M I N U T E S

Select Committee on School Capital Construction

Room 204                                                                                                                         May 14, 2001

State Capitol Building                                                                                              Cheyenne, Wyoming

PRESENT:      Senator Irene Devin, Cochairman;

Representative Jim "Bubba" Shivler, Cochairman;

Senators Jim Anderson, Rich Cathcart and Mike Massie;

Representatives Mike Baker, Layton Morgan, Ann Robinson and Colin Simpson;

                        Legislative Service Office: Mary Byrnes and Dave Nelson.

Others Present: See attached Appendix A.

ABSENT:        Senator Hank Coe.

AGENDA:       Please see attached Appendix B.

*  *  *  *  *

Senator Irene Devin, Select Committee Cochairman, called the Committee to order at 9:05 a.m.

Executive Session

At 9:05 a.m., the Committee resolved itself into executive session to discuss school capital construction litigation matters with Mr. Raymond B. Hunkins, State's Counsel, and Rowena Heckert, Deputy Attorney General.

At 12:40 p.m., Representative Shivler, Committee CoChair, reconvened the Committee in open session by directing Committee staff to review the existing school capital construction program.

School Capital Construction Program Review

Committee staff reviewed major components of the school capital construction program existing subsequent to the 1995 Supreme Court decision on school finance and prior to the February 2001 Court decision.  Components reviewed are identified in attached Appendix C and included the statewide building adequacy standards, the statewide building needs assessment, the building adequacy determination process and state assistance programs.  Referenced in the review of building adequacy standards was the January 2001 analysis of state standards conducted by MGT at the request of the Joint Appropriations Committee, and the finding that state standards were generous when subjected to a national comparison.  A copy of the analysis is attached as Appendix D.  The findings resulted in legislation enacted by the 2001 Legislature (Chapter 192) addressing state building standards.

Additionally, the January 1998 MGT assessment of state school buildings was referenced in staff discussion, a copy of which is on file with the Legislative Service Office.  The March 2001 Needs Assessment Update was also referenced.  The Assessment Update includes building reassessments conducted by MGT during 1999 and 2000 involving roughly fifty percent of total statewide buildings. A copy of the update is on file with the Legislative Service Office.  A reassessment of approximately twenty-five percent of statewide buildings is undertaken annually, enabling a complete reassessment of school buildings every four years.

Components of state assistance programs identified by Committee staff included the mill levy supplement program, the state capital construction assistance program, emergency assistance as revised by the 2001 Legislature (Chapter 159) and the major maintenance program.  Process timelines prescribed by law were identified and are summarized in attached Appendix E.

Committee staff also reviewed the structure in place for school capital construction projects conditionally approved by the Legislature under Chapter 139, Section 205, Footnotes 6 and 7, as well as any subsequent projects recommended on and after June 1, 2001.  A summary of this discussion is attached under Appendix F.  In response to an inquiry by Senator Massie, Committee staff pointed out two districts with conditionally approved projects have received voter approval for district bonded indebtedness.  One condition for eligibility under the current school capital construction assistance program requires the district to be at ninety percent of its constitutional debt limitation or ten percent of its assessed valuation.  Continuing, staff indicated one district did not receive voter approval and the remaining two districts have yet to submit any bonded indebtedness proposal to respective voters.  Districts have eighteen months following the program application filing date in which to submit a bonding question to the district electorate.

Representative Simpson requested staff elaborate on the process in place for conditionally approved projects, including use of information requested of districts under this process.  In response, staff indicated the review imposed by law includes a project value engineering analysis, an energy efficiency analysis and a safety and security review for each project.  The Joint Appropriations Committee, through the Management Council, will contract with MGT to undertake the analysis and review of each conditionally approved project and to report findings to the Committee to assist with development of project recommendations.  MGT will subcontract with national expertise to complete the required analysis and review for each project, and has requested each district submit schematic design documents to the Legislative Service Office to assist with project review.  MGT has indicated the process includes direct dialogue and meetings with involved districts and their contracted professional service providers.

State Department of Education

Deputy State Superintendent Joe Simpson and Gerry Maas, State Department of Education, discussed the current capital construction process, differentiating responsibilities of school districts from those of the state.  Materials accompanying the discussion were distributed to Select Committee members and are attached under Appendix G.  Senator Massie commented on the length of time required to process capital construction projects under the existing system.  Representative Simpson questioned the process imposed upon conditionally approved projects under 2001 legislation, and the implications of this process upon the school capital construction program. CoChair Shivler indicated the additional information generated through schematic design documents required by MGT for subsequent project analysis and review will assist the state decision-making process.  Mr. Maas responded the revised application for state assistance, a copy of which is contained in the materials distributed by the department, requires districts to provide information similar to that contained within the schematic design documents.

Continuing, Mr. Maas reported the department has modified statewide building adequacy standards to reflect 2001 legislative directives contained within HB0275 (Chapter 192).  In essence, the revised standards conform square footage criteria to levels dictated by law.  Elaborating, Deputy State Superintendent Simpson stated the revised standards eliminate classroom size requirements entirely and provide a range of gross square footage criteria for each school level subject to an adjustment for school buildings accommodating less than 350 students. The revised standards provide the department necessary flexibility in addressing district needs, as needs and requirements vary from district to district.  In addition, the revised standards impose limitations on student population projections used within applications for state capital construction assistance.  The limitations are designed to allow the department a mechanism to address enrollment declines.  CoChair Devin questioned if information contained within the revised application would provide the state with sufficient information to discourage building replacement in those districts facing significant enrollment decreases.  Deputy State Superintendent Simpson responded the department is requesting districts to provide the department alternative remedies addressing identified needs.  CoChair Shivler expressed concern with the Fremont County School District #1 capital construction project for a new high school building in light of student population projections.  District student population projections developed by CoChair Shivler were distributed to Select Committee members, a copy of which is attached under Appendix H.

Mr. Moss concluded by presenting Committee members with a copy of the December 2000 capital construction program progress report, a copy of which is attached as Appendix I. The report identifies the impact of the state's capital construction and major maintenance efforts since program implementation in 1998.  Deputy State Superintendent added the program continues to evolve, but suggested the issue of state and local control relative to maintaining school building adequacy will continue to be a major factor impacting program success.  CoChair Devin stated the Legislature has worked hard to satisfy the desire of the state to maintain local control of school buildings, but added the Supreme Court makes it increasingly difficult to continue to do so.  Senator Massie expressed his opinion the Court did not invalidate local control but rather suggested the state has used local control to abdicate its responsibilities.

Wyoming Water Development Office

Mike Besson, Office Director, addressed Select Committee members on the state water development process implemented for water development projects.  The office is comprised of three main functions including project planning, project construction and office administration.  Costs are determined at the initiation of project development, and once projects are completed, funds revert back to the water development account for use in funding future development projects.  The Water Development Commission reviews projects in accordance with established criteria and forwards project recommendations to the Select Water Development Committee of the Legislature.  The recommendations are then forwarded to the Legislature in two separate pieces of legislation, one dealing with project construction providing grants and loans to project sponsors, and the second dealing with project planning providing authorization for levels I and II water development studies. Project beneficiaries are primarily local governments and agriculture.

In response to Committee questioning, Mr. Besson reported the agency is comprised of nineteen positions, most of which are licensed professionals.  In addition, the agency contracts with professionals as necessary to complete project planning studies.  The agency is funded at $1.5 million per biennium for office staff exclusive of acquired consulting expertise.  Local input is insured through project criteria review and needs surveys conducted by the agency.  Mr. Besson indicated a flow chart of the water development process would be provided to Committee members.

State Treasurer's Office

State Treasurer Cynthia Lummis and Sharon Garland, State Treasurer's Office, reported to the Select Committee on efforts to obtain independent public finance expertise for the state in exploring available options to address state capital construction needs including school construction.  The contract expertise will be paid by the State Treasurer's Office and will be available to the State Land and Investment Board as well as the Legislature.  A timeline for issuance of an RFP was distributed to Committee members, a copy of which is attached as Appendix J.  The intent is to have expertise under contract by July 1, 2001.

In addition, State Treasurer Lummis reported her office has contacted private bond rating entities to assist the state with analyzing bonding capacity against specified revenue streams including coal bonus revenues.  Responding to Committee inquiry, Ms. Garland referenced material submitted to the Select Committee on Capital Financing and Investments specifying financing options available to the state for school capital construction, a copy of which is attached as Appendix K.  As indicated in the material, capital leasing is a financing option available to the state in addition to the issuance of revenue bonds.

Future Committee Study

Representative Simpson submitted a letter from Johnson County School District No. 1 pertaining to concerns with the process imposed upon conditionally approved capital construction projects under jurisdiction of the Joint Appropriations Committee.  A copy of the letter is attached as Appendix L.  Representative Simpson suggested Committee staff be requested to arrange for the attendance of the district's project construction manager at the next scheduled Committee meeting for purposes of presenting expressed concerns.  Absent objection, CoChair Shivler authorized the request.

The subject matter jurisdiction of the Select Committee and that of the Select Committee on Capital Financing and Investments was discussed.  Representative Baker advised the Select Capital Financing Committee has indicated interest in addressing state capital financing policy including school capital construction.  Following discussion, CoChair Shivler requested Committee staff forward this matter to the Management Council for consideration and clarification at its May 22 meeting.  Senator Massie requested staff provide Committee members at its next scheduled meeting estimates of state revenues generated through an additional property tax mill, an additional one cent sales tax, an additional percent increasing each of the oil, coal and gas excise taxes, and future estimates of coal bonus payments.  Absent objection, CoChair Shivler authorized the request.

CoChair Shivler requested Committee staff provide MGT a copy of the revised school capital construction standards earlier presented by the State Department, with the expectation that MGT would provide a response to the Committee at its next meeting.

Adjournment

CoChairs Shivler and Devin announced the next meeting of the Select Committee will be scheduled for August.  Meeting particulars will be announced at a later date.  The Select Committee was adjourned at 4:30 p.m.

Respectfully submitted,

____________________________                            ____________________________________

Senator Irene Devin, Cochair                                         Representative Jim "Bubba" Shivler, CoChair