Legislature(1995 - 1996)
02/21/1995 03:04 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HHES - 02/21/69 HB 94 - PRIVATE MANAGEMENT OF PUBLIC SCHOOLS Number 955 REPRESENTATIVE JEANNETTE JAMES explained that her bill authorizes school districts to contract with private agencies to manage schools. She has spoken with many teachers. One of the biggest problems teachers have is that they are not allowed to teach as they know is best for their students. They may spend much of their time writing reports and performing other administrative duties, and often very little time is spent on teaching. REPRESENTATIVE JAMES has also heard from teachers that they would like a Reduction In Force (RIF) program, because there are some that are ready to retire and they are just burned out. She feels that there is a pool of intelligence in Alaska that might be spirited into doing other things, providing the legislature were to allow private contracting of the management of Alaska schools. REPRESENTATIVE JAMES is not exactly sure whether this law is necessary. She thinks that such a decision is probably not prohibited in the current statutes, and she will have to ask someone about that. However, by putting together HB 94, someone may be inspired to contract management to schools. REPRESENTATIVE JAMES said that the public wants to make our schools more efficient. They want to make it more effective, they want the students to have higher academic achievements, they want better behavior from students. Additionally, people are interested in better education for less money. It appears that in our efforts to determine how we can make the government and education better, the opportunity to contract with private agencies to provide services is an option we ought to consider. REPRESENTATIVE JAMES continued that all of the protections that are in place shall remain. The school board will be the body which still determines what can or cannot happen in the schools. That would all be in the contract process. There are some management companies in the Lower 48 which have provided school districts with both good and bad experiences. However, Representative James feels that we have the human resources here in Alaska to solve problems. REPRESENTATIVE JAMES stated this bill will not change anything if school districts do not want to contract out. School districts probably would not want to do this unless someone presented a sufficient plan. School boards will have the ability to contract to a private agency as opposed to a nonprofit group, and "private agency" indicates that people want to make some money and they know they must work within the confines of the district and the state budget processes. This is a good step and might open up some good ideas for education in the state. Number 1136 CO-CHAIR TOOHEY said there is a fear this bill will be a vehicle for religious schools, and there is a fine line between what people believe is a religious school and a private school which teaches religion. She asked how this can be prevented. REPRESENTATIVE JAMES said that all laws currently on the books which prevent public schools from being religious would still apply. No existing rules are being modified. The only thing this bill allows for is permitting the school district to hire a private agency, as opposed to hiring the administration and teachers by an administrative procedure. This means a group of people may come forward and offer a contract to run such services for a set amount of money. That contract would have to apply and support all the existing rules and regulations in place for our education system. CO-CHAIR TOOHEY asked if schools could then be run without union teachers. REPRESENTATIVE JAMES answered yes, this would be the only change because the private agencies would not be required to have union teachers. The teachers could be union, but it would not be required. This would be part of the contract. Number 1240 REPRESENTATIVE BRICE asked if the private agency could hire teachers who are not part of the teacher's union, and what collective bargaining unit teachers would be under considering they are still public teachers and they fall under Title 14. REPRESENTATIVE JAMES invited Mr. Ford, who helped draft the bill, to testify with her. She then responded that it would be a public school managed by a private industry. She believes the private industry would be insulated from the requirement of the teacher's union. REPRESENTATIVE BRICE understood the people within the administrative organization would not necessarily be union, but wondered if the teachers in the classroom, considering they are still public employees, would maintain their collective bargaining status. Number 1314 REPRESENTATIVE JAMES said that teachers would not be public employees. They would be employees of the private agency which has a contract to maintain a public school. REPRESENTATIVE BRICE clarified that the private agency would not merely be administrative, it would run everything below the school board level. REPRESENTATIVE JAMES agreed and noted that the private agency could also only run any portion of the district, depending on the contract. HB 94 simply makes it an option for school boards. The boards would be the creative ones to figure out what would work. MIKE FORD, Division of Legal Services, agreed with Representative James. He said there is flexibility attached to the provision at this time. A private agency could contract at any level. There is no requirement that union teachers be hired. Non-union teachers can be hired as long as they meet the requirements of law. REPRESENTATIVE BRICE said that Mr. Ford just made him very nervous when he said the agency may contract to run the school board on down. Representative Brice wanted to know if the school board could be controlled. MR. FORD said the school board would not be replaced, only the management and the administration of the education system if that was the will of the school board. CO-CHAIR BUNDE asked for clarification. Teachers would not be public employees, therefore they would not qualify for the public benefits, health insurance, retirement, etc. Representative James suspected that the private agency would have to take care of that. Those things could be bargained for. Number 1418 REPRESENTATIVE ROKEBERG asked if it was being suggested that this could give a school board union-busting power. REPRESENTATIVE JAMES said that is not the goal of the bill, but it is a possibility. The goal should be for better schools. The people that Representative James visualizes could best run the schools is the teachers who are already on retirement. REPRESENTATIVE ROKEBERG asked if she meant that those teachers could simply form an organization to manage the schools. REPRESENTATIVE JAMES said, yes. Number 1455 REPRESENTATIVE ROKEBERG asked if Representative James was aware of any special education requirements that a school district may have, and if it would be beneficial to a school district to contract out to a private supplier for such special services. REPRESENTATIVE JAMES said that such a contract would be allowed under this legislation. Her intent is to make possible any kind of contracting with a public agency that would achieve the goals that the school district would be reaching for, i.e., better education, more efficiency, etc., within the confines of the available funds. REPRESENTATIVE ROKEBERG asked if currently the state law allows the majority of a school board to make a decision about private management, instead of going to the voters. REPRESENTATIVE JAMES said she does not know of any law that would prohibit a school board from making such a decision, however she cannot visualize this happening. She also cannot imagine the school board organizing the management. She imagines the people would bring this option to the school board's attention. She feels that most likely, the private agency would approach the school board as opposed to the school board looking for a union-busting organization. Number 1538 REPRESENTATIVE ROKEBERG asked if legally a majority of a school board in this state could make any decision they wanted to. REPRESENTATIVE JAMES said that as of right now, the answer was yes. REPRESENTATIVE ROBINSON said that she has received many Public Opinion Messages against this bill. She asked Representative James about her basic feelings about this and why there is so much negative feedback about this bill. REPRESENTATIVE JAMES answered that she has also received those negative messages, and she has been responding to them. The opinions are somewhat slanted. She is not proposing that private industry should come in and take over the schools. She is proposing that should be an option for the school board, if in fact the private agency could meet the challenges in a better way. She is not saying that as soon as this legislation is passed such a thing will happen. But particularly, in some smaller schools, this could be an option. REPRESENTATIVE JAMES said that one of the problems that exists currently is that teachers have to do a lot of administrative work. A flatter organization could be made out of the school district, in which the teachers at the bottom have more authority about what and how they teach. This will never happen in the existing system. This legislation is simply to provide an opportunity to make education less expensive and more efficient and achieve better academic and behavior standards. Representative James reminded the HESS Committee members that the private agency would have to follow all laws that are currently in place. Number 1616 CO-CHAIR TOOHEY said this is a new concept, and that people should not be afraid of new concepts. Maybe 20 years from now all schools will be privately run. She commended the bill. REPRESENTATIVE JAMES said that private management is occurring everywhere. The nation is in a financial crunch, and so is the state. The government has to figure out how to meet the needs of the public less expensively and more effectively. Children cannot graduate without knowing how to read and write. There used to be a better system. This has been complicated so now teachers are actually teaching for less time every day. This is obvious. CO-CHAIR BUNDE asked if any agencies were waiting in the wings to take advantage of this, or if this legislation was requested by a private agency. REPRESENTATIVE JAMES said the bill was her idea. Number 1693 REPRESENTATIVE DAVIS reminded Representative James that she said we need to meet the needs of our communities. Representative Davis felt that we need to provide the opportunity for the community to meet their own needs. He also asked if such allowances for private management is necessary and if it is currently allowed. REPRESENTATIVE JAMES said there is nothing that precludes this management from happening, but deferred the question to Mr. Ford. She also said that if it is not outlawed, she assumed that it is "lawed." MR. FORD said the problems with regional school boards, REAAs, is that their powers are set in statute. The language being added by the bill simply makes clear they have the power to contract management. There are always discussions when there is a list, concerning whether the list limits action to the confines of the list. In this case, the language gives school districts the authority to contract out. This is to avoid argument, if nothing else. MR. FORD said that for municipal school districts, there is simply not a statute that prohibits them from doing contracting with a private agency. They could contract management now. However, to be consistent, Mr. Ford added language to HB 94 that clearly gives school boards authority. REPRESENTATIVE DAVIS said that some language in the bill refers to regional school boards. MR. FORD said Section 2 refers to municipal school districts. Number 1774 REPRESENTATIVE JAMES said some of the smaller schools in the bush communities are having problems because there are just as many problems that arise when there are too few students as arise when there are too many. Students learn from each other. There might be some interest in some of the regional districts to band together to create some sort of boarding school which could be managed on a private basis. This could take in the students from a number of small schools and offer more educational opportunities to those students. This just another possibility of how this legislation could be used. Number 1809 REPRESENTATIVE BRICE asked how this would affect state standards, safer teaching certificates, etc., and if the State Board of Education will have the ability to establish standards for the private agencies before they could take over a school district. He was concerned with unqualified people running the schools. REPRESENTATIVE JAMES said the existing laws which apply currently would still apply. If a group wants the contract, they would have to comply with those standards of a public school. The teachers would have to be certified in the same way. REPRESENTATIVE BRICE asked if there was a section in statute which related to administrative standards as well. Number 1864 CO-CHAIR BUNDE answered there are requirements for being a principal. REPRESENTATIVE BRICE said there are more positions than just principal, such as information officers and funding officers. He wanted to make sure that those types of people have some type of knowledge or background. REPRESENTATIVE JAMES said she did not think it was necessary, but maybe that is something that should also be fixed. REPRESENTATIVE BRICE said there is no certification process for the private agency, and HB 94 was not going to look at such a process. REPRESENTATIVE JAMES said that would have to be established by the local school board, in addition to bonding and other concerns. This legislation is being introduced to open up possibilities. She thinks that such factors and caveats may come to light in the future, but she just wants to provide an option. This legislation is a tool that could be used if the opportunity arose. Number 1928 CO-CHAIR BUNDE observed that there are credentials for administrators, but credentials for positions such as school secretary are determined by district. REPRESENTATIVE BRICE said there has been a lot of talk about statewide performance standards lately. He assumes that these agencies will have to maintain high standards. He asked about consistency throughout administrations throughout the state, not that there is a whole lot of consistency at the present time. REPRESENTATIVE JAMES said that whatever the school district could do in the hiring and firing of their existing system, they could still do after contracting with a private agency. The same rules that apply to their hiring and firing would still apply in contracting. Number 1972 REPRESENTATIVE DAVIS felt that students are after a state certification. There are plenty of rules and regulations in place. Teachers are certified and would need to be under additional state law, administrators probably also. There are administrative certifications, but whether it is required under state law for a private agency, he didn't know. The curriculum is directed to a large degree by the local school board. That is the beauty of this bill, it provides an option, whether it is good or bad. Number 2044 SHEILA PETERSON, Special Assistant to the Department of Education, said that as a representative of the DOE she was here to observe and listen to dialogue to learn about the possibilities available under this legislation. CARL ROSE, Executive Director, Association of Alaska School Boards, said his organization supports HB 94. However, he was not privy to all the discussion that just took place. That discussion has opened some broad parameters that he would like to clear up. School boards are political subdivisions of the state. The parameters under which a school board operates are set in statutes, regulations, funding constraints set by the legislature, local policies and negotiated agreements. They operate in an oversight capacity. He appreciates HB 94 because it provides some options. MR. ROSE continued that he didn't think the options will be interpreted near as broadly as the sponsor hopes or thinks it might be, simply because the school boards are a political subdivision of the state. As such, a school board is required to meet the requirements of the state. As everyone is aware, four years ago the legislature adopted Title 23, Public Employees Relations Act (PERA), which moved labor relations in under PERA. At that point, there was a lengthy discussion over the ability of school districts to opt out of PERA, the way many of the municipalities were allowed to do back in the 1970s. It was decided that the policy of this state would be that all school districts would fall under the confines of PERA and move from Title 14, where labor relations was addressed, into Title 23, PERA. MR. ROSE thought that when it comes down to the interpretation of what we will be able to do with the employees in the state, the rules are already set. MR. ROSE said he did not interpret the bill as allowing for a private group to come in and hire new employees. TAPE 95-9, SIDE A Number 000 MR. ROSE said that in some particular areas, this bill will help because the law is not clear. There are two areas, one of interim superintendencies, and the other is the area which attempts to consolidate administrative services. First Mr. Rose discussed interim superintendencies. MR. ROSE said when there is a separation between a school board and its superintendent, and it comes in an untimely manner (perhaps mid-year), the school board must find an interim superintendent. Any superintendent must be certified. They must have a Type A teaching certificate, a Type B administration certificate, and a superintendent endorsement. Number 066 At 4:35 p.m. Co-Chair Bunde announced that he had to leave the meeting to make a quorum elsewhere. Because there were some questions which remained unanswered, he asked Co-Chair Toohey to appoint a subcommittee to explore the bill. He requested to be on the subcommittee and suggested that Co-Chair Toohey be on it also. Number 099 MR. ROSE continued that the position of interim superintendent requires a certificate with an endorsement for superintendent. Normally, you cannot find someone who is available mid-year. If they are available, you may want to question why they are not employed and why you would want to hire them. On the other hand, there happens to be a number of people who are available, and they are retired superintendents. MR. ROSE said this is where interpretation comes into play. When a person is utilizing the Teachers Retirement System (TRS) and receiving benefits, he or she cannot be serving in a position that requires a certificate as a condition of employment. There is a conflict there. Mr. Rose thinks this bill would allow someone to come in and contract for a period of time. The school board will then have the expertise present while it searches for another permanent superintendent. MR. ROSE said the second area this legislation would assist is the area of contracting services. Pelican, for example, has contracted services with the Southeast Regional Resource Center. They have contracted their superintendent services for $30,000. This is considerably less than the cost of a full-time employee. With the remainder of that money, they employed a full-time principal on- site. The principal's duties are to be responsible for the operation of the school. The functions and operations of the district and operating the school board are left to the executive director of the Southeast Regional Resource Center, which for the record is John Anttonen. Number 219 MR. ROSE said that relationship is working so well that Skagway is looking to do the same thing. The problem arose when the commissioner of the DOE raised the concern that since John Anttonen had a certificate and was already using it in Pelican, he should not be allowed to use that same certificate in Skagway. The Regional Resource Center is a pretty large organization. They have a lot of talent in there and they also have other people who have certificates. But the point is that they are providing a service that allows school districts to exercise their right under the authority of this bill. This is to hire and contract the services and allow them to put their money into principalships and dollars that go back into the classroom. MR. ROSE continued that the question has to be if it is not just the Regional Resource Center, who else might be able to provide that service. These factors must be looked at. Mr. Rose cannot imagine a school district deciding to go private with all the constraints he just mentioned. Mr. Rose thinks that someone would have to come up with a very good plan to suggest that something like this could work. He looks at these good plans and proposals as very little more than a campaign. Many things can be promised on the campaign trail. Many things can be promised when a person is proposing that they will run a business. MR. ROSE explained the problem is that at some point there is a "leaping off point." When a person signs into a multi-year contract, it is no different than any superintendency. That person is responsible for that contract for the duration of that contract. There are a lot of protections already in state law that provide us with the protections that we need. But this bill does clarify, and it gives us another option to take a look at private agencies. MR. ROSE added the Regional Resource Center is kind of a hybrid in terms of an agency. It is mentioned in statute; therefore, it is kind of a political subdivision of the state; therefore, many of their employees qualify for TRS benefits. On the other hand, they are also a 501-C(3), which is a private nonprofit agency, thereby allowing them some proprietary interests to competitively bid for grants from the DOE. Number 387 MR. ROSE questioned if the bill is clear whether the Regional Resource Center qualifies as a private agency, however, Mr. Rose thinks it does, one way or the other. For the points Mr. Rose just enumerated, he feels that the bill gives some options. He also thinks the current statutes provide all the protections that HESS Committee members had concerns about. Lastly, Mr. Rose thinks that the school board is the one that is probably best qualified to make determinations as to what is most effective for the operation of the schools. Number 437 MR. FORD said the discussion has covered both ends of the spectrum. The existing law allows one to contract with an agency, and the current bill just says, "a private agency." Whether it is public or private, the school board is covered. Number 461 REPRESENTATIVE ROKEBERG commented that the most recent testimony should be taken into consideration by the subcommittee. Co-Chair Toohey said she would take that under consideration. REPRESENTATIVE BRICE asked how many private agency management options are currently working in the U.S., how long have they been working, and have they been working long enough to have any type of fairly definitive outcome. REPRESENTATIVE JAMES answered that legislative research was working on that information right now. CO-CHAIR TOOHEY said if you take away the words "private management" and think about the type of education, the bill becomes clearer. REPRESENTATIVE BRICE clarified by saying "Privately managed, publicly funded." CO-CHAIR TOOHEY held the bill for further consideration. Number 571 REPRESENTATIVE DAVIS asked about Co-Chair Bunde's request to be on the subcommittee. Co-Chair Toohey said that she and Co-Chair Bunde would comprise the subcommittee until further notice.
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