MINUTES OF THE
SENATE Committee on Finance
Seventy-second Session
April 21, 2003
The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 8:15 a.m., on Monday, April 21, 2003, in Room 2134 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room V4406, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William J. Raggio, Chairman
Senator Raymond D. Rawson, Vice Chairman
Senator Dean A. Rhoads
Senator Barbara K. Cegavske
Senator Sandra J. Tiffany
Senator Bob Coffin
Senator Bernice Mathews
GUEST LEGISLATORS PRESENT:
Senator Maurice E. Washington, Washoe County Senatorial District No. 2
STAFF MEMBERS PRESENT:
Gary L. Ghiggeri, Senate Fiscal Analyst
Bob Guernsey, Principal Deputy Fiscal Analyst
James D. Earl, Committee Secretary
OTHERS PRESENT:
Thyra Slusher, Executive Director, Nevada Leadership Academy
Lucretia Glidewell, Chief Executive Officer, Creative Resources for Education in Accounting
Craig Butz, Executive Director, Odyssey Charter Schools
Tonya Karlowicz, Support Services Coordinator, Sierra Nevada Academy
Keith Rheault, Ph.D., Deputy Superintendent for Instructional, Research, and Evaluative Services, Department of Education
Al Bellister, Lobbyist, Nevada State Education Association
Dr. Dorothy L. Merrill, Lobbyist, Washoe County School District
Craig Kadlub, Lobbyist, Clark County School District
Cindy N. Kirkland, Lieutenant Colonel, Deputy Commander, HQ Nevada Air National Guard
Miles Celio, Administrative Officer, Office of the Military
John P. Comeaux, Director, Department of Administration
Douglas C. Thunder, Deputy Superintendent for Administrative and Fiscal Services, Department of Education
Nancy K. Ford, Administrator, Welfare Division, Department of Human Resources
Would staff provide a status report?
Gary L. Ghiggeri, Senate Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau:
The Subcommittee on General Government has one budget left to review. It should be completed this week. At that time, all 408 budgets in the Executive Budget will have been reviewed. The full committee has closed 71 budgets as of April 18, 2003. Twenty-nine budgets are scheduled for closure this week by the full committee. That will result in a total of 100 budgets being closed by the full committee. Subcommittees have closed 83 budgets, and 41 budgets are scheduled to be closed this week. Accordingly, approximately 224 budgets should be closed by the end of the week either by subcommittee or full committee; this represents about 55 percent of the entire budget. Of the 114 capital improvement projects recommended by the Governor, 78 have been reviewed; 23 are scheduled to be reviewed this week. That will result in 101 of the 114 capital improvement projects, approximately 89 percent, having been reviewed by the end of the week. The only projects left for review after this week will be the University and Community College System of Nevada projects. There have been 99 referred to committee; 15 bills have been processed; 76 Senate bills are in committee; 8 Assembly bills are in committee; 77 bills have been heard; 9 bills are scheduled to be heard this week.
Senator Cegavske:
Does the State have the funds to cover the budgets we have closed? Is there money to cover additional budget closures?
Mr. Ghiggeri:
Legislative Counsel Bureau (LCB) staff is uncertain as to the tax package the Legislature will enact. The availability of funds is entirely dependent upon the approved tax package. The budgets closed to date have minimal fiscal impact. However, the public safety subcommittee added four conservation positions back into the budget last week; this will cost approximately $500,000 more than provided for in the Governor’s budget.
Senator Raggio:
We need to keep in mind, for the current fiscal year (FY), the State is now below the legally required year-end fund balance. The Economic Forum will report on existing revenue sources on May 1. That is what we are required to build the budget on. However, we are looking at a tax revenue package that will increase revenue. We find ourselves in a different situation than we normally experience.
Mr. Ghiggeri:
I have distributed a memorandum from Mike Chapman of the Fiscal Analysis Division of the LCB addressing the assessments on wireless services imposed by Senate Bill (S.B.) 164 (Exhibit C). The Public Utilities Commission (PUC) of Nevada has been assessing charges on wireless services. However, not all wireless service providers have paid. Some providers were under the impression they were not required to pay that assessment. The approval of S.B. 164 will clarify the requirement placed upon wireless service providers.
SENATE BILL 164: Creates the Office of Disability Services within Department of Human Resources to coordinate and administer certain services and programs for persons with disabilities. (BDR 38-701)
Senator Raggio:
I think we should discuss with the PUC whether the rate should be decreased if the program envisioned by S.B. 164 is implemented.
Mr. Ghiggeri:
The PUC will be reviewing the rate issue for implementation on May 1.
Senator Raggio:
Let us turn to budget amendments. We have additional amendments from the budget office.
Mr. Ghiggeri:
The budget office has transmitted budget amendments 137 through 149 (Exhibit D). These amendments would reduce General Fund need by about $638,000 in FY 2004 and about $918,000 in FY 2005. Thus far, through budget amendment 149, there has been an increase in General Fund need of approximately $3.5 million in FY 2003.
Senator Raggio:
Is that for the State Gaming Control Board?
Mr. Ghiggeri:
I believe the $3.5 million represents combination expenditures; most of it is for Medicaid and an unknown supplemental recommended for youth community services not included in the original budget. For FY 2004, approximately $9.2 million in additional General Fund dollars have been recommended. For FY 2005, approximately $9.1 million, in additional General Fund dollars, have been recommended. The first spreadsheet of Exhibit D summarizes amendments 137 through 149, and the following seven spreadsheets list amendments 1 through 149 in budget account order.
Senator Raggio:
Is there a bill for amendment?
Mr. Ghiggeri:
I distributed a handout dealing with S.B. 410 (Exhibit E). The committee heard the bill on March 31, 2003. As drafted, the legislation provided for a supplementary appropriation of about $470,000. The LCB staff has reviewed the supplemental and recommends the amount be reduced to $370,000. We also recommend the reason for the supplemental be expanded to include not only postage increases but also increases in maintenance agreements for microfilm machines, microfilm expenses, and network access to national driver’s license information.
SENATE BILL 410: Makes supplemental appropriation to Department of Motor Vehicles for unanticipated shortfall in money for Fiscal Year 2002-2003 resulting from increased postage rates and mailing requirements. (BDR S‑1267)
Senator Raggio:
Would the amended amount be $370,000?
Mr. Ghiggeri:
That is what we are recommending.
Senator Raggio:
I will entertain a motion to amend and do pass S.B. 410. The amendment would change the amount of the supplemental and the purposes as indicated.
SENATOR RAWSON MOVED TO AMEND AND DO PASS AS AMENDED S.B. 410.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Mr. Ghiggeri:
The committee heard S.B. 302 on April 9, 2003. At that time, Senator Townsend submitted an amendment to provide tuition to universities or colleges within the State to all highway patrolmen, not just disabled patrolmen. The benefit would become an incentive for use in recruiting. We have received a revised fiscal note reflecting an increase in cost from $11,000 to approximately $411,000 annually. This estimate is based on a 60 percent participation rate by troopers, taking an average of 16 credits per year.
SENATE BILL 302: Requires Nevada Highway Patrol under certain circumstances to provide educational benefits to officers injured in line of duty. (BDR 43-1151)
Senator Raggio:
What is the expenditure if the bill is amended?
Mr. Ghiggeri:
It would cost about $411,000 annually.
Senator Raggio:
We will make a note of that and consider the matter at another time.
I would now like to turn to S.B. 252. Please limit your remarks.
SENATE BILL 252: Makes various changes concerning charter schools. (BDR 34-140)
Senator Maurice E. Washington, Washoe County Senatorial District No. 2:
I have distributed three handouts. One contains a chart showing the administrative fees and loan fund contributions by school and county (Exhibit F). The second contains a list of arguments in favor of the bill and a section‑by‑section explanation of the bill (Exhibit G). The third is a proposed amendment (Exhibit H).
The bill has three major objectives. The bill provides for sponsorship by the State. There is an amendment that will be proposed to the committee creating a dual sponsorship with the State as primary sponsor for charter schools. The amendment is important to comply with federal requirements in obtaining grants at the state level. Sole sponsorship at the state level would negate this. As amended the bill would eliminate the bureaucracy imposed on charter schools. It will eliminate competition with school districts and add flexibility for internal governance by charter schools. The bill requires that, upon exiting sponsorship, the district would turn over the 2 percent administrative fees to the State during the first year. That percentage would decline to 1 percent for the following 2 years.
Senator Raggio:
We have one amendment here (Exhibit H). Is that what you mean?
Senator Washington:
No, I am referring to the chart, page 2 of Exhibit F, generated by LCB.
Senator Raggio:
Is this an amendment?
Senator Washington:
It is going to be a proposed amendment.
Senator Raggio:
Amendments need to be furnished in writing, showing the precise text of the amendment.
Senator Washington:
The only reason this is not in written form is that I understand an additional amendment will be offered. This is a conceptual amendment. The table was calculated with 25 percent of the 2 percent administrative fee set aside in the first year of a charter school’s operation or conversion to the State Board of Education (State Board) sponsorship, and 5 percent of the 1 percent administrative fee set aside for subsequent years. The money goes into a revolving fund created last session. Currently, there is no money in that fund. The purpose of the fund was to provide loans or additional funds to schools in trouble. The fund was to be augmented by gifts and donations; however, none have been received. The bill would allow schools to build the fund themselves. Looking at the totals, about 2600 students are currently enrolled in charter schools. The first year would entail about $195,000; the second year would involve about $123,000. The loan fund contribution would be about $65,000 the first year and about $6500 each successive year. The State has indicated that the 2 percent amount would not be sufficient for staffing. Our research shows that other states with state‑sponsored schools have a staffing level of either one or two persons. Currently, in Nevada, there is one person on staff. His job is to assist charter schools in their reporting requirements.
Without the 25 percent and the 5 percent, merely based on the total enrollment of the 13 charter schools in the state, we would be looking at $250,000 that would revert from the counties to the State for staffing purposes and administrative procedures. We think that is fair. The Department of Education will offer an amendment for 3 percent, which is still subject to negotiation. Its plan is for 3 percent the first year and 3 percent for subsequent years as well. Part of that money would go into the revolving fund. The proposal had been as high as 5 percent. We were able to get it reduced to 3 percent, and there remain questions about that level.
The second principle section of the bill deals with the definition of the term “at risk.” Currently, the State Board defines “at risk” schools based on the percentage of students in the school receiving free or reduced-price lunches. The problem is that the initial intent was to define charter schools based on their programs and academic content to deal with “at risk” students. The current provision of the Nevada Administrative Code does not provide flexibility to charter schools.
Senator Raggio:
I am not following you. You mentioned the second section of the bill. That section has nothing to do with what you are saying.
Senator Washington:
I was talking about the second part of the bill. That would be section 4.
Senator Raggio:
Let us talk about the sections of the bill because that is what we have before us.
Senator Washington:
I am talking about section 4, subsection 3, of the bill.
Senator Raggio:
Section 2 has to do with hearings.
Senator Washington:
That is correct. Section 2 deals with revocation hearings. It puts in place an arbitration procedure dealing with revocation. It would share the cost between the sponsoring agent and the charter school. Based on the hearing and the recommendation of the hearing officer, the charter school subject to revocation could either accept or reject a finding. It would have the opportunity for court appeal. The reason for this provision is that it would speed up the process. An expedited process would not leave the school, parents, or children in a limbo situation.
Section 4 deals with the “at risk” provision. The intent was to define “at risk” based on the academic programs for “at risk” children. The State Board, however, has indicated that “at risk” status should be defined by the number or percentage of the pupils receiving free or reduced-price lunches. We argued our case before state authorities, and now we want a statutory provision that the intent of an “at risk” school is defined by the academic content and by the programs provided to children. Otherwise, successful schools are penalized if they reduce the number of “at risk” students by increasing academic performance.
Changes to section 5 deal with the exodus of schools from their current sponsors to state sponsorship. This section also deals with the issue of administrative fees.
These are the sections of the bill that are important to this committee; other sections deal with examinations and technical changes. I have provided the committee with an explanation of the sections of the bill (Exhibit G on page 2).
You also have an amendment in front of you dealing with definition and functions of “the local educational agency” (Exhibit H). We have experienced difficulty in determining who is the local educational agency. In the past, the Department of Education has been deemed to be the local educational agency. This amendment makes the governing body of a charter school the local educational agency for certain purposes and the State Board for other purposes.
Senator Raggio:
What is the difference? Is the State Board the local education agency with respect to special education programs?
Senator Washington:
That is correct.
Thyra Slusher, Executive Director, Nevada Leadership Academy:
The Nevada Leadership Academy (NLA) is a charter school located in Sparks. I support S.B. 252. Although NLA was vindicated in court and our charter was reinstated, we at the school know that our ordeal is not over. We know Washoe County School District and its board of trustees will not let up until they take NLA down.
Our lawyer is currently fighting the appeal filed by the district. The district did not accept the court’s ruling to the effect that Washoe County School District unlawfully revoked NLA’s charter in December 2002. If section 2 of the proposed bill had been in place, then the relationship between NLA and the district would be quite different. In May 2002, the school received a letter of intent to revoke the charter. It was not until February 2003 that we received the court ruling reinstating our charter. During the intervening months, the school was in a state of limbo. The school lost students and personnel. We were unable to apply for grants that could have been awarded to us as a third‑year charter school.
I speak from experience since NLA is the only Nevada charter school that has dealt with the revocation process. I believe a request for arbitration would have eliminated many unnecessary actions. Charter schools do not have sufficient resources to support staff lawyers. The NLA had no knowledge Washoe County School District had voted to reconsider revocation of our charter during its board meeting on September 24 in Gerlach. We learned of this vote only when we were in court the following January. Not only must we continue to fight in court, we must go before the district’s board of trustees in July to renew our initial charter and present evidence we have met the goals and objectives identified in NLA’s mission statement.
The relationship between NLA and Washoe County remains strained. We do not really trust our sponsors. We continue to experience prejudice from the district. During the annual compliance review this year, we learned we must obtain everything expected of the school in writing. We had previously requested a checklist of what would be monitored during on-site compliance reviews. This year, we were accused of denying access to our records when we repeated this request. We felt it necessary to remind the district in a letter that we had every right to make that request. The district’s response was that it was not required to provide us with a checklist and that we should know what to expect from our previous compliance review. I found the language in the district’s letter quite interesting since it came from someone new to the district. That person had already formed an opinion about NLA and its staff. That person also found it necessary to bring the district’s attorney to retrieve requested information during the monitoring process. It is time for NLA to run its school and to devote time and energy to the students it serves and to their parents and community. We need a relationship of mutual respect with our sponsor. The relationship should not be characterized by suspicions and assumed motives. We will not have such a relationship while NLA remains under the sponsorship of Washoe County School District. I support this bill accordingly.
Lucretia Glidewell, Chief Executive Officer, Creative Resources for Education in Accounting:
For the last 4 years I have offered financial consulting services to charter schools and committees interested in forming charter schools, both in north and south Nevada. The changes in the proposed legislation will bring benefits to both charter schools and the Department of Education. I support the proposed legislative changes for two major reasons. First, oversight by the Department of Education and the sponsoring district is duplicative, imposing unnecessary costs on the State and the charter school. Second, the legislation provides for a uniform and consistent set of policies applicable to all Nevada charter schools. Charter schools are attempting to share information in order to avoid problems other schools have experienced; these attempts are frustrating, and the outcomes costly, when each sponsoring school district deals with its schools in its own way. My written statement (Exhibit I) expounds on my concerns based on my experiences with charter schools in both Washoe County and Clark County. Change and innovation in education is required by our society, and I look forward to helping improve Nevada charter schools.
Craig Butz, Executive Director, Odyssey Charter Schools:
I support S.B. 252. I support the amendment allowing schools to maintain their sponsorship with their local district if that relationship remains appropriate. The strongest charter school laws in the country include the ability of multiple agencies to charter schools. An “at risk” school should be defined by its program and not by the percentage of its students qualifying as “at risk.”
Tonya Karlowicz, Support Services Coordinator, Sierra Nevada Academy:
As an employee of a charter school, I see many inconsistencies in our oversight and treatment. Oversight by a single entity will eliminate subjectivity in the interpretation of applicable law. The regulation and oversight of Nevada charter schools have increasingly interfered with the intention that charter schools offer alternative learning opportunities to underserved children. I see more bureaucracy and less personalization in the accomplishment of the goal of my school. While I believe in accountability, all charter schools should operate on a level playing field, using the same rule book. I support S.B. 252 and believe it will help us accomplish this objective.
Keith Rheault, Ph.D., Deputy Superintendent for Instructional, Research, and Evaluative Services, Department of Education:
I am here on behalf of the State Board of Education. The State Board discussed S.B. 252 at its meeting on April 12. The State Board’s position at that time was neither to support nor oppose the bill; however, the bill will be discussed at the next meeting as well. The board identified four concerns.
First, the State Board opposes section 2 dealing with appeals and the hearing officer. The board believes this section to be redundant. There is a sufficient appeals process at present. The proposed provisions would actually delay the present procedures. The State Board would like to see section 2 deleted.
Senator Raggio:
Does the State Board have an amendment, or does it simply want the proposed section deleted?
Dr. Rheault:
The board would like that section deleted.
Senator Raggio:
What is the appeals process today? Proponents of the legislation believe there is no effective appeal as you heard.
We need to be honest about this. There has been a mind-set of reluctance from the outset, at the Legislature and in the school districts, opposing the implementation of charter schools. Even though charter schools are growing as an institution across the country, there has been great reluctance to accept this fact. We need to overcome that. Charter schools are here to stay. We need to make them efficient, effective, and responsible.
What is available now that would make the proposed section 2 redundant?
Dr. Rheault:
I do not have all the timelines in front of me, but I know there has to be a process whereby a school is given time to correct its actions. The board then reviews the correction. Even proposed subsection 3 of section 2 contemplates acceptance or rejection of the arbitration result by the State Board. The issue would end up in court anyway. If there has been a fair hearing at the local district, and if the charter school has had an opportunity to correct the action, then the arbitration would drag out the process.
Senator Raggio:
Does not the issue revolve around independence? The proponents of the legislation want an independent hearing officer.
Dr. Rheault:
I am sure that is the concept of the arbitration.
Senator Raggio:
I think that is the issue, independence from the influence of an opposition mind‑set. The schools are concerned they do not get a fair shot on appeal because there is no independent person selected from a list of potential arbitrators.
Dr. Rheault:
If this bill were to pass, the State Board would be the sponsor of charter schools. As a result, we would have an arbitration involving the State Board, and then the State Board would also accept or reject the arbitrator’s result. Conflict of interest seems inherent.
The second concern relates to section 4. The State Board would like to see the administrative code provisions adopted last year remain in effect. These provisions describe “at risk” charter schools based on the percentage of “at risk” students and not just the program definition at the time of charter application. Superintendent McLaughlin sent you a letter dated April 15, 2003 (Exhibit J). That letter elaborates the definition of “at risk” students. The definition does have implications for the number of charter schools. There are regular charter schools and “at risk” charter schools and limits on how many can operate in each school district. The State Board would like to see the deletion of the proposed section 3, leaving the current definition of “at risk” schools in effect.
Senator Raggio:
What is the greatest difference between the definitions?
Dr. Rheault:
In an application under this proposed definition, the school would describe the programs in the charter. If it were meant to serve “at risk” students, then the State would look no further. The school would be an “at risk” charter school regardless of whether the school served 10 percent or 100 percent “at risk” students.
The board’s last concerns relate to section 12. Upon completion of a school year, subsection 3 would allow the State to recover 2 percent of the money apportioned to the charter school during the year in order to support staff. However, we need funding up front to support the staff. If we could only collect at the end of the year, there would be no money for the first year of operation to monitor the school’s operations. Eventually, we could collect funds to administer the program, but state funds would be needed up front to hire staff the first year.
Senator Raggio:
Do you know what amount would be needed to hire staff?
Dr. Rheault:
We would probably phase that in as schools are chartered. This brings up the fiscal note. I do not know if this could be done on a quarterly basis, although, even then, payment would be 3 months behind the consideration of hiring staff.
Senator Raggio:
Are you looking at the fiscal note dated March 12, 2003?
Dr. Rheault:
Yes, in that note, we show two staff positions in order to phase into the program. The first year we would need the money up front to recruit the staff. As we collect money at the end of the school year, if nothing changed in the bill, then some of that money could revert back to the State.
The last concern has to do with subsection 3, paragraph c, the amount of money the State could collect. For the first year, the State would be able to collect 2 percent administrative charges from the charter school if it converted to State sponsorship. In successive years, the amount collected would fall back to 1 percent. In looking at practices in other states and talking with school districts, the State Board believes 3 percent would be a more appropriate figure for the first year and all succeeding years. The recommendation from the State Board is changing the amount to 3 percent annually.
Senator Raggio:
Does the State Board have a position on contributions of a portion of the administrative fees to the fund for charter schools?
Dr. Rheault:
The State Board did not take action on that issue. However, since it is 0.25 percent of whatever we are considering, it is not that large an amount.
Senator Raggio:
Do you think it a good idea to have a fund of that kind to provide loans for troubled spots?
Dr. Rheault:
I think it is a good idea. The provisions are already on the books, but there is no money in the fund at present. The proposed legislation is a way to provide some funding in order to meet emergencies.
Senator Cegavske:
I appreciate the comments made by Senator Raggio. Do you have a list of concerns you can leave with us?
Dr. Rheault:
I will leave a copy of superintendent McLaughlin’s letter.
Senator Cegavske:
It would be helpful if you would lay out for us the current arbitration mechanism that was the focus of Senator Raggio’s question. This would help us evaluate the proposed legislative change.
In looking at this bill as well as recently adopted legislation, do you agree that there need to be changes?
Dr. Rheault:
I think we do agree on that point. There is always some fine-tuning to be done. The State Board is considering the first State‑sponsored charter school pursuant to current statutes. That proposal involves an application that was twice denied by the local school district. The decision will be made shortly.
Senator Cegavske:
Do you honestly expend as much time and effort scrutinizing charter schools as you expend on each of the public schools?
Dr. Rheault:
No, we spend a lot more time on each charter school.
Senator Cegavske:
Perhaps it would be a good idea to scrutinize the public system more carefully if there are concerns.
Dr. Rheault:
Referring to the amendments discussed today, the provision identifying a charter school as a local education agency has large state fiscal implications. The impact is not mainly monetary; rather, there are responsibilities that come with the status of local education agency (LEA). I cannot provide all of these today. However, there would be a change in entitlement for direct funding from the State. There would be implications for special education, and for other areas as well.
Senator Raggio:
Will you provide the committee with a written analysis of the potential impacts?
Dr. Rheault:
We will provide an analysis. It would be beneficial to the charter schools; however, there are reasons why charter schools have not been named as LEAs in the past.
Senator Raggio:
My understanding is that designation as an LEA would entitle a charter school to receive certain funds directly. Is that the case?
Dr. Rheault:
That is the greatest advantage to being named an LEA.
Senator Raggio:
If charter schools are so designated, why would there be an impact?
Dr. Rheault:
I can only recall previous testimony to the effect that there is a reason that funds now come through the school districts. I think the most significant factor has to do with special education. If a charter school were the LEA, it would be required to provide the free and appropriate education to all special education students without a link back to the school district.
Senator Raggio:
The amendment proposes that the State be the LEA for special education purposes.
Dr. Rheault:
I am not prepared right now, but we will get back to you.
Senator Raggio:
Would you do that within the next week? If there is an impact, we will be interested.
Dr. Rheault:
We will do that. At this point, I wanted the committee to be aware that there are advantages and disadvantages.
Al Bellister, Lobbyist, Nevada State Education Association:
The Nevada State Education Association opposes this bill because of section 4, subsection 3. The original intent of the charter school legislation was to serve an “at risk” population of students. Current legislation defines “at risk” student.
Consistent with that definition, current legislation establishes population caps limiting the number of charter schools in the state. This bill waters down that intent and basically eliminates the cap on charter school formation. It would override current administrative regulations requiring that a majority of the student population be “at risk” pursuant to the current statutory definition. We oppose watering down the requirement to serve a population group.
Senator Raggio:
Would you repeat the reference to the provision you oppose?
Mr. Bellister:
We are opposed to section 4, subsection 3, of the bill. We believe it to be inconsistent with the intent of the original legislation.
Senator Cegavske:
Is this the only section you oppose?
Mr. Bellister:
I have not seen all the amendments. I am concerned about arbitration and sponsorship, but it sounds as though existing amendments may address our concerns.
Senator Cegavske:
Is there compromise that would satisfy your concerns? Is deletion the only option?
Mr. Bellister:
We support deletion. There is a current administrative code provision requiring a certain percentage of “at risk” students attend a charter school. I believe the requirement is 51 percent.
Senator Cegavske:
As you know, we do change the governing statutes occasionally. What is your opposition if parents demand more charter schools of various types? Why would you be opposed if we can help students?
Mr. Bellister:
Our opposition is based on the original intent of the law to serve an “at risk” population. We supported that legislation. We specifically considered the original legislation in Minnesota involving a school for the deaf. We thought that was the kind of service to be brought to Nevada, based on populations. We are not opposed to providing schools and services to students. We are opposed to this bill because it undermines the existing cap, which is consistent with the original legislation. This bill would eliminate the cap on establishment of charter schools.
Senator Cegavske:
Sometimes there is a need for change.
Dr. Dorothy L. Merrill, Lobbyist, Washoe County School District:
I appear for the Washoe County School District and superintendent in limited support of and strong opposition to S.B. 252. Before my formal testimony, also submitted in writing (Exhibit K), I would like to clarify several issues raised this morning.
The revocation of the Nevada Leadership Academy charter was not handled by the trustees in the meeting in Gerlach in response to a request from the Nevada Leadership Academy. Second, representatives from the Nevada Leadership Academy were in the audience of a public meeting in September when the motion to reconsider the revocation was made. Third, a monitoring checklist was used last spring. It was derived in a collaborative effort involving the district and the Department of Education based on the Nevada Revised Statutes and the Nevada Administrative Code requirements for charter schools. That monitoring checklist was used last year throughout the state. It was sent this spring to the president of the governing board and other individuals at Nevada Leadership Academy via certified mail. Although the United States Postal Service left three different reminders, the certified letters were never picked up and were eventually returned to the school district. The items requested in the monitoring and compliance materials are all listed in the governing statute and regulation.
In five different places, this bill addresses one of the issues about which the school district has provided previous Legislative testimony. The bill would require a charter school to pay all costs connected with the re-administration of proficiency or achievement examinations in case of test irregularity or breaches of test security. We strongly support this provision.
The Washoe County School District Board of Trustees also supports having the State Board sponsor all charter schools in the state with two stipulations. First, the State Board must assume all responsibility for monitoring compliance, annual reviews, and make up the unfunded mandate portion of the Distributed School Account apportionment. The necessary language is not yet included in the bill. Second, our trustees propose that if the State Board does take sole control of sponsoring charter schools, then a 10 percent charter school cap be established for each school district based upon the number of schools in the relevant district. An implementing amendment is contained in my written testimony. Should the State Board not take sole sponsorship of charter schools pursuant to legislation, then each school district should have the opportunity to establish its own cap for the number of charter schools in the district, regardless of population. An implementing amendment addressing this issue is also attached to my written testimony.
From the school district perspective, the most troubling aspect of the bill is contained in sections 2 and 10 and involves charter revocation. These provisions would establish an overly time‑consuming process, riddled with procedural flaws, requiring taxpayers to incur substantial and clearly unnecessary expenses and attorney fees. My written testimony details some eleven steps that would potentially be involved in the revocation process and our critique of those steps and their consequences. We strenuously dispute any conclusion that the proposal would streamline the existing revocation process.
Most importantly, the time‑consuming process would result in a severe detriment to children. As proposed, the drawn-out revocation process could exceed an entire school year. While effective charter schools provide valuable educational opportunities, during a revocation, students who continue to be enrolled at an ineffective charter school would lose valuable instructional time that could otherwise be spent in a more effective setting. Such lost educational time cannot be recovered.
We have been told repeatedly that charter schools should be able to be created quickly, and if ineffective, dismantled quickly. The proposed extended process defeats the entrepreneurial spirit driving the charter school movement. Businesses are created easily, and if they fail, they simply go out of business. The public should not expect a failing business to be afforded procedures exceeding 1 year at taxpayer expense. Nor should it afford failing charter schools such a long, drawn‑out and one-sided process. During the prolonged revocation proceedings, deficiencies will continue. Those deficiencies may involve misappropriation and denigration of state academic and content standards.
Senator Raggio:
What is the reasoning behind wanting to limit the number of charter schools to 10 percent of the number of public schools? Is that an arbitrary figure? Is it simply explained by the district not wanting any more charter schools?
Dr. Merrill:
The concern discussed by the trustees relates to the capacity of the school district to monitor and review charter schools. Our capacity is severely stretched at present.
Senator Raggio:
If we followed your suggestion, would we not have to close one of the existing charter schools in Washoe County?
Dr. Merrill:
Ten percent of 86 is 8.6, so the maximum number of charter schools in Washoe County would be 9. This would preclude any additional charter schools.
Senator Raggio:
Does the school district have suggestions as to how the present system could be improved? There are concerns on both sides of these issues. If a school is not functioning properly and should be closed, then there needs to be an effective way to do it. On the other hand, there is considerable effort, experience, and financing involved in the creation of a charter school, and we would like to avoid revocation done in a summary fashion. There needs to be a procedure providing assurances to both sides in the revocation issue.
Dr. Merrill:
I am not prepared to do that today, but would be glad to do so.
Senator Raggio:
Would you think about this? If there are suggestions to alleviate concerns, whether real or imagined, we would like to hear them. There is a feeling that something needs to be added to the present process.
Dr. Merrill:
Would such suggestions need to be made within the limits of this bill, or could we just provide them.
Senator Raggio:
We have to use a vehicle of some kind. You believe certain provisions of this bill are appropriate, so we could amend the bill if appropriate.
Craig Kadlub, Lobbyist, Clark County School District:
There are good things in the bill; however, I would like to identify the two concerns of the Clark County School District. The first involves section 2. We agree that adding an arbitration step is unnecessary. There are already three steps in an appeal process, one at the district level, one at the state level, and one in the district court.
The testimony you have heard is not typical. I have issued multiple letters of intent to revoke a charter. In all but one case, the schools have not contested the findings. They agreed to fix the problems and did so. Only one case required revocation, and that revocation was uncontested. Arbitration addresses an atypical problem, and would lead to an unnecessarily protracted process.
Senator Raggio:
The difference, as regards the Nevada Leadership Academy, is that the process was not followed properly. The district court found that to be true. We need to consider the procedure to determine whether it needs to be changed or whether it is appropriate if followed. That is the issue here. I would like you to consider the procedure as objectively as possible and consider whether there are appropriate changes. People will want an opportunity to address any concerns as well as an appeal process should they believe the procedure was unfair or unlawful. What are the other sections you oppose?
Mr. Kadlub:
We are concerned with section 5. While we support the State taking sponsorship of charter schools, we believe the State should take full oversight of charter schools with that sponsorship authority. It would be unworkable if the State were to approve the existence of charter schools, but then delegated oversight and evaluation to local districts.
Senator Raggio:
How many charter schools of either kind now exist in Clark County?
Mr. Kadlub:
There are four schools. We have several applications pending.
Senator Raggio:
Are some “at risk?”
Mr. Kadlub:
Yes, they all are.
Senator Raggio:
We will close the hearing on S.B. 252 and open the hearing on S.B. 493.
SENATE BILL 493: Makes supplemental appropriation to Office of the Military for unanticipated shortfall in money for utility costs in Fiscal Year 2002‑2003. (BDR S-1335)
Cindy N. Kirkland, Lieutenant Colonel, Deputy Commander, HQ Nevada Air National Guard:
General Vanderhoof is on previously scheduled travel; he asked me to apologize for his absence.
Miles Celio, Administrative Officer, Office of the Military:
We are asking for the supplemental to cover unanticipated utility expenses. The additional expenses are driven by an increase in rates as well as an increase in usage, largely as a result of mobilizations of both Army and Air National Guard units. In recent discussions with Legislative Counsel Bureau staff, we uncovered a salary adjustment requirement of $11,216 that was not included in projections. Staff advised that this amount must be included in the supplemental appropriation. Doing so would increase the amount from $131,604 to $142,820.
Senator Raggio:
Is that in addition to utilities and personnel costs?
Mr. Ghiggeri:
There were savings in the salary category. These savings were used to offset utility expenses. The office also needs salary adjustment funding from the salary adjustment pool. Historically, when salary adjustment funding is provided from the pool, there is no permissible use for that money outside the salary category. Therefore, the office cannot use the approximately $11,000 to offset the utility shortfall. The appropriation will still be going for utilities, but some accounting corrections need to be undertaken as well.
Senator Raggio:
Mr. Comeaux, do you agree?
John P. Comeaux, Director, Department of Administration:
This matter was brought to our attention this morning. I am going to have to consider it.
Senator Raggio:
We will defer action until you have the opportunity to discuss it with staff.
Mr. Comeaux:
We will do that today.
Senator Raggio:
We will close on S.B. 493 and open the hearing on Assembly Bill (A.B.) 253.
ASSEMBLY BILL 253: Makes supplemental appropriation to State Distributive School Account in State General Fund for unanticipated shortfall in Fiscal Year 2002-2003. (BDR S-1224)
Douglas C. Thunder, Deputy Superintendent for Administrative and Fiscal Services, Department of Education:
The amount of this supplemental appropriation is included in the Governor’s Executive Budget. Before the last receipt of sales tax, the number was slightly higher. The present projected number is almost the same as the original number, the $72 million in the bill.
Senator Raggio:
Mr. Comeaux, is this number still valid?
Mr. Comeaux:
As Mr. Thunder indicated, sales tax receipts through January put the State right at the amount forecast by the Nevada Economic Forum. The sales tax growth was about 5.2 percent. We do not have a more precise number at present. I expect that number to hold.
Mr. Ghiggeri:
We are hoping we will have the local school support tax (LSST) numbers within a few days. They will impact this supplemental appropriation. I believe the Department of Education needs the legislation quickly. Staff needs the latest LSST numbers to consider whether an adjustment is required. We also caution that receipts from the estate tax have been averaging $1.2 million or $1.3 million monthly this year. However, for the last 3 months, collections from the estate tax have averaged slightly more than $800,000 per month. If that trend continues, additional money will be required to make up for the shortfall in estate tax.
Senator Raggio:
We will keep on top of this since we do not have to process the bill now.
Senator Rawson:
Can we wait until the May 1 figures are available, or will that be too late?
Mr. Thunder:
We have about $46 million in cash at present. From now on, we are paying monthly. I do not have the expenditure amount with me, but we need to pay out more than that on May 1.
Senator Rawson:
Are you saying you need additional money before May 1?
Mr. Thunder:
That is correct.
Mr. Ghiggeri:
Staff recommends processing this bill sometime this week. We have committee meetings scheduled on 2 days.
Senator Raggio:
We will take care of this.
Senator Rawson:
There is enough of the session left for any necessary fine-tuning.
Senator Raggio:
We will move on to A.B. 468.
ASSEMBLY BILL 468: Makes supplemental appropriations to Welfare Division of Department of Human Resources for unanticipated shortfalls in Fiscal Year 2002-2003 for Electronic Transfer Program and State’s share of caseload requirements and cost allocation of Division. (BDR S-1228)
Nancy K. Ford, Administrator, Welfare Division, Department of Human Resources:
There are two parts to this bill. The first shortfall of $122,437 is in the welfare administration budget account. The second shortfall of $2,761,305 is in the field services budget account resulting from changes in the Welfare Division’s caseload mix. Details of both shortfalls are contained in my written testimony (Exhibit L).
Senator Raggio:
What is the total anticipated shortfall in the field services budget account?
Ms. Ford:
The total shortfall is projected to be $3,061,345.
Senator Raggio:
Are you getting money somewhere else?
Ms. Ford:
Yes, we had a 3 percent reversion based on the Governor’s request. We will be receiving that amount back. We have deducted that amount in making our request.
Senator Raggio:
What are the time considerations regarding the supplemental appropriation?
Ms. Ford:
Currently, we are adversely impacting other agencies because we are unable to pay current bills.
Senator Raggio:
Staff tells me your agency is currently in deficit in the amount of $416,000. Is there a staff recommendation?
Mr. Ghiggeri:
Staff recommends this legislation be processed.
Senator Raggio:
I understand that the Welfare Division will have to close all field offices and lay off 800 employees if we do not process this bill.
SENATOR RAWSON MOVED TO DO PASS A.B. 468.
SENATOR COFFIN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TIFFANY VOTED NO. SENATOR RHOADS WAS ABSENT FOR THE VOTE.)
*****
Senator Raggio:
In view of the floor session, we will defer closings. We stand adjourned at 9:40 a.m.
RESPECTFULLY SUBMITTED:
James D. Earl,
Committee Secretary
APPROVED BY:
Senator William J. Raggio, Chairman
DATE: