Legislature(1997 - 1998)
02/26/1997 09:00 AM Senate HES
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SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE
February 26, 1997
9:00 a.m.
MEMBERS PRESENT
Senator Gary Wilken, Chairman
Senator Loren Leman, Vice Chairman
Senator Lyda Green
Senator Jerry Ward
Senator Johnny Ellis
MEMBERS ABSENT
All members present.
COMMITTEE CALENDAR
SENATE BILL NO. 11
"An Act relating to state aid for school construction debt; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 11 - No previous Senate action.
WITNESS REGISTER
Senator Halford
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 11.
Don Moore, Manager
Mat-Su Borough
350 Dahlia
Palmer, Alaska 99645
POSITION STATEMENT: Discussed the Mat-Su Borough area.
John Stoltz
PO Box 878738
Wasilla, Alaska 99687
POSITION STATEMENT: Supported SB 11.
Charles Huggins, Member
Mat-Su School Board
PO Box 878115
Wasilla, Alaska 99687
POSITION STATEMENT: Discussed the Mat-Su situation.
Maureen Swed, Chair
Renovation/Addition Committee for the Talkeetna Elementary School
PO Box 646
Talkeetna, Alaska 99676
POSITION STATEMENT: Discussed the Mat-Su commitment to education.
Larry Wiget, Director
Government Relations for the Anchorage School District
4600 DeBarr Road
Anchorage, Alaska 99519
POSITION STATEMENT: Supported SB 11.
John Cyr, President
NEA-AK
Second Street
Juneau, Alaska 99801
POSITION STATEMENT: Indicated support of SB 11.
Eddy Jeans, Manager
School Finance Section
Department of Education
801 W 10th Street, Suite 200
Juneau, Alaska 99801-1895
POSITION STATEMENT: Discussed DOE's fiscal note.
Mike Morgan, Manager
Facilities Section
Department of Education
801 W 10th Street, Suite 200
Juneau, Alaska 99801-1895
POSITION STATEMENT: Discussed the Bond Reimbursement Grant Review
Committee.
ACTION NARRATIVE
TAPE 97-20, SIDE A
SB 11 SCHOOL DEBT REIMBURSEMENT
Number 001
CHAIRMAN WILKEN called the Senate Health, Education & Social
Services Committee (HES) to order at 9:00 a.m. and introduced SB 11
as the only order of business before the committee.
SENATOR HALFORD , Prime Sponsor, noted that in 1990 the ongoing
program of bond reimbursement for education was frozen and the cash
capital expenditures on education was rewritten. At that time, the
list was to represent the organized and unorganized areas and be
able to deal in cash which Senator Halford preferred. Since that
time, the results can be illustrated by the School Construction
Grant Fund list and the Major Maintenance Grant Fund list. The
system is not working. Unless something is done for the organized
areas, Senator Halford would not vote for any capital expenditure
any where. SB 11 is a conservative effort, going back to the 50
percent point. The 50 percent approval and voter approval knowing
that the local community must pay back 50 percent and is liable for
the entire amount if not appropriated is an appropriate safety
valve. Senator Halford believed that the Department of Education
(DOE) has a proposed amendment broadening the things that could be
used under the proposal which seems reasonable when at 50 percent.
Senator Halford said that he would like to see the reimbursement at
70 percent, but any more than that would offer potential problems
with DOE's amendment.
Number 102
SENATOR LEMAN noted that Colony and Sky View schools were not
filled when first built, but are now in use. There is a school for
five children in Southeast Alaska in which the community is
pleased, but the community only requested a restroom. Senator
Leman indicated that care should be taken that actual needs are
addressed.
SENATOR HALFORD directed the committee to the yellow sheet, the
Major Maintenance Grant Fund list. On that list, the largest
single appropriation, number three, is to the richest municipal
government in North America.
CHAIRMAN WILKEN referred to page 3, line 29 which says "1997," when
asking if SB 11 would pick up those bonds that have already been
approved at 70 percent. SENATOR HALFORD was not sure. Senator
Halford believed that SB 11 created 50 percent reimbursement going
forward, but indicated that he would like it if the bill were
amended to pick up those bonds at 70 percent. In response to
Chairman Wilken, Senator Halford explained that Mat-Su went to the
ballot with $31 million worth of projects which were approved on a
70 percent basis. The money would have been available if Fairbanks
voters voted their bond proposal down.
Number 176
DON MOORE , Manager of the Mat-Su Borough, noted that the Mat-Su
Borough is one of the fastest growing areas in Alaska, particularly
the school age population. Based on the demographics, the Mat-Su
Borough would need to construct an elementary school a year.
Currently, students are housed in over 60 portables. The
geographic size of the area and the demographics make it difficult
to shift lines of attendance to address over crowding. Mr. Moore
commented that schools in the Mat-Su are based on prototypical
designs which meet basic needs. The Talkeetna school, an upgrade
of a 30 year old building, is the highest priority project. Mr.
Moore stated that Mat-Su has made use of the state bond
reimbursement program in the past and would like to continue. Mr.
Moore appreciated the comparisons between the organized and
unorganized areas with regard to basic need.
JOHN STOLTZ , Meadow Lakes citizen, said that his district would be
most effected by SB 11. There is a school at a Big Lake which was
built for 400 students, but has an enrollment of over 690. Many of
the children in that school are from the Meadow Lakes area. Meadow
Lakes is scheduled for a school. It is number 47 on the list. Mr.
Stoltz informed the committee that as a result of overcrowding some
students were going to be bused over an hour to equalize the
schools. Students will be bused by some schools to be placed in
other schools in order to make the numbers work. Mr. Stoltz
supported SB 11 and stressed the need to fund the bill as well.
Number 260
CHARLES HUGGINS , Mat-Su School Board Member, said that the current
situation is confusing. Mr. Huggins stated that some schools are
facing over 40 percent over crowding and now the busing issue
creates further fiscal issues. The people of Mat-Su want to help
themselves, but it is practically impossible to receive 100 percent
reimbursement through a bond issue in an organized area. Mr.
Huggins emphasized that the average person would agree that 70
percent is better than 50 percent which is better than 0 percent.
MAUREEN SWED , Chair of the Renovation/Addition Committee for the
Talkeetna Elementary School, acknowledged that Talkeetna is high on
the list after four years of efforts to receive funding. She
echoed that Mat-Su has shown its commitment to education. Ms. Swed
hoped that the aforementioned amendment would be considered. Ms.
Swed was pleased that SB 11 did not establish a cap which would
allow communities to plan for the future. Ms. Swed asked if a
general obligation bond from the state required statewide voter
approval and if so, does it have to be in a general election, 1998.
SENATOR HALFORD said that these are general obligations of the
municipality. In response to Ms. Swed, Senator Halford explained
that the municipality would seek approval for a bond from the
Department of Education and the voters. Then a school is built
with the proceeds from the bond and then the state pays a portion
of the debt service on those bonds as the bonds come due.
MAUREEN SWED hoped the Legislature would pass the capital
improvements on educational facilities legislation on a timely
basis.
CHAIRMAN WILKEN announced that a brief at ease would be taken for
a press conference. The committee recessed from 9:25 a.m. to 9:45
a.m. at which time the meeting resumed.
Number 356
LARRY WIGET , Director of Government Relations for the Anchorage
School District, supported SB 11. Mr. Wiget informed the committee
of a school bond survey in Anchorage which resulted in more support
for bonds with 50 percent state support. The results of the survey
and discussion lead to the board's approval of a proposal for
capital construction which was increased by the Assembly for
$24,595,000. Currently, there is no state reimbursement for these
bonds if the bonds passed. Therefore, Mr. Wiget requested that the
effective date be moved back to an earlier date than July 1, 1997
or lift the maximum of AS 14.11.101.
Mr. Wiget said that a 50 percent or higher state/local match
provides an incentive to voters to approve bonds while allowing the
dollar to be stretched to cover school construction. Further, the
match demands public accountability by the local voters who are
liable for at least 50 percent of the cost. Mr. Wiget emphasized
that even with a 50 percent match, school districts will have to
work to obtain voter support. Mr. Wiget urged the committee to
reinstate the school construction debt reimbursement program at the
suggested level or higher and consider a means for those bonds
being considered this spring in Anchorage and those approved last
fall in Mat-Su.
SENATOR LEMAN stated he intended for the Anchorage bonds to be
covered if approved as well as those approved in Mat-Su last fall.
SENATOR HALFORD pointed out that the problem with the Mat-Su bonds
is that the bonds were approved at a 70 percent reimbursement. He
would like for those to be covered if there is a window of 70
percent which should cover the Anchorage bonds as well. The intent
of SB 11 is to provide 50 percent going forward, and if possible 70
percent before June 1.
Number 424
JOHN CYR , President of NEA-AK, said that clearly Mat-Su, Kenai,
Fairbanks and Anchorage areas need the state's help to bond for new
schools. Mr. Cyr agreed with Mr. Wiget's testimony that voters are
not interested in 100 percent bonds. SB 11 just begins to address
the problem. Mr. Cyr reiterated the desire to have a higher
reimbursement level. Mr. Cyr favored picking up the approved bonds
in Mat-Su and the upcoming bonds in Anchorage, if possible.
EDDY JEANS , Manager of School Finance for DOE, explained that SB 11
amends AS 14.11.100 by adding a new section, under Section 8 of the
bill, which allows reimbursement of up to 50 percent for school
construction debt incurred after July 1, 1997. The department's
fiscal note is zero because the range of participation cannot be
anticipated. Mr. Jeans explained that under the debt retirement
program, school districts must first submit projects to the
department for consideration of eligibility and approval, then the
projects must go before the voters of the municipality for
approval. Then the school district must notify the department of
intended reimbursement by October 15 preceding the year for which
reimbursement is sought. Based on that analysis, DOE determined
that the first year that the proposed amendment could have a fiscal
impact on Alaska is FY99. Mr. Jeans interpreted SB 11 to bring
closure to the 70 percent reimbursement and reopens the program at
50 percent reimbursement.
SENATOR LEMAN asked Mr. Jeans if the Anchorage bonds were approved
would the bond be covered at 50 percent. EDDY JEANS said if the
projects were approved by the department with the proper process,
the projects would be eligible for reimbursement at the 50 percent
level. SB 11 brings closure of the 70 percent reimbursement and
adds a new section establishing a reimbursement of 50 percent.
SENATOR HALFORD interjected that the 70 percent is already closed
due to the cap. The 70 percent only exists on the books.
Number 485
MIKE MORGAN , Manager of the Facilities Section of DOE, informed the
committee that the Bond Reimbursement Grant Review committee was
established with SB 7. The committee was charged with reviewing
the application process and implementing AS 14.11. The committee
developed a ranking/scoring process which evaluated the need for
school capital projects on a statewide basis with no regard to the
location of the facility. The committee also reviewed issues such
as prototypes, maintenance standards, facility appraisals, and
conditional surveys. As the department implemented the review
process, the process was implemented with regard to grants and
resulted in the list for major maintenance and school construction.
Mr. Morgan noted that on the bond side, the department recommended
that the categories for approvable projects be expanded which would
allow districts more freedom in applying for projects.
CHAIRMAN WILKEN noted the handout passed out by Mr. Morgan.
In order to clarify Senator Leman's question, SENATOR HALFORD
believed that the date in the new paragraph (8) " authorized by t
qualified voter of the municipality on or after July 1, 1997, "
would need to be amended depending upon what is determined with the
70 percent reimbursement of previously approved bonds or bonds
approved before that date. Senator Halford said that Senator
Leman's concern was correct and could not be fixed with an
interpretation.
CHAIRMAN WILKEN announced that SB 11 would be held for further
clarification. There being no further business before the
committee, the meeting was adjourned at 10:00 a.m.
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