Legislature(2021 - 2022)ADAMS 519

04/19/2021 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HB 169 Out of Committee
-- Public Testimony --
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR SENATE BILL NO. 19(FIN)                                                                                                
     "An  Act  relating  to   allocations  for  the  special                                                                    
     education   service  agency;   extending  the   special                                                                    
     education   service  agency;   and  providing   for  an                                                                    
     effective date."                                                                                                           
1:55:28 PM                                                                                                                    
TIM  LAMKIN, STAFF,  SENATOR  GARY  STEVENS, introduced  the                                                                    
legislation. He  communicated Senator  Stevens' appreciation                                                                    
of  the  bill  hearing.  He  shared that  the  bill  was  an                                                                    
opportunity to recognize  an agency that did  a large amount                                                                    
with very  little. He explained  that the  Special Education                                                                    
Service Agency (SESA) was a  community of people providing a                                                                    
unique set of services  for severely disadvantaged youth. He                                                                    
stated there  was trust  and respect  for the  agency's work                                                                    
that involved helping many  schools, students, and families.                                                                    
He noted the subject area  was fairly sensitive and required                                                                    
significant compassion, patience, grace,  and love. The bill                                                                    
would  extend  the SESA  sunset  to  2029 and  adjusted  the                                                                    
agency's  funding formula  to keep  it whole  over the  next                                                                    
eight  years.   He  reported  that  the   latest  audit  was                                                                    
constructive  and illuminated  SESA's success  and efficacy.                                                                    
He detailed that the SESA  director was available online and                                                                    
the legislature's  auditor was available in  person to speak                                                                    
about the findings.                                                                                                             
Mr. Lamkin reviewed the sectional analysis (copy on file):                                                                      
     Section  1: AS  14.30.650  is amended  to increase  the                                                                    
     funding component  for SESA,  from an existing  rate of                                                                    
     $18.65 to  $23.13 times the  number of students  in the                                                                    
     state in average daily membership.                                                                                         
     Section 2:  AS 44.66.010(a)(6) Extends the  sunset date                                                                    
     for SESA to June 30, 2029.                                                                                                 
     Section 3:  Provides for  a retroactive  effective date                                                                    
     in  the event  the bill  doesn't pass  before June  30,                                                                    
     Section  4: Makes  the funding  component described  in                                                                    
     Section 1 effective July 1, 2021.                                                                                          
     Section  5: Provides  for an  immediate effective  date                                                                    
     upon its passage.                                                                                                          
1:58:04 PM                                                                                                                    
Representative Carpenter  asked why there was  a change from                                                                    
the existing rate from $18.65 to $23.13.                                                                                        
Mr.  Lamkin  answered  that SESA's  caseload  had  increased                                                                    
substantially with  flat funding  and flat  staffing levels.                                                                    
He relayed  that an  upcoming PowerPoint  presentation would                                                                    
explain the issue more thoroughly.                                                                                              
Representative LeBon  asked if the  rate had been  locked at                                                                    
$18.65 for quite some time.                                                                                                     
Mr. Lamkin replied  that the rate had been set  at $18.65 at                                                                    
the time  of the last  audit in 2013.  Prior to that  it had                                                                    
been 15 years since the last increase.                                                                                          
1:59:25 PM                                                                                                                    
PATRICK  PILLAI,   EXECUTIVE  DIRECTOR,   SPECIAL  EDUCATION                                                                    
SERVICE AGENCY  (via teleconference), provided  a PowerPoint                                                                    
presentation titled "SESA:  Special Education Service Agency                                                                    
Introduction" (copy on  file). He shared that  he had joined                                                                    
SESA in  1994 as  a deaf  education specialist.  He reviewed                                                                    
the presentation  with prepared  remarks beginning  on slide                                                                    
     This  is the  homepage of  SESA's website.  It provides                                                                    
     online  access to  program  services  and resources,  a                                                                    
     lending  library, online  professional development,  e-                                                                    
     modules, and  an easy process  for school  districts to                                                                    
     submit online referrals for  SESA service. The agency's                                                                    
     mission  reflects  a  focus on  addressing  the  unique                                                                    
     special  education  needs  of  students,  parents,  and                                                                    
     teachers across Alaska's 54 school districts.                                                                              
Mr. Pillai moved to slide 3:                                                                                                    
     The  statute  establishing   SESA  addresses  technical                                                                    
     assistance and  service to students with  low incidence                                                                    
     disabilities.  Low incidence  disabilities are  defined                                                                    
     as  occurring in  less than  one percent  of the  total                                                                    
     population. The  rarity of  the disability  often means                                                                    
     specialized services are not  normally available in the                                                                    
     school district.  SESA affords  such sites access  to a                                                                    
     specialist   with  an   endorsement  in   a  particular                                                                    
     disability area in addition to other resources.                                                                            
2:01:05 PM                                                                                                                    
Mr. Pillai turned to slide 4:                                                                                                   
     SESA's logic  model captures the  design of  process to                                                                    
     deliver specialized  services to parents,  schools, and                                                                    
     school districts. The intent is  to address the gap via                                                                    
     solutions that  promote availability of  SESA's service                                                                    
     through  on-site and  distance  support. This  approach                                                                    
     creates  broad participant  training  to address  staff                                                                    
     turnover  and  promises  collaboration  and  networking                                                                    
     amongst  teachers and  paraprofessionals. This  in turn                                                                    
     reduces isolation and  ultimately provides retention of                                                                    
     teachers  especially  in  rural  remote  areas  of  the                                                                    
Mr. Pillai addressed technical assistance on slide 5:                                                                           
     The  continuum   of  services   includes  observations,                                                                    
     assessments,  educational  interventions,  modeling  of                                                                    
     educational strategies,  in-service training, assistive                                                                    
     technology,  and many  more pertinent  activities based                                                                    
     on requests from the  child's educational team members.                                                                    
     Specialists  also  work  with vendors  to  troubleshoot                                                                    
     assistive   technology   when    teachers   call   with                                                                    
     complaints of device non-functionality.                                                                                    
Mr. Pillai turned to slides 6 and 7:                                                                                            
     In   addition  to   specialist  evaluation,   the  SESA                                                                    
     management  system  is  designed  to  collect  data  on                                                                    
     various aspects  of agency  activity. Metrics  focus on                                                                    
     mission-centric   activities  such   as  site   travel,                                                                    
     creation  of educational  materials,  training and  in-                                                                    
     services, and writing of  student service reports. Data                                                                    
     is analyzed  to understand variables  impacting service                                                                    
     and the SESA budget.                                                                                                       
     SESA's  database allows  us to  run  reports of  agency                                                                    
     productivity.   The   slide  captures   activities   of                                                                    
     technical assistance,  number of schools  and districts                                                                    
     served, number  of trainings conducted on-site  and via                                                                    
     distance delivery, and an analysis of expenses.                                                                            
2:03:08 PM                                                                                                                    
Mr. Pillai advanced to slide 8 and spoke about the                                                                              
customized management system:                                                                                                   
     This  slide  is  a  visual example  of  the  customized                                                                    
     management system  SESA designed to  ensure data-driven                                                                    
     decision  making. Individual  reports  provide data  on                                                                    
     specialist   activity  allowing   for  measurement   of                                                                    
     productivity;  number  of  reports  completed  with  an                                                                    
     agency timeframe of 10 working  days; schools and sites                                                                    
     requesting   service;  active   student  caseloads   by                                                                    
     district, location, and school etcetera.                                                                                   
Mr. Pillai reviewed slide 9:                                                                                                    
     Legislative audits and the  program component of annual                                                                    
     public audits  run tests of  compliance with  regard to                                                                    
     process  and procedure.  This section  of the  database                                                                    
     was  created in  response  for specific  data and  with                                                                    
     feedback from  auditors. Following a  recommendation of                                                                    
     the SESA board  to go green, SESA  management worked to                                                                    
     eliminate  paper files.  All of  SESA's student  record                                                                    
     keeping is  now electronic.  The compliance  element of                                                                    
     the SESA database drives quarterly compliance reviews.                                                                     
Mr. Pillai turned to slide 10:                                                                                                  
     Slide  10  captures  in  red  the  number  of  students                                                                    
     attending Alaska's  schools in  any given  year between                                                                    
     2011  and  2020.  The  solid  blue  line  captures  the                                                                    
     steadily increasing  number of  students on  SESA's low                                                                    
     incidence  caseload. High  turnover  of  staff in  many                                                                    
     districts often drives the  need for repeated trainings                                                                    
     for new  staff, especially first-year teachers  who may                                                                    
     be  encountering any  given  disability  for the  first                                                                    
Mr. Pillai moved to slide 11:                                                                                                   
     Slide 11  is a history  of SESA fund balance  from 2013                                                                    
     and projected to 2023. The  cycle captures low funds at                                                                    
     the end  of a sunset  cycle, in this case  2013, higher                                                                    
     funds  at the  middle  of the  cycle,  and trending  to                                                                    
     lower fund balance at the end  of the cycle as a result                                                                    
     of the  increase in cost. SESA's  last funding increase                                                                    
     was in 2013. At the end  of [FY] 22, factoring for cost                                                                    
     increase,  we  anticipate   using  $578,000  from  fund                                                                    
     balance.  This is  a result  of the  impact of  the CPI                                                                    
     index  increase  of 6.3  percent  over  the last  eight                                                                    
Mr. Pillai looked at the fund balance on slide 12:                                                                              
     Slide 12 illustrates  SESA's projected withdrawals from                                                                    
     fund balance  in fiscal year 2022  moving into complete                                                                    
     deficit in  fiscal year 2025. SESA  utilizes a cashflow                                                                    
     of  roughly  $400,000  for  day-to-day  expenses.  SESA                                                                    
     revenues,  annual  support   grant,  and  LID  activity                                                                    
     occurring   between  the   initial   grant  award   and                                                                    
     disbursement of  funds at a later  date. Grants operate                                                                    
     with an initial upfront award  of roughly 25 percent of                                                                    
     the  grant total  and  thereafter  are reimbursed  upon                                                                    
     submission of receipts  for qualified grant expenditure                                                                    
     post the activity.                                                                                                         
Mr. Pillai moved to slide 13 and discussed a proposed 24                                                                        
percent funding increase:                                                                                                       
     Slide 13 is  the projection of the  24 percent proposed                                                                    
     increase to  SESA funding through  Senate Bill  19. The                                                                    
     bill  would  increase  the  current  $18.65  times  the                                                                    
     number of  students in the average  daily membership in                                                                    
     the   prior  fiscal   year   to   $23.13.  This   would                                                                    
     effectively fund SESA  without interruption of services                                                                    
     to  families  and  school districts  through  June  30,                                                                    
     2029, the end of the period of reauthorization.                                                                            
Mr. Pillai addressed the recently completed legislative                                                                         
audit on slide 14:                                                                                                              
     The recently  completed legislative audit  concurs that                                                                    
     SESA  meets the  needs of  students with  low incidence                                                                    
     disabilities,    provides   professional    development                                                                    
     opportunities   to   teachers  and   paraprofessionals,                                                                    
     provides  special education  resources  to parents  and                                                                    
     school    districts,    and    concludes    with    the                                                                    
     recommendation    for    an   eight-year    legislative                                                                    
Mr.  Pillai  relayed  that  he   was  happy  to  answer  any                                                                    
Co-Chair  Merrick thanked  Mr. Pillai  for SESA's  hard work                                                                    
with special needs students.                                                                                                    
2:07:51 PM                                                                                                                    
Co-Chair  Merrick  asked to  hear  a  review of  the  recent                                                                    
legislative audit.                                                                                                              
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE   AUDIT,   reported   that   the   Division   of                                                                    
Legislative  Audit conducted  a review  of SESA  dated April                                                                    
2020 (copy  on file).  She began  the presentation  with the                                                                    
background information section  on page 5 of  the audit. She                                                                    
read from prepared remarks:                                                                                                     
     SESA  was  created  to help  Alaskan  school  districts                                                                    
     provide special education  services to individuals with                                                                    
     a low incidence disability.  A low incidence disability                                                                    
     occurs in less  than 1 percent of  the national school-                                                                    
     aged population  and the  disabilities are  more severe                                                                    
     in   nature    and   require    specialized   education                                                                    
     intervention.  SESA  was  established  as  a  nonprofit                                                                    
     organization  whose governing  board is  the Governor's                                                                    
     Council  on Disabilities  and Special  Education, which                                                                    
     is  organizationally housed  within  the Department  of                                                                    
     Health  and  Social   Services;  however,  its  primary                                                                    
     service,   its  low   incidence  outreach   program  is                                                                    
     budgeted   and  funded   through   the  Department   of                                                                    
     Education  and  Early   Development.  This  funding  is                                                                    
     independent  of  the  intensive needs  funding  that  a                                                                    
     district   may   otherwise  receive.   SESA's   funding                                                                    
     provides  additional financial  support to  help ensure                                                                    
     students   affected  by   low  incidence   disabilities                                                                    
     receive a  free and  appropriate public  education that                                                                    
     is required by state and federal laws.                                                                                     
     SESA's services  are available  to districts  whose low                                                                    
     incidence special  education needs  occur infrequently,                                                                    
     making it difficult  for the district to  serve the low                                                                    
     number  of students  in need  of a  particular service.                                                                    
     SESA   recruits,   trains,    and   retains   education                                                                    
     specialists   to  provide   technical  assistance   and                                                                    
     training  to  parents,  students,  and  district  staff                                                                    
     without regard  to the state.  The number  and location                                                                    
     of students  served by SESA  you will  see in a  map on                                                                    
     page 8. That shows that  as of February 2020 there were                                                                    
     335 students  served in 48  school districts.  You will                                                                    
     also see  that information broken  out on page 27  in a                                                                    
     separate  table,   which  breaks  out  the   number  of                                                                    
     students   served  by   a   low  incidence   disability                                                                    
     Report  conclusions  begin  on page  11.  Overall,  the                                                                    
     audit concludes that SESA  served the public's interest                                                                    
     by  assisting school  districts and  providing students                                                                    
     affected by low incidence  disabilities an education to                                                                    
     meet  the  children's  unique needs  and  by  providing                                                                    
     opportunities to enhance  school district teachers' and                                                                    
     paraprofessionals'   capabilities   and  by   providing                                                                    
     resources.   We   are    recommending   an   eight-year                                                                    
     extension,  which   is  the  maximum  allowed   for  in                                                                    
     statute. As part of the audit,  we did send a survey to                                                                    
     school district  special education directors in  all 51                                                                    
     school  districts. We  received a  59 percent  response                                                                    
     rate  and  in  general   the  school  district  special                                                                    
     education   directors  viewed   SESA  services,   staff                                                                    
     availability  and  their   expertise  favorably.  Those                                                                    
     questions and responses  can be found in  Appendix C to                                                                    
     the audit.                                                                                                                 
     As already  discussed, on page  13 we do  discuss their                                                                    
     statutory  funding   formula  and  how  it   is  $18.65                                                                    
     multiplied  by  the  states average  daily  membership,                                                                    
     again, set  in 2013.  Before that it  was set  14 years                                                                    
     earlier. That  has not  changed; however,  the caseload                                                                    
     has increased by 63 percent during the last 8 years.                                                                       
     We did  find that SESA's education  specialists serving                                                                    
     certain  categories  were experiencing  high  caseloads                                                                    
     and as of February 2020  the agency had three education                                                                    
     specialist vacancies.                                                                                                      
2:11:45 PM                                                                                                                    
Ms.  Curtis shared  that the  agency had  one recommendation                                                                    
beginning  on   page  18.   The  audit   recommended  SESA's                                                                    
executive  director implement  written procedures  to ensure                                                                    
the reclassification of a  student's referred disability was                                                                    
adequately  supported and  communicated  to school  district                                                                    
personnel. She detailed auditors  reviewed 40 case files and                                                                    
found  five  students'  disabilities as  identified  in  the                                                                    
referral   form  from   the   school   districts  had   been                                                                    
reclassified by  an education specialist  and had  not found                                                                    
any  documentation  in the  file  regarding  the reason  for                                                                    
reclassification. Additionally,  in four  of the  five cases                                                                    
there had been  no visible communication back  to the school                                                                    
district  about the  reclassification.  Auditors believed  a                                                                    
simple administrative fix should not  be too much trouble to                                                                    
accomplish. She  relayed that the  board chair and  the DHSS                                                                    
and DEED  commissioners agreed  with the  report conclusions                                                                    
and the recommendation.                                                                                                         
2:12:43 PM                                                                                                                    
Representative  Wool looked  at the  map on  page 8  showing                                                                    
school  districts   and  number   of  students.   He  listed                                                                    
Anchorage, Fairbanks,  and Juneau  and asked if  the program                                                                    
did not serve large school districts by design.                                                                                 
Ms. Curtis  replied in the  affirmative. She  detailed there                                                                    
was a  threshold. When  a school district  reached ten  in a                                                                    
specific  category,   SESA  worked  with  the   district  to                                                                    
transition  away  from  SESA   services  to  make  sure  the                                                                    
district  hired its  own  specialists  given SESA's  limited                                                                    
resources. She added that there  were some students in those                                                                    
categories, but much fewer than in other locations.                                                                             
Representative Wool  asked if  statute designated  that SESA                                                                    
serve school  districts with  less than  ten students  [in a                                                                    
particular category] requiring intervention.                                                                                    
Ms. Curtis  answered that there  was no  statutory guidance.                                                                    
The prior sunset audit had  found that some type of criteria                                                                    
was  needed  to  specify  when school  districts  needed  to                                                                    
absorb  students.   She  explained  that   school  districts                                                                    
received  special  education  intensive needs  funding.  She                                                                    
elaborated that  SESA was in  place to serve  districts with                                                                    
needs in  such a low number  that the district did  not have                                                                    
the services in place to address them.                                                                                          
2:14:27 PM                                                                                                                    
Representative  Rasmussen referenced  page  8  and asked  if                                                                    
multiple disabilities was a combination  of one of the other                                                                    
six  listed  disabilities.  She  asked  if  there  were  any                                                                    
unlisted disabilities.                                                                                                          
2:15:18 PM                                                                                                                    
AT EASE                                                                                                                         
2:16:14 PM                                                                                                                    
Ms.   Curtis  pointed   to   the   definition  of   multiple                                                                    
disabilities  on  page  7; the  definition  listed  out  the                                                                    
different  combinations  that  qualified a  person  for  the                                                                    
HEIDI  TESHNER,  DIRECTOR,  FINANCE  AND  SUPPORT  SERVICES,                                                                    
DEPARTMENT   OF  EDUCATION   AND   EARLY  DEVELOPMENT   (via                                                                    
teleconference), was  available to present the  fiscal note,                                                                    
OMB Component  Number 2735. She  stated that the  bill would                                                                    
increase  SESA's funding  multiplier from  $18.65 to  $23.13                                                                    
multiplied by  the average daily  membership (ADM)  from the                                                                    
prior fiscal year. She elaborated  that the governor's FY 22                                                                    
budget request  included a $2.4 million  projected grant for                                                                    
SESA  based on  the statutory  calculation. She  detailed it                                                                    
had been determined  by multiplying the FY  21 projected ADM                                                                    
of  128,923.91  times the  $18.65.  Based  on the  increased                                                                    
multiplier and the final FY  21 ADM count finalized in March                                                                    
2021,  the   amended  FY  22   SESA  grant   was  $2,937,900                                                                    
(determined  by  multiplying  the final  ADM  of  127,015.30                                                                    
times $23.13).  The bill reflected an  increase of $533,500.                                                                    
She noted  the extension would  carry out through  June 2029                                                                    
and  DEED would  adjust  the budget  annually  based on  the                                                                    
statutory calculation.                                                                                                          
SB  19  was   HEARD  and  HELD  in   committee  for  further                                                                    
2:19:48 PM                                                                                                                    
AT EASE                                                                                                                         
2:19:56 PM                                                                                                                    

Document Name Date/Time Subjects
SB019_SESA-Sunset_Support Letters_bundled_as of 24Feb2021.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Research_LBA-Audit_Full-Report_03April2020.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA_Presentation_Revised_07April2021.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Sectional_version i.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_SponsorStatement.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Summary-of-Changes_from A to B.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Summary-of-Changes_from B to i.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
HB 169 Attachment 1 Foundation Formula Enrollment Comparison 041821.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 4.14.2021 (H)FC DEED Hearing Follow-Up.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 Attachment 2 Foundation Formula Timeline 041821.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 Response to Q Attachment DEED 041821.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 Public Testimony 042021.pdf HFIN 4/19/2021 1:30:00 PM
HB 169