Call to Order and Roll Call
The2nd meeting of the Budget Review Subcommittee on Postsecondary Education of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, September 23, 2010, at 10:00 AM, in Room 154 of the Capitol Annex. This was a joint meeting with the Budget Review Subcommittee on Primary and Secondary Education of the Interim Joint Committee on Appropriations and Revenue. Senator Vernie McGaha, Chair, called the meeting to order, and the secretary called the roll and the minutes from the July 22, 2010 meeting were approved.
Members:Senator Vernie McGaha, Co-Chair; Representative Arnold Simpson, Co-Chair; Senator Ken Winters; Representatives Jim DeCesare, Kelly Flood, Melvin B. Henley, Reginald Meeks, Harry Moberly Jr., Jody Richards,† and Carl Rollins II.
Guests:† Dr. Robert King, President of the Council on Postsecondary Education; Dr. John Hayek, Sr. Vice President of Finance, Planning and Performance for the Council on Postsecondary Education; Dr. Bill Payne, Finance Senior Associate for the Council on Postsecondary Education; Sherron Jackson, Assistant Vice President of Equal Employment Opportunity and Finance; Dr. Terry Holliday, Commissioner for the Kentucky Department of Education; Hiren Desai, Associate Commissioner of Administration and Support for the Kentucky Department of Education; Kay Kennedy, Director for the Division of District Support for the Kentucky Department of Education; Beth Patrick, Morehead State University; Clyde Caudill, Jefferson County Public Schools and Kentucky Association of School Administrators; Susan Weston, Prichard Committee; Jim Thompson, Education and Workforce Development Cabinet, and Lori Davis, Kentucky Community and Technical College System.
Update on American Recovery and Reinvestment Act (ARRA) funding
††††††††††† Dr. King updated the committee on the status of ARRA funding for the Council on Postsecondary Education (CPE). No questions were asked following the update.
Discussion of Council on Postsecondary Education Facilities Study
Dr. King, Dr. Hayek, and Dr. Payne utilized a PowerPoint presentation to discuss the Council on Postsecondary Education Facilities Study.
††††††††††† In response to a question asked by Representative Meeks concerning the Councilís request from the General Assembly, Dr. King stated in the FY 2010 budget cycle the Council was reluctant to request any funding because of the respect they had for the stateís economic situation. However, Dr. King stated the Council was strongly encouraged to request money for new buildings, renovation and renewal as well as technology needs. The focus has been primarily on new buildings thus far and the focus should be more balanced towards renovation of existing buildings as well.
Mr. Jackson stated in the 2008 Session of the General Assembly the Council requested a $100 million appropriation for capital renewal and asset preservation. The $100 million that was requested in the 2008 session was not authorized or funded. The Council received $13.9 million to use for renewal and preservation and that amount was carried over from the 2006 Session of the General Assembly from an amount that was vetoed by Governor Fletcher. The Councilís recommendation included renovations of several facilities and campuses that were based on results of the facilities study.† In the 2010 Session of the General Assembly, the Council requested $100 million once again to address asset preservation and several renovations. The Council was unable to receive any funding for Capital Construction for the 2010-2012 Biennial Budget.
Representative Rollins pointed out that the facilities study was actually a subset of the VFA incorporated study therefore when Dr. King stated the study covered 83 percent of facilities, it was in fact only 62 percent. Dr. King stated that was correct and he misspoke.
Representative Simpson stated he would be interested in receiving a copy of the facilities study. Dr. King stated the study was available on the website.
Representative Simpson stated in the 2010 session, the requests that were made by most campuses indicated they wanted new buildings as opposed to renovations because the buildings were approximately 30 years of age or older. The campus buildings compared to buildings in other parts of the world, such as Europe, are in reality not that old. Buildings that are approximately 30 years in age are not very old buildings. The question that must be asked is which is more cost effective building a new building or renovating the existing one. He also asked if there had been a study to determine which would be more cost effective. Dr. King stated he believed in most instances, but not all, that kind of assessment needs to be made. The outside structure of most buildings are built to last longer than 30 years; however, the inside systems such as electrical systems, HVAC systems, and roofing systems have much shorter lives. Therefore, a 30 year expected life for a building is reasonable.
Dr. King stated a concern that has arisen in terms of budgeting is the ongoing maintenance and operation costs of a building. When a new building is built; maintenance and operation costs are being added to the base operating budget. However, when renovating an existing building, maintenance and operating costs are already being spent on that building. By renovating, maintenance and operation costs are not added and in some instances the maintenance and operation cost can even be reduced by installing more energy efficient equipment during the renovation.
In response to a question from Representative Simpson, Dr. King stated that in the future there will likely not be as great of a need for classroom space on campuses because of the increasing interest in technology and internet classrooms. If the need for campus classrooms decreases in the future, it would be a major cost saver.†
In response to a question asked by Chairman McGaha, Mr. Jackson stated he would have liked to have seen a marketing plan included in the facilities study. A marketing plan was implemented and became a success in North Carolina to excite citizens and the General Assembly about funding of the study and the study outcome.†
In response to an inquiry made by Representative DeCesare concerning construction of new buildings versus renovation in the study, Mr. Jackson stated the study has found that the cost of renovating a facility is at approximately 75 percent to 80 percent of the cost of constructing a new facility.
Representative DeCesare asked if the cost of dealing with toxins such as asbestos in older buildings had been considered. Mr. Jackson stated in the late 1980s and early 1990s, the General Assembly provided assistance to the universities and† other state owned facilities to deal with any asbestos that might be in the facilities. A majority of the toxins have either been removed or encapsulated. During the encapsulation a monitoring system was put in place to alert the occupants if the encapsulation has deteriorated to the point of exposure. If the monitoring system alerts the occupants, then the toxins will have to be removed.
Representative Henley stated he wanted to caution citizens of Kentucky to keep in mind the types of buildings that are needed in each circumstance. Science, technology, and engineering buildings and the needs of renovation versus new construction in those buildings are completely different from liberal arts or college of business buildings.† Liberal arts or college of business buildings need less hands on and laboratory experience, whereas in a science, technology, and/or engineering building, that type of experience is a necessity. The final product for each different type of building needs to be taken into consideration.
Senator Winters referred to the 717 buildings listed as reviewed in the VFA and asked if the 141 listed as education and general facilities (E and G facilities) constitutes the bulk of all E and G facilities. Dr. King stated the 717 refers to the total of the education and general facilities on all the campuses. The 141 buildings are a subset of the 717 buildings reviewed. Senator Winters asked how the 141 buildings were pulled away from the 717 total. Mr. Jackson stated the 141 buildings in the subset are buildings that were constructed before 1965 and the facilities that were used for research. The Council asked institutions to identify those among the E and G facilities so they could analyze if the facility was still in use, if it met the requirements of functionality, if it was fit to be used in the manner it was meant to be used, or if it needed to be renovated in order to be used effectively and efficiently, or demolished and reconstructed.† If the facility were a research facility, they needed to know if the laboratories and laboratory equipment were adequate enough to continue to be used in competitive research.† The age of the buildings and what they were being used for were the primary characteristics in setting apart those 141 buildings.
Representative Moberly asked if facilities are being analyzed on their deferred maintenance programs, energy efficiency programs, and the overall maintenance of facilities before a request is made to the General Assembly.† Mr. Jackson stated as part of the Councilís review process for making capital projects recommendations to the General Assembly,† an analysis is done that includes deferred maintenance and other efficiency programs that are being implemented† on the campuses.
Representative Moberly stated he agreed with Representative Henleyís statement concerning the different types of buildings and the different needs each of those buildings. Some may be better suited for renovation, while others may be better off with new construction depending on what the buildings intended use is.†
Representative DeCesare asked if the study took into consideration the energy bill passed in the General Assembly that stated any construction projects that receive 50 percent or more of their funding from the state have to meet high performance standards developed by the High Performance Advisory Committee. Mr. Jackson stated the study was completed before the 2008 session in which that bill was passed. That committee constructed a set of guidelines and the postsecondary institutions were included in the workgroup that helped develop those guidelines. The postsecondary institutions fully understand the guidelines that were set in place.
Update on American Recovery and Reinvestment Act (ARRA) funding
Dr. Holliday, Hiren Desai and Kay Kennedy updated the committee on the status of ARRA funding for the Kentucky Department of Education.
Representative Sims thanked Dr. Holliday for a great presentation.
Representative Moberly asked if the state fiscal stabilization funds were used to backfill when general funds are reduced. Representative Moberly also asked what has been done on the federal level about replacing some of the primary and secondary funds.† Dr. Holliday stated they did a webinar for superintendents on the recently enacted Edujobs program. Kentucky received approximately $135 million to help school districts save teachers jobs in FY 2011 and FY 2012. He will provide the committee with that information by individual school district on how much each district received. He strongly advised the districts to use the funds for Senate Bill 1 implementation purposes, to help with college career readiness, and professional career development.
Representative Moberly asked what requirements Kentucky did not meet for the Race to the Top application. Dr. Holliday stated Kentucky was 28 points short of being able to receive the funding from Race to the Top. He stated of those 28 points, Kentucky received zero points for charter schools and Kentucky was not as strong as preferred on teacher evaluation.
Chairman McGaha asked if any Education Jobs Fund money will be used to implement Senate Bill 1. Dr. Holliday stated the Department cannot require districts to spend the money a certain way, but they are strongly encouraging each district to use a portion of the funds for implementing Senate Bill 1.
Senator Winters asked if there was anything the General Assembly could do to help implement the use of Senate Bill 1 funds. Dr. Holliday stated the best thing the members of the General Assembly could do is to talk to their district superintendents and encourage them to use the funds for implementing Senate Bill 1. He also suggested having letters from the leadership of the House, Senate, and Governorís Office sent to superintendents to strongly suggest also using Title II funds for the purpose of implementing Senate Bill 1.
Senator Winters made a motion for members to communicate with their district superintendants concerning the use of Title II funds for the implementation of Senate Bill 1. The motion was seconded and approved.
A second motion was made by Senator Winters to request the leadership of both the House and Senate, along with the Governorís Office, to communicate with superintendants concerning the use of Title II funds for the implementation of Senate Bill 1. The motion was seconded and approved.
Dr. Holliday referred members to a document with a summary of each school districtís school calendar.
Representative DeCesare stated in reference to the change in original instructional days in schools, that some of those changes are double digit changes. He asked if this included snow and flu days. Dr. Holliday stated that could be the case; however, in some instances it could be schools using an innovative calendar. If the schools had 170 days, but 1062 hours, they still get automatic approval and anything below 170 days has to get approved as an innovative Calendar.
Representative DeCesare asked Dr. Holliday what his opinion was on the effectiveness in terms of the quality of instruction in adding 10 or 15 minutes per day of instructional time.† Dr. Holliday stated a few research studies have indicated that adding 15 minutes to an instructional day has limited impact, and adding 30 minutes to an hour tend to have more impact. He has not seen the studies for Kentucky. The Department will report the districts that have the innovative calendar and the impact on student learning outcomes by the first of November.
†Senator Winters stated when a school has dropped two days off of the school year calendar then they must increase the number of hours to compensate for that loss. If one day of a calendar is taken out and the equivalent of that day added back in minutes added to other days, the productivity amount in 10 minutes added per day might amount to 2 Ĺ or 3 minutes per day. In middle and high school, 2 Ĺ to 3 minutes per day of productivity time might equate to 30 seconds per class period. Senator Winters stated 30 seconds per class period is not worth the money it costs to run the schools per day. He has a concern about the number of hours lost and trying to make that equate to an effective instructional day.†
Representative Moberly stated he agreed with Senator Winterís previous statement. There was a reason for originally adding those two instructional days and making sure those days were full days. The state has backtracked to a point where he does not feel those two days have any value at all unless it is for giving teachers additional salary. The state has gone backward in the last few years on this issue.†
In response to a question asked by Representative Meeks concerning the latest test scores in Jefferson County Schools, Dr. Holliday stated the dollars that are spent in Kentucky actually have a slight negative correlation to learning outcomes. Poverty is the greatest predictor of student learning outcomes. Jefferson County has 10,000 homeless children and approximately 300 children within Jefferson County move from school to school every day.
Representative Meeks stated until the state gets serious about helping the poverty issue and addressing the specific needs in each district, the poverty and learning outcome correlation will not improve. If the poverty issue and specific needs are addressed, it will not only increase scores but better the quality of life for all parties involved. It disturbed him to hear that the dollars that are spent in Kentucky actually have a negative correlation on learning outcomes.†
Representative Meeks asked Dr. Holliday to further explain the concept of the negative correlation and suggest any solutions to the issue. Dr. Holliday stated there is a correlation chart of 174 districts and what they spend per pupil compared to the percent of students that are proficient in reading and math. That chart shows a slight negative correlation between the two. The General Assembly has led the way to helping solve this issue by enacting† Senate Bill 1 to help correct the problem. The Department is working to raise standards. The Department put out the first college readiness report which gives a much better measure of the impact of the school district and whether they are preparing children for the future, college and career readiness. The state board will adopt an accountability plan in December that will make sure the funding is tied to learning results and consequences are tied to decreasing achievement gaps.†
Representative Meeks stated he was involved in a group that met with people out of Jefferson County and they shared information that he would like to know if Dr. Holliday agrees with. Representative Meeks asked in the Race to the Top funding proposal, did Kentucky do better or worse this year than the previous proposal. Dr. Holliday stated this year was approximately 4 points below the previous submission but the interview portion of the latest submission had improved from the previous one. Representative Meeks stated he had heard a suggestion that national politics were being played in the Race to the Top applications. Dr. Holliday stated he saw no evidence of that.
Discussion of Kentucky Department of Education Facilities Study
Hiren Desai discussed the Kentucky Department of Education Facilities Study.
Representative DeCesare stated that facilities management has serious issues that need to be addressed. He is not pleased with the personnel changes that have been made because there is no one that is heading facilities management that has educational credentials or have even been employed by a school district in a facilities management position.† Across the state there is not a lot being accomplished because of the lack of experience in that particular area. BG 1 applications are being held over 60 days and that has to stop. School districts want to move forward with their construction projects and the Department is holding them up.
Dr. Holliday stated he has heard the same concerns and has made those concerns known. Personnel changes have been made and he would alert the committee to that. The Department has had 17 percent budget cuts in the last two years and that staff has been reduced by 40 percent since FY 2000. He eliminated a Deputy Commissioner position and has gone from eight associates to six. He went from 25 Directors to 16, so prioritization and streamlining is being done.
Representative DeCesare stated he believed unfortunately the wrong people were eliminated. Dr. Holliday stated he disagreed. There are 15 regulation employees and the Department seems to be way too regulation oriented. He has asked a group to come together quickly to tell them which regulations they might be able to eliminate to speed the process up but still make sure there is good quality construction occurring. He is aware of that issue. He is going to hire the right people to do the right work and the Department is going to cut back on regulations.
Representative DeCesare asked how long the process will take for that to occur. Dr. Holliday stated he will have the State Board of Education recommendation by the first of the year.
Representative DeCesare stated some statutes may need to be changed as well. For instance, the Capital Funds Contingency for nonfixed equipment, except for desks and chairs, may need to be changed. Schools are built and they need carts, lunchroom tables, and other movable items in addition to desks and chairs. There needs to be more decision making by local school districts.
Hiren Desai stated he would like to remove the personnel aspect from the situation. Regulations that the Department have in place have been in place for a number of years and not because of a personnel change made two months ago. He has not seen a direct correlation between the reduction in personnel and the bureaucracy that is in place.
Rep. DeCesare stated it is important to have someone in facilities who knows about education construction and has experience in that area.
Representative Moberly referenced the discussion of Jefferson County schools, poverty, and low academic achievement. He is unhappy that poverty is being used as a reason for students not achieving. He has seen schools with high poverty rates that have had the right strategies, the right leadership, and the right dedication to move the students forward. Jefferson County has problems other than poverty that need to be addressed.† Poverty should never be an excuse and he does not agree with anyone that makes the correlation between low scores and poverty. Dr. Holliday stated he did not use poverty as an excuse for Jefferson County but stated poverty is still the strongest predictor in student learning. He wanted to fix that issue. Representative Moberly stated a correct strategy is needed to move the students forward in high poverty areas.
Update on School District Issues
Dr. Holliday updated the committee on school district issues such as end of the year fund balances, current year tax levies, teacher salaries, and school calendars.
Representative Miller stated he has had experience in dealing with homeless children and it is hard to know where they are or what they are doing; therefore, dealing with 10,000 homeless children in Jefferson County must be difficult. This is a big problem.
Chairman McGaha thanked the members and guests for attending the meeting and adjourned the meeting at 11:58 A.M.