HB 386-ENERGY SUBSIDY FOR SCHOOLS 10:34:41 AM CHAIR WILSON announced that the final order of business would be HOUSE BILL NO. 386, "An Act relating to an energy subsidy for public schools." 10:35:27 AM THOMAS BROWN, Intern to Representative Gabrielle LeDoux, Alaska State Legislature, presented HB 386 on behalf of Representative LeDoux, sponsor. Mr. Brown explained that the bill was drafted, at the request of several school boards across the state, in reaction to the 100 percent increase of gas prices. Schools are taking measures to address the increase in heating costs; however, many permanent solutions are cost prohibitive. He stated that the foundation formula funding does not cover the increase in heating costs, which remain the same even if there is a decline in enrollment. School districts are mitigating this increased cost by sealing doors and windows, closing off parts of schools, and reducing the hours of after school programs. Moreover, high technology solutions are cost prohibitive. 10:36:43 AM REPRESENTATIVE FAIRCLOUGH reminded Mr. Brown that the legislature recently passed the largest education package in a decade. 10:37:37 AM MR. BROWN expressed his understanding that the education package funded 50 percent of the recommendations of the Institute of Social and Economic Research (ISER). CHAIR WILSON stated that the increase in funding in her district is $12,000 per year, provided that there is no decrease in enrollment. 10:38:17 AM JIM NYGAARD, Superintendent, Cordova School District, informed the committee that fuel bills in Cordova have increased by 372 percent since FY 03. Furthermore, Cordova's budget increase to cover additional heating and health care costs is $150,000. He listed the measures that Cordova schools have taken to conserve heating energy. Mr. Nygaard said that, although only the high school has computer climate control, the buildings are maintained efficiently and fuel consumption has gone down. Further, the district will close its district office and move to a school building in order to conserve fuel. In addition, its elementary school, that was built in 1953, is being surveyed for energy loss. He concluded that the high cost of oil is a resource benefit that should reach Alaska's kids. 10:45:28 AM REPRESENTATIVE ROSES asked whether the Cordova School District received any funding for increased costs over the last two years. 10:45:41 AM MR. NYGAARD said no. 10:45:45 AM REPRESENTATIVE ROSES assumed, from materials provided in the committee packet, that the energy costs for Cordova during FY 07 were $398,065 and the projection for FY 08 is $523,057. He opined that, if passed, the bill will fund the increased cost and more. He then asked how the district budgeted for the higher than projected costs last year. 10:46:40 AM MR. NYGAARD responded that the money for fuel comes from the efforts of the legislature last session to fund cost differential increases. He said that the impact to his district with the current legislation will be about $250,000. 10:47:30 AM REPRESENTATIVE ROSES referred to the Department of Education and Early Development (EED) Energy Cost Analysis that projected Cordova to have an increase in energy costs of about $120,000 for FY 08. He expressed his understanding of the burden of additional costs to every school district. 10:48:37 AM MR. NYGAARD indicated that his information was different. 10:49:13 AM REPRESENTATIVE ROSES repeated his question about how the school district covered its higher fuel costs last year. 10:51:03 AM CHAIR WILSON re-stated the question and asked whether programs were cut to make up costs. 10:51:22 AM MR. NYGAARD said that the district is cutting staff, through attrition, and is looking at all areas of conservation. 10:52:03 AM REPRESENTATIVE FAIRCLOUGH asked whether the Cordova cost information reflects the additional education funding that was recently passed by the legislature. 10:52:33 AM MR. NYGAARD said yes. REPRESENTATIVE FAIRCLOUGH further asked if the supplemental appropriation now before the legislature was also included. 10:52:45 AM MR. NYGAARD said that he was not sure. 10:52:49 AM REPRESENTATIVE CISSNA asked whether any of the fuel saving measures created a safety issue. 10:53:15 AM MR. NYGAARD said no. 10:53:30 AM REPRESENTATIVE CISSNA further asked what after school educational programs have been curtailed. 10:54:04 AM MR. NYGAARD explained that after school programs have not been cut but have been moved to the high school because that building has computerized climate controls. 10:54:41 AM CHAIR WILSON announced that HB 386 would be held over with public testimony open.