Legislature(1999 - 2000)
02/02/1999 01:35 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
GENERAL SUBJECT(S): OVERVIEWS:
Department of Education, K-12 Enrollment
Department of Administration, General Services
The following overview was taken in log note format. Tapes and
handouts will be on file with the House Finance Committee through the
21st Legislative Session, contact 465-2156. After the 21st Legislative
Session they will be available through the Legislative Library at 465-
3808.
Time Meeting Convened at 1:35 p.m.
Tape HFC 99-15, Side 1 and 2
PRESENT:
X
Representative G. Davis
X
Co-Chair Therriault
X
Representative Foster
X
Co-Chair Mulder
X
Representative Grussendorf
X
Representative Austerman
X
Representative Kohring
X
Representative Bunde
X
Representative Moses
Absent
Representative J. Davies
X
Representative Williams
ALSO PRESENT:
KAREN REHFELD, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF EDUCATION; RICHARD CROSS, DEPUTY COMMISSIONER,
DEPARTMENT OF EDUCATION; EDDY JEANS, MANAGER, SCHOOL FINANCE
SECTION, DEPARTMENT OF EDUCATION; MARSHA HUBBARD, DIRECTOR, GENERAL
SERVICES, DEPARTMENT OF ADMINISTRATION; KEITH GERKEN, DIVISION OF
GENERAL SERVICES, DEPARTMENT OF ADMINISTRATION
LOG
SPEAKER
DISCUSSION
000
HFC 99-15, SIDE 1
TAPE CHANGE
021
Co-Chair Mulder
Convened the meeting at 1:35 p.m.
DEPARTMENT OF EDUCATION
201
EDDY JEANS,
MANAGER, SCHOOL
FINANCE SECTION,
DEPARTMENT OF
EDUCATION
Provided members with a handout detailing
average daily membership (ADM) (copy on
file). He reviewed the handout. The total
statewide average daily membership was
2,104.27 students over the projected
amount.
365
Co-Chair
Therriault
Questioned if the shift is from home
schooling to correspondence students.
421
RICHARD CROSS,
DEPUTY
COMMISSIONER,
DEPARTMENT OF
EDUCATION
Observed that there is not a significant
change from the overall projection. This
is the first time student data has been
collected by school. Observed that 75% of
the new correspondence students had not
been enrolled before. The department is
attempting to determine if there is double
counting of students.
580
Co-Chair
Therriault
Is Fairbanks the exception to the norm?
603
Mr. Cross
The department anticipated the decline of
Fairbanks numbers. They had observed a
decrease in children entering
kindergarten. Overall numbers are not
deviating significantly from projections.
665
Co-Chair
Therriault
Referred to correspondence growth.
681
Mr. Cross
Students were allowed to enroll in two
school districts for the first time. The
department had to track students to make
sure that they are not being counted in
duplicate. The department also needs to
assure that the quality remains high as
the correspondence program grows.
760
Mr. Cross
Parents were surveyed in Galena. Parents
were happy with the correspondence
program. Most parents have no access to
representation in a local school board.
The department feels that they have
additional responsibility to these
parents, since they do not have
representative.
881
Co-Chair
Therriault
Asked if they had feedback from Mat-Su.
He noted that Mat-Su had a large drop in
enrollment.
925
Mr. Jeans
Explained that the department is trying to
ascertain the reason for Mat-Su's change
in enrollment..
943
Co-Chair
Therriault
Questioned if there were a cap on
correspondence studies programs.
957
Mr. Cross
No restrictions are currently in place on
correspondence studies programs.
997
Representative
Bunde
Asked for more information on quality
control. Will pupil teacher ratio be
included in their calculations?
1044
Mr. Cross
Noted that the pupil teacher ratio would
be considered in data.
1071
Representative
Bunde
Noted that the majority of school
districts overestimated the number of
students that they would have.
1116
Mr. Cross
The department did an analysis of
projected numbers versus actual numbers.
No trend was identified. Nothing was found
to contribute to projection amounts.
1186
Representative
Bunde
Urban/rural trend?
1207
Mr. Cross
Questioned if student population is aging.
They were unable to identify any trends.
1235
Co-Chair
Therriault
Compare average state population age.
1269
Co-Chair
Therriault
Questioned status of second count.
1289
Mr. Jeans
The second count was eliminated, with one
exception. The supplemental funding floor
was implemented. The department must first
establish the floor then limit increases.
An optional account was allowed this year
only.
1331
Mr. Jeans
The new law changes on Nov. 5th
1387
Mr. Cross
In response to a question by
Representative Austerman, he noted that
the department does not know where the new
students have come from. They come from
all over the state.
1432
Co-Chair
Therriault
Questioned if data exists to do studies.
1450
Mr. Cross
The department has data for 1997 and 1998
that can be used.
1488
Representative
Kohring
Stressed that there should not be a cap on
correspondence studies.
Mr. Cross
Responded that they have no intent to
limit correspondence studies.
1600
Co-Chair
Therriault
Expressed concern that the quality of
correspondence courses be maintained in
light of increased growth.
Co-Chair
Therriault
Referred to growth in the Alyeska Central
school.
Mr. Cross
Increases are due to summer school.
1667
Representative G.
Davis
What is the amount paid for each
correspondence student? Is there a
requirement to indicate where they went
the previous years?
1697
Mr. Cross
Districts that operate correspondence
courses and allow students outside their
district to enter into cooperative
agreements must identify where the student
resides and notify their home district.
Students can split their enrollment
between districts. The department must
make sure that the amount that districts
receive for a student is not more than the
total for each student. The program is
compensated at 80 percent of the
foundation formula per student.
1793
Representative
Bunde
How do we know if students are attending
school?
1805
Mr. Cross
The department has no way of knowing if a
child has never been enrolled, unless
reported by neighbor or social workers.
They know that there are several children
that are not attending. 95 percent of the
increase in the Galena correspondence
program had been home schooled. Home
schooling can be done without any state
supervision.
DEPARTMENT OF ADMINISTRATION
1872
MARSHA HUBBARD,
DIRECTOR, GENERAL
SERVICES,
DEPARTMENT OF
ADMINISTRATION
Discussed the Bank of America Building
purchase. The department's leasing budget
was reduced by $900,000 thousand dollars
due to the purchase of the Bank of America
Building and subsequent lease
consolidations
1926
Ms. Hubbard
The department anticipates that the next
three units will be moved into the Bank of
America Building in 1999. This should
provide a significant savings in 2001.
2036
KEITH GERKEN,
DIVISION OF
GENERAL SERVICES,
DEPARTMENT OF
ADMINISTRATION
Provided members with a handout, Bank of
America Building Status Report (copy on
file). Reviewed handout.
2063
Mr. Gerken
Has spent time negotiating with tenants to
vacate the building. Still in negotiations
with a few tenants. Has had success in
relocating tenants. Close to having it
ready to fit all of the Anchorage staff
for the Office of the Governor, and
Department of Commerce and Economic
Development. The Department of Natural
Resources will also move in with the
exception of the Division of Oil and Gas.
2105
Mr. Gerken
There was good competition for the
management contract. The management
contract was awarded for a savings to the
state.
2179
Mr. Gerken
Discussed page 2.
2201
Mr. Gerken
Still have issues to resolve. Not enough
space for divisions of Senior services and
Insurance.
2260
Mr. Gerken
Estimated that they will be able to
complete the move without additional
funds.
Ms. Hubbard
Pointed out that purchases are being kept
to a minimum.
2333
Co-Chair
Therriault
Questioned the number of tenants.
2359
Mr. Gerken
Only two tenants are expected to remain in
the building by the year 2006. After that
point there is not much incentive to
encourage tenants to move.
000
HFC 99-15, SIDE 2
TAPE CHANGE
043
Mr. Gerken
Explained that the department is on track
with the number of tenants that needed to
be relocated. They paid more in property
taxes then expected. Management costs are
in accordance with the estimate amount. He
suggested that the total savings might be
greater than anticipated.
201
Mr. Gerken
In response to a question by Co-Chair
Mulder, Mr. Gerken explained that the
state still leases 175,000 square feet in
the Frontier Building. The state is
preparing for its first big move from the
Frontier Building to the Bank of America.
The state is negotiating with the Frontier
Building to recoup savings when the space
they leave is occupied.
300
Mr. Gerken
Explained that there are 50,000 square
feet under state management by the
Department of Natural Resources in the
Bank of America Building. The rest has
been cleared by tenants and is being
prepared for occupancy.
355
Co-Chair
Therriault
Questioned the projected bond rate.
370
Mr. Gerken
Thought it was 6 or 6.5 percent. The debt
has not been sold yet. They expect the
bond rate to be lower than anticipated.
Payments were deferred for several years.
445
Representative
Grussendorf
Questioned if an agreement was made to
only pay on private leases.
482
Mr. Gerken
Correct, the state miscalculated how the
tax would be calculated. The state paid
approximately $250 thousand dollars in
municipal tax.
538
Representative
Kohring
Spoke in support of putting the
legislature in the Bank of America
Building.
600
Co-Chair
Therriault
Referred to parking.
610
Mr. Gerken
The consultant has substantiated that some
additional parking will need to be rented.
The department estimated that 60-75
additional spaces would be needed. The
consultant estimates only 35 spaces will
need to be rented. Looking at stacking 3
cars in a space. Seems to be plenty of
spaces to rent. Need to work on providing
public parking spaces for those visiting
the building.
772
Co-Chair Mulder
How much space is the state looking for
outside of the Bank of America Building?
831
Mr. Gerken
There are a number of small space
proposals and one large one for the
Division of Family and Youth Services. The
Division of Family and Youth Services will
need 30,000 square feet in Anchorage.
862
Mr. Gerken
Their lease is expiring without an option
to extend. They are also expanding to
accommodate additional positions.
881
Ms. Hubbard
Expect an interesting rental market in the
next few years.
911
Co-Chair Mulder
Suggested that the state look at the Arco
building, anticipated rents will decrease.
946
Co-Chair Mulder
Questioned if there are other big
contracts in other parts of the state?
975
Mr. Gerken
Pointed out that there would be a leasing
contract for renewal in two years for the
Department of Health and Social Services
in Anchorage. Leasing is fairly stable.
1043
Ms. Hubbard
Reviewed consolidation of division space
for the Department of Health and Social
Services. There are a number of leases
that expire during the year 2000. Trying
to locate together sections with similar
functions.
1297
Mr. Gerken
Pointed out that the leases are expiring.
He noted that the intent is to decrease
leasing space through consolidation.
1309
Ms. Hubbard
Observed that they are aware that there is
no new money for leasing.
1333
Co-Chair
Therriault
Asked terms of leases.
1345
Mr. Gerken
They attempt to enter into 10-year leases.
Stressed that they are more successful
obtaining longer terms on large leases..
By statute, leases are limited to at least
4 years.
1381
Representative G.
Davis
In response to a question by
Representative G. Davis, explained that
white area in the handout's map represent
space that is occupied by private tenants.
1403
Co-Chair Mulder
ADJOURNMENT
The meeting adjourned at 2:45 p.m.
HOUSE FINANCE COMMITTEE
LOG NOTES
February 2, 1999
HFC 6 2/02/99
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