Legislature(1993 - 1994)
04/19/1994 03:00 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 312 - SCHOOL CONSTRUCTION GRANT REVIEW CHAIR BUNDE explained that Rep. Jerry Mackie would address the bill, but as he had not arrived, the committee would hear testimony. Number 010 LARRY WIGET, Legislative Liaison, Anchorage School District, testified via offnet in support of CSSB 312. He stated that Dr. Brent Rock would be testifying after him. He thanked the committee for the passage of HB 505 on behalf of the Anchorage School District. He said the Anchorage School District supports Section 2 of CSSB 312 as it is believed it will provide the district with greater flexibility. He also indicated that the district supports Section 4, as it would allow a district to develop appropriate alternative methods to meet the educational needs of students at resource and self-contained levels. Section 4 would also allow the district to maintain the current level of funding while developing alternative methods for program delivery. MR. WIGET indicated that the district would prefer the pilot to be expanded to include appropriate students receiving intensive services while maintaining the level of funds form the prior year. He further indicated that the number of allowed pilot projects is very limited, especially when each project can last up to three years. Under HB 522 only four projects would be accepted at any one time. He said he would like to see that extended. MR. WIGET encouraged the passage of the aforementioned sections, but indicated that the district stands in opposition against Section 1. He stated that the section would allow the Department of Education (DOE) to modify a project request when necessary to achieve cost effective school construction and would require that school construction in a project be phased. He then asked Dr. Brent Rock to address the issue of Section 1. Number 131 DR. BRENT ROCK, Assistant Superintendent, Administrative Services, Anchorage School District, testified via offnet in opposition to Section 1 of CSSB 312. He stated that although the district appreciates the efforts of the DOE and the legislature in attempting to address containing school construction costs, he felt the DOE's proposed criteria remains too subjective in areas that require objectivity. He asserted that Section 1 would usurp local control and would not address unhoused student needs. DR. ROCK referred to AS 14.11.013 (c) as amended and said it would further erode local control in making decisions concerning cost effective school construction. He indicated that currently the DOE requires that certain subjective criteria must be met, including a maximum of 100 square feet per student maximum for elementary schools and 150 square feet per student for secondary schools. He felt that criteria is acceptable. He further stated that if the district had control at the local level, cost saving measures could be realized. He felt that if the decisions were made by the DOE, it may end up costing the district more money. DR. ROCK stated that with the authority provided for in CSSB 312, the DOE could force a district to use cheaper materials to lower costs, thereby lowering the life expectancy of the building and at the same time increasing maintenance costs. He added that the last six schools constructed in the district are prototypical schools and if the bond issues pass, more prototypical schools will be constructed. He explained that if the DOE were to modify a current spec, it would "change the programmatic responsibility that we have to our students." He asserted that the district stays well within the current criteria of the DOE, which stipulates a ratio of 100 square feet per student at the elementary level and 150 on a secondary level. He asserted that the method is an effective cost saving method. DR. ROCK further explained that requiring a district to phase in a project rather than completing it at the time of initial construction could increase the overall costs of the project. He then explained that the Eagle River\Chugiak Middle School does not meet the criteria for the number of students at 100% capacity five years after its initial opening. He then said, "I would assume that an ideal thing for DOE to do, under such circumstances, would be say, `we will only allow you to build a facility that will house the number of students you're going to have at the end of that five years.' That sounds good on the surface. It sounds like it might save you money. But, in reality, it will not because we have learned through experience that it may not take five years. It may take seven years; it may take ten years with that building well built class rooms. And, if we have to add an addition and an additional design, that cost is $37 million today may end up costing us $45 to maybe even $50 million ten years down the road. It doesn't save money unless it's done deliberately with good reason at the local level." Number 403 MR. WIGET reiterated the district's support of the Sections 2 and 3 and their opposition to Section 1. CHAIR BUNDE indicated that Rep. Jerry Mackie was present to address the bill. Number 425 REP. JERRY MACKIE addressed CSSB 312. He stated that he drafted the legislation and asked the Senate Finance Committee to introduce the bill. He explained that the proposal started out as a simple bill that consisted only of Section 1. He indicated that Sections 2 and 3 were added in the Senate. He said Duane Guiley would address those sections. REP. MACKIE further stated that the DOE should have the authority to modify school requests and phase projects if necessary. He explained that there will be declining revenues in the future, therefore less funds will be expended on school construction. He explained that of the numerous school construction and maintenance projects currently on the statewide list, the DOE does not have much control presently over the amount for which the school districts are asking. He said in some cases there has been no planning, feasibility studies, or even design research for the schools themselves. Subsequently, he asserted that there has been a circumstance of "over kill" in the building of schools, including in his own district. He stated that to efficiently address the future needs of the school list the DOE will phase school construction and maintenance projects. He further indicated that most schools just submit to the DOE a request of what they would like to have for their community in the form of a school. He said the amounts requested usually are not based on design research and planning. REP. MACKIE asserted that the state must become more fiscally conservative and address the basic needs for school construction and build more for less. He maintained that prototypical schools can be tailor built to withstand the elements that are specific to its region. He also said it is possible to have one design to facilitate the enrollment for a particular region. He felt these measures would eliminate construction projects that are an "architect's dream." He related to the committee that in his district in the town of Tenakee a lavish school was built for a total of ten students. He said the electricity alone cost $50,000 per year. He reiterated that the DOE needs the ability to make decisions to prevent unwarranted spending and the districts need to work with the DOE in justifying they're requests and the costs. He asserted that if the costs cannot be justified, the DOE would have the ability to make the necessary reduction. REP. MACKIE further explained that currently the DOE can only reject a project in its entirety, which would set a district back at least one year, and they would have to reapply for a place on the statewide list. He asserted that through a negotiation process, problems could be worked out with the DOE and an acceptable project could be agreed upon that would be economically feasible and would also meet the needs of all involved. REP. MACKIE said he was aware of the criticism involved because to make the changes, money must be involved. He asserted that the DOE is in a position to evaluate those concerns and they need the authority to make difficult decisions. He felt the legislature would make decisions based on politics and the process would suffer. He thought it would be more realistic to have the DOE make those decisions. Number 648 (Chair Bunde indicated that Rep. Brice arrived at 3:11 p.m. and Rep. Nicholia arrived at 3:17 p.m.) CHAIR BUNDE asked Duane Guiley to address Sections 2 and 3. REP. B. DAVIS indicated that she had questions for the DOE. CHAIR BUNDE suggested holding questions until the bill had been completely addressed. He also indicated that if it seems advisable, he would like to pass the CSSB 312 out of committee. REP. MACKIE asserted that legislation resulted from a meeting he had with Commissioner Jerry Covey from the DOE, Duane Guiley, and various other people in the legislature. He deferred to Mr. Guiley to address the remainder of the bill. CHAIR BUNDE asked Rep. Mackie why, as a House member, did he bring the legislation through the Senate and not the House first? REP. MACKIE explained that he approached the House Finance Committee, who agreed to introduce it. He said because of the Finance Committee's workload, they could not give it much attention. He said the Senate "passed it over and this became the vehicle." CHAIR BUNDE observed that Rep. Mackie began at the Finance level. REP. MACKIE agreed and said the legislation started late in the process. He felt the only chance the bill would have for passing would be if the Finance Committee in either body would introduce it. MR. GUILEY asked if he should continue to address Section 2. CHAIR BUNDE suggested that Mr. Guiley proceed in whichever manner was comfortable for him. MR. GUILEY indicated that he had written testimony on Section 1. CHAIR BUNDE encouraged Mr. Guiley to proceed. DUANE GUILEY, Director, Division of Education Finance and Support Services, Department of Education, stated that CSSB 312 was not intended to give the DOE unilateral authority in relation to school construction projects. He said SB 7 created the Bond Reimbursement and Grant Review Committee. He explained that one of the statutory obligations of the committee is to develop criteria for school construction, provided that the criteria takes into account cost effective school construction. It then becomes the obligation of the DOE to carry out that criteria in awarding school construction grants. He noted CSSB 312 suggests that the DOE can modify a project budget request for the purpose of achieving cost effective construction that is approved by the committee. The DOE would be provided the opportunity to phase a capital project request. He indicated that the DOE would not support phasing a project during the construction cycle. MR. GUILEY explained that the application will become more complex, will require more attachments, and will become more expensive for the districts to accomplish. He said in recognition of that, the Bond Reimbursement and Grant Review Committee felt that resource needed to be provided to districts to develop the application. He further explained that the phasing being proposed is for the planning and design of a project before a construction grant is awarded. Those districts that have the necessary resources to carry out the proper planning and design prior to applying for a school construction grant would not be required to have their project phased. He said phasing would occur only in situations where a district does not have sufficient resources at the local level to complete the application process for a full construction grant. MR. GUILEY pointed out that there was some confusion as to the intent of the phasing aspect of the bill. He indicated that currently the DOE can reject a project if it is determined that it is not in the best interest of the state. If a project is rejected, he asserted that the decision is not appealable by a district, therefore the DOE already has total unilateral authority in relation to a project application. The DOE is suggesting through the administrations that the authority be added to by giving the DOE the opportunity, during the review process, to amend a project's scope or budget. He indicated that those decisions are appealable through the established process. He maintained that it does not delay the district another year. It provides the DOE to evaluate the project, prioritize it, and put it on the list. And, if the district is aggrieved by the decision, it can appeal that process. MR. GUILEY said currently the DOE can accept an application and pass it on or reject it and delay the district another year. He further indicated that currently under statute at the point when the DOE is signing a grant agreement with a district, the DOE does have the authority to reduce a project or change the scope, but only after the legislature has made the appropriation. He suggested that that authority would be better placed at the review stage as opposed to after the appropriation is made. MR. GUILEY suggested that to alleviate some of the concern regarding abuse of authority by the DOE, the HESS Committee might consider deleting lines 9 and 10 on page 1 and insert the phrase, "require that a school construction project be phased for the purpose of planning, design, and construction." He felt the language would further clarify that the DOE is not asking to phase during a construction cycle, only on the preplanning stages, to assure solid cost estimates that are feasible. He indicated that currently districts must cover all the unknowns in their applications and that many project budgets are inflated and some are short funded. Number 840 REP. TOOHEY asked if there is a geographical cost differential between Kake and Nome. She asked if the disparity was considerable. MR. GUILEY said yes and indicated that the difference could be 100% or more. CHAIR BUNDE observed that construction costs vary widely throughout the state. REP. TOOHEY asked if it was more the area location and not the design of the school that is of financial concern. MR. GUILEY explained that a back log continues to grow on the project list because the same project is being applied for year after year for up to six years. He said the first year the project would be one dollar amount, and the next year the same exact project is applied for, conditions haven't changed, and the project budget has increased 60 to 80% with no rationale whatsoever. He asserted that without planning up front, "we can't defend that project to you." Number 880 REP. MACKIE stated that seldom does a project go from one year to the next and the request amount reduces. He asserted that if the price of lumber goes up then an adjustment could be made, but it would not allow for a district to decide that the next year they need an excessively large auditorium. He observed that the districts currently have the ability to do just that. MR. GUILEY addressed the remainder of the bill. He stated that Section 2 creates an opportunity for the DOE to consider a school calendar that is less than 180 days, provided that the school district justifies the educational program as being the equivalent of 180 days. Number 903 CHAIR BUNDE questioned as to whether the school day would be lengthened to allow for a shorter school year. MR. GUILEY said yes and explained that under existing statute a day in school session is defined as not less than four hours for grades 1, 2, and 3 and not less than five hours for all other grades. Kindergarten is determined to be four hours for full time equivalent. He said the DOE would consider the number of hours in session and multiply them by the number of days in session to determine the educational equivalent of the 180 day calendar. He further stated that, "This section of law has a sunset date in it, and it will be superceded by other law. That's the reason for Section 3, which puts on to the books a different opportunity for a school board to adopt a calendar of not less than 150 days for two purposes: 1) for abating health hazards in the school and 2) for submitting an acceptable plan again that provides the educational equivalent of a 180 day school year. Mr. Guiley indicated that the language already exists in statutes, it sunsetted, and was replaced by new language. He said CSSB 312 would attempt to put back on to the books language that had previously been removed. Number 933 CHAIR BUNDE referred to page 2, line 13, and asked how often that stipulation is used. He said it seemed to him that if there is an earthquake and the school is closed for a month, "...we're not going to say the children were in school that month." MR. GUILEY said that section is used approximately ten times a year and they normally are one to three day closures due to perhaps a roof collapsing or a gas odor wafting throughout the school. He further indicated that because the school calendar is set, contracts are let, and teachers are paid whether they teach or not, the cost to the district for extending the calendar is sometimes cost prohibitive. CHAIR BUNDE clarified by saying that closures only happen approximately five times a year. MR. GUILEY added that it happens throughout the state. Number 975 CHAIR BUNDE observed that it seemed strange that the committee had considered HB 84, that included a provision that would extend the school year by three days, and now they are being asked to consider legislation that would counter that. REP. OLBERG said, "Mr. Chairman, to clarify my own thinking, did you say that Section 3 replaces some language that is sunsetting, and Section 2 adds new language to what has been replaced?" MR. GUILEY explained that Section 3 of the bill suggests that it take effect July 1, 1997. It would be new language replacing existing Section 2. He stated that Section 2 is existing language in statute that would be amended in subsection 4 to provide an opportunity for a district to submit a plan of not less than 170 days. He further explained that all of Section 2 would be replaced with Section 3 on July 1, 1997, as the bill is written. Number 999 REP. G. DAVIS said, "Mr. Guiley, with the exception of paragraph 4, isn't that correct?" MR. GUILEY concurred. REP. MACKIE added that Section 3 allows the school term to begin and end on dates fixed by the governing body of a school district, as long as the term equivalent is not less than 180 days. He asserted that it would also allow for the accommodation of situations such as the Russian Orthodox holidays in certain districts. He said that amendment was offered by the Senators from the Kenai Peninsula to accommodate the holidays that are being recognized by particular schools. Number 019 CHAIR BUNDE acknowledged that Bob Bell was standing by to testify via teleconference and that his testimony would be heard shortly. He asked Mr. Guiley to continue the sectional analysis. MR. GUILEY stated that Section 4 of CSSB 312 provides an opportunity for the DOE to consider applications for pilot programs for the purpose of reducing the number of students that are identified as certain special education needs students. The DOE could set a percentage of students currently identified in different special education categories and use that percentage for purposes of funding the years under which the district is undergoing the pilot study. MR. GUILEY explained that the goal of the pilot study would be to determine alternative methods of delivering services to those students without attaching a label that identifies those students as special education students through other methods, such as early intervention and staff development and training for regular classroom teachers. He indicated that there is a limited number of pilot programs that the DOE can approve and it would not increase the cost to the state. He said, "It should, in theory, reduce the cost to the state of Alaska by holding the districts static at the percentage of students identified by classification. We find that this is the single largest growing area of our foundation program." He further explained that year after year the increase in special education students far out paces the increase in non-special education students or the total increase in average daily membership (ADM). At times, the increase has been as much as 200% of the increase in ADM. He said he hoped that the pilot study would provide an opportunity for services to be replicated in other districts, thereby reducing the funding across the state. Number 061 CHAIR BUNDE observed that the gifted program is included under the special education program and asked what effect there would be regarding the pilot programs. MR. GUILEY responded that the DOE is currently undergoing a review of statute and regulation in regards to special education and education for gifted students is one of the areas under consideration. He said the pilot proposal that has been forwarded by at least one school district would suggest that they hold the gifted and talented percentage constant as well and not further identify gifted and talented students. He anticipated that there would be some changes in regulation or that there would be requests for some statutory changes overall in the special education area of funding. REP. NICHOLIA asked if the proposed changes could be considered "watering down the program" by integrating those students into regular classrooms instead of them being in separate classes. MR. GUILEY asserted that the pilot program should not be referred to as watering down the program. It would be referred to as early intervention and inclusion models. He stated that current research indicates that special education students can participate in regular classrooms, except perhaps for those students that have intensive classification and multiple handicapping conditions. Number 108 CHAIR BUNDE urged the committee to hold their questions for the purpose of time and indicated that minority committee members needed to be at a meeting at 4:00 p.m. MR. GUILEY stated that Section 5 would repeal existing statute relating to the Alaska Student Activities Association. He said that association has been replaced by an incorporation of school districts that govern student activities. MR. GUILEY explained that Section 6 provides the effective date for Section 3, which is July 1, 1997. CHAIR BUNDE asked for testimony from Bob Bell. Number 132 BOB BELL, Principal Teacher, Razdolna School, Kenai Peninsula Borough School District, testified via offnet in support of CSSB 312. He stated that he was particularly interested in the section of the bill that pertains to a 170 day school term. He said that provision would allow some schools in the Kenai School District to have the flexibility to structure their school calendars to meet local needs. He said it was his hope to increase the length of the school day to equal or exceed the present instructional hours specified for the entire year. He felt that, in the long run, students would receive a better education. He also felt that there are sufficient safeguards in the bill that would prohibit districts from abusing the issue of the shorter school year. TAPE 94-68, SIDE B Number 000 CHAIR BUNDE asked Mr. Guiley if the districts would be required to match what would be accomplished in 180 days if they shorten the school year. MR. GUILEY said they would have to match or exceed what is expected from a 180 day session. CHAIR BUNDE, seeing no further testimony, asked if there were any questions for Rep. Mackie or Mr. Guiley. Number 028 REP. B. DAVIS indicated that the only problem she has with the bill falls in Section 1 of the proposal. She said either more work needs to be done to the section or perhaps it should be deleted altogether because it gives even more power to the DOE. She felt the decisions should be left to local school districts to decide what the various components would be for the construction of new schools or maintenance projects. She referred to the statement that Mr. Guiley made that indicated that those districts that have the necessary resources to carry out the proper planning and design, prior to applying for a school construction grant, would not be required to have their project phased and she said that stipulation is not in the proposal. She felt that concern needed to be identified within the bill. She also indicated that according to Mr. Guiley's testimony it is already possible for the DOE to stop a construction project. She then asked how many times the DOE had stopped a construction project. Number 080 MR. GUILEY said in the three years that he has been with the DOE, no projects have been stopped. He stated that the DOE has prorated their share of funding on projects where districts wanted to build more than the gross square foot guidelines. He asserted that the DOE has not tried to stop a project or has not disallowed a district to do something. He said the DOE decisions only relate to the level of funding that they will participate in. REP. B. DAVIS asked Mr. Guiley if the DOE would limit their decision making to funding involved and not the planning and design phases of the projects. She asked, if the DOE had not already been doing that in the past, why would they want the authority to do it now? MR. GUILEY explained that the passage of SB 7 last year created the review committee and charged them with obligation of developing school construction design criteria. He said it was not previously an obligation of the DOE, but it is now the obligation of the committee. REP. B. DAVIS asserted that the issue should be addressed by providing more regulations for the committee, not by giving more authority to the DOE. She then asked if the legislation would give the DOE the power to stop a project either in the planning, design, or construction phases. MR. GUILEY asserted that the intent of the legislation is to provide planning grant funds for those districts that cannot accomplish the application process with their own resources. The intent is not to stop projects. He reiterated that if a district has the resource to complete the application, to do the building evaluation and the condition survey with their own funds, and to recover those funds through the grant application, they would be afforded that opportunity, which was at the suggestion of the Bond Reimbursement and Grant Review Committee. REP. B. DAVIS maintained that what is written in the legislation does not speak to what Mr. Guiley was saying. According to Mr. Guiley's testimony, she said it was her understanding that if a school district has its own design team and staff, it would not preclude them from completing the application with their own resources. She said if a district needed assistance the DOE would guide them. She said the proposal does not stipulate that. Number 171 REP. MACKIE responded that the intent of the bill is to put the authority into the statute and not into regulation, because regulation changes and the scope of criteria could change from one year to the next or one committee to the next. He reiterated that the legislation would give the DOE the statutory authority to carry out those decisions. REP. B. DAVIS asked Rep. Mackie if he felt that the legislation does not speak to all school districts. She then indicated that to put this language into statute without provisions for districts such as the Anchorage School District that does not need the type of legislation being proposed, would not be fair. REP. MACKIE pointed out that the legislation says that the DOE "may" modify a request or "may" require that construction be phased, which would give the DOE the ability to exercise the authority where necessary. He asserted that the provision does not say "shall." Number 218 REP. G. DAVIS said "Bettye's right. There's a lot of `trust me' in this. But, the department certainly is not going to want to phase everything. They're not going to want to cut and deny projects where it's not necessary. I just see this as a stop gap. And, they need something in statute that's going to address the entire state. And, I think where there are school districts that there are school districts that have planning personnel and do the job correctly and watch out for the dollars as does the majority of the large districts." He also indicated that he felt that the DOE would not want to scrutinize projects in any more detail than they do now. He said, even under more financially difficult times, there will still be districts wanting to build "Taj Mahals." In those cases, the DOE would have the statutory authority to step in and address the issue properly. Number 258 CHAIR BUNDE asked for testimony from Patrick Case. Number 260 PATRICK CASE, Member, Kenai Peninsula School District Council PTA, testified via teleconference on CSSB 312. He stated that he agreed with the previous comments made. He then asked if the legislation gives power to the state to change their level of contribution after a school project has been "approved by bond, by the voters?" Number 283 MR. GUILEY said no. MR. CASE indicated that he is currently involved with the project for a new elementary school in Homer and that there are committees working with the district to use a prototype school with minor changes to fit the needs of the particular area's particular programs. He then asked if the legislation would give the DOE the ability to "line-item veto any design changes in the plan?" MR. GUILEY explained that the DOE would have the authority to make changes if there is a more cost effective way of accomplishing a specific design item in regards to evaluating the project request. The review committee is obligated to evaluate prototypical designs to determine cost effective school construction. He stated that the committee supports prototypical type design and acknowledges that there is a savings overall in the project cost to the state by utilizing prototypical type designs. Number 335 REP. MACKIE added that the prototypical design system that has been used in the Kenai Peninsula is a model for the state that has worked quite effectively and has saved a lot of money over the last several years. He maintained that the bill would affect districts much like his own. He said the legislation would not adversely affect rural schools because over a ten year period, if a considerable amount of money is saved by building prototypical schools, there is a greater possibility of getting further down the statewide list. Rep. Mackie asserted that all districts would need to justify to the DOE exactly what they need and what the project will cost. CHAIR BUNDE asked how long the minority members of the committee would be able to stay. REP. B. DAVIS indicated that she would stay as long as needed. CHAIR BUNDE said he would appreciate everyone's participation as he would like to pass the bill out of committee if the issue can be resolved. He then referred to page 1, line 9, and proposed an amendment that would delete item 2 and replace it with the phrase, "require that a school construction project be phased for purposes of planning, design, and construction..." He asked if there were any objections. REP. NICHOLIA explained that the Tok School District has a school that has gone through the phase process. She said presently it is number 15 on the list. She asked if the DOE could guarantee their construction. MR. GUILEY asserted that the DOE could never guarantee that construction would be finished because the appropriation must be approved by the legislature. He said the Tok School was not phased by the DOE. It was phased through the legislative process by short-funding the project and asking the district if they were willing to accept that short- funding for purposes of beginning the project. He indicated that the district did accept that appropriation and began the project. Then last year, the Tok School District made a request for final funding which was fully funded by the legislature, short of the match. He said, "The district found that in finishing the construction they, in fact, are short-funded. So, now they need more money." The phasing of that project was not considered by the DOE. He said the DOE forwarded a full funding request for the construction phase. He said, "We don't want to see any more Tok projects." He asserted that the DOE wants to consider bid projects that are fully funded. CHAIR BUNDE directed the committee's attention to the amendment before them and asked if there were any objections. REP. B. DAVIS explained that she had no concerns regarding the amendment, but suggested that additional language should be added perhaps in another subsection. CHAIR BUNDE said he felt that the amendment would address some people's concern and that any additional language would be considered after the amendment is voted on. Hearing no objections, Chair Bunde indicated that Amendment 1 was adopted. Number 519 REP. OLBERG asked if the state actually pays anywhere from 60 to 100% of school construction costs. MR. GUILEY replied that the actual current range is 65 to 98%. REP. OLBERG maintained that the percentage would make the state the majority partner in any school and that the state should have a say in how the projects go together. He further indicated that he agreed with Rep. Mackie that if standardized designs that are deemed more efficient can be used and the state stops building "Taj Mahals" everyone will benefit. Number 537 REP. G. DAVIS referred to Rep. Nicholia's example and said it is a perfect example of why phasing is necessary. He said if a school district believes that they might receive half of the money needed for their design, it could be phased as a functional unit that is only half of the entire project. He further explained that the district would then wait for the other half of the money, but would still have a functioning building in the meantime. REP. B. DAVIS said she was unaware that it was the DOE's intent to build small units and then add on at a later time. MR. GUILEY said that it is not the intent of the DOE. He said a district would design to select a site, purchase the site, design a building suited to the community's needs, develop a cost estimate for the design, and then request construction funding. He indicated that at the point that the district requests construction funding, it is for the full amount to complete and audit the project, to equip it, and to close it out. He reiterated it is not the DOE's intent to phase the construction process. Number 588 REP. MACKIE reiterated that the DOE would not be able to change the scope of the plan in the middle of construction. He said the cost savings would result from the DOE making the initial determination of how much the district would need to fund an appropriate project and that there could be no additions to the decision after it is made and added to the list. REP. OLBERG referred to Rep. G. Davis' statement and said that a completed project could be phase 1 of a "multi- building" project, whereby phase 1 would be built as a complete project and at some point in the future phase 2 could be built. REP. MACKIE stated that a school district may decide to do it that way. REP. OLBERG observed that each phase would have to stand alone as a completed project with all funding in place. Number 625 REP. TOOHEY declared her support for the legislation but said that Rep. B. Davis' concerns are valid and that she hoped they would be addressed. REP. B. DAVIS maintained that Anchorage has been using prototypical designs for quite some time. She then asked Mr. Guiley what the DOE would do differently under the language in the proposal that is not already being done. She said if districts are busy building Taj Mahals, it is because the DOE has approved the projects. MR. GUILEY explained that what is common place today is that districts, once they receive the appropriation, are designing the building to the appropriation dollar amount as opposed to what their need is. He argued that currently when a district applies for a school construction grant, most districts have no idea where they're going to build, what they're going to build, how they're going to build it, and who's going to build it. He said most don't even have a site selected and indicated that site selection costs in the state vary from zero to $5 million. He stated that the districts try to cover themselves by giving high estimates. He explained that when the project bids are open, many times the project construction cost is less than what they anticipated, but districts always find a way to expend the balance of the money through added enhancements. He asserted that the DOE rarely receives a check back from the school districts because the project was over funded. Number 683 REP. B. DAVIS said, "I understand what you're saying, but I don't see... first of all, you don't have the expertise in DOE to do all the things that you are saying you `may' do in this particular bill." She asserted that the corrections must be made in the front end, not after the district has found a site and planned and designed a building. She also said it is her understanding that if the districts can fund the application process themselves, the DOE will "leave those districts alone." She asserted that the DOE would only assist those districts that need help. REP. MACKIE stated that for the very reasons that Rep. B. Davis specified, the legislation was proposed to give the DOE the authority to address problems from the beginning. MR. GUILEY referred to page 3 of the report attached to the written testimony from the DOE which states that districts should be required to submit standardized facility evaluations on existing educational facilities within the district as a prerequisite to school capital improvement funding in fiscal year (FY) 1998. He indicated that the review committee adopted the recommendation and is charged with establishing a form of application for school construction projects. He explained that the committee submitted the report to the DOE and the commissioner has accepted the recommendation. He further explained that the DOE will require more information to be attached to the applications. He also stated that some of that information may cost as much as $40,000 to develop. He indicated that there are districts that don't have the resource to develop the application without some assistance from the state. He asserted that the CSSB 312 would give the state the opportunity to provide assistance to districts who need it. Number 734 REP. B. DAVIS asked where the money would come from, citing that it is not listed in the fiscal note. MR. GUILEY said the funds would come from the capital construction funding process by which districts would submit their six year plan on September 1. The DOE would then present a list through the governor's office to the legislature for funding. He indicated that the fiscal note would be whatever the legislature appropriates. He stated that if a district did not have the resource to get beyond the planning stage, the legislature would be asked to fund planning grants in a prioritized sequence. CHAIR BUNDE suggested that Rep. B. Davis offer some language that might address her concerns. REP. B. DAVIS said she did not have the language, but indicated that Mr. Guiley had said that districts that have already met the criteria need not be included in the legislation. She felt the issue should be clearly addressed within the bill. She felt that Mr. Guiley's testimony aligned with her feeling that the decisions should be made by the districts and that more authority should not be given to the DOE. Number 776 CHAIR BUNDE observed that the Anchorage School District would come to the DOE with a plan in place, but the Kake School District would ask the DOE for planning money before they asked for the school. He pointed out that a district that pays its own way may not want to be under "this umbrella." He then asked Mr. Guiley if there was language that could address the issue. CHAIR BUNDE then indicated that Mr. Guiley was busy working on the language and asked Rep. Mackie to respond. REP. MACKIE said, "It just says that the department may do it." He explained that if a rural school district needed money for planning, they would request the money and submit an application. If a school district does not need money for planning because they already have their own planning staff, they won't ask for phase 1, they will request the school because they have already designed it. Number 821 REP. B. DAVIS asked Mr. Guiley how exactly the legislation will be implemented if it is passed and how the school districts will be made aware which districts will or will not be affected. REP. TOOHEY referred to Section 1, line 6, and suggested that the provision addresses Rep. B. Davis' concerns. CHAIR BUNDE disagreed and said a district might not request assistance for planning, but could still submit a plan for a Taj Mahal. He asked Mr. Guiley to address Section 1 again. MR. GUILEY stated that under circumstances where the Bond Reimbursement and Grant Review Committee has already adopted the idea and forwarded it to the commissioner, and he has already accepted the recommendations, for applications beginning in FY 1996, districts will be required to attach to the application a standardized educational adequacy survey document. CHAIR BUNDE said the survey document is essentially a plan. MR. GUILEY explained that it is a plan that evaluates the existing facility in relation to the educational plan that is the desire of the community for that building. He said a national model is being used that was developed by the Council of Educational Facility Planners, Inc. He further explained that in addition to that document there will be a detailed architectural and engineering study of the existing facilities that will be required as an attachment to the application. Based upon the research, he stated that in some cases that document may cost as much as $40,000 to produce. He asserted that the aforementioned will be required attachments in order to receive funding. They will be prerequisites before a district can be put on the list. He said if a district does not have the documents, they won't be on the list. He recapped by saying the committee suggests, the commissioner accepts, and the DOE produces the form. MR. GUILEY further stated that because of the training necessary to accomplish the standardized documents, the process must be delayed one year. He said initially the DOE intended to have the applications consistent by September 1, 1994, for FY 1996 funding. The committee suggested that the DOE postpone their time line one year and require the applications for FY 1997 funding. He said if CSSB 312 passed, he envisioned that on the FY 1997 list there would be districts requesting planning money only. The FY 1996 list will be similar to what has been seen in the past. Number 908 CHAIR BUNDE asked Mr. Guiley if he had language that would address concerns regarding districts that would do their own planning. MR. GUILEY asserted that based on Amendment 1 that the committee adopted, the word require might be superceded with the words, "for districts that do not have the resource to accomplish the planning and design phases of the projects, require that a school construction project be phased for purposes of planning, design, and construction;..." Therefore, if a district has the resource, the DOE cannot require phased funding. CHAIR BUNDE asked Mr. Guiley to write out the language and to read it to the committee. TAPE 94-69, SIDE A Number 000 REP. B. DAVIS said the review committee sends a recommendation to the commissioner and the commissioner then approves the recommendation. She asked if any approval is needed from the legislature during that process. Number 017 MR. GUILEY stated that the commissioner is responsible for developing the application form for school construction projects. Under existing statute, the review committee is obligated to make suggestions on that application form. He explained that the review committee has made those suggestions on the application form to the commissioner, and he has accepted the recommendations. REP. B. DAVIS asked if the commissioner is the only one who can approve or disapprove the application. CHAIR BUNDE explained that the review committee is comprised of a member from both the House and the Senate who provide recommendations to the commissioner. He indicated that any project that the commissioner does adopt must be funded through legislative process. REP. B. DAVIS asked if there was a public hearing process. She stated that the review committee makes the recommendations and the commissioner implements them. CHAIR BUNDE asserted that the review committee is a wide representation of the educational community. He then read the proposed amendment which refers to subsection 2, page 1, line 9: "For districts that do not have the resources necessary to accomplish planning and design phases of the project, can require that school construction projects be phased for purposes of planning, design, and construction;..." He then asked if the language was accurate. Number 128 MR. GUILEY said yes. CHAIR BUNDE asked for discussion. REP. NICHOLIA indicated that some rural schools do not bond and asked Mr. Guiley if the recommendation process would apply to their grants also. MR. GUILEY indicated that the Section 1 addresses eligibility for school construction grants. He said the discussion is focused on grants only. REP. NICHOLIA asked if the bill applies to all grants across the state. REP. OLBERG said, "Mr. Chairman, there have been hundreds if not thousands of schools built in this state; some under construction today. And, all this happened without us doing anything. And now, we've got a simple two line proposal here which makes, and maybe that's the problem, it makes sense to me. And, we're going to expand it into something that doesn't make sense." CHAIR BUNDE indicated that a potential amendment was before the committee for discussion. He said if someone wished to move the amendment there would be a discussion and a vote if necessary. REP. B. DAVIS made a motion to adopt Amendment 2 for discussion purposes. REP. OLBERG objected. Number 191 CHAIR BUNDE acknowledged the objection and repeated the aforementioned language for Amendment 2. He asked for discussion. Hearing none, Chair Bunde called for the vote. REP. B. DAVIS asked exactly what was being voted on. CHAIR BUNDE indicated that the vote would be to either adopt Amendment 2 or not. REP. B. DAVIS stated that she wanted to discuss the amendment. She said she was unsure if she wanted to adopt the amendment because she felt that it may not address her concerns. She referred to those districts who could afford the planning and design phases but indicated that perhaps they would say that they can't afford the first phase and would apply for a grant. She reiterated that the language in the bill needed to be expanded and to be more specific. She then asked what advantage a district, that has the money to afford the first phase, has over a district that doesn't. She asked if districts that could afford the first phase would their project get moved faster. Number 259 REP. OLBERG explained that in theory any district in the state can apply for a grant. REP. MACKIE concurred. He also indicated that he was not favorable to the amendment because it might eliminate a school that potentially has the money or says they have the money. He further explained that any school district would have the right to apply for a grant to do planning. REP. TOOHEY asked if a district that has applied for a grant would then be under the financial constraints of the DOE. MR. GUILEY said currently any portion of school construction costs that a district chooses to be reimbursed for, at any time in the future, is under the constraints of statute and regulation. He explained that if a district proceeds with planning and design from their own resource, they are still obligated to follow state statute through that process, including competitive bidding, length of advertising, gross square foot guidelines, and all other guidelines that exist. If the district has the resource to "up-front" the fund, they have that option. And they can apply for reimbursement after the fact but would still be subject to constraints. Number 335 REP. B. DAVIS clarified and said that the district can apply for reimbursement. Number 340 CHAIR BUNDE reminded the committee that Amendment 2 was objected to and called for the vote. Reps. Bunde, G. Davis, Kott, Olberg, B. Davis, Nicholia and Toohey voted Nay. There were no Yea votes. Chair Bunde declared that Amendment 2 failed to be adopted. He stated that he felt CSSB 312 had been thoroughly discussed and asked for a motion. Number 370 REP. OLBERG made a motion to pass CSSB 312 as amended out of committee with individual recommendations and accompanying fiscal note. CHAIR BUNDE, hearing no objections, announced that CSSB 312 was so moved. (Chair Bunde handed the gavel over to Rep. Toohey to preside over the remainder of the meeting. Chair Toohey then took a brief at ease from 3:35 p.m. to 3:40 p.m.)
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