Legislature(1997 - 1998)
04/25/1997 03:40 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
HB 190 - SCHOOL CONSTRUCTION GRANT PROGRAM Number 1152 CHAIRMAN BUNDE announced the next item on the agenda as HB 190, "An Act relating to the participating share for school construction grants; and providing for an effective date." Number 1167 REPRESENTATIVE REGGIE JOULE, Sponsor of HB 190, explained that when a school district meets the listed criteria the commissioner will waive the required match for school construction projects. The three criteria include: the assessed valuation per average daily membership of $200,000 or less, currently in statute; have an unemployment rate of at least 10 percent; the average per capita income of the district is 85 percent or less of the statewide average per capita income. This criteria attempts to identify what factors would best indicate districts with economic situations leaving them with little ability to generate cash for their local match. REPRESENTATIVE JOULE stated that HB 190 sets the stage so that a district can see new construction and/or have the issue of deferred maintenance addressed. The school district will not feel that because they cannot meet this required match amount they would never see a project in their district. Number 1270 DAVID BELL, Director of Property Services, Northwest Arctic School District, testified next via teleconference from Kotzebue. He explained there were 12 village sites with 25 educational facilities. The newest building is seven-years-old and the oldest is 41-years-old. Two buildings have had structural failures this year. A six year plan has been updated and sent to the borough. This plan includes major maintenance items, renovation items and construction items for new schools. Currently the list represents $66 million worth of items with a local contribution of $6.6 million. The school district does not have funds within its normal operational budget to take care of these problems and so they are deferred to the borough. The borough has a difficult time meeting the local match contribution for some of the larger projects. Number 1402 REPRESENTATIVE GREEN referred to the unemployment rate of 10 percent or higher. He asked if this would be measured on an average annual rate. Number 1415 REPRESENTATIVE JOULE answered that it would be based on the Department of Labor employment statistics, the average annual. Number 1422 REPRESENTATIVE GREEN referred to an area that has a per capita income of its residents at 85 percent or lower than the state average. He thought some rural areas might have both a cash and a barter economy. He wondered if this fact might skew the criteria in favor of rural areas. Number 1460 REPRESENTATIVE JOULE said the criteria would only be based on a cash economy. Number 1487 JOHN ATCHAK testified next via teleconference from Chevak. He stated that they have been talking about this for more than six years. The first school was built in 1951 and is still in use. Some student housing is needed, there is a separation between the buildings and this is why a new school is needed. Number 1614 GREG FLAST (Ph.) testified next via teleconference from Chevak. He said there are more enrollees in the kindergarten then the number of the graduating class. The current school was built for 180 enrollees and now there are 247 students enrolled in the school. The proposed construction consists of a cost of over $20 million, requiring a $500,000 local match. There are no revenues in Chevak which would fund this $500,000 match. Number 1717 MR. ATCHAK discussed the condition of the school and the separation of the buildings. He said there is no sprinkler system in the schools. At least 5 to 10 percent of students would get hurt or die because of trampling for lack of fire escape routes, inadequate classrooms and hallways. The plumbing in the building is so deteriorated that the water is unfit for human consumption. There is too much iron and manganese in the plumbing. Number 1904 CHAIRMAN BUNDE turned the gavel over to Representative Green. Number 1916 REPRESENTATIVE PORTER stated that the section of statutes, that HB 190 replaces, currently allows the commissioner to waive the requirement for a participating share in situations where a community can't meet it. REPRESENTATIVE JOULE clarified that the current language is "may" and HB 190 would change it to "shall". REPRESENTATIVE PORTER asked if he could obtain information regarding denials. Number 1950 REPRESENTATIVE DYSON felt that most communities outside of the railbelt have a 10 percent unemployment rate. Number 1972 REPRESENTATIVE JOULE pointed to information listing the 20 districts which would meet all three criteria. He said if an expanded version of unemployment statistics were used, then probably more districts would qualify. The unemployment figures change, year to year, so one year a district may qualify and the next year they might not qualify depending on their level of activity. Currently, 20 of the existing districts meet the criteria. It recognizes that there are villages within other districts who don't make it. Number 2019 REPRESENTATIVE GREEN presented a scenario where District A qualified one or two years allowing construction to begin without requiring a match, but then the next three years District A did not meet the criteria. Number 2038 REPRESENTATIVE JOULE explained that there are two issues involving capital dollars and accessing them; potential school construction and major deferred maintenance. He said the criteria for some of these districts will probably not change, but he did not know how to answer this particular situation. Number 2063 REPRESENTATIVE GREEN asked if the intent was to increase the amount of funding or to reallocate the finite amount of money available. Number 2081 REPRESENTATIVE JOULE stated that Chevak cannot meet the 2 percent matching requirement, consisting of $500,000. Chevak could not meet the match for deferred maintenance. This bill states that these areas that meet the three criteria have very little cash. These areas probably have a local sales tax and some of the slack is attempted to be taken up by government assistance, but there really isn't a tax base. He stated that 85 percent of the population is under that income per capita, the community has double digit unemployment and there is devaluation. The intent of this legislation is to offer those communities, who need construction or deferred maintenance, some encouragement that they would be able to complete some needed projects. He said a 41-year- old building is going to become a 60 and 70-year-old building if communities cannot come up with the local match. Number 2168 REPRESENTATIVE PORTER referred to a bill which would change the formula to allow other kinds of participation including land. TAPE 97-35, SIDE A Number 0000 MICHAEL A. MORGAN, PMP, Manager, Facilities Section, Education Support Services, Department of Education, stated that there is a current department regulation which allows an in-kind contribution by districts where labor, equipment materials or land can be used to meet the local match requirement. REPRESENTATIVE GREEN clarified that this is an existing regulation. Number 0043 REPRESENTATIVE JOULE explained that the contractors have issues of liability, in terms of people getting out there to volunteer their work. People will expect to get paid for specialty work, especially in places where there is high unemployment. He thought that this was a potential avenue, but there are also issues of liability, recognizing that the contractors and construction people are coming in from the urban areas of the state and would have insurance considerations. Number 0161 B. A. WEINBERG, Lobbyist, Kashunamiut School District, said legislation providing a local share contained a provision allowing the commissioner to grant a waiver. The department's policy on granting waivers is so restrictive that it is virtually impossible to get a waiver. To the best of his knowledge, a waiver has never been granted. The school district he represents has simply stopped asking for waivers. MR. WEINBERG explained that local governments with little property wealth, low income and high unemployment are already strained to provide the most basic kinds of public services. The burden of the local share would cause those meager services to be reduced even further. MR. WEINBERG stated that the Kashunamiut is number one on the 1998 priority list. The current school is documented to be a life safety hazard, it is educationally inadequate and is at 189 percent of capacity in terms of enrollment. He said 98 percent of those students are Alaska Natives, 84 percent have limited English proficiency and 79 percent live below the poverty level. If this project were to be funded, the school district would have to come up with approximately $484,000. The only practical place this money could come from is the operating budget. There are in-kind methods of funding, but as a practical matter a contractor is not going to be able to put in a bid based on the fact that he is going to get $500,000 in volunteer labor. The school district has been negotiating with the DOE for about three years to use land in lieu of their participating share. Those negotiations are still inconclusive. Based on what has been said, the school district has no expectation that the land will be allowed. The only practical place for that money to come from is out of the operating budget. Number 0394 REPRESENTATIVE GREEN suggested that it was difficult to incorporate manpower into a construction or a renovation project, but added that it could be a possibility. Number 0481 REPRESENTATIVE JOULE answered that this is a real dilemma. There is a school in his district which used to be at the top of the list of needs. He said when it was at the top, the Northwest Arctic Borough School District couldn't come up with the required match. Since then, this school has dropped down to number five. This school has the library in the hall and the high school is in a building without restroom facilities. He said there are schools like this throughout the rural areas. Number 0531 REPRESENTATIVE PORTER clarified that the plan in Chevak would be to create a replacement facility. He suggested that demolition could be possible and labor from the village could be utilized. Number 0566 MR. WEINBERG explained that the existing facility belongs to the state. The school district's position would be to turn over the existing building to the state. The state could demolish it, give it away or whatever. The new school is intended for a separate space. Number 0584 REPRESENTATIVE PORTER suggested that if it were slated for demolition, labor used to demolish it could be used as a cost for the project.
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