Legislature(1995 - 1996)

02/21/1995 03:04 PM HES

Audio Topic
* first hearing in first committee of referral
+ 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              
 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             
 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            
 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              
 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              
 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             
 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                    
 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                    
 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           
 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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