Legislature(2021 - 2022)DAVIS 106
03/01/2021 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Student Enrollment Counts & Covid-19 Federal Relief Funding | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
March 1, 2021
8:03 a.m.
MEMBERS PRESENT
Representative Harriet Drummond, Co-Chair (via teleconference)
Representative Andi Story, Co-Chair
Representative Tiffany Zulkosky (via teleconference)
Representative Grier Hopkins (via teleconference)
Representative Mike Prax (via teleconference)
Representative Ronald Gillham (via teleconference)
Representative Mike Cronk (via teleconference)
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION(S): STUDENT ENROLLMENT COUNTS & COVID-19 FEDERAL
RELIEF FUNDING
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
HEIDI TESHNER, Director
Finance and Support Services Division
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
regarding student enrollment counts and COVID-19 federal relief
funding for fiscal year 2021.
LACEY SANDERS, Director
Administrative Services Section
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Provided the portion of DEED's PowerPoint
presentation titled "COVID-19 K-12 Federal Relief Funding
Overview."
ACTION NARRATIVE
8:03:39 AM
CO-CHAIR ANDI STORY called the House Education Standing
Committee meeting to order at 8:03 a.m. Representatives Cronk,
Zulkosky, Hopkins, Gillham, Drummond (all via teleconference),
and Story were present at the call to order. Representative
Prax (via teleconference) arrived as the meeting was in
progress.
^PRESENTATION(S): Student Enrollment Counts & COVID-19 Federal
Relief Funding
PRESENTATION(S): Student Enrollment Counts & COVID-19 Federal
Relief Funding
8:06:46 AM
CO-CHAIR STORY announced that the only order of business would
be a presentation on "Student Enrollment Counts & COVID-19
Federal Relief Funding."
CO-CHAIR STORY said the presentation, given by the Department of
Education and Early Development (DEED), was started on 3/24/21
and would be completed today. She related her appreciation for
Alaska's teachers and the challenges they face transitioning to
remote learning.
8:08:22 AM
HEIDI TESHNER, Director, Finance and Support Services Division,
Department of Education and Early Development, provided the
remainder of the PowerPoint presentation regarding student
enrollment counts and COVID-19 federal relief funding for fiscal
year 2021 (FY 21) [hard copy included in the committee packet].
She reminded committee members that [at the House Education
Standing Committee meeting on 3/24/21] she had talked about the
overall foundation formula, where it started, the count period,
and an analysis of some initial counts. She said that today she
would be discussing the foundation formula itself.
MS. TESHNER turned to slide 7, titled "Hold Harmless Provision,"
and stated that House Bill 273, enacted in 2018, established a
hold harmless provision for those school districts experiencing
a reduction in their brick-and-mortar school's average daily
membership (ADM) after it had been adjusted for school size in
the foundation formula. She explained that eligibility for hold
harmless is determined after a district's adjusted-for-school-
size ADM is calculated in total for all schools; it is a
district-wide adjustment, not by school. She further explained
that the sum total of a district's adjusted-for-school-size ADM
is compared to the prior fiscal year's total adjusted-for-
school-size ADM to determine if a decrease of 5 percent or
greater has occurred. If that answer is yes, then the prior
fiscal year is locked in as the base year for the next three
years. She said, "The new school size adjustment, with hold
harmless, continues through the formula adjustments." This
results in about 75 percent of the basic need calculation being
restored in that first year. The hold harmless provision is
available to school districts over a three-year step-down of 75
percent in the first year, 50 percent in the second year, and 25
percent in the final year, provided the adjusted-for-school-size
ADM stays below the established base year.
CO-CHAIR STORY asked how many of Alaska's 50-plus districts are
in hold harmless.
MS. TESHNER replied that for FY 21 there are 32 districts in
hold harmless.
MS. TESHNER returned to slide 7 and explained that the three-
year step-down allows time for the districts budgets to adjust
to the decreased funding that comes with the reduction in the
brick and mortar ADM. This provision, she noted, was put into
place to help with yearly fluctuations, not necessarily for a
pandemic like what is now being experienced this past year.
8:12:53 AM
REPRESENTATIVE HOPKINS requested Ms. Teshner provide the
committee with the names of the 32 school districts as well as
how many students they have lost. He inquired about the seven
school districts hardest hit by loss of student enrollment.
MS. TESHNER agreed to provide a list of the 32 districts for FY
21 that are in hold harmless, along with the enrollment
reduction and the school size adjusted ADM. She said the seven
hardest hit districts are looking at the FY 21 foundation
compared to the money that districts received through the
state's Coronavirus Aid, Relief, and Economic Security (CARES)
Act. Between that and their fund balance they were showing a
deficit, she explained, and DEED is trying to identify districts
that are still potentially in the red in revenue because of
fluctuations in enrollment.
8:15:18 AM
CO-CHAIR STORY said the committee has heard from many groups
that it would be preferred if the districts would use the FY 20
enrollment numbers in planning for next year. She asked Ms.
Teshner to explain why DEED doesn't think that is the solution.
MS. TESHNER answered that statute does not allow the department
to change the count period or choose the count that can be used
to pay and calculate the state aid that comes through the
foundation formula. She said statute is very clear that budget
projections are submitted in the November prior to the fiscal
year in order for DEED to be able to present a budget number for
the governor's budget. It is very clear that there is a 20-day
count period in October ending the fourth Friday in October that
is the first step in determining a district's state aid amount
in the foundation formula. So, she added, it's outside DEED's
purview to pay anything beyond what is laid out in statute.
CO-CHAIR STORY offered her understanding that statute allows for
the commissioner to hold a second count period at a different
time.
MS. TESHNER confirmed there have been talks of a second count
period. The original count period is a lengthy process that
takes 30-60 days, she explained, including the time to clear and
review the counts submitted by the districts. A second count
period would be more feasible if the state had a real-time
system where districts could add data regularly, she said, but
DEED has one person who runs this program, so no capacity to do
a second count period.
CO-CHAIR STORY commented that COVID-19 is still active, and
schools are not all back to in-person enrollment, so it is hard
to get a count for the fall. But, she added, it would be
helpful to get a second count.
MS. TESHNER clarified that the projections DEED gets in the
previous November are based on what each district feels it's
going to look like in the district the following year. For
example, she said, this past November is for FY 22, and that
following count period is what DEED will actually pay for FY 22.
So, it gets trued up based on what actually happens.
CO-CHAIR STORY reflected that in her experience as a former
school board member the board set its fall projections in the
spring while doing its budgeting. Every school district is
working from what it thinks it will have based on its planning.
8:19:27 AM
MS. TESHNER resumed her presentation. She turned to slide 8,
titled "Public School Funding Formula," and explained that after
the count period data is reported, the ADM for each school in
the district is calculated by applying the school size factor to
that student count according to the table in AS 14.17.410. The
product of that calculation is then used as a factor in the next
step of the formula. She said slide 8 shows the steps and
statutory citations for determining a district's average daily
membership: First taken is the ADM and next is the school size
table. Between the school size table and the district cost
factors, which are not reflected here, is where the department
looks at hold harmless and determines eligibility for all
districts. From there the department multiplies the district
factor, then the special needs factor 20 percent add-on, the
vocational education factor, the special education intensives
which is 13 times the base student allocation per student, and
then the 90 percent correspondence ADM is added in. All of that
added up determines the district's adjusted average daily
membership. She drew attention to the 8-page overview document
in the committee packet, which provides a detailed walk through
of each of the steps on slides 8 and 9, both slides titled
"Public School Funding Formula."
8:21:28 AM
REPRESENTATIVE PRAX inquired about availability of the criteria
for the special education intensives.
MS. TESHNER agreed to provide that requirement along with the
details for that requirement.
MS. TESHNER noted that slide 9 depicts the remaining components
and multipliers for determining state aid. She explained that
the district's adjusted ADM is multiplied by the base student
allocation (BSA), which is $5,930, to determine the basic need.
Basic need is paid out of three components: the required local
contribution for all cities and boroughs, the deductible impact
aid, and state aid. Next the quality schools grant is added in,
which is $16 times the adjusted ADM, and this determines the
state aid entitlement that is paid to each district. She noted
that the required local contribution is only for cities and
boroughs; the Regional Educational Attendance Area (REAA)
districts do not have a required local contribution. She
further noted that not all districts participate in or receive
impact aid funding. She pointed out that all of the factors
within the formula are in statute, so any change requires the
legislature's action.
8:23:32 AM
CO-CHAIR STORY asked what year the base student allocation (BSA)
of $5,930 was last adjusted.
MS. TESHNER answered by bringing attention to slide 10, titled
"Base Student Allocation (BSA) Funding," that gives a historical
look at the BSA. She noted that the BSA was moved from $5,880
in FY 16 to $5,930 in FY 17. She further noted that slide 10
also provides a history of the one-time funding appropriated by
the legislature outside of the funding formula.
CO-CHAIR STORY related that her office worked with "legislative
finance" to develop an inflation-adjusted chart, which she will
be sharing with the committee.
MS. TESHNER addressed slide 11, titled "FY2021 Statewide
Enrollment Comparison." She said the figures in the top half of
the slide were also on slide 6, which she reviewed during the
2/24/21 committee hearing. She specified that the figures on
the bottom half of the slide depict funding. The FY 21 Online
Alaska School Information System (OASIS) update versus DEED's FY
21 projected shows a net increase of approximately $25 million,
a 2 percent increase. She noted that this is a 25 percent
increase in the current fiscal year's budget. Regarding the
data behind these numbers, she said 25 districts are estimated
to receive an increase in their total state aid, totaling about
$54.5 million. Comparatively, the remaining 29 districts are
estimated to receive a decrease in their state aid, totaling
approximately $29.4 million. A greater amount of state aid is
going to districts than those that are going to receive a
decrease, for a net increase of $25 billion in the current year
budget. She stated that the FY 21 OASIS update versus the FY 20
actual is showing a net increase of about $38 million, a 3.1
percent increase. The FY 22 projected versus DEED's FY 21
projected is showing a net decrease of $19.8 million, which
isn't reflected on this slide. She pointed out that the current
information in the column for FY 22 projected versus FY 21 OASIS
from which DEED will pay is an almost $45 million decrease.
Comparing DEED's FY 22 projected to FY 21 projected, she
continued, is a $19.8 million decrease. She explained that
these decreases are a result of students being projected to move
from their correspondence programs back to brick and mortar
schools, whether in their community or if they've moved to
another community.
8:27:46 AM
CO-CHAIR STORY commented that many districts believe students
will be back if the decline in COVID cases continues, and are
trying to plan for pretty much a full program. The districts,
she continued, are projecting as closely as they can an adequate
count so they will have those dollars in hand technically. She
said she is trying to think of how to give districts some
certainty in this uncertain time. Regarding the decrease of $19
million for next year, she surmised that DEED is expecting many
students to be back at their original brick and mortar schools
MS. TESHNER replied yes, based on what districts have reported
for FY 22 the last column on slide 11 reflects that DEED is
projecting comparatively to FY 21 OASIS about a 32 percent
decrease in correspondence and an 8.8 percent increase in the
regular ADM. While there is still a lot in flux, districts are
definitely projecting a shift back to their brick and mortars.
She said she has heard that a lot of families have had
conversations with districts and have already put students back
into a brick and mortar or are planning to for next year. The
flip side, she continued, is that some families have children
who have thrived in correspondence and so might stay there.
8:30:58 AM
REPRESENTATIVE PRAX inquired whether it is correct that the BSA
number from this year determines the amount that the state will
contribute for the next nine months.
MS. TESHNER responded by moving to slide 12, titled "Foundation
Payments Process." She explained that AS 14.17.610(a) outlines
the process for how districts receive their state aid and how it
is distributed. Payments are processed on a monthly basis and
th
are timed to arrive in a district's bank account by the 15 of
each month. Payments on the first nine months of the fiscal
year are calculated based on the prior fiscal year's foundation.
For example, she continued, for FY 21 the first nine months of
July-March are paid on the final FY 20 foundation, and for the
remaining three months of April, May, and June, DEED
recalculates and trues up based on the finalized current year
foundation counts. So, for FY 21, these last three months will
be based on the finalized FY 21 foundation counts. She said
this ensures that when the fiscal year ends the districts will
have been paid what is due based on their current year actual
reconciled average daily membership counts.
MS. TESHNER turned to slide 13, titled "Foundation Payments:
Advances," and continued her answer. She said AS 14.17.610(c)
provides that a district experiencing a large increase in
student enrollment, and therefore expects a shortfall in
funding, can request an advance on its anticipated finalized
state aid funding. The department then adjusts its final three
payments based on any advanced payment that is paid. To request
an advance, she continued, a district must provide a written
request to the department [that, at a minimum, includes the
following information: copies of the last bank statements for
all accounts; cash reconciliation prepared in the last 30 days;
and a listing of investments with maturity dates].
8:35:06 AM
REPRESENTATIVE PRAX asked whether he is correct in surmising
that the school districts which have experienced an enrollment
decrease would receive funding at roughly the previous year's
level until March, but then there could be a significant
decrease comparatively in the last three months.
MS. TESHNER answered correct.
CO-CHAIR STORY related that in a presentation last week the
Yukon-Koyukuk School District superintendent said the district
already had over 200 of its 400-student increase go back to
their neighborhood schools. She asked whether she is correct in
understanding that since this happened mid-year there is not any
funding that follows those students; it stays with Yukon-Koyukuk
where the count was.
MS. TESHNER confirmed the aforementioned is correct.
8:36:36 AM
MS. TESHNER resumed her presentation and spoke to slide 14,
titled "Federal Impact Aid Disparity Test." She explained that
the federal government allows the State of Alaska to deduct 90
percent of allowable impact aid from the amount the foundation
formula allocates to school districts. Per AS 14.17.410, the
basic need minus the required local contribution minus the 90
percent of eligible impact aid equals state aid. This reduces
the state's cost by an average of $85 million per year.
However, she noted, the state is only allowed to deduct the
federal impact aid if it has an equalized formula in accordance
with federal law. The state must ask for permission from the
federal government to take the impact aid payments into account.
This is an annual certification that must occur not later than
120 days prior to the next fiscal year, so typically this is by
the end of February. The current year certification for the
prior fiscal year for FY 20 is due this Wednesday, 3/3/21. She
said each year DEED performs the disparity test, which compares
the high per revenue and low per revenue districts to each
other. If the funding differential is not more than a 25
percent disparity between districts revenue per adjusted average
daily membership (AADM), then the funding formula is considered
equal, and the state is allowed to deduct the approximately $85
million. This is the reason for why there is a 23 percent cap
on the maximum local contribution, she continued, it is intended
to ensure disparity does not exceed 25 percent. If the state
fails the disparity test, the foundation formula would not be
considered equalized, and the state would owe school districts
that $85 million. She pointed out that the state also could not
deduct federal impact aid again in its formula until the federal
government recertified the state's education funding system.
Since the disparity test is performed after the end of the
fiscal year, she added, this means that the state will owe the
$85 million for multiple years. For instance, if the state
failed for FY 21, the results would be determined in FY 22, and
the state could not get recertified until about FY 24. In this
case, failing the disparity test could cost the state at least
$155 million - $85 million over three years.
8:39:45 AM
CO-CHAIR STORY inquired about the state's latest disparity
measure that will be coming out next week.
MS. TESHNER replied that DEED is in the process of finalizing
that, so she doesn't yet have an answer.
CO-CHAIR STORY requested Ms. Teshner provide an idea of what it
was last year or the prior year.
MS. TESHNER responded that she doesn't have the exact number,
but it was below the 25 percent mark. In further response, she
agreed to provide the committee with this year's number [when it
is available].
CO-CHAIR STORY asked whether federal COVID-19 relief funds have
been included in disparity calculations.
MS. TESHNER answered that they have not been included because
they are outside that calculation.
8:40:56 AM
MS. TESHNER returned to her presentation and addressed slide 15,
titled "Additional State-Funded Formula Programs." She related
that two other state-funded programs, the pupil transportation
and the residential schools programs, use the FY 20 and FY 21
enrollment counts to determine their FY 21 final grant amounts.
The pupil transportation grant is determined based on the
statutory formula in AS 14.09.010, she said, which takes the
districts average daily membership, less their correspondence
average daily membership, multiplied by the per student amounts
that are set out in statute. The FY 21 appropriation is
approximately $77 million and the FY 21 estimated actual grants
total about $65.3 million, a decrease of $11.7 million or 15
percent compared to what DEED projected to pay out of the pupil
transportation program for this fiscal year.
MS. TESHNER explained that the residential schools program
funding is also determined based on a statutory formula in AS
14.16.200. This funding has two parts. First is the
residential stipend, which is a per pupil monthly stipend rate
multiplied by nine months multiplied by the actual student
count. Second is a one round-trip transportation reimbursement
per student, which must be at the least expensive means between
the student's community of residence and the school. The FY 21
appropriation for residential schools is about $8.3 million, she
reported, and the FY 21 estimated actual grants total $2.4
million, a decrease of $5.9 million or a 71 percent decrease.
In a normal year there are 9 school districts that operate 10
approved programs, she pointed out. For FY 21, the current
year, only four schools are up and operating, but at a reduced
capacity, and that is in the Galena, Lower Yukon, Nenana, and
Northwest Arctic school districts.
8:44:09 AM
CO-CHAIR STORY asked whether the residential schools program is
participating in coming back up to the capacity in FY 22, so it
would be $8 million for the appropriation.
MS. TESHNER replied yes, she has been told that the districts
are anticipating that their residential schools are planning for
near capacity in the next fiscal year.
CO-CHAIR STORY inquired about the extent to which districts were
able to save money on pupil transportation this year.
MS. TESHNER responded that DEED doesn't yet know whether
districts were able to save any money on pupil transportation
because DEED won't get their actual data for FY 21 until next
November when their audits are due. In her conversations with a
handful of districts, she continued, some are saying they
weren't able to save anything with pupil transportation,
especially with the decrease in funding.
CO-CHAIR STORY said she has heard that many districts used their
school buses to deliver meals to neighborhoods and various other
uses.
8:45:37 AM
REPRESENTATIVE HOPKINS offered his belief that several school
districts stated last Friday that they didn't see any savings in
their pupil transportation because a bus still had to run the
same route even if a household along the route decided not to
attend school. He asked whether the reductions in funding for
the pupil transportation or residential schools programs were
reflected in the governor's [12/15/20] budget or the amended
budget.
MS. TESHNER answered no, neither one of these is projecting a
decrease because DEED anticipates the programs will be at full
capacity next year and the full funding will be needed.
8:47:02 AM
LACEY SANDERS, Director, Administrative Services Section,
Department of Education and Early Development, provided the
portion of DEED's PowerPoint presentation titled "COVID-19 K-12
Federal Relief Funding Overview." She displayed slide 16 and
said she will be discussing the federal relief packages that
have been allocated to DEED.
MS. SANDERS addressed slides 17-18, titled "Coronavirus Aid,
Relief and Economic Security (CARES) Act Update." She said the
CARES Act was signed into law on 3/27/20 and appropriated $30.75
billion into the Education Stabilization Fund. This funding was
allocated to three pots: One, about $3 billion for the
Governor's Emergency Education Relief Fund (GEER I Fund); two,
about $13.5 billion for the Elementary and Secondary School
Emergency Relief Fund (ESSER I Fund); and three, about $14.25
billion for the Higher Education Emergency Relief Fund. She
pointed out that she would speak only to the ESSER and GEER
funds, given the University of Alaska is the appropriate agency
to speak to the Higher Education Emergency Relief Fund. In
response to Representative Prax, she clarified that the
aforementioned allocations are for the national level.
8:49:40 AM
MS. SANDERS displayed slide 18 and outlined the State of
Alaska's allocation of CARES Act funding for the ESSER I and the
GEER I funds. She reported that Alaska's total allocation of
ESSER I funding was $38.4 million. Of that, a total of 90
percent or $34.6 million was allocated to local education
agencies (the school districts). It is available for school
districts to obligate until 9/30/22, and as of 1/29/21 school
districts had requested reimbursements totaling $11.3 million.
She explained that the school districts provide an application
and a budget for their funding each year, and FY 20 was the
first year the funding was available for expenditure. She said
DEED is working through the FY 21 applications and requests
submitted by the school districts, and this process will
continue into FY 22 and FY 23. She noted that DEED, the state
education agency, received $3.8 million to award grants or
contracts to address emergency needs resulting from the COVID-19
pandemic. One-half of 1 percent may be used for administrative
costs, and this funding is available until 9/30/22.
MS. SANDERS continued on slide 18 and reported that Alaska's
total allocation of GEER I funding was $6.5 million. She said
the purpose of this money is to provide emergency assistance as
a result of the COVID-19 pandemic. The funding was available to
the governor to allocate at his discretion and Governor Dunleavy
allocated the funding as follows: $3.7 million to school
districts; [$1.5] million to institutes of higher education; and
$1 million for competitive grant awards to education and
education related entities.
8:52:05 AM
CO-CHAIR STORY requested Ms. Sanders elaborate on the $3.7
million to school districts.
MS. SANDERS explained that the ESSER funding is required to be
allocated to school districts based on Title I, Part A; however,
a few school districts are not eligible for the title funding.
So, to allocate funding to all school districts and to bring
them up to an amount that was equal to the veto reduction that
was made in the prior year, $30 million, the governor allocated
funding to all school districts to bring them up to that
minimum. In further response to Co-Chair Story, Ms. Sanders
explained that Title I funding supports the low-income students
and is based on federal law under the Every Student Succeeds
Act. She offered to provide the committee with the specific
allocation language from the federal guidance. She noted that
in a few slides she would review each of the attachments in the
committee packet, and the allocations to the school districts
are included there.
MS. SANDERS addressed slides 19-21, titled "Coronavirus Response
and Relief Supplemental Appropriations (CRRSA) Act Update." She
said the CRRSA Act was signed into law on 12/27/20 and provided
about $82 billion of funding to the Education Stabilization Fund
at the national level. She outlined how this funding was
allocated: 1) Approximately $4.1 billion went into the
Governor's Emergency Education Relief Fund (GEER II Fund); 2)
Approximately $54.3 billion for the Elementary and Secondary
School emergency Relief Fund (ESSER II Fund); and 3)
Approximately $21.7 billion for the Higher Education Emergency
Relief Fund. She noted that the CRRSA funding has a different
reference, GEER II and ESSER II, because they are accounted for
separately from the CARES Act funds and they also have different
allowable uses and periods of availability.
8:55:53 AM
MS. SANDERS moved to slide 20 and outlined the State of Alaska's
allocation of CRRSA Act funding for the ESSER II and the GEER II
funds. She reported that the State of Alaska's allocation of
ESSER II funds was about $159.7 [million]. The local education
agencies, school districts, were awarded $143.7 million. This
funding is available for school districts to obligate until
9/30/23, she continued, and the funds may be used for
expenditures dating back to 3/2020. She related that the
department's online application for this funding was made
available to school districts on approximately 2/15/21. She
further reported that DEED, the state education agency, was
awarded $15.2 million of this funding to address emergency needs
and, of this, [$789,597] may be used for administrative costs
and the funding is available until 9/30/23.
MS. SANDERS noted that ESSER II funds have an expanded list of
allowable activities as compared to the CARES Act. These
activities are: 1) Addressing learning loss; 2) Summer
programming such as summer schools; and 3) School facility
repairs that reduce the risk of virus transmission and improve
air quality. She related that DEED has received questions about
water system upgrades and investments in Internet and broadband
infrastructure, and federal guidance provides allowances for
those. She pointed out that the school districts determine how
their funding will be used. The department reviews the proposed
plans and budgets, as well as the requests for reimbursements,
to ensure that they follow the federal guidance for allowable
uses. She added that the school district is also responsible
for demonstrating that its plans for expenditures meet the
federal allowable uses. She said DEED provides assistance on
determining whether a use is allowable, and frequently addresses
questions from the school districts on ideas or purchases that
they want to make and determining that they are following the
federal guidance.
8:58:47 AM
CO-CHAIR STORY surmised that addressing learning loss among
students can be anywhere from extended summer school plans, to
extended day plans during the school year, to tutoring, and to
counselors for social and emotional learning needs.
MS. SANDERS replied yes, those are all ideas that have been
discussed in the department.
CO-CHAIR STORY stated it would be important for the committee to
hear from districts on how they are planning to use these funds
as they go forward to help meet the needs of Alaska's kids. She
said it's a multi-year process to get everyone back up to where
they would like to be in their learning and to where families
would like their children to be.
9:00:26 AM
MS. SANDERS resumed her presentation. She displayed slide 21
and reported that the State of Alaska's allocation for GEER II
funding was $8.2 million, which was broken into two parts. The
first part is the Governor's Supplemental Allocation of $2.8
million, which is available similar to the GEER I funding in
that the governor will determine how the funding is allocated.
She said no direction has yet been made on how this funding will
be allocated; the governor has until 1/2022 to determine how
those funds will be awarded. GEER II funds have allowable uses
similar to those under the CARES Act, which includes preventing,
preparing for, and responding to the COVID-19 pandemic. She
said the second part of GEER II is a new provision titled the
Emergency Assistance for Non-Public Schools (EANS), for which
Alaska was allocated $5.4 million. This funding will be awarded
to non-public schools in partnership with DEED, she explained.
The application for this funding was made available on 2/12/21
and non-public schools have 30 days to submit their application.
Ms. Sanders noted that non-public schools are not required to
register with the department, making it difficult to provide a
comprehensive list of eligible schools in Alaska. She said DEED
conducted an extensive search, and Handout 9 in the committee
packet is a list of schools that DEED has identified as non-
public schools eligible for this funding. She cautioned that
once the application period is closed there might be additional
eligible schools identified.
9:03:36 AM
REPRESENTATIVE HOPKINS said this raises questions with Alaska's
state constitution. He offered his assumption that while it is
federal dollars coming in, they would need to be passed through
within a budget to be a line item. He asked whether there are
any concerns about how that would fit in with the constitution
regarding no public funds for non-public schools.
MS. SANDERS answered that DEED worked with the Department of Law
and it was determined that these federal funds coming to the
state will be passed through the budget via the Revised Program
Legislative (RPL) Process by the Legislative Budget & Audit
Committee. Because the funding is to address immediate health
and care of students and teachers in the school districts and
that it's federal funding, there was not the concern of state
funding being handed to non-public schools, she explained.
REPRESENTATIVE HOPKINS inquired whether the Legislative Budget &
Audit Committee discussed on the record that this was not a
concern given it was for public health and safety.
MS. SANDERS clarified that the funding request was made through
the Legislative Budget & Audit Committee meeting. She said this
concern with the funding to non-public schools was not discussed
in that meeting; it was discussed prior to submission of the
request for the RPL for that committee.
9:06:05 AM
MS. SANDERS returned to her presentation and addressed slide 22,
titled "Total Education Stabilization Funds." She said the pie
charts show what the State of Alaska has received in total from
ESSER and GEER funds. She noted that DEED has provided handouts
in the committee packet to address any detailed questions that
the committee might have. She outlined each of the handouts as
follows: Handout 3 is a summary of the allocation of all
Education Stabilization Funds to the school districts, it
includes both the CARES Act and the CRRSA Act with a breakdown
of ESSER and GEER funding by school district. Handout 4 is the
FY 21 state funded program changes by school district. It
identifies the changes due to enrollment fluctuations and has
the CARES Act and CRRSA Act funding impact by school district.
Handout 4 also shows the FY 20 unreserved fund balances that
were carried forward into FY 21, showing the overall net
available to school districts in FY 21. This handout may
address an earlier question that was asked about the
identification of school districts having increases or
decreases. Handout 5 shows the school districts expenditures as
of the end of January [2021] for the CARES Act only. There are
no expenditures for CRRSA funding since the application for
CRRSA funding just became available. Handout 6 is the detail by
account code for what has been spent by school district of the
CARES funding for FY 20. Handout 7 is the FY 21 expenditures of
CARES funding, which provides a deeper dive on how school
districts are spending their funds. Handout 8 is a grant award
list for the $1 million that was awarded in the GEER funding.
Handout 9 is the list of active non-profit private schools that
DEED identified just before the application period went out.
CO-CHAIR STORY noted Handout 1 is the overview. She invited
committee members to ask questions now or email questions to her
office and she would get answers back to them.
9:10:29 AM
REPRESENTATIVE PRAX offered his understanding that the school
districts decide how the CARES Act funding is spent. He asked
whether the state would be on the hook if the districts spend
the money in ways that the CARES Act does not allow.
MS. SANDERS confirmed it is correct that the school districts do
determine how their funding is going to be spent. However, she
continued, the school districts submit applications and budgets
that are reviewed by DEED to ensure that that funding follows
the federal rules and the federal guidance. School districts
are not spending the money and then asking for reimbursements.
Rather, they submit plans on how they are going to spend their
money and the department is approving those plans based on that
federal guidance. Ultimately the school districts come back and
ask for reimbursement of their funds once they've made the
expenditure. This ensures there is no potential for spending to
be outside what is an allowable use. There is a significant
amount of dialog between the school districts and the department
in requests or ideas that they have. There have been several
instances in which an idea put forward resulted in DEED denying
it for not being an allowable use.
REPRESENTATIVE PRAX asked whether the expenditure of CARES Act
funding resulted in a reduction of expenses that the state would
have paid for had that funding not been there.
MS. SANDERS replied that there was no reduction to the amount
that was awarded to school districts through their normal state
aid because they received additional CARES Act money.
CO-CHAIR STORY offered her understanding that this money is
targeted to meet learning loss needs and many of the needs that
have happened because of the pandemic. The money is not to
maintain staffing; rather, that is what the state is doing with
its foundation formula.
MS. SANDERS responded that's correct.
9:14:17 AM
REPRESENTATIVE PRAX recounted that a number of schools were
closed last spring, and some didn't open for a couple months
this fall. He asked if DEED is trying to determine whether that
should have reduced some expenditures and thereby leaving an
additional fund balance.
MS. SANDERS replied that she might not be the appropriate person
to answer the question. There were times when schools were
maybe closed to the public but providing online learning in lieu
of, she explained. So while some savings could be expected
during that time that they were closed, they probably had
increased expenses as they transitioned. She said she would
follow up further in writing.
CO-CHAIR STORY responded that an answer in writing would be
helpful. She further requested that Ms. Sanders also include a
description of the difference between supplementing schools with
funds and supplanting education funds. She inquired whether
there are different criteria of allowable expenses between the
different federal grants.
MS. SANDERS responded that she would provide the committee with
a written terminology and definitions document created by DEED.
She said the document includes the federal statutes regarding
supplements and not supplant provision, and the definition and
how that relates to CARES Act and CRRSA funding. She explained
that non-replacement funds are also talked about, which are what
the CARES Act and CRRSA are considered, meaning it is funding
received that may not be used for government replacement.
Additionally, she noted, the document includes a description on
maintenance of effort requirement that the state is held to for
both the CRRSA and CARES Act funding.
REPRESENTATIVE PRAX clarified that he understands that shifting
to distance education requires staff to provide that service.
But, he continued, it would seem that custodial and maintenance
expenses related to the building not being used by students
would be reduced, and money spent for any modifications would be
paid by CARES Act funding. He said he is trying to determine
how that worked and whether DEED has done any audit or
monitoring of that.
MS. SANDERS said she would follow up, but it might be a better
question for districts on how they are spending their money in
the current year. The CARES Act funding was to address the
COVID-19 pandemic and the CRRSA funding for the learning loss
and modifications to the building to reduce transmission.
9:19:41 AM
MS. SANDERS concluded her presentation with slide 23, titled
"Additional CARES Act Allocations." She noted that DEED
received three other funding allocations: 1) The Child
Nutrition Program received $42.2 million for several food
service programs. As of 1/29/21, $28.3 million had been
expended, with availability of this funding limited to the
period of 3/2020 to 9/2020. 2) Libraries, Archives, and Museums
was awarded $66,000 from the Institute of Museum and Library
Services for grants to museums and libraries throughout Alaska.
As of 1/29/21, $63,500 had been awarded. 3) The Alaska State
Council on the Arts received an award of $421,500 for grants to
Alaskan artists. As of 1/29/21, $385,800 had been awarded.
9:21:46 AM
CO-CHAIR STORY drew attention to Handout 4 and requested a
description of what is meant by unreserved fund balance.
MS. SANDERS deferred to Ms. Teshner to provide an answer.
9:22:40 AM
MS. TESHNER stated she would speak to unreserved fund balances
as she discusses the remaining slides in the presentation. She
began the next part of her presentation, a highlight of the
Anchorage, Fairbanks, Juneau, Kenai Peninsula, and Lower
Kuskokwim school districts. She turned to slide 25, titled
District Snapshot: Anchorage School District," and reviewed the
data for Anchorage. She explained that the columns at the
bottom left of the slide depict the Anchorage district's CARES
Act expenditures as of 1/28/21 and the percent spent, as well as
CRRSA Act allocations, expenditures, and percent spent. She
noted that DEED is just now receiving applications from
districts for their budgets and narratives for the CRRSA money,
so no districts have yet spent any of that money. She drew
attention to the table in the lower right of the slide and said
it shows the FY 20 Operating Fund ending fund balance, which is
broken out between the reserved and unreserved portions, as well
as the unreserved fund balance percentage.
MS. TESHNER explained that AS 14.17.505 and 4 AAC 09.160 relate
to the fund balance in school operating funds and their
operating budget. Per statute, a district may not accumulate in
a fiscal year an unreserved portion of its year-end fund balance
in its school operating fund - as defined by department
regulations - that is greater than 10 percent of its
expenditures for that fiscal year. Per regulation, all money in
the year-end fund balance of a district's school operating fund
are subject to the 10 percent limit described in AS
14.17.505(a), except for money in the following six categories:
encumbrances, inventory, prepaid expenses, self-insurance,
federal impact aid received, and any unexpended annual school
allotment funds that have been provided, primarily the
correspondence allotments. Ms. Teshner specified that these six
categories are what DEED considers reserved categories, and
anything else would be included in the unreserved category. The
governor, she continued, issued the COVID-19 Disaster Order of
Suspension No. 3, which suspended this statute and regulation
for fund balance. It allowed school districts to retain more
than 10 percent of their unreserved fund balance for the
following year, so carrying over from FY 20 into FY 21 in
response to COVID-19.
MS. TESHNER provided a glance at the FY 2020 audits for the 52
school districts that DEED has received to date. She said that,
so far, 43 districts are reporting carrying over more than the
unreserved fund balance at the end of FY 20 versus what they
carried forward at the end of FY 19. In addition, 26 of these
school districts are reporting an unreserved fund balance
greater than 10 percent. She explained that in handout 4 the
asterisks next to the unreserved fund balance are the 26 school
districts that have a balance over 10 percent. This additional
carryover are funds that the districts have available to help
them address funding fluctuations in enrollment and addressing
COVID-19 response.
9:27:32 AM
MS. TESHNER noted that the aforementioned is the data layout
seen on each of the five district snapshots. She resumed her
discussion of the Anchorage School District data on slide 25,
and reported the following: Anchorage shows a 1,688.32 or 150
percent increase in its correspondence ADM from FY 21 projected
to FY 21 OASIS data. About 170 students moved from the
district's brick and mortar schools to its two correspondence
programs, and about 2,800 students went to other statewide
correspondence programs. Anchorage triggered hold harmless in
FY 21 with an 11.19 percent decrease in its school size adjusted
ADM from FY 20. Anchorage is estimated to receive about $5.8
million less than its FY 21 projected foundation and $8.1
million less than received in its FY 20 actual foundation.
Anchorage has spent approximately 59 percent of its ESSER I
allocation under the CARES Act and did not receive any
allocation from DEED under the GEER I funds. Anchorage is
expected to get about $50 million in CRRSA funding under ESSER
II. At the end of FY 20 the Anchorage School District reported
a 10.34 percent unreserved fund balance in its district
operating fund.
MS. TESHNER proceeded to slide 26, titled "District Snapshot:
Fairbanks North Star Borough School District," and reported the
following: Fairbanks shows a 2,647.8 or 20.6 percent decrease
in its regular brick and mortar average daily membership, and a
665.1 or 248.2 percent increase in its correspondence ADM when
comparing the FY 21 OASIS to the FY 21 projected numbers. The
district's statewide correspondence program is called Building
Educational Success Together (BEST). Fairbanks triggered hold
harmless in FY 21 with a 16.59 percent decrease in its school
size adjusted ADM compared to FY 20. Fairbanks is estimated to
receive about $7.5 million less than its FY 21 projected
foundation and $5.7 million less than its FY 20 actual
foundation. Fairbanks has spent about 65 percent of its ESSER I
allocation and has spent approximately 41 percent of its GEER I
allocation. The district is estimated to receive $9.7 million
in ESSER II funds under the CRRSA Act. At the end of FY 20, the
Fairbanks North Star Borough School District reported a 4.71
percent unreserved fund balance in its district operating fund.
9:31:39 AM
MS. TESHNER displayed slide 27, titled "District Snapshot:
Juneau School District," and reported the following: Juneau
shows a 967.3 or 21.1 percent decrease in its regular brick and
mortar average daily membership, and 377.8 or 1,208.7 percent
increase in its correspondence ADM, a program called HomeBRIDGE.
Juneau triggered hold harmless in FY 21 with an 18.09 percent
decrease in its school size adjusted ADM. Juneau is estimated
to receive about $91,400 more than its FY 21 projected
foundation and $634,900 less than its FY 20 actual foundation.
Juneau has spent about 8 percent of its ESSER I allocation and
18 percent of its GEER I allocation. Juneau is estimated to
receive about $2.4 million in ESSER II funding. At the end of
FY 20 the Juneau School District reported a 5.49 percent
unreserved fund balance in its district operating fund.
CO-CHAIR STORY offered her understanding that these funds can be
used through 2023. She related that the Juneau School
District's summer program this summer is going to cost $800,000
and that is just one program. While there is a lot of money
coming into the state, she opined, the scope of need is
tremendous and it's important for each committee member to touch
base with his or her district to learn what these numbers really
mean and what the effort costs the districts. She said the
committee is hoping to hear from districts in a future meeting.
MS. TESHNER responded that the districts are trying to spend the
money wisely over the period to 2023 so many expenditures won't
be seen yet because of the timeframe that the districts have to
spend these funds. In the majority of cases, she explained,
districts have already obligated the funds at the district level
but haven't spent them, so a reimbursement at the state level is
not being seen yet. These numbers don't reflect what the
districts have already committed of their entire allocation.
She noted that the handouts show how the districts are planning
to spend that money.
9:35:43 AM
MS. TESHNER returned to her presentation. She showed slide 28,
titled "District Snapshot: Kenai Peninsula Borough School
District," and reported the following: Kenai shows a 1,754.84
or 22 percent decrease in its regular brick and mortar average
daily membership, and a 933.75 or 115.3 percent increase in its
correspondence ADM comparing FY 21 projected to the FY 21 OASIS.
Kenai triggered hold harmless in FY 21 with an 18 percent
decrease in its school size adjusted ADM. The district is
estimated to receive about $1.6 million less than its FY 21
projected foundation and $2.6 million less than its FY 20 actual
foundation. The Kenai Peninsula Borough School District has
spent about 30 percent of its ESSER I allocation and is
estimated to receive $9 million in ESSER II funding. At the end
of FY 20 Kenai reported a 9.63 percent unreserved fund balance
in its district operating fund.
MS. TESHNER moved to slide 29, titled "District Snapshot: Lower
Kuskokwim School District," and reported the following: Lower
Kuskokwim shows a 26.25 or 0.7 decrease in its regular brick and
mortar average daily membership from FY 21, and the district
does not have a correspondence program. The district didn't see
huge fluctuations in enrollment like others across the state.
Since Lower Kuskokwim only saw a small percentage change in its
school size ADM it didn't trigger hold harmless in FY 21. Lower
Kuskokwim is estimated to receive about $2.3 million less than
its FY 21 projected foundation and $158,500 less than its FY 20
actual foundation. The Lower Kuskokwim School District has
reported spending about 50 percent of its ESSER I allocation and
did not receive an allocation under GEER I. Lower Kuskokwim is
estimated to receive $13.6 in ESSER II funds. At the end of FY
20 Lower Kuskokwim reported a 5.02 percent unreserved fund
balance in its district operating fund.
MS. TESHNER noted that slide 30 provides committee members with
contact information for [Ms. Teshner, Ms. Sanders, and Ms.
Hardin].
9:38:51 AM
REPRESENTATIVE HOPKINS offered his understanding that the COVID
relief package passed in December 2020 included a total
allocation of $159 million to Alaska. He further understood Ms.
Teshner to be saying that it is available for application to the
state starting 2/15/21. He requested Ms. Teshner to explain why
the allocations are so different from each other. For example,
he observed, Lower Kuskokwim with an ADM of about 4,000 will
receive $13.6 million in CRRSA funds; Kenai with an ADM of about
7,800 will receive $11 million; Fairbanks is larger than that
but will only get $9.7 million; and Anchorage is the largest and
will get $50 million.
MS. TESHNER answered that the allocations for both the CARES Act
and the CRRSA Act are based on Title 1 federal funding
allocations to districts; they are not based on average daily
membership. It is based on the poverty levels within districts.
The Aleutian region and the Pelican and Skagway school districts
do not receive any Title 1 funding and so do not technically
qualify for CARES Act or CRRSA Act funding.
REPRESENTATIVE HOPKINS asked whether that was a state decision
or a federal decision.
MS. TESHNER replied that it was a federal decision outlined in
both Acts.
REPRESENTATIVE HOPKINS asked whether terminology guidelines were
provided for what the differences are in CARES Act funds and
CRRSA Act fund.
MS. TESHNER confirmed that the state's FAQs [frequently asked
questions], as well as the federal FAQs, do address how the
allocations are to be determined.
9:41:48 AM
REPRESENTATIVE GILHAM asked whether it would benefit
administration if the funds were to follow the child given that
some of the districts' numbers are going up and some are going
down. He further inquired about the discrepancy between Ms.
Teshner stating $159 million came to Alaska in CARES Act funds
while the commissioner stating $185 million.
MS. TESHNER, regarding the first question, confirmed that if a
district's enrollment fluctuates between the count period in
October and the end of the fiscal year, a district is not
receiving the funding if a student comes to that district in the
second half of the year. She said that having funds follow the
student would definitely be a policy call. Regarding the second
question, she said there is $182 million in COVID relief money
from both the CARES Act and the CRRSA Act; the [$159] million
cited by Representative Gilliam is just the CRRSA Act.
9:43:36 AM
CO-CHAIR STORY commented that one of the issues involved with
the money following the child is that districts have set
contracts with their staffing to provide services for that
child. She related that she has seen resolutions from school
boards that particularly with a special needs child they wished
money could be given to the new school district, especially when
it is an intensive needs student, and the new district must hire
someone on the spot to help with that student. She further
related that this is a concern and has been a concern for
several years.
MS. TESHNER added that districts already see increases and
decreases in their enrollment counts throughout the year. Some
have reported that that shift in enrollment is a net zero and so
the funding matches what a district has. However, she allowed,
this isn't always the case.
CO-CHAIR STORY pointed out that during this pandemic it has been
an extreme swing.
MS. TESHNER concurred.
9:46:24 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 9:46 a.m.