Legislature(2005 - 2006)CAPITOL 106
03/03/2005 11:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| HB13 | |
| HB128 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 13 | TELECONFERENCED | |
| *+ | HB 128 | TELECONFERENCED | |
HB 13-SCHOOL CONSTRUCTION BOND REIMBURSEMENT CHAIR NEUMAN announced that the first order of business would be HOUSE BILL NO. 13 "An Act relating to reimbursement of municipal bonds for school construction; and providing for an effective date." 11:10:38 AM REPRESENTATIVE GATTO, sponsor to HB 13, stated that this legislation is a way for urban districts to finance school construction. He said that there is a shortage of space in several areas in Alaska, specifically in the Mat-Su Valley and Anchorage and as schools deteriorate, they need replacement. He related that this bill allows for the construction of schools where the state supplies 70 percent of the cost and the homeowners and residents of the area supply 30 percent. REPRESENTATIVE THOMAS commented that Haines is an organized municipality and qualifies [for the proposed legislation]. REPRESENTATIVE GATTO stated that he is unaware of any areas in the state that would not qualify for the "70/30" division of funding. He remarked that this funding is open to everyone in the state if those interested, apply. CHAIR NEUMAN asked if this legislation will act like a new school bond or if it can be used for repairs and maintenance. REPRESENTATIVE GATTO said that this legislation does not cover routine repairs and maintenance, but does apply to reconstruction or major maintenance. 11:13:55 AM REPRESENTATIVE GARA commented that this legislation is something that wealthier [or urban] districts in the state can take advantage of. Since many of the rural communities don't do matching bond contributions, he related, those schools are usually funded through an appropriation. He said that if school construction is pushed in places that need it, then he would like a commitment from the sponsor to address the needs of rural districts [that cannot benefit from this legislation]. He questioned if [this legislation] is viewed as a global way to help all the school districts. He asked if Representative Gatto supports the funding of rural school district construction and maintenance. REPRESENTATIVE GATTO reminded Representative Gara that legislation enabling the "70/30" split construction issue expired [January 1, 2005]. He related that some districts didn't have bonding available or didn't put bonding out at the time. He explained that this bill extends the old bill to July 1, 2006 and gives [urban communities] an opportunity to put bonding out there. The important part of this legislation is the commitment from a community to fund 30 percent [of school construction costs]. He inquired as to the percentages supplied by rural communities to cover school construction costs. REPRESENTATIVE GARA said that this bill only applies to school districts that have a tax base that bond, and it doesn't apply to the REAA's (Rural Education Attendance Areas) or to the smaller communities that don't bond. He explained, "if I feel that we're not going to be supportive to the bush communities and help them with their maintenance and construction problems ... I think I will end up fighting this ... I think all of the school districts need help in this area ... I am not going to get into a regional war where we are trying to do something for our own districts but not for other people's districts ... what I was really looking for was a commitment that we could all work together to ... get through the maintenance and construction list for those schools that aren't going to benefit from this bill." REPRESENTATIVE GATTO stated that he can commit to "work." He said that this legislation is available to any district that applies for [school construction funding assistance]. 11:17:11 AM REPRESENTATIVE GARA stated that the small, rural, and REAA districts don't apply and can't apply, so they might want to, but they are unable to. He explained that he will support this legislation as long as he feels that there will be support for the rural districts when that time comes. CHAIR NEUMAN said that Mr. Jeans will be available to answer questions concerning issues of funding in rural districts. REPRESENTATIVE THOMAS pointed out that the Haines Borough recently went through an election to bond and it will cost $2.67 "mills" that they are willing to put on their "mill" rate to build a new school. He said, "it depends on what definition ... they are rural because they are an organized municipality ... and they are going to borrow 17 or 16 because the state ... they're under the old plan, 70/30, and are willing to do that ... it did pass ... little towns are willing to do it, but at a big expense ... three of the schools are ready to fall down ... it is cheaper to build a new one than it is to replace or remodel the old ones." 11:19:40 AM REPRESENTATIVE GRUENBURG stated that he is sensitive to the issues in bush communities and has made commitments to the bush caucus in helping provide for school construction. He emphasized that he wants to move HB 13 forward, while keeping in mind the needs of bush communities. 11:21:38 AM EDDY JEANS, Director, School Finance, Department of Education and Early Development, (EED), stated that he had previously given testimony on HB 13 and had described the position of the EED. CHAIR NEUMAN asked Mr. Jeans to give the committee an idea on how to address the needs of rural Alaska with the construction of new schools and the repair [of old schools]. MR. JEANS replied that the mechanism is already in place and the EED has a process where the new construction and major maintenance requests, from school districts, are evaluated. He explained that the lists are prioritized for the legislature. On the EED's web page, he related, there is the school construction list as well as the major maintenance list. He reminded the committee that the governor has recommended in his budget, that the first 20 projects on the major maintenance [list] be funded this session. The process is there, he said, and the list is there, and it is up to the legislature to consider those requests. REPRESENTATIVE GARA inquired as to the types of schools included on the major maintenance list. MR. JEANS stated that [the list] includes any school district that applies. It is up to the school districts to apply, he said, and after they apply the EED goes through the prioritization process. 11:24:48 AM REPRESENTATIVE GARA stated that, in 2002, [the legislature] passed the last big bonding proposal, including a state bond for rural districts, and a match for the districts that contributed. He inquired as to what Anchorage funded through its 30 percent match and if they were schools on the major maintenance list. He asked if schools that are on the major maintenance list are the ones that end up not being bonded through the local match program. MR. JEANS explained that on the 2002 "statewide geo bond list" of schools, there was one project from the Anchorage School District and the rest were REAA school districts. He said that at the same time that that "geo bond package" was approved by the voters, the debt reimbursement program opened up and was available to all municipalities. Included in that legislation, he related, was that the grant program was closed to municipal school districts because the debt program was available to them. That legislation has "sunsetted", he said, so the two lists that the EED compiled this year include both REAA's and municipal school districts. REPRESENTATIVE GARA asked if non-REAA districts have the ability to bond. MR. JEANS said that non-REAA districts have the ability to bond, but they may not have the capacity [to bond]. CHAIR NEUMAN asked Mr. Jeans to explain what REAA stands for. MR. JEANS said that REAA stands for Regional Education Attendance Area. REPRESENTATIVE SALMON inquired as to how HB 13 affects the priority list of school construction. MR. JEANS explained that it does not affect the school construction list or the major maintenance list, other than if this bill was to pass, those municipalities that have projects on those lists could go back to their voters, get approval and bond for those projects. In response to Representative Salmon, Mr. Jeans said that the two different programs require separate appropriations. He explained that going into the 2007 budget, the EED is requesting $86 million to fund the debt reimbursement program for fiscal year 2006. He mentioned that the governor has requested $28 million for the first twenty projects on the major maintenance list. 11:29:29 AM KIM FLOYD, Public Information Specialist, Matanuska-Susitna Borough School District, (MSBSD), stated that the MSBSD has a school on "deed's" priority list for school construction and the state would have to invest $440 million before that school is built. She said that this school was needed three years ago. She continued: We have an average annual growth rate, in our district, of approxiamtely 7 percent ... 500 - 600 new kids each year ... the Knick Goose Bay area is the fastest growing area in the state of Alaska ... our school is number 31 on the "deed priority list", $440 million dollars before we get there, we need some relief, we're asking for help; I do hope that HB 13 can pass out of this committee, today, so that the conversation can continue. We are not trying to, by any means, create a regional debate. The reality is, with 500 to 600 kids new to our district every year, it is the equivalent of a new elementary school. We've had 300 new kids just since the count period ended. They are coming both from in the state and from out of the state. As you can imagine, this is creating great strain on our existing facilities, currently we have 52 portable classrooms in use throughout our district, approximately 12 percent of our students are educated in portable classrooms. They are fine for a temporary "stop gap" measure, but they certainly aren't a long-term investment in infrastructure. Those schools will still be needed thrity years down the road and portables certainly don't have that type of lifespan. CHAIR NEUMAN inquired as to the associated costs of using portable classrooms. MS. FLOYD said that each portable costs $70,000 to build and install plus the additional heating and electricity costs after installation. She explained that portables do not have [restroom] facilities and children are required to leave classrooms, unattended, and enter the main building. She pointed out that the MSBSD has a comprehensive, 20 year facility plan, has updated the 6 year plan submitted to "deed" each year, and are actively working with developers in the Mat-Su community to make sure that planning is efficient and cost effective. She emphasized that the MSBSD feels as though they have been extremely good stewards for bonding projects in the past, and expect to be in the future. CHAIR NEUMAN asked Ms. Floyd to comment on the process that the MSBSD will go through if HB 13 passes. 11:34:22 AM MS. FLOYD stated that the MSBSD has a 6 year "sub" plan that is given to the state to look at the capital infrastructure needs. The priority list generated from that plan helps to create a bond package list and that is forwarded to the borough assembly, she related. The borough assembly analyzes the needs and may repackage what the MSBSD created, she explained, and then they approve an intiative for the ballot. She pointed out that once that passes, the MSBSD must wait 4 years before the [new] school actually opens. She added that if the MSBSD were to successfully bond this fall, the new schools would not open until 2009. She emphasized that new schools were needed 3 years ago. She stated that MSBSD will need short term solutions in the meantime. CHAIR NEUMAN inquired as to the number of schools in the MSBSD that are over capacity. MS. FLOYD stated that there are 36 schools in the MSBSD; of the 17 elementary schools, the majority are in the Palmer-Wasilla area and there is not a single empty classroom. She explained that even with increased operating monies, class sizes cannot be reduced. She said that the MSBSD is at a critical point of looking at options that aren't acceptable to parents and that don't meet community expectations for quality education. She added that last year the funding that the legislature appropriated helped reduce class sizes at the Kindergarten level. CHAIR NEUMAN asked about the growth rate of the MSBSD. MS. FLOYD stated that the MSBSD has a growth rate of 500 to 600 students a year with an average annual growth of about 7 percent. She said that population forecasts estimate the MSBSD will be bigger than the [Anchorage School District] in 30 years. 11:37:01 AM REPRESENTATIVE THOMAS asked for clarification related to the MSBSD going under the last bond issue and applying for [new] schools. MS. FLOYD stated in the fall of 2003, the MSBSD passed $56 million in bonds. In response to Representative Thomas's follow up question regarding the application for more bonds, Ms. Floyd explained that last year, the MSBSD was faced with a 13 percent increase in assessed evaluations and that is the MSBSD's only source of revenue in the community for borough operations or for payment on bond debt. She said that the MSBSD was faced with a sales tax that was 1 percent borough wide, and dealing with discussions on real estate transfer fees and gravel extraction taxes. She said: We try very hard to make sure that we are in communication with all stakeholders in our community and the belief at that time was it was not a good idea, in that environment, to go forth with a school bond. We tend to be a little reactive in our community, we're learning to grow up, and we weren't quite at the crisis point that people felt that those bonds could have been successful in that environment. We're there now. We're at the precipice, we're going over ... we did do a survey this past fall, we asked residents how they felt about an $80 million dollar bond package, which would include 3 elementary schools and a high school - all needed projects. With the "70/30" bond debt reimbursement, we had a 75 percent support ... people know we've reached that edge ... our community is ready, and we would appreciate an extension and an opportunity to address our student's needs." 11:39:19 AM REPRESENTATIVE GATTO asked if the opening of the new hospital is included in the population growth prediction. MS. FLOYD said yes, along with the retail bloom that is occurring and the building of the biggest Wal-Mart in the state. She said that it is staggering to listen to developers and hear about what will hit the community around the MSBSD. REPRESENTATIVE THOMAS inquired as to the the Mat-Su community utilizing "forgiveness taxes". MS. FLOYD stated that the MSBSD is trying very hard to meet with developers and plan how to deal with the coming changes in the community. She said that the MSBSD feels that there is a very valuable public/private partnership that needs to happen. 11:42:02 AM CHAIR NEUMAN commented that property taxes in the Mat-Su Borough have risen over 40 percent in the last 3 years, with another expected rise of almost 13 percent this year. He emphasized that the community is willing, despite these tax increases, to support the school bond. REPRESENTATIVE GATTO inquired as to the development of a vocational technology focused high school and if it will affect the need for more funds. MS. FLOYD stated that the career and "vo-tech" high schools were part of the last bond package that was passed. She stated that there will also be an elementary school that will open in the fall of 2006, and it will be completely filled by the time it opens. She emphasized that these new schools will be at their maximum capacity when they open. REPRESENTATIVE WILSON stated that her district is losing so many teachers and programs, that it is hard to imagine how difficult the MSBSD situation is. MS. FLOYD said the the MSBSD realizes that this situation is very different than most districts in the state. She said that though they are addressing the situation adequately, the time has come where the MSBSD needs help. MS. FLOYD commented that the MSBSD will start surveying students and investigating where they are coming from. She mentioned that after Christmas break, at Goose Bay Elementary School, 10 students were enrolled that came from out of state. In response to Chair Neuman's comments on the benefits of "vo- tech" schools, Ms. Floyd stated that the MSBSD has the most highly recognized career and technical education programs in the nation. REPRESENTATIVE GATTO commented that the top six welding students all came from one school in the [Mat-Su] Valley. He also stated that the issues of growth in the Mat-Su Valley are causing severe expenses. 11:46:36 AM MARY FRANCIS, Executive Director, Alaska Council of School Administrators, (ACSA), stated that there are schools all over the state in need of construction and major maintenance, and the ACSA supports the continuation of the debt reimbursement program. She explained that the ACSA has a resolution that advocates for fully funding previously approved bonds as well as the continuation of the program. As you know, she said, there have been many years of minimal funding for school construction and major maintenance and it has created a huge need statewide. She mentioned that because there are high needs now, there are many municipalities that are willing to kick in their share of 30 or 40 percent [for construction and maintenance of schools] and the ACSA would very much support this legislation and hope that it passes out of committee. REPRESENTATIVE GARA asked if the ACSA has a position on the proposal for how much should be funded to get through the major maintenance and construction list. MS. FRANCIS stated that the ACSA supports following the list that the EED creates. She explained that the ACSA feels that the process by which people apply for placement on the EED's list is very thorough. She pointed out that the ACSA supports the funding of all school districts in the state of Alaska. REPRESENTATIVE GARA inquired as to the ACSA having a proposal on how far through the list the legislature should go this year, to be equitable. MS. FRANCIS stated that the ACSA has not addressed that issue, yet. REPRESENTATIVE GATTO asked for clarification about an earlier comment concerning full funding of existing bonding. MS. FRANCIS stated that some of the school districts were concerned that [the legislature] would cancel what was previously approved for bonding. 11:50:05 AM REPRESENTATIVE GATTO moved to report HB 13 out of committee with individual recommendations and the attached fiscal notes. There being no objections, HB 13 was reported out of the House Special Committee on Education.
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