by local  voters                                                               
until July  1, 2020, there  has been an increase  in applications                                                               
vying  for legislative  funding  on the  major maintenance  grant                                                               
funding list.   Therefore  HB 212  was good  for rural  Alaska as                                                               
well as urban  Alaska, she said.  By adding  major maintenance to                                                               
the REAA  and small  district fund,  other non-REAA  projects can                                                               
rise more quickly to the top of the major maintenance list.                                                                     
8:36:10 AM                                                                                                                    
REPRESENTATIVE  KOPP  asked  for  further  clarification  on  the                                                               
priority list, specifically how the priorities would be weighed.                                                                
MS. PIERSON answered  that she conferred with  the department who                                                               
indicated  that two  lists  would  be created.    One list  would                                                               
contain  projects for  REAA and  small school  districts and  the                                                               
second  list would  list all  the rest  of the  projects.   These                                                               
projects would  continue to be  prioritized in the same  way they                                                               
currently  are;  however,  this  new  list  would  include  major                                                               
maintenance and  new school construction.   She further explained                                                               
that the  same rating system  currently being used will  be used,                                                               
including that  it would  maintain the  same appeals  process and                                                               
reconsideration process currently in statute.                                                                                   
8:37:25 AM                                                                                                                    
REPRESENTATIVE  KOPP related  his understanding  that it  sounded                                                               
like that this would be done by regulation.                                                                                     
MS. PIERSON answered  yes; that the department said it  can do so                                                               
without any additional cost.                                                                                                    
8:37:35 AM                                                                                                                    
CHAIR DRUMMOND  asked for further  clarification on  other things                                                               
included in major maintenance.                                                                                                  
MS. PIERSON  answered that major  maintenance would  also include                                                               
bringing things into  compliance with building codes  and it will                                                               
save the  state money in  the long  run by keeping  these schools                                                               
viable  and continuing  to  create  educational opportunities  in                                                               
these   small  communities   and   help   foster  healthy   rural                                                               
communities in Alaska.                                                                                                          
CHAIR  DRUMMOND asked  whether this  would be  limited to  the 23                                                               
districts listed in attachment 1.                                                                                               
MS. PIERSON agreed.                                                                                                             
8:39:01 AM                                                                                                                    
SCOTT  MACMANUS, Superintendent,  Alaska Gateway  School District                                                               
(AGSD), said he  appreciated the opportunity to  speak in support                                                               
of HB 212.   He stated that he  has been at the AGSD  for over 20                                                               
years and he has been the  superintendent for the past 20 months.                                                               
The school  has been using local  wood sources to heat  and power                                                               
some of the schools.  The  district has done considerable work on                                                               
energy  efficiency,  including  converting  the  school  lighting                                                               
system to LEDs.   He related that the AGSD  has been pursuing any                                                               
available federal  funds that will  help expand those  savings to                                                               
better serve students.                                                                                                          
MR.  MACMANUS   highlighted  one   issue,  which  has   been  the                                                               
district's inability to gain major  maintenance funding using the                                                               
Capital Improvement  Project (CIP)  list.   His district  has not                                                               
received  CIP funding  since  2009.   He said  the  AGSD and  the                                                               
Coalition  for  Education Equity  strongly  support  the idea  of                                                               
allowing flexibility  to use school construction  funds for major                                                               
maintenance.  He said he hoped  that HB 212 would assist and meet                                                               
the district's  needs for maintenance projects.   He acknowledged                                                               
that these projects  have been deferred.  The AGSD  has wanted to                                                               
move  its  maintenance  projects  forward, such  as  a  sprinkler                                                               
system at  the Tok  school that  has been  out of  compliance and                                                               
costs  $50 thousand  to  maintain  each year.    He related  that                                                               
classes have  to move  out of  some classrooms  due to  broken or                                                               
leaking pipes.   Last year,  this critical project moved  up from                                                               
number 47  to number  14 on  the CIP list.   Replacement  of this                                                               
system  would  cost  $1.2 million  dollars,  which  exceeded  the                                                               
amount the  school district could  afford to do  on its own.   He                                                               
characterized this  project as one  glaring example,  noting that                                                               
all of the  schools were aging.  He said  that the oldest school,                                                               
Northway School, was  40 years old, noting the  sewer system kept                                                               
freezing  due  to  floor  shifts   since  the  building  sits  on                                                               
permafrost.  He  said that funds for major  maintenance are being                                                               
diverted from  the primary  mission of  educating students.   The                                                               
district constantly  must evaluate  how to provide  education for                                                               
its students.   He offered  his support  and the support  of both                                                               
organizations for the bill.                                                                                                     
8:43:25 AM                                                                                                                    
REPRESENTATIVE  JOHNSTON  asked  how  many  people  the  district                                                               
MR. MACMANUS answered that the  district serves 400 students over                                                               
26,000 square miles  ranging from Eagle Village to  Mentasta.  He                                                               
stated that the district has two fulltime maintenance staff.                                                                    
8:43:49 AM                                                                                                                    
REPRESENTATIVE  JOHNSTON related  her understanding  that he  has                                                               
two  fulltime  maintenance  staff.   She  asked  whether  he  has                                                               
considered  using  local  village   resources  for  some  of  the                                                               
MR.  MACMANUS  answered  that whenever  possible  he  uses  local                                                               
support; however, it has been  difficult to find qualified people                                                               
in some of the small  communities that can manage the complicated                                                               
facilities.  Some of the work  must be done by those qualified to                                                               
do it but whenever possible the district uses local support.                                                                    
8:44:32 AM                                                                                                                    
CHAIR DRUMMOND  asked whether the Alaska  Gateway School District                                                               
in the unorganized borough.                                                                                                     
MR. MACMANUS answered yes.                                                                                                      
CHAIR  DRUMMOND answered  that the  community does  not have  any                                                               
local property taxes or sales taxes.                                                                                            
MR. MACMANUS agreed.                                                                                                            
8:45:20 AM                                                                                                                    
LISA SKILES  PARADY, PhD; Executive  Director, Alaska  Council of                                                               
School    Administrators     (ACSA);    Representative,    Alaska                                                               
Superintendents Association  (ASA), Association of  Alaska School                                                               
Boards   (AASB),  stated   that   the  ACSA   was  the   umbrella                                                               
organization  for  all   professional  educators,  including  the                                                               
Alaska  Superintendents Association,  the  Alaska Association  of                                                               
Secondary  Principals,  the   Alaska  Association  of  Elementary                                                               
Principals,  and  the  Alaska School  Business  Officials.    She                                                               
stated these organizations are in support of HB 212.                                                                            
8:46:16 AM                                                                                                                    
DR.  PARADY  thanked  members  for the  important  work  on  many                                                               
challenges facing  Alaska today  and especially  appreciate their                                                               
support of  tools that support the  school districts.    She said                                                               
that  her  organizations support  HB  212  since it  would  allow                                                               
access  to funds  to sustain  major maintenance,  which helps  to                                                               
delay replacement capital  costs.  This bill does  so by allowing                                                               
REAAs  and  small  municipal  school   districts  to  fund  major                                                               
maintenance  in addition  to school  construction under  the REAA                                                               
and  small   municipal  funds.     For  these  reasons,   and  in                                                               
recognition  of  the vital  importance  of  major maintenance  to                                                               
schools  across  the  state,  the  organizations  she  represents                                                               
support the bill.  She focused  on the REAAs across the state and                                                               
in small municipal districts without  the ability to access other                                                               
support.  She  stated that the organizations  strongly support HB
212 as it  provides useful flexibility.  She  characterized it as                                                               
another tool  in the  toolbox during  a time  that the  state has                                                               
been struggling.  She thanked members for their work.                                                                           
8:47:47 AM                                                                                                                    
The committee took an at-ease from 4:47 p.m. to 4:49 p.m.                                                                       
8:49:24 AM                                                                                                                    
SARAH SLEDGE,  Executive Director, Coalition of  Education Equity                                                               
(CEE),  stated   that  the  CEE  was   a  statewide  organization                                                               
representing   Alaska   school  districts,   organizations,   and                                                               
individuals who  are concerned about  the quality and  breadth of                                                               
educational opportunities  available to  Alaska's children.   Her                                                               
organization  was   formerly  known  as  the   Citizens  for  the                                                               
Educational   Advancement  of   Alaska's  Children   (CEAAC),  an                                                               
organization that  advocated for reform at  the legislative level                                                               
while  pursing  the  Kasayulie and  Moore  lawsuits,  which  were                                                               
settled in 2011 and 2012, respectively.                                                                                         
8:50:00 AM                                                                                                                    
MS.  SLEDGE  asked  the  committee   to  consider  the  Kasayulie                                                               
lawsuit, which was filed in  1997 regarding the method of funding                                                               
capital  projects for  education.   At the  time the  lawsuit was                                                               
filed,  many of  the  physical facilities  of plaintiffs'  school                                                               
districts were  in dire need of  replacement or in need  of major                                                               
maintenance   exhibiting   widespread   deterioration,   physical                                                               
dangers, structural  deficiencies, inability to  satisfy relevant                                                               
code requirements and a lack of sufficient instructional space.                                                                 
8:50:33 AM                                                                                                                    
MS. SLEDGE  stated that as  REAAs, these school districts  do not                                                               
have the legal  authority to raise capital funds  through a local                                                               
capital  tax  levy  or  bond  issue.   At  the  same  time,  most                                                               
municipal school  districts have  bonding capacity  sufficient to                                                               
raise  capital funds  and  access to  state  funding for  capital                                                               
projects through  the state's debt  reimbursement program.   This                                                               
resulted in disparities between  facilities in plaintiffs' school                                                               
districts and those  in districts with the ability  to pass local                                                               
bond  issues  to  raise  the  necessary  capital  for  facilities                                                               
funding, major maintenance and renovation.                                                                                      
8:51:12 AM                                                                                                                    
MS.  SLEDGE  related that  in  1999,  the  court found  that  the                                                               
state's  history   and  practice  of  funding   of  rural  school                                                               
facilities  violated  its  obligations under  the  education  and                                                               
equal protection clauses  of the Alaska Constitution  and Title 6                                                               
of the Civil Rights Act.  She  stated that CEAAC and the State of                                                               
Alaska (SOA) reached a settlement in  the lawsuit in 2011.  Prior                                                               
to  the settlement,  CEAAC  worked with  legislators  in 2010  on                                                               
passage of  Senate Bill 237,  which directed 24 percent  of funds                                                               
allocated  to bond  debt  reimbursement to  REAA  schools on  the                                                               
Department of Education and Early  Development's (DEED) CIP list.                                                               
This established  a systematic mechanism for  identifying funding                                                               
amounts  for rural  school construction,  which  was expanded  to                                                               
include small  municipal districts in  2013.  She  mentioned that                                                               
when  Senate  Bill  237  was  drafted  there  was  discussion  on                                                               
including language in  the bill that would permit the  fund to be                                                               
used  for school  construction  and  major maintenance  projects;                                                               
however, the  need for school  construction was great and  it was                                                               
given priority.                                                                                                                 
8:52:20 AM                                                                                                                    
MS. SLEDGE  said that while several  school construction projects                                                               
remain  on  the  CIP  list,   many  have  been  completed  and  a                                                               
significant  backlog  of major  maintenance  exists  in REAA  and                                                               
small municipal school districts.   As a result, the situation of                                                               
deteriorating   school   facilities   has   created   unsafe   or                                                               
uncomfortable environments that interfere  with or impede student                                                               
learning  or  create  increased   costs  for  maintenance.    She                                                               
expressed  the CEE's  concern that  continued deferment  of major                                                               
maintenance   will  necessitate   a  larger   number  of   school                                                               
construction  projects in  the future  at great  cost to  Alaska.                                                               
This  bill would  seek  to  allow the  REAA  and small  municipal                                                               
school  district  fund  to  be  used  for  major  maintenance  in                                                               
addition  to  school construction.  She  said,  "We believe  this                                                               
follows  the intent  of the  Kasayulie case,  seeking to  achieve                                                               
parity in funding  between areas with bonding  capacity and those                                                               
that do not."  She offered the CEE's support for HB 212.                                                                        
8:53:23 AM                                                                                                                    
CHAIR DRUMMOND announced that HB 212 would be held over.                                                                        

Document Name Date/Time Subjects
HB 212 - Sponsor Statement 2.16.18.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Attachment #1 Districts covered by the bill.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Attachment #2 REAA & Sm School Fund.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Attachment #3 School School Construction Grant Fund, Final List.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Attachment #4 Major Maintenance List FY19 Final.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Attachment #5 Kasayulie Order.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Attachment #6 Annual Report School Capital Project Funding Under SB237.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
SB 237
HB 212 Bill version D.PDF HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Fiscal Note DEED Education Support and Admin Services.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
HB 212 Support Document 2.17.18.pdf HEDC 2/21/2018 8:30:00 AM
HB 212
AASB Support of HB 339.pdf HEDC 2/21/2018 8:30:00 AM
HB 339