SENATE CS FOR HOUSE BILL NO. 239(HES) "An Act establishing a pilot program for a regional learning center." This was the first hearing for this bill in the Senate Finance Committee. REPRESENTATIVE RICHARD FOSTER, the bill's sponsor, explained that this legislation would provide the Bering Strait School District (BSSD) and the Nome City School District with State funds to assist in the development of a joint regional pilot program to enhance educational opportunities for approximately 200 junior and senior high school students from the 15 villages that comprise the BSSD. He communicated that currently most BSSD village school graduates remain in that village and have limited employment opportunities. Representative Foster explained that on an annual basis, this non- traditional boarding school style program, which would operate in Nome, would provide job shadowing opportunities and courses, some with a duration of only one or two weeks, to educate BSSD youth about such things as how to find a job or how to work in retail or the transportation industry. He stated that once State funds are secured for the program, federal funds would be sought to assist the program's continuing development. Senator Wilken commented that a similar program is scheduled for the Fairbanks area; however, he stated, the Fairbanks North Star Borough has committed to pay 30 percent of the construction costs of the program's facility and would additionally provide funding for the program through the Borough's school district budget which is supported by local property taxes. Senator Wilken asked whether a pro forma plan has been established to outline the program's direction and funding requirements. He noted that the fiscal note specifies that State support would be required for the program's initial four years with the expectation that the program would be self-supporting after that time period. Senator Wilken asked how the Bering Strait School District and the City of Nome propose to support the program. LARRY LABOLLE, Chief of Staff to Representative Richard Foster, noted that responses to the local support inquiry indicate that Nome would support the program with property tax revenue and that both the City of Nome and the BSSD have the option to use federal funds to support the program. Dr. LaBolle asserted that this program differs from the Fairbanks' program in that this program would require students to be housed in Nome in order to be provided with opportunities for such things as driver's education, water safety programs, as well as exposure to expansive career opportunities that are not readily available in their villages. Senator Wilken specified that the May 1, 2002 letter from Dr. John A. Davis and Dr. Stan Lujon of the Bering Strait School District [copy on file], addressed to the Senate Finance Committee Co- Chairs, does not identify the source of the fifth year funding. He asked whether a financial analysis has been undertaken. Dr. LaBolle commented that no additional information has been provided. Senator Green commented that a fifth year analysis has not been provided because this is a four-year pilot program. She voiced concern regarding how the State's school foundation formula funding might be impacted since the districts would be, in essence, sharing students. She stated that the Nome School District would be required to hire additional teachers in addition to housing BSSD students. She pointed out that this scenario is not provided for in the school foundation formula funding. She reminded the Committee that expenses for such things as a program coordinator, food, travel, and house parents would also be a fiscal consideration. She remarked that even though she considers this to be a good program, fiscal concerns must be addressed. Senator Wilken noted that the letter from the City of Nome to Representative Foster, [copy on file] dated April 26, 2002, specifies that "House Bill 239 is needed to assist in sending the State portion of school funding with the students as they attend school in the Bering Straits School District or in the Nome Public Schools." He reiterated Senator Green's concern regarding how the State school foundation formula funding would provide for this program. Senator Wilken declared that it is "uncomfortable" to consider committing State funds to a project that has "no plan." He stated that the Fairbanks North Star Borough has committed local taxes to support the program in their community; however, this bill contains no local participation requirement. He opined that this bill "strikes at the very heart of the problem" that exists in the State, as exampled by the practice in Rural Education Attendance Areas to "spend as you wish, because there is no accountability, there is no requirement to have any local participation so whether it is sewer and water or schools," they want to do it because there is no local commitment involved. Senator Wilken announced that were this project proposed in "organized Alaska," it would be accompanied by a plan that would provide assurances as to how the pilot program would be able to continue after the fourth year. Senator Wilken argued that the expectation should be that this pilot program is a good thing and would continue to operate through local involvement and support, and not because "the people of Alaska are being asked to shoulder the burden." He suggested this program be set aside until a plan is presented that provides viable funding assurances for the program after the fourth year. EDDY JEANS, School Finance Manager, Department of Education and Early Development, informed the Committee that the State's school foundation formula funding would be allocated, as routine, to a student's home school district, which he clarified, in this case would be the Bering Strait School District. He communicated that the BSSD would contract with the City of Nome School District to provide the required services. He characterized this as a "cooperative effort between the two school districts." Mr. Jeans voiced the understanding that, in the program's fifth year, other grants would be sought to support the program in addition to the use of the State's school foundation formula funding. Co-Chair Kelly questioned whether the pilot project school would qualify for the State school foundation formula funding as a result of the two school districts' contractual agreement. Mr. Jeans clarified that the students' home school districts would transfer portions of their foundation formula funding and other impact aid funding to support the pilot program. Co-Chair Kelly stated that there is no language specifying that this funding support must occur. Mr. Jeans agreed, but reiterated that school districts are allowed to enter into cooperative agreements. Co-Chair Kelly asked Senator Wilken whether Mr. Jeans' comments provided the pertinent funding information he requested. Senator Wilken replied that, "they did not." Senator Green asked whether the funding agreement between the two districts could begin with the programs' first year rather than with the fifth year. Mr. Jeans clarified that the State funding requested in this bill would supply "the seed money" required to initiate the program. He continued that this "seed money" would provide the foundation upon which to approach the federal government for further funding assistance to address such needs as housing facility renovation expenses and on-going operational costs. Senator Green explained that the State school foundation formula allots annual funds to schools based on the number of students enrolled in that district, and she specified that this funding and student/teacher ratio guidelines determine staffing needs. She voiced concern that a long-term funding plan for this program might be difficult to develop because of the uncertainty of this annual funding amount. Senator Green stated; however, that if the BSSD does not allocate their money to hire District staff; they could support this project by providing funds to the Nome School District to hire program teachers. Mr. Jeans commented that it has not been established that Nome would be required to hire additional teachers. He stated that as part of the program, students from the BSSD would be temporarily housed in Nome as a means to supplement the educational opportunities provided by their own District; however, he noted, no mechanism exists to offset the boarding home expenses because these students are disqualified from receiving boarding home stipends since their participation in the program would be funded through their home district. He stated that the boarding home expenses "are really a core issue." Mr. Jeans opined that the interaction between Nome and remote village students would additionally provide cultural benefits. Senator Green understood that three or four additional staff would be required to facilitate the program. She stated that even though the formula funding might not provide a funding mechanism to support the boarding home component of the program, the Bering Strait School Board could choose to allot money from its formula funding to support it. Mr. Jeans reiterated that he is not aware that additional instructional staff would be required; however, he noted that the Department of Education and Early Development's fiscal note specifies that the program would require three staffers: one of whom would be the program coordinator with the other two being housing staffers. Senator Green expressed the understanding that the additional staffers would be teachers. Mr. Jeans commented that the school districts could allocate portions of their "discretionary money" to fund housing and other program expenses. STAN LUJAN, Superintendent, Nome Public School District, testified via teleconference from Nome and informed the Committee that the BSSD has Rural Education Attendance Area (REAA) funding available to hire vocational education staff; however, those funds are not currently being accessed because the District does not have a vocational technical training facility. He continued that those funds could be accessed to fund three staffers if BSSD students were in this program. Senator Green asked who would supervise the staff. Mr. Lujan stated that a Memorandum of Agreement (MOA) would be developed between the two school districts to address this issue. He stated that in order for the REAA funds to be realized, the instructors would be required to hold either a Type A or Type C vocational education certification. Senator Austerman asked whether local matching funds are required to receive State foundation formula funding. Mr. Jeans replied that Nome residents do contribute to the education formula funding and that the BSSD "is an REAA and make their contribution through impact aid." Senator Austerman asked Senator Wilken to further explain his concern about local funding participation in the Nome program. Senator Wilken explained that his concern is that these school districts have a $30 million school budget and are requesting an additional $1 million of State money to undertake this pilot program. He stressed that no information is included in the request regarding how the Districts would fund the program after the four- year pilot program funding concludes. He asserted that no business plan has been provided and that no local community financial support has been established. Mr. Jeans responded that Nome is a "first class city" and is a separate school district within the Bering Straits region. He clarified that Nome does locally contribute funds to support education. Senator Wilken agreed and acknowledged that Nome contributes the maximum four-mils in support of education. Senator Hoffman stated that other entities, such as the Kuskoquim School District, could contribute to this program, as there is great demand for vocational training in the region, particularly in the health care field. He detailed some of the possible non-State funding opportunities that could materialize. He stated that many entities support the program and that the benefits realized from the State investment would offset the expense. Senator Hoffman continued that this demonstration project at the high school level could unite the region in retaining and training local people for jobs rather than continuing the current "revolving door" employment situation. He stressed that the success of the program would spawn continuing support momentum from regional entities. Senator Wilken voiced appreciation for Senator Hoffman's comments that "helped define" the program goals; however, he asked why the region's students could not attend one of the three existing rural vocational/technical schools instead of duplicating those efforts. He voiced concern that this program might defer funds away from the existing programs. Senator Hoffman responded that there might be duplications of efforts; however, there are benefits in keeping students within their region as it provides support groups and a familiarity with regional needs and job opportunities. He stated that some students would suffer "cultural shock" if they were sent to a large community which might result in them "dropping out" of the program. He stated that regional job needs could more easily be addressed were the program located within the region. Senator Olson addressed the duplication of efforts question by commenting that were this program looked at through the eyes of one of the rural high school students from a small remote village rather than through the eyes of someone from outside of the region, it would be determined that a program in their region would be an easier transition than being sent to a larger, unfamiliar, and distant area. Senator Wilken questioned whether a student who attends similar programs in Nome rather than the existing program in Kotzebue would recognize any differences. He stated that if the Committee decides to support a new four-year pilot program in Nome, perhaps a similar vocational technical program slated for construction in Bethel should instead be located in Nome since facility infrastructure already exists. Senator Wilken reiterated his request for a program plan to be provided to the Committee. Co-Chair Kelly requested Superintendent Lujan to submit a program plan to the Committee to address concerns about the bill. Senator Olson commented that Kawerak, a Nome non-profit social services agency, is successful at securing federal funds for training programs and that a local union is also a strong supporter of training programs. He reminded the Committee that the Bethel vocational training center is, specifically a post secondary education facility, whereas the Nome program would be provided to high school students. Senator Wilken acknowledged that the Nome and Bethel facilities would serve differing age groups; however, he asked, "what the difference is between the proposed Nome facility and the Kotzebue tech facility, three years from now." Dr. LaBolle communicated that the Kotzebue vocational technical program is a concentrated post-secondary education program through which students learn a trade. He continued that the program being considered in Nome would expose high school juniors and seniors to a variety of careers that the region supports. He stated that this process would provide students with job shadowing opportunities as well as introducing students to the needs of the regions' industries. Dr. LaBolle informed the Committee that individuals from "outside" of the region are employed in the majority of the viable jobs in the region, and he asserted, the goal of the program would be to have area students choose an educational path which would allow them to assume these jobs over time. Co-Chair Kelly asked for confirmation that the BSSD would contract with the Nome School District and thereby provide a portion of their student foundation formula funding to the Nome School District to support the program. Dr. LaBolle replied that the BSSD would continue to claim BSSD students in the community in which they reside, and that the BSSD would contract with the Nome School District to provide the educational services in "short block" programs. He asserted that this is not a boarding school scenario. Co-Chair Kelly requested Mr. Lujan to supply the Committee with a more detailed plan. He voiced support for the concept, but stressed that further information is necessary to address the Committee's program funding concerns. He stated the need for the State to undertake steps "to transition rural Alaska out of the past and into the future." Senator Hoffman informed the Committee that because many rural residents "live off the land," many professionally trained individuals regard these Native peoples as "the experts" when regional geophysical and wildlife information is needed. He asserted that residents of the area are well equipped to assume area jobs once formal training is acquired, and he shared that one of his relatives pursued a wildlife degree and is now gainfully employed in the region. Senator Wilken interjected for clarification that the BSSD has a current school budget in excess of $30 million, and that Nome, being a first class city, provides the maximum local funding match required to receive State school foundation formula funds. Senator Green suggested that a study be conducted to determine whether State funds would be required to further the development of this type of program in the State. She additionally requested that the two school districts investigate methods to implement this program without requiring State support. Mr. Lujan stated that the BSSD receives annual grants amounting to approximately $2.5 million and that future increases of grant receipts would alleviate some of the District's demand for State funds. Co-Chair Kelly asked Mr. Lujan to include this type of information in the project plan. Co-Chair Kelly ordered the bill HELD in Committee. SFC 02 # 91, Side B 10:24 AM