"Draft Only - Approval Pending"

M I N U T E S

Select School Finance Committee and

Joint Education Interim Committee

Wyoming Game and Fish Office October 31, 2005 - November 1, 2005

3030 Energy Lane Casper, Wyoming

PRESENT: SELECT SCHOOL FINANCE COMMITTEE

Senator Hank Coe, Cochairman;

Representative Jeff Wasserburger, Cochairman;

Senators Kit Jennings, Phil Nicholas and John Hines;

Representatives Ross Diercks, Owen Petersen, Lorraine Quarberg and Debbie Hammons.

JOINT EDUCATION INTERIM COMMITTEE

Senators Tex Boggs, Robert Peck and Chuck Townsend;

Representatives Patrick Goggles, Steve Harshman, Del McOmie and Mark Semlek.

Other Legislators in Attendance: Senator John Schiffer and Representatives Randall Luthi and Ann Robinson.

Legislative Service Office: Dave Nelson, Brenda Long, Joe Rodriguez, and Matt Sackett.

Others: See attached Appendix A.

ABSENT: Senator Rae Lynn Job and Representatives Kurt Bucholz and Becket Hinckley.

* * * * *

Monday October 31, 2005

Representative Jeff Wasserburger, Committee Cochair, convened the joint meeting of the Select School Finance Committee and Joint Education Interim Committee at 10:02 a.m. Roll call of member attendance followed, with one Select Committee member absent and two Joint Committee members absent. A copy of the tentative agenda is included as Appendix B.

Representative Quarberg motioned to approve the minutes from the June 30-July 1, 2005 meeting and the August 23, 2005 meeting, which was seconded by Representative Peterson. The motion carried.

The meeting commenced with Cochair Coe thanking everyone for attending and for all the great input from everyone involved in the recalibration process.

Picus and Associates recalibration working draft report dated October 20, 2005, as well as a summary of recalibration recommendations, were distributed to the Committees and audience members. These are included as Appendix C and Appendix D respectively. The summary recommendations (Appendix D) are what Picus and Associates intended to use as a guide to outline what needed to be discussed and decided during the meeting. A Fact Sheet prepared by the Legislative Service Office was handed out to the Committees and the audience members that discussed the status and preliminary impacts of recalibration, which is included as Appendix E.

Dr. Lawrence O. Picus and Dr. Allan Odden.

Dr. Picus then commenced the working session portion of the meeting by telling everyone that a very preliminary estimate of the total funding level was $987 million. This is an increase of approximately $142 million over the current model and an increase of $1,160 per ADM. Cochair Coe inquired if the $142 million difference included the other resources that were given during the last session and Dr. Picus responded that yes those other resources were included. Dr. Picus said it was important to consider the model as a whole and how the resources all work together to provide an educational system. It was emphasized the estimates were made on the assumption the recalibration recommendations were operating in lieu of the current funding model for 2005-2006 school year funding.

Dr. Picus continued with some general background information and discussion on the evidence based approach to meet standards of education for the benefit of Joint Education Committee in attendance. Dr. Picus explained what Picus and Associates have found through their continuing research in this area, explaining the details would be covered as they moved through the material.

Dr. Picus discussed the series of Professional Judgment Panel meetings (PJP) and also the small school PJP to further explain the process and input from the school districts. Dr. Picus explained the intention for the new model was to be as simple and transparent as possible, knowing the complexities in K-12 school finance funding.

Dr. Odden then gave a brief overview of the current model and explained the major changes that will be implemented in the recalibrated model, including the recommendations of the Committee. Dr. Odden continued that they started with the foundation of the current model and then added a few things and changed a few things to adjust it.

First, Dr. Odden explained that the new model will be a school based program that starts with each school and builds resources up for each school, and then adds resources for the administration at the central district level. All the school based resources are combined with the central district level to arrive at the district’s total resources.

Then Dr. Odden explained that the model of school prototypes was kept, but these were adjusted to fit more schools. In addition, the class sizes of 16 for elementary and 21 for middle and high schools were retained. He explained that normally Picus and Associates recommends a class size of 18 for elementary schools and 25 for middle and high schools, but that the 16 and 21 were maintained for Wyoming based upon panel discussions and Select Committee deliberations. Dr. Odden briefly discussed that there is an inherent tradeoff between class size and teacher salary. If you bump up class sizes, then more resources are available for salaries.

Dr. Odden continued by discussing the increase in the number of prototypes. Dr. Odden briefly explained the rational for the class sizes for the elementary, middle school and high school. Dr. Odden continued with a discussion of how to approach and resource small schools, which are below 49 students, which is the same way Picus and Associates propose to fund alternative schools, since they are also usually small.

Dr. Odden then explained how the new prototypes negate the need for a large portion of model resources to be generated through a small school adjustment, as more schools match model prototypes. As such, the degree of required regression analysis for model prototype fit is diminished.

Dr. Odden continued with a discussion of the integration of at-risk student strategies which include one-to-one tutoring, extended day and summer school programs and other additional resources for assisting at-risk student performance.

Dr. Odden also pointed out that Picus and Associates recommend a much more ambitious program for professional development. Dr. Odden continued explaining the research shows that the best way to increase student learning is to improve classroom instruction through professional development. Dr. Odden explained the research has shown that having people in schools to help teachers become better teachers is the best type of professional development. Dr. Odden continued that the way to achieve this is by including instructional facilitators, instructional coaches and promoting effective planning periods in the school system program.

Finally, Dr. Odden discussed how several programs that were currently outside of the funding model were rolled into the model, which includes summer school, full day kindergarten, tutoring and health care.

The Committee then asked if the $142 million increase was above and beyond the extra resources given to the school districts through appropriations last general session, which included monies for a teacher and employee bonus payments and health insurance. Dr. Picus then replied that yes, the $142 million was an increase over and above all monies given to school districts.

The Select Committee discussed the options for finalizing recommendations for submission to the Joint Education Committee. Several members noted that they could have core recommendations with proposed alternatives with the final decisions left to the Joint Education Committee. Senator Nicholas asked Picus and Associates if they could explain along the way which recommendations were the base recommendations, and which were made by the committee. Dr. Odden said that would be fine.

The Committee then asked where Wyoming ranked compared to the national average with regard to benefits and salaries combined. Dr. Odden explained that those numbers were difficult to obtain because the numbers are collected in different ways, by different sources. Dr. Odden continued that small class sizes were probably a large factor in lower salaries. If class sizes were larger, then there could be fewer teachers with higher salaries, reiterating the tradeoff between class size and teacher salary.

Cochair Coe added that salary comparisons may not be all that accurate on a national level because they do not include things such as cost of living and other factors such if the state has an income tax. Cochair Coe continued that since Wyoming does not have a state income tax, that should be a relevant consideration when comparing Wyoming with states that have state income taxes.

The Committee then discussed salaries and the different possibilities for raising salaries. The Committee asked Dr. Picus and Dr. Odden if the resources in the model for salary would give the teachers a raise, a cut or stay the same. Dr. Odden indicated that it would allow for a raise. Dr. Picus added that was up to the districts because this is a block grant model and the school districts are allowed to do whatever they wanted with their resources.

Dr. Picus suggested starting at the top of the summary of recalibration recommendations (Appendix D) and going through and explaining the difference, if any, between the recommendation and the committee’s decision. The Cochair agreed.

Dr. Odden discussed the class sizes of 16 for elementary and 21 for middle and high schools and indicated it was lower than Picus and Associates usually recommends, but as this level is widely accepted as evidenced in professional judgment panel discussions and Committee deliberations, the consultants forwarded this level.

Dr. Odden then explained the core and specialist teachers with certain minimums for small class sizes. Picus and Associates recommended 20 percent for specialist teachers and the Committee had discussed everything from 17 to 40 percent, but in the end agreed with the 20 percent proposed by Picus and Associates. Dr. Odden explained that Picus and Associates recommended 7 minimum teachers in secondary and 3.6 minimum teachers in elementary school but the PJP meetings felt that 9 in secondary and 6 in elementary were needed. Dr. Odden continued that after much discussion, the Committee had previously decided on 9 minimum teachers for secondary schools and 6 minimum teachers for elementary schools.

Senator Nicholas motioned to use the core of 3.6 minimum teachers in elementary schools and 7 in secondary schools but to include the options of 6 and 9 minimums respectively so the Joint Education Committee could discuss and decide. The motion was seconded by Wasserburger. Members of the Committee then discussed the delivery of the basket of education and the advantage of leaving options open for the Joint Education Committee, but making the recommendations based on what they have learned. The motion failed.

Dr. Odden continued with instructional facilitators and explained the committee accepted Picus and Associates recommendation to have the positions prorated up and down depending on ADM. Dr. Odden then explained the role of the instructional facilitator for members of the Joint Education Committee and also explained their salary is the same as that provided for a teacher.

Dr. Odden then moved on to at-risk students. Dr. Odden explained there were four programs designed to address at risk students. Dr. Odden then explained the tutoring program, ELL program, extended day program and summer school program. Dr. Odden added that the key to a successful at-risk program is increasing teaching time and holding the standards constant. Dr. Odden continued that the trouble with most extended day and summer school programs is they do not have a defined plan of action to increase student outcomes.

The Committee then inquired as to why certified positions are important versus other paraprofessionals. Dr. Odden explained that research shows certified teachers are more effective for at-risk programs.

Dr. Odden next discussed substitutes and explained funding for substitutes is placed at 5% of ADM generated teachers paid at $85 per day plus 7.65 percent for benefits. Dr. Odden explained this approach is typical of that provided within other states.

Dr. Odden next covered supervisory aides and said the resources for supervisory aides were very similar to the existing MAP model.

Dr. Odden discussed pupil support and explained that pupil support is typically associated with family outreach. Dr. Odden explained these positions could be a combination of councilors, nurses, psychologists, etc., depending on the need in each school. Dr. Odden pointed out the PJP’s felt this resource level would fit the needs of schools.

Librarian and library media tech positions were next discussed by Dr. Odden. Dr. Odden explained how there is generally one position in all schools, which is then prorated up or down depending on school ADM. Dr. Odden also explained that the secretary and clerical positions are prorated up and down.

Dr. Odden then moved to the principal and assistant principal position. The Committee inquired as to how the principal and assistant principal positions were handled for small schools and the operation of position proration. Dr. Odden responded by explaining that below a 96 ADM elementary and 105 ADM middle or high school, the positions are prorated down. Dr. Odden also explained that there is one assistant principal for a 630 ADM secondary school and one-half position assistant principal at a 316 ADM secondary school.

Dr. Odden pointed out the assistant principle position was added by the Select Committee to be used as an assistant principal, athletic director or to fill another position of need. Dr. Odden added that the proposed principal and assistant principal recommendation is essentially the same as the current model.

Dr. Odden moved the discussion to books and instructional materials and informed Committee members that the proposal is similar to the current model, but makes the elementary and middle schools equal. Dr. Odden added that all the numbers from the current model were increased by 14 percent from the Wyoming Cost of Living Index (WCLI).

Dr. Odden next discussed computers and computer equipment, which includes computers, schools networks, software, management, etc. Dr. Picus added that the $250 per ADM should allow for computers to be fixed and updated regularly.

Dr. Picus moved the discussion to special education, which will remain 100 percent reimbursement of prior year actual expenditures.

Dr. Odden discussed gifted and talented resources and informed the Committees that the $25 per total ADM was to be used for accelerated learning, advanced classes or any other program the school felt was best. Another option discussed included use of a web based program. Dr. Odden added the current model funds $10 per ADM for these programs.

Dr. Odden then discussed vocational education and explained it is similar to the current model, but implemented somewhat differently because there are no exceptions to how the model works and the funding is not tied to a prototypical level as is currently the case. The funding for equipment for each FTE teacher was updated from the current model by the WCLI. The Committee then discussed vocational education and agreed to leave the vocational education as proposed.

Dr. Odden explained the student activity resources. Dr. Odden informed the Committees that this was an increase from the old model and that it could be analyzed further except reliable data was not available. Dr. Odden added that this could be something that is looked at subsequent to recalibration implementation.

Dr. Odden moved the discussion to professional development and explained how the recommendation added five days to a teacher’s contract for a total of ten days for professional development. There are also resources available to bring in consultants or trainers for a school block training or something similar.

Dr. Odden next discussed assessment. Dr. Odden explained that the state was moving from the WYCAS statewide assessment to PAWS, which expands assessment to grades required under federal NCLB laws. In addition to the PAWS assessment, the department is developing an online bank of assessment banks that all the school districts can access to obtain different assessment tools. Picus and Associates recommend keeping the Wyoming Department of Education resources to continue these current assessment efforts.

Dr. Odden explained the central office staffing resources and how the positions are prorated up above differing levels of ADM. Dr. Odden also explained the central office miscellaneous resources of $300 per ADM for office supplies.

Dr. Odden then briefly covered transportation which is left at 100 percent of prior year actual expenditures.

Employee benefits are resourced at 19.66 percent plus $7,235 for health insurance, which is predicated upon study results soon to be released to the Joint Appropriations Committee. Dr. Odden informed the Committees the remaining items on Appendix D, including maintenance and operations, utilities, regional cost adjustment and small schools are items yet to be discussed and forwarded by the Select Committee.

Dr. Picus started the discussion by addressing maintenance and operations. Dr. Picus explained there are four major ways to arrive at resourcing custodians for schools and they all make sense, resulting in a resource recommendation based upon an average of all four different methods. Dr. Picus explained that the advantage of using all four formulas is that it will accommodate for growth or decline in enrollment.

Dr. Picus also discussed the concern of various members of the PJP discussions over the fact that schools operate well beyond the typical school day. Dr. Picus stated this fact increases the amount of custodial staff needed to maintain the schools. Dr. Picus added there is additional funding equal to one-half of a custodial position provided to each secondary school to pay overtime or hire an additional part time custodian.

Senator Jennings moved to approve the maintenance and operations recommendation for custodians which was seconded by Representative Hammons. The motion carried.

Dr. Picus discussed the facility maintenance component of total maintenance and operations resourcing. Dr. Picus explained the core tasks of maintenance workers include preventative maintenance, routine maintenance and emergency response activities. Dr. Picus continued that various formulas are used to generate total FTEs for elementary, middle and high school resource levels.

Senator Nicholas moved to approve the maintenance and operations facilities maintenance recommendations. The motion was seconded by Cochair Coe and the motion carried.

Dr. Picus discussed maintenance and operations groundskeepers. Model resourcing is based upon personnel resources necessary for school grounds maintenance, snow shoveling, etc.

Senator Nicholas moved to approve the maintenance and operations groundskeeper recommendation, which was seconded by Representative Quarberg. The motion carried.

Dr. Picus briefly discussed maintenance and operations supplies which are resourced at $0.55 per 110 percent of gross square feet of instructional space.

Senator Nicholas moved to approve the maintenance and operations supplies recommendation which was seconded by Cochair Coe. The motion carried.

Dr. Picus concluded by explaining the utilities component resources. Dr. Picus reported after trying to approach utilities in various different modeling approaches, analysis failed to develop a recommendation which accurately reflects school utility costs. Subsequently, it is recommended utility resources be based upon school year 2004-2005 data inflated upwards in subsequent years by a cost of living index. Several members of the Committee inquired if it would make more sense to just fund utilities costs through a 100 percent reimbursement adjustment. Dr. Picus replied it was important to give the school districts an efficiency incentive, which would not be incorporated into a reimbursement mechanism. The Committee agreed with this recommendation.

Senator Nicholas moved to accept Picus and Associates recommendation for utilities which was seconded by Representative Hammons. The motion carried.

Dr. Odden began a discussion of recommendations pertaining to the regional cost adjustment. Picus and Associates recommend use of a Hedonic index as the WCLI is a cost of living measure. Dr. Odden continued that a regional cost adjustment should measure factors beyond the costs of living in a certain location. Dr. Odden indicated that recruiting and retaining employees involves more than salary, such as other amenities and dis-amenities. Dr. Odden provided a few examples of positive amenities such as good schools, small class sizes, attractive surroundings, lots of recreational activities, lots of cultural activities and nice weather. Dr. Odden also added that hedonic indices have been used historically for a considerable period of time and are widely accepted for most wage indices.

Recess.

At 4:55 p.m., Cochair Wasserburger recessed the Committees.

Tuesday November 1, 2005

Senator Coe, Committee Cochair, reconvened both Committees at 8:30 a.m.

Dave Nelson, Legislative Service Office, summarized the purposes of the public hearings scheduled for November 10-11^th and the schedule for remaining recalibration work. Appendix F was distributed showing the locations of the WEN video sites available across the state for the November 11 public hearing.

Cochair Coe encouraged members of both Committees and the public to attend the public meetings and give Picus and Associates thoughts about the proposed school finance block grant model recalibration recommendations. Cochair Coe directed attention to remaining items, beginning with the regional cost adjustment.

Dr. Picus initiated discussion of amenities and dis-amenities by explaining how a Hedonic index accounts for these factors. Dr. Picus added that the Hedonic index would generate approximately $14 million over use of the Wyoming Cost of Living Index within the recalibrated model as the regional cost adjustment. Dr. Picus added that the Hedonic index applies to certificated staff only within the recalibrated model proposal.

Several members of the Committee requested an explanation of the difference between an external cost adjustment and a regional cost adjustment. Dr. Picus responded explaining that an external cost adjustment is only designed to account for the affects of inflation on prices. Dr. Picus continued that prices rise and fall each year which makes goods or services more or less expensive than they were before. Dr. Picus added that these prices need to be adjusted with a cost of living index to account for changes in prices to maintain a cost based model. Dr. Picus elaborated on his previous discussion of the Hedonic index by stating the purpose of using a Hedonic index is to estimate the differences in regional characteristics. Dr. Odden added that the external cost adjustment as previously approved by the Select Committee was erroneously excluded from Appendix D. Select Committee approval recommended use of the WCLI as the external inflationary adjustment.

Discussion of the Committees continued on use of the Hedonic index and the WCLI as the regional cost adjustment. Senator Nicholas noted that it may be possible to use the greater of the WCLI and Hedonic index when making the final determination. Senator Boggs requested consultants provide analysis of use of the greater of the WCLI versus the Hedonic index, and that the Hedonic index be implemented without a value included for Teton County. This request is combined with an assertion that if greater resources were available to districts for salary purposes, the quality and number of job applications would also increase. Dr. Picus acknowledge this request. Mike Goetz, Picus and Associates, estimated the usage of the greater of the Hedonic index and the WCLI as the regional cost adjustment results in a cost increase of approximately $4 million.

Senator Nicholas moved to request Picus and Associates model both the WCLI and the Hedonic index and forward both to the Joint Education Committee for a final recommendation. The motion was seconded by Cochair Wasserburger. The motion carried.

Dr. Picus continued with a discussion of the external cost adjustment which is recommended to be based upon the WCLI. Senator Nicholas indicated that circumstances are different each year and the external cost adjustment has always been left as a decision of the Joint Appropriations Committee.

Dr. Picus responded that if the Committee wants to leave it to be looked at every year, this is acceptable. Dr. Picus added the use of the WCLI is recommended to provide consistency for district budget building, and would ensure the external cost adjustment was applied uniformly and with certainty.

Senator Nicholas moved to leave the Joint Appropriations Committee with the responsibility of determining the external cost adjustment. The motion was seconded by Cochair Coe. Several Select Committee members suggested it is within the purview of the Select Committee to establish the external cost adjustment and that the Joint Education Committee should have the final determination on this recommendation. The motion failed.

Dr. Odden discussed treatment of small schools within the proposal by explaining that all schools with less than or equal to 49 ADM are resourced with one assistant principle position and one FTE teacher for every seven students. Dr. Odden added this was the total for all staff. Dr. Odden also explained that in other small schools with ADM between 50 and 96 there were a minimum of 6 teachers for elementary schools and a minimum of 9 teachers for secondary schools. Dr. Odden also briefly discussed the treatment of non-conventional schools for modeling purposes.

Dr. Odden then discussed salaries. Dr. Odden stated that when considering salaries adjusted for cost of living, it changes the salary level but does not necessarily change the ranking on a national level.

Dr. Picus explained salary differences under the current model and the recalibration proposal. Dr. Odden added that the recalibration proposal uses a statewide average with an experience adjustment and education adjustment, with district level experience compared with statewide averages. Continuing, Dr. Odden stated the experience adjustment has two levels, an experience adjustment for 20 years of experience or under and another adjustment for over 20 years of experience, which then is combined with education and responsibility factors as applicable.

Dr. Picus continued with reiterating that there is a conscience choice made between more teachers for less pay or fewer teachers with more pay. An incentive problem may exist in that there may be the resources available to pay higher salaries but school districts may instead hire more teachers for less pay and come back to the state and say that the school district needs more money to be able to raise salaries, leading to more teachers.

Senator Nicholas moved to forward the salary value as a placeholder for the purpose of the upcoming legislation, allowing for future consideration by Joint Education Committee. The motion was seconded by Representative Quarberg and the motion carried.

The Select Committee discussed the idea of school districts correctly allocating resources at the local level, as the proposal infuses considerable resources into the school finance system without stipulation as to district program expenditure.

Senator Nicholas moved that the recommendations of the Select Committee be included in the final report on recalibration and that the recalibration recommendations within the report be incorporated into draft legislation for final consideration of the Select Committee prior to forwarding the report to the Joint Education Committee. The motion was seconded by Cochair Wasserburger and the motion carried unanimously, with one absent. The vote count is attached as Appendix G.

The Committee discussed the public hearings tentatively scheduled for November 10^th and 11^th. Several members of the audience questioned the effectiveness of public hearings without financial information showing what each district would receive under the proposal compared to how much they are funded by the state under current funding. Concern was expressed as to the inability to provide comments without knowledge of future funding levels. Representative Luthi expressed concern that districts focus on education programs rather than continuously focusing efforts on funding.

Following requests by districts for copies of draft model spreadsheets assembled thus far by consultants, Dr. Picus responded his firm is not capable or prepared to release any preliminary model spreadsheets at this time as substantial work is necessary prior to completion.

Based upon audience reaction, the Select Committee postponed the public hearings tentatively scheduled for November 10^th and 11^th, and directed the public hearings not be held until after Select Committee recommendations have been forwarded to the Joint Education Committee, most likely in January.

Future Meetings.

Cochair Coe announced the next meeting would be a joint meeting of the Select Committee and the Joint Education Committee, to be scheduled for Tuesday, December 6 through Wednesday December 7, in Cheyenne.

Adjournment.

There being no further business, Cochair Coe adjourned the Select Committee and the Joint Education Committee at 11:38 a.m.

Respectfully submitted,

_________________________________ _________________________________

Senator Hank Coe, Representative Jeff Wasserburger,

Select Committee Cochair Select Committee Cochair