MINUTES OF THE meeting
of the
jOINT sUBCOMMITTEE ON K-12/HUMAN RESOURCES
Seventy-First Session
February 20, 2001
The Joint Subcommittee on K-12/Human Resources was called to order at 8:10 a.m., on Tuesday, February 20, 2001. Chairman David Goldwater presided in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
ASSEMBLY COMMITTEE MEMBERS PRESENT:
Mr. David Goldwater, Chairman
Mr. Morse Arberry
Mrs. Barbara Cegavske
Mr. Joseph Dini, Jr.
Ms. Sheila Leslie
Ms. Sandra Tiffany
SENATE COMMITTEE MEMBERS PRESENT:
Senator Bob Coffin
Senator Bernice Mathews
Senator William J. Raggio
Senator Raymond D. Rawson
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Georgia Rohrs, Program Analyst
Robert A. Guernsey, Principal Deputy Fiscal Analyst
Linda Smith, Committee Secretary
Dr. Keith Rheault, Deputy Superintendent of Instructional, Research and Evaluative Services, Nevada Department of Education (NDE), distributed a packet to members titled Nevada Department of Education Budget Hearings, Ways & Means/Senate Finance Joint Subcommittee, February 20, 2001, (see Exhibit C)
BUDGET ACCOUNT 2673, EDUCATION STATE PROGRAMS
PAGE K12ED-1
Dr. Rheault explained this budget account was supported with state appropriations. Page one of Exhibit C listed 25.25 full-time equivalent (FTE) positions funded through the budget. Administrative positions included in the budget were the state superintendent, and two deputy superintendents. The following positions were also funded by this account: 75 percent of the human resources/technology team leader, 50 percent of the southern office administrator, 75 percent of the standards, curricula and assessments team leader, and management assistants for those professional positions. Dr. Rheault indicated the Indian education consultant and the cultural diversity consultant had been included in the base budget. Other positions supported by the budget were 75 percent of the private school/home school position, a school improvement consultant, a Student Management Automated Record Transfer (SMART) system consultant, the standard academic consultants in English, math and science, a library consultant, a technology consultant, an early childhood and family literacy consultant, and a half-time charter school consultant. Dr. Rheault indicated a proposal that would change funding of salaries for part-time support staff was included in an enhancement.
Dr. Rheault discussed the first maintenance item, M-201, which increased the charter school consultant position from .5 FTE to 1 FTE. A full-time position was needed due to increased demands on the current consultant. Dr. Rheault stressed school districts and charter schools had many charter school-related questions.
Mrs. Cegavske referred to a bill Clark County School District would be submitting related to charter schools. Dr. Rheault stated the bill with which he was familiar provided a 3 percent administrative fee that covered costs related to the additional administrative work required for charter schools. Clark County had indicated to Mrs. Cegavske that other states charged a great deal more than 3 percent for like services. Mrs. Cegavske asked if the department offset any of the costs for the charter school expenses incurred by local districts, and Dr. Rheault responded in the negative, but stressed local districts had incurred extra expenses. Mrs. Cegavske wanted to know if the state had requested additional funding for charter school-related expenses. Dr. Rheault stated because of the increased workloads created by the charter schools, the department had requested additional auditors and an account clerk position. He verified the department had requested that the state provide funding for the new positions, not the charter schools.
Senator Raggio understood the department had submitted a grant application to the U.S. Department of Education that might fund new positions for planning and implementation of charter schools. Senator Raggio asked if the state General Fund commitment would be reduced if the federal funds were received. Dr. Rheault explained the department had applied for an approximately $15 million three-year grant and the extra funds required for the additional half-time position had been built into the application. However, the grant was competitive and there was no guarantee Nevada would be granted an award. If the grant was received, the need for General Fund dollars would be eliminated. Dr. Rheault indicated the department would know by the middle of May if Nevada had been granted an award. Senator Raggio asked if the budget could be constructed to allow General Fund dollars to be reverted and replaced with grant funds and Dr. Rheault affirmed. Dr. Rheault also indicated the majority of the grant funds would be passed-through to the charter schools and would provide funding for renovation, instructional supplies, and other needs. Funding would be flexible but could not be used for construction.
Chairman Goldwater questioned the four auditor positions requested in Budget Account 2720. Dr. Rheault explained the auditor positions would be addressed later in the presentation, but the department had requested two new auditors – one would be used to monitor and audit charter schools. Chairman Goldwater asked if the charter school consultant performed the same duties as the auditor, and Dr. Rheault responded the duties were different. The charter school consultant processed applications, organized application reviews, checked for compliance with statutes, and addressed other areas related to charter schools. Dr. Rheault anticipated a full-time charter school consultant position was required to perform all the required duties related to charter schools.
Dr. Rheault referred to M-205, the SMART program transition. The Executive Budget recommended $299,986 each year of the biennium. In the past, similar funding had been used to hire a contractor who assisted the state with the SMART program. The funding requested in the current budget would begin the transition of the SMART program from contract services to the NDE staff. A Management Analyst III would be hired in the first year who would organize volumes of data received through the SMART program from each district. A Computer Systems Programmer II would be hired the second year. Job descriptions were contained in Exhibit C, pages 6 and 7.
Ms. Tiffany indicated she had been involved in the SMART program since its inception and had questions related to the transition phase. Ms. Tiffany asked the department to provide detail on the number of SMART staff located in NDE and the school districts, and a description of the transition from contractor to NDE staff. Dr. Rheault referred Ms. Tiffany to the first page of Exhibit C, which listed current SMART staff – one consultant and one Program Assistant III. Ms. Tiffany asked what duties the two full-time positions performed that were different from the management analyst and the systems programmer. Dr. Rheault explained the SMART consultant had program oversight, organized the required advisory group, and provided technical assistance to local school districts. The program assistant worked with SMART data forwarded to the department from local school districts. Ms. Tiffany asked what duties the two new positions would perform. Dr. Rheault responded the management analyst would compile data from the 90 different fields, prepare reports, and ensure smooth operation of the software. In response to a request from Ms. Tiffany, Dr. Rheault stated he would provide work performance standards for the two current SMART positions. Ms. Tiffany remarked there appeared to be a great deal of crossover of duties between the current positions and the new positions. In response to a question posed by Ms. Tiffany, Dr. Rheault indicated each district did not currently have a position dedicated to SMART. Ms. Tiffany questioned if funding had been included in the budget for updated software, addition of new fields, additional reports, etc.; was there a probability of a $2 million hit in two years due to a system upgrade.
Doug Thunder, Deputy Superintendent for Administrative and Fiscal Services, NDE, stated the department was aware of the possibility of additional fields and the significant amount of costs involved. Mr. Thunder stated when new data elements were proposed, the costs would have to be determined and that information would be provided to the legislature. The amount included in Budget Account 2699 did not reflect any major updates in the next biennium, nor was there an intent to go before the Interim Finance Committee (IFC) to request additional funding. Ms. Tiffany again requested detail on the structure of staff and job descriptions. Dr. Rheault stated the new positions were intended to replace the contractor, but he would provide the requested detail. Chairman Goldwater indicated Ms. Tiffany had addressed important issues and stressed the value of the requested information.
Senator Rawson asked if Budget Account 2673 administered the state Distributive School Account (DSA) and forwarded the funds to the districts. Mr. Thunder responded the individual responsible for distribution of DSA funds was funded in Budget Account 2720 and indicated the budget included a request for a DSA Administrator that would be funded in Budget Account 2673.
Mr. Thunder referred to enhancement, E-251. The enhancement addressed an issue raised by the Fundamental Review Committee during the interim when focus was placed on the cash flow in Budget Account 2720. General Fund money was currently appropriated to the various accounts, the indirect cost rate was applied to the expenditures of those accounts, and that money was then transferred from the state-funded accounts into the indirect cost account. It was recommended the appropriations be made directly into Budget Account 2720. The numbers included in E-251 reflected the amount of indirect cost that would potentially be charged to Budget Account 2673. Reconciliation would occur at the end of the year – if expenditures came in less than budgeted, a refund to the state of that amount of money would be made. An E-251 was included in each of the department’s budgets.
Chairman Goldwater deferred to Georgia Rohrs, Program Analyst, Legislative Counsel Bureau, to pose a question. Mrs. Rohrs indicated the budget transferred the administrative portion of the SMART costs into Budget Account 2720, and asked why the SMART administrative costs had been separated from the other SMART funds included in Budget Account 2699. Mr. Thunder stated, in the past, the staff that administered SMART was in Budget Account 2673. The last legislative session SMART was funded through a one-time appropriation and funds had been placed in the DSA, Budget Account 2610. Based upon the department’s understanding, the funds included in the one-shot appropriation for the SMART administrative costs were moved into Budget Account 2699. The department wanted all administrative costs for SMART combined in one place. Mr. Thunder stated Budget Account 2699 was primarily made up of pass‑through funds, and the portion of funds that would be forwarded to districts would be placed in a separate budget category in 2699.
Senator Rawson asked about E-275, which provided an Administrative Services Officer II position who would have responsibility for the administration of the DSA. Mr. Thunder stated, in the past, staff in Budget Account 2720 had administered the DSA -- a very significant state-funded budget account. The department felt it was appropriate that administration of the DSA would be a state responsibility. Additionally, in the past, the only professional administrative support for the administration of the DSA was a fraction of the position held by Mr. Thunder – an unclassified position. The department felt it was important that some classified employees had expertise in the DSA. For that reason, an Administrative Services Officer II had been requested. Senator Rawson remarked the department had a budget analyst position that worked with the DSA, but the position had been vacant since September 2000 and wanted to know if that position could be filled and DSA responsibility assigned to that position. Mr. Thunder indicated the primary reason the budget analyst position had not been filled was due to cash flow problems in Budget Account 2720. Until the cash flow could be resolved, it would not be prudent to fill the position and end up in a negative situation. Senator Rawson asked if the budget analyst position could be eliminated if the administrative officer position was approved by the legislature. Mr. Thunder indicated the position could be eliminated, however, the department felt the operation of the DSA and the wide variety of issues involved called for someone who had exclusive responsibility for the DSA. Senator Rawson stated that in the administration of the DSA there was a state responsibility, a guarantee, local school support tax (LSST), property tax, and other tax bases. Senator Rawson stated he had received hundreds of e-mails from disgruntled citizens upset that state support had been cut to $3,300 per student. Senator Rawson asked if all the money came into the state at some point and then was disbursed to each district on a monthly basis. Mr. Thunder stated the current aggregate basic support per pupil amount for FY2001 was $3,804. The aggregate amount was adjusted by the basic support per pupil determination formula, which modified the $3,804 for each district based on local wealth, transportation costs, and a variety of other issues. Once the amount per pupil was established for each district, the amounts paid to the districts were calculated by multiplying the number of students on count day by that amount. The special education unit amounts were then added in.
Senator Rawson stated the Nevada Plan formula supplied a certain level of support per pupil. Mr. Thunder stated the primary element not included in the basic support amount was the 50-cent property tax. The total property tax for the operation of schools was 75 cents. Senator Rawson asked if those funds were forwarded to the local school districts by the state or by the counties. Mr. Thunder said the funds, for the most part, were forwarded from local agencies to the districts, with the exception of net proceeds of mines and centrally assessed properties, which were forwarded from the Department of Taxation. Mr. Thunder stated when the basic support formula was calculated, the amount anticipated on a per student basis from the 50-cent property tax was added in the basic support per pupil amount. Senator Rawson asked “does it offend some eternal plan if we talk about the total amount of support and we report that amount of support as the Nevada Plan figure for support?” Mr. Thunder indicated he did not see a problem. Senator Rawson testified all of the funds could be collected at the state level and then disbursed to the local districts but felt that would be superfluous and unnecessary. Mr. Thunder stated sales tax was disbursed monthly and the funding from the DSA was disbursed quarterly. Mr. Thunder pointed out, in most states, what Nevada called local revenue (sales tax and property tax) would be called state tax due to the fact it was mandated by the state rather than at the local level. Senator Rawson asked Mr. Thunder to prepare a plan to report support per student in a manner that reflected total funding under the Nevada Plan and to advise whether a change in statutory language was necessary.
Chairman Goldwater pointed out although property tax was stable, sales tax was not, and indicated the state might not be willing to guarantee certain levels of sales tax. Mr. Thunder explained the state formula guaranteed the LSST and 25 cent property tax. If those revenues were less than projected by the legislature then that difference would be made up either by supplemental appropriation or borrowing from the second year for the first year.
Ms. Tiffany agreed with Senator Rawson that total revenues received by school districts should be reported. Ms. Tiffany understood school districts and school district superintendents could not be stopped from reporting only the basic support amounts, and asked how the public could be informed of the actual amounts. Mr. Thunder commented the department had published annual accountability reports for the past seven or eight years – the report included data for each school and a summary for each district. The department had also published the Status Report for many years that reported actual expenditures per pupil for each district and a statewide summary. Mr. Thunder thought it might be wise for the department to generate public relation releases that detailed the actual dollars received per student. Mr. Thunder disclosed he had not been aware of the problem, and the department was certainly willing to work with the members to develop a mechanism for reporting total revenues. Ms. Tiffany indicated the committee might want to submit a Letter of Intent.
Mr. Thunder indicated a department employee funded from more than one account had to complete a time sheet for each budget account each week. Because the new state Integrated Financial System (IFS) did not divide benefits between budget accounts, the department was required to submit a massive journal voucher that distributed group insurance into the appropriate budget accounts for part-time employees. To alleviate the problem, the budget recommended all part-time positions and funding for those positions be transferred to a new Budget Account 2719. The employees would be paid from the new account requested in E-252. An employee paid 75 percent from one budget account and 25 percent from another would be included in the account having the greatest percentage.
Mr. Thunder referred to E-278, which facilitated the accounting within the department for Budget Account 2673. The account included administrative positions and activities in addition to five of the department’s teams. Traditional use of category 02 (out-of-state travel), 03 (in-state travel) and 04 (operating expenses), had made it difficult for teams to adequately monitor their portion of the budget account. The budget recommended the expenditures currently reported in 02, 03 and 04 be assigned to separate special categories – one for each team.
BUDGET ACCOUNT 2699, OTHER STATE EDUCATION PROGRAMS
PAGE K12ED-18
Dr. Rheault indicated all the programs in this budget account had been funded with state appropriations. Dr. Rheault referred to page 8 of his handout (Exhibit C) and addressed the ten programs recommended for funding in The Executive Budget – Apprenticeship Program, SMART, vocational student organizations, local education agency library books, administration of the Byrd scholarships, public broadcasting, Project LEAD (Leadership in Educational Administration), Project GAIN (The Geographic Alliance in Nevada), COW (Classroom-on-Wheels), and the National Teacher Certification Program. Dr. Rheault indicated the department had received many new programs over the last few sessions. The public broadcasting funds, $300,000 for the biennium, were 100 percent flow-through. The Public Broadcasting Association allocated the funds to private radio and television stations. Project LEAD provided in-service training in leadership development for Nevada administrators -- $80,000 had been included in the budget for each year of the biennium for continuation of the program. The budget recommended $50,000 each year of the biennium for Project GAIN, which provided training and materials to teachers in areas related to geography. The budget also recommended funding of $358,474 for each year of the biennium for LEA Library Books. Grants would be provided to school districts that supplemented the purchase of library books for use in the media centers of school libraries. Dr. Rheault explained that districts had been required to expend as much, or more, than the prior year to be eligible for the funding, and many of the rural districts, and some of the larger districts, had difficulty meeting the required match from year to year. The handout, (Exhibit C), contained a brief paragraph describing each program in Budget Account 2699.
Ms. Leslie understood approximately $1.5 million would be required each year of the biennium for the COW program. The budget recommended only $301,000 for each year of the biennium, and Ms. Leslie questioned how the additional funds would be generated. Dr. Rheault explained that the COW program raised additional funds beyond the amounts included in the budget. Ms. Leslie noted the state contribution to the program would be doubled in the next biennium and asked what the state funding would provide. Mr. Thunder thought additional buses would be added. The department would provide the requested information for the COW program at a later date. Dr. Rheault indicated a very detailed summary report on the program had recently been provided to Legislative Counsel Bureau staff.
Ms. Leslie asked about the one-time appropriation the 1999 legislative session approved for peer mediation and conflict resolution. Although Ms. Leslie had not yet seen the department’s report on the program, she understood it had been submitted to staff and thanked the department for providing the report. Ms. Leslie wanted to know why the department had requesting funding to continue the program. Dr. Rheault indicated the school districts had expressed extreme interest. In the current year, 21 programs had been funded, primarily in middle schools. The funding ranged from $1,000 to slightly more than $2,000 per program. Ms. Leslie asked if the department’s report contained an evaluation of the program, and if there had been any connection between the schools that had the programs and a reduction in middle school violence. Dr. Rheault indicated the report did not contain the information, but the department would survey the 21 schools and provide Ms. Leslie with a report.
Senator Rawson explained many appropriations included in past budgets had been one-shot appropriations and had been rolled into the recommended budget. Senator Rawson felt members needed to make a policy decision on the appropriations. He also indicated surprise that Holocaust funding had not been included in the budget. Mr. Thunder stated indirect costs had to be assessed if the department administered the Holocaust funding. Based upon an agreement between the department and the Department of Administration, the funds had been transferred to administration to avoid assessment of indirect costs. Mr. Thunder noted that The Executive Budget included a one-shot appropriation for Holocaust funding.
Senator Rawson understood one of the school districts had computer programs not compatible with the SMART program. Dr. Rheault referred to page 12 of his handout (Exhibit C) and noted $349,990 had been earmarked for the Lyon County School District to convert from the MAC system to a Windows-based system. Dr. Rheault, in response to an earlier question from Ms. Tiffany, noted the largest portion of the enhancement, M-200, funded staff for SMART. At least one FTE position would be funded for each district, with the exception of Esmeralda County -- because of the small size of the district a full-time position could not be justified. Funding had also been included for repair, maintenance, equipment replacements, and upgrades. Page 13 (Exhibit C) contained detail on the number of servers/workstations requested based on the type of site and student enrollments, and page 14 detailed, again based on school population, funding reserved for repair or replacement of routers, hubs, etc.
Mr. Dini questioned the pilot project for alternative programs for disruptive students as provided by A.B. 521 of the Seventieth Session. It appeared there had been a pilot program for three or four months, then the program had been evaluated, and funding had not been included in the recommended budget. Mr. Dini asked for an explanation of how the $500,000 appropriated for each year of the current biennium had been spent. Dr. Rheault stated some funding had been provided for an evaluation of the program and the department had provided a full report as required. Eight pilot sites had been funded. A major problem the department had encountered was that the initial evaluation had to be completed in a short time frame. The initial report had not been favorable due to the fact staff was still being hired and there was uncertainly about what needed to be done. However, recent monitoring visits revealed the programs were operating probably 100 percent better than at the time of the initial evaluation. One observation made by department staff was that many alternative programs were already operating and blending the programs, rather than initiating separate programs, would be beneficial. Dr. Rheault stated the department had requested funding for the program, however, funding had not been recommended for the next biennium. Dr. Rheault assured Mr. Dini the department would provide a report later in the spring that summarized the changes from the first year report. Chairman Goldwater requested the report be prepared and submitted. Mrs. Cegavske added that in-house suspension had been cut out of Clark County School District’s budget and asked if anything had been done along those lines. Mrs. Cegavske stated the solution was not to kick the students out of school without dealing with the problems. Mrs. Cegavske thought each school district should be reporting in-house suspensions, how those students were handled, and how those students were tracked.
Dr. Rheault then referred to E-300, which provided $340,000 for the biennium for comprehensive evaluations of charter schools and the Class-size Reduction Program (CSR). Dr. Rheault presumed the department would contract with regional or national evaluators to conduct the evaluations in order to assure comprehensive reports. Dr. Rheault mentioned the department had requested funding for evaluation for many years and it was included in The Executive Budget.
Chairman Goldwater addressed SMART and asked if all the current personal computers and file servers would be replaced. Dr. Rheault indicated the plan recommended replacement or equipment upgrades every five years. The amount included in the budget for repairs, replacement, and upgrades was $697,300. Chairman Goldwater asked if the funding was only for SMART, and Dr. Rheault responded in the affirmative, but indicated a computer in a small elementary school might be used for other purposes. Dr. Rheault acknowledged SMART was an expensive system, but felt it would be well worth the cost.
Ms. Tiffany asked if the state had responsibility to provide hardware for each of the school districts since the districts built technology into their budgets. Ms. Tiffany commented there was a “graveyard of computers” in Clark County and asked if existing computers would also end up in a graveyard. Ms. Tiffany also asked if a responsible planning program existed for disposition of used computer equipment. Dr. Rheault was not aware of a statewide effort to refurbish the equipment. Ms. Tiffany indicated the SMART program had been in existence for a long time and did not want to fund an additional $697,300 when no policy existed.
Chairman Goldwater asked how the SMART program staff would be funded in the future. Dr. Rheault indicated the department’s perspective was that the SMART system needed trained staff dedicated to the program and that the SMART data would only be as good as the data entered into the system. Dr. Rheault stated the program was still being phased in, and because the state had mandated the system, it was the department’s perception the state had responsibility to support the program. Mr. Thunder interjected that eventually the SMART staff needed to be built into the regular school budgets.
Mrs. Rohrs asked how the numbers had been developed for the 92 administrative workstations and 16 servers and how many schools were in Lyon County. Mr. Thunder indicated the department had the numbers and he would be happy to provide the information to Mrs. Rohrs. Mr. Thunder remarked when SMART had been initiated, Lyon County was ahead of other districts—all the schools were equipped and used the MAC system. Unfortunately, the company that provided the software no longer supported it. The MAC system had to be replaced to bring Lyon County in line with other districts.
Dr. Rheault testified E-325 provided funding for 75 teachers to each receive a maximum reimbursement of $2,000 for successful completion of the National Teacher Certification Program. Out of the 48 teachers who had applied for certification in the past biennium, 24 had been successful. Chairman Goldwater asked how the dollar amount had been determined, and Dr. Rheault said the cost to apply and participate was slightly higher than $2,000. Between 75 and 100 teachers were expected to apply in FY2002 and that number was expected to increase in FY2003. Dr. Rheault indicated the $2,000 was an incentive to encourage participation, and a recent report indicated teachers holding the certification had skills well above an average teacher.
Chairman Goldwater referred to the $340,000 requested for evaluation reports on charter schools and the Class-size Reduction Program, and asked what benefits would be received. Dr. Rheault indicated he would provide the committee with details.
BUDGET ACCOUNT 2705, TEACHER EDUCATION AND LICENSING
PAGE K12ED-23
Dr. Rheault addressed the teacher licensing account and provided background information. Licensing staff was located in Carson City and Las Vegas. The 1999 Legislative Session determined the teacher licensing account should be self-supporting -- funded solely with teaching licensing fees. Dr. Rheault indicated the main issue was how fast the account would become self-sufficient. Dr. Rheault referred to page 15 of the handout (Exhibit C) for more detail. In FY2000, the actual budget revenues from licensing fees made up 77.2 percent of the budget. The state appropriation in FY2000 was $186,000 and only $100 of state funding was provided in FY2001. The $100 of state funding allowed the department the opportunity to request special funding from the Interim Finance Committee if funds received came in under projected revenues. Dr. Rheault explained the current budget could not be supported with licensing fees. The Commission on Professional Standards had increased the licensing fees, based upon the department’s estimates of what would be needed, to fund the budget during the current biennium. The initial license, a three-year, non-renewable license, had been raised from $85 to $100. Of the $100, $39 covered fingerprint fees—the state received only $61 per new licensed applicant. Renewal licensure had been raised from $65 for a five-year period to $80. Additional endorsements had been raised from $40 to $45. Dr. Rheault referred to page 17 of the handout (Exhibit C), which provided a comparison of the estimated revenues from licensure fees to the actual revenues in FY2000. The number of license renewals was far fewer than what had been projected and anticipated revenues had not materialized. Dr. Rheault thought many individuals who had, in the past, renewed licenses, even though not employed, had not renewed due to the increased costs of the licenses. In the FY2000 budget, it had been estimated $679,100 would be received in revenues and only $619,509 had been received – a difference of $59,591. Any funding received was placed in a reserve and carried forward to the next year. At the beginning of FY2001 the reserve was $104,012, which was higher than anticipated due to staff vacancies, reduction in travel, and a reduction in the information services category. The total revenue projected for FY2001 was $123,169 short of the amount contained in the budget. The new imaging system that had been included in the budget was placed on hold and that reduced the anticipated shortfall by approximately $61,000.
Chairman Goldwater asked where Nevada stood with teacher licensing fees when compared to other western states, and Dr. Rheault indicated the last report he reviewed that covered licensing fees in all of the states indicated Nevada had the fourth highest fees. Dr. Rheault stated he had an updated report and would forward a copy to staff. Chairman Goldwater asked why the reserve levels had been held at the same level. Dr. Rheault responded only $100 of state funding was provided in FY2001 and if revenues were not received, funds would not be available to pay the 11.5 FTE positions. It was estimated a $100,000 reserve would be a comfortable margin. However, because revenues were projected to be so low, Dr. Rheault estimated only $33,000 would be available – the approximate amount needed for one pay period. Dr. Rheault stated he would be monitoring the budgets closely to make certain projections were accurate and would keep the subcommittee informed.
Senator Raggio stated the recommended budget included a reserve of $19,728 for each year of the biennium and asked Dr. Rheault to explain the differing reserve numbers. Dr. Rheault indicated part of the confusion was that the budget included two reserves, and the one Senator Raggio addressed was generated by a $5.00 charge for each teacher proficiency test. Dr. Rheault indicated Senator Raggio was correct; the licensing reserve for each year of the next biennium was zero and with the revenues projected there probably would not be any reserve unless the fees were raised. Senator Raggio asked what the $913,027 in FY2002 and $818,858 in FY2003 revenues in licenses and fees had been based upon. Dr. Rheault indicated the recommended budget did not include increased licensing fees. He referred to the funding requested in E–850 that provided funding to store teacher licensing files electronically and indicated the department would not proceed in that area if fees were not raised sufficiently, or if there was insufficient funding. Dr. Rheault indicated that in order to meet budget requirements, initial license fees would have to be increased to $135, the renewal license increased to $120 and the added endorsements increased to $50. Senator Raggio asked for clarification -- if the budget was to end with a reserve of approximately $48,000 at the end of the next biennium, the fees would have to be increased, otherwise a subsidy would be required. Dr. Rheault agreed. Mr. Thunder indicated one of the problems Senator Raggio had noted was the absence of any amount for the reserve. In the summary, $104,000 would be carried forward from FY2000 to the next year and then that amount was carried forward to the following year. Chairman Goldwater indicated staff would work with the department on Budget Account 2705.
BUDGET ACCOUNT 2697, PROFICIENCY TESTING
PAGE K12ED-32
Dr. Rheault referred to page 20 of his handout (Exhibit C) and described the state tests, grade levels, and subject areas required:
Chairman Goldwater was concerned information received by the subcommittee indicated the costs for the proficiency examinations would be much higher than what had been budgeted and asked Dr. Rheault if he would please address the issue. Dr. Rheault referred to page 33 of The Executive Budget and explained $1.2 million had been allocated for FY2000 -- $900,000 for the development of the HSPE and $300,000 for grades 3 and 5 criterion-referenced tests (CRTs). The department had contracted with CTB/McGraw-Hill to complete both projects. As of the end of FY2000, the department had only been billed by CTB/McGraw-Hill for a portion of the $1.2 million – $72,304 for the CRTs and $184,345 for the HSPE. Dr. Rheault stated the budget the department submitted had included $900,000 for the HSPE and $300,000 for the CRTs. However, because FY2000 was the “base year,” and only actual expenditures could be included in the base budget, $72,304 and $184,000 had been included in the agency requested base budget. Dr. Rheault indicated the department had contacted the three major testing companies in spring of 2000 to determine estimated costs. Bids would have to be requested for the HSPE and CRTs in FY2002 and for the Norm Referenced Tests in FY2003. The criteria sent to potential vendors for the HSPE and CRTs were detailed on page 22 of Exhibit C. Dr. Rheault indicated there was a possibility costs could be cut, but it depended on what the legislature wanted from the testing program. The department felt a full-fledged testing program had to include the criteria listed.
In response to a question posed by Mrs. Cegavske, Dr. Rheault stated the contracts for the HSPE and grades 3 and 5 CRTs expired June 30, 2001, and the TerraNova contract would expire June 30, 2002. Mrs. Cegavske asked if the subcommittee would have an opportunity to review new contracts before a decision was made and Dr. Rheault affirmed. Mrs. Cegavske stated Mrs. Peterson, former Superintendent of Public Instruction, had been asked to make certain each contract generated by the department included time lines and penalties if time lines were not met and that had not been done. Mrs. Cegavske stressed that subcommittee members expected the department to strictly enforce penalties if contract time lines were not met.
Dr. Rheault again referred the subcommittee to page 22 of Exhibit C and discussed the CRT criteria:
· Must be based on Nevada performance standards.
· Four forms of each CRT in each subject at each grade level (reading, math and science) – Dr. Rheault indicated this was an area where costs could possibly be reduced. Rather than four forms generated the first year, one could be developed each year.
· Test would be administered once each spring.
· 40-60 multiple-choice items on each test given within each subject.
· 2-3 constructed response items on each test given for each subject – Dr. Rheault indicated a math advisory group had reviewed the math portion of the HSPE and the constructed response items had been one of the suggested criteria. The Academic Standards Council had made the same recommendation. Dr. Rheault indicated including the constructed response items would approximately double the cost of the test.
· Costs for all phases of the testing – test construction, administration, scoring and reporting based on 30,000 to 35,000 booklets -- Dr. Rheault indicated the department currently projected between 25,000 and 30,000 for grades 3, 5, and 8 so there might be room to cut back in this area.
· Development of a manual for test coordinators and one for test administrators.
Chairman Goldwater indicated the main concern of the subcommittee was that the budget included sufficient funding to cover vendor costs. The department needed to provide accurate amounts. Dr. Rheault referred members to page 23 of Exhibit C, a summary of cost comparisons for CRTs and HSPE for FY2002. Dr. Rheault stated the enhancement request for grades 3 and 5 CRTs was $700,000 and had been fully funded in The Executive Budget. Dr. Rheault stated the $772,304 included in the recommended budget had been based on the $72,304 that had been paid in FY2000, plus the $700,000 in the enhancement. Dr. Rheault indicated the Governor recommended one-shot funding for grade 8 CRTs. The department thought $2 million per year was required for the HSPE. Districts and students had requested practice tests, and costs for those had been included in the estimated contract costs. Chairman Goldwater asked how many vendors provided the required services, and Dr. Rheault indicated there were only three for large-scale, high-security tests.
Senator Raggio indicated his concern about the testing programs and requested the department provide a reconfigured budget that did not compromise the suggested requirements. Senator Raggio indicated: 1) the constructive response questions were important and should not be eliminated; 2) it was important to have an adequate supply of test forms; and 3) it was important to have practice tests available. Senator Raggio asked the Chair to have the department return with revised numbers as quickly as possible so the subcommittee could address the obvious budget shortfall. Senator Raggio stressed adequacy and degree of testing were very important elements in the reform of education. Chairman Goldwater stated Senator Raggio had made an excellent point and the subcommittee wanted to see an itemized list of any cutbacks and also wanted the department to work with the Budget Division to make certain the numbers requested would be adequate.
Dr. Rheault stated pages 24 through 28 contained examples of steps required for each type of test and a chart that detailed approximate costs per pupil for each testing program. The CRTs were the most expensive because they were state-developed -- $17 to $20 per pupil.
Mrs. Cegavske asked if there was a possibility of shifting the TerraNova NRT to grade 7. Dr. Rheault stated the possibility had not been discussed, but perhaps it should be considered. Instead of having grade 8 students take norm-referenced and the criterion-referenced tests, the testing would be spread out among grades. Mrs. Cegavske indicated the shift made a great deal of sense due to the large amount of time students currently spend testing.
Mrs. Rohrs asked the department to provide a job description, with specific job responsibilities, for the new consultant, and explain why it was necessary to add another position when three of the six current positions were consultants.
BUDGET ACCOUNT 2719, NDE STAFFING SERVICES
PAGE K12ED-47
Mr. Thunder stated Budget Account 2719 was the new budget account referred to earlier in the hearing. Nine FTEs would be created in this account from the transfer-in and consolidation of numerous less than full-time equivalent staff positions. Currently, many of the department’s staff positions were combinations of less than full-time equivalent positions funded from multiple budget accounts. This made the positions difficult to track and required that employees filled out timesheets for each budget account.
BUDGET ACCOUNT 2720, EDUCATION SUPPORT SERVICES
PAGE K12ED-48
Mr. Thunder explained Budget Account 2720 was the administrative account funded by indirect costs. There were two indirect cost rates – restricted and unrestricted. The restricted rate was applied to programs and activities, primarily federal programs that had a non-supplant clause. The budget was constructed using a restricted rate of 12.7 percent. The unrestricted rate, applicable to all other activities, was 21.8 percent. The activities paid out of this budget account were primarily overhead expenditures – costs that could not be distributed among the various cost centers. The costs were paid from one budget account and the other accounts were assessed accordingly to recoup needed funding. One new account clerk had been recommended in the budget. Mr. Thunder indicated the position was needed due to the wide variety of new assignments given to the department over the past two biennia. Mr. Thunder indicated the number of staff in Budget Account 2720 had remained the same for the past 15 years. Travel costs had increased significantly. The addition of the new position would facilitate the processing of all the information. M-201 requested an additional information systems specialist. The department had four or five networks; currently one position was responsible for maintaining the networks. Mr. Thunder indicated there was a network in the southern office and in the Carson City office and the two were connected. The department had a mixture of platforms – the Windows-based machines and the MAC-based machines. The teacher licensing system was being brought more and more in-house. Other networks included the payment system of the nutrition program and SMART. Mr. Thunder explained the current system specialist also worked with schools districts in setting up Nevada School Network accounts. The current duties were too overwhelming for one position, and, for that reason, a request for a new specialist was included in the budget.
Chairman Goldwater asked about revenue projections in Budget Account 2720 and Mr. Thunder responded that the budget account depended upon activity in all the other budget accounts and the rates negotiated with the federal government. The Governor’s budget indicated the account revenues would remain status quo. Mr. Thunder indicated the department would soon receive the rates for FY2001. Chairman Goldwater stated a Letter of Intent had been sent to the department at the end of 1999 and Chairman Raggio and Chairman Arberry had been very concerned with the staffing levels, the expenditures, and reserve levels in this budget account. Mr. Thunder stated one individual within Budget Account 2720 monitored the account and determined when funds needed to be brought into the account. Chairman Goldwater noted the reserve in The Executive Budget was $31,000 and questioned if the amount was sufficient. Mr. Thunder stated the department would like to see a reserve of $100,000, however, until the indirect cost rates were received it would be difficult to determine the reserve. Mr. Thunder explained the issue would be addressed if the legislature agreed with the recommendation that General Fund dollars be appropriated directly into Budget Account 2720.
Chairman Goldwater indicated the Legislative Committee on the Fundamental Review of Base Budgets had recommended development of procedures to provide careful monitoring of transfers of indirect costs into Budget Account 2720, and questioned the status of the recommendation. Chairman Goldwater also asked if the department had improved internal controls since new positions were being requested, there was uncertainty about the revenues, and the reserve was low. Mr. Thunder stated the department had requested two additional auditors and support staff for the auditors. The initial request was that the positions be included in Budget Account 2673 rather than Budget Account 2720 due to the fact the positions would deal mainly with charter schools and the DSA. Mr. Thunder explained auditing was a legitimate expenditure from Budget Account 2720, however, the addition of the two positions could cause a hardship on the revenue source.
Mrs. Rohrs asked Mr. Thunder to provide an update on the procedures for monitoring the budget that the department had developed since the fundamental review, and to provide the same information on internal controls -- the other recommendation that had been combined with the monitoring.
BUDGET ACCOUNT 2691, NUTRITION EDUCATION PROGRAMS
PAGE K12ED-60
Dr. Rheault indicated a state appropriation was used for the match for the administrative portion of Budget Account 2691, Nutrition Education. The department anticipated continued growth in the program, a reimbursement program funded through the U. S. Department of Agriculture. Dr. Rheault explained grant funding was based on the number of participants and was not limited.
BUDGET ACCOUNT 2605, DRUG ABUSE EDUCATION
PAGE K12ED-67
Dr. Rheault pointed out there was an M-200, demographic caseload change for Budget Account 2605, Drug Abuse Education. A temporary quarter-time management assistant had been funded during FY2001 and the M-200 made the position permanent. Dr. Rheault explained the consultant funded through the budget worked with school discipline issues, drug and safety related surveys, and provided technical assistance -- the management assistant would provide support to the position. It appeared federal funding would be decreased by approximately $360,000; however, the final grant amount had not been received by the department.
Chairman Goldwater indicated the department had a mandate, through a Letter of Intent from the 1999 session, to determine what programs were effective and feasible for drug education programs. Dr. Rheault responded the Letter of Intent had not been fully met. Dr. Rheault stated the department had presented a drug education study to the 1999 legislature. The current Letter of Intent requested the department go back and look specifically at drug education programs that would be useful in Nevada. Dr. Rheault recalled the first study had cost between $12,000 and $15,000. The department had worked with professors from the University of Las Vegas (UNLV) and the University of Nevada, Reno (UNR) to develop a feasibility study outlining a full evaluation and cost estimates. A letter had been forwarded from the department to Senator Raggio and Chairman Arberry that indicated the department had run into difficulty funding the review. Dr. Rheault explained the department did not know what could have been included in a new report that had not been included in the first report, and did not have a report to present to the subcommittee.
Ms. Leslie indicated Assemblywoman Jan Evans had been very supportive of the study and felt it was very important to conduct a study especially in light of recent reports on the Drug Abuse Resistance Education (DARE) program that indicated the program had mixed results. Ms. Leslie stated the DARE program was being totally revamped. Dr. Rheault agreed the study was needed – and the first department report had indicated the DARE program was not working. The majority of drug education programs were either national or regional programs and Dr. Rheault indicated the department could enhance what had been provided in the original report on the programs currently being used without a full-blown state report. Ms. Leslie asked Dr. Rheault what the time frame was for getting back to the subcommittee with a report. Dr. Rheault indicated he would check with Mike Fitzgerald, the drug education consultant, to determine what could be provided and get back to Ms. Leslie. Dr. Rheault asked Ms. Leslie to let him know as soon as possible if the suggested report would be sufficient. Senator Rawson stated he did not want to eliminate the drug education program, however, he recommended a sunset be placed on the drug education program funding to force scrutiny of the program. The sunset would be written into a final bill and if the report was not provided by the department the next time he did not want to see any funding going to the program. Chairman Goldwater stated the suggestion was noted and thought Mrs. Evans had wanted the department to determine what role it played instead of the legislature merely throwing funding into different programs that might have worked or might not have worked. Mr. Thunder added in prior years research studies had been conducted on alcohol abuse and at-risk behaviors and wanted members to know in the future there would be one report that combined both areas.
BUDGET ACCOUNT 2670, EDUCATION OF HANDICAPPED – NRS 395
PAGE K12ED-76
And
BUDGET ACCOUNT 2715, INDIVIDUALS WITH DISABILITIES
PAGE K12ED-79
Mr. Thunder referred to Budget Account 2670, the NRS 395 program that funded education of students that local school districts were not able to provide, and Budget Account 2715. Mr. Thunder stated in recent years the draw on Budget Account 2670 had diminished, however, one or two cases could reverse the trend. Half of the funding for students placed out-of-district or out-of-state was paid by Budget Account 2715; the balance was paid by a state appropriation. The state also paid for administrative costs. The Budget Division recommended, and the department concurred, merging the two budget accounts. The funding for NRS 395 would be located in a special category and isolated from other expenditures and would allow the department to report the expenditures to the legislature. Chairman Goldwater asked for Mr. Thunder’s assurance and Mr. Thunder agreed. Mr. Thunder addressed the significant increase in federal funding that had occurred and thought the increased funding would continue. The federal increase over FY2000, the base year, was approximately $14 million. When the State Board of Education lowered the ratios in certain special education categories, the department had assured the board and the school districts approximately $4 million would be available to cover the costs of the additional staff. The department had initially requested state funding, however, because federal special education funding had increased that was not included.
Chairman Goldwater asked about the reserves in Budget Account 2715. Mr. Thunder explained funding received from the federal government had a life of 27 months. The department expended the aid portion of the funding within the first year then administrative funds not spent in the first year would be held in reserve and spent in the second year. Mr. Thunder stated administrative funds not needed were eventually reallocated as aid to schools. Mrs. Cegavske questioned the mandate from the department for the class-size reduction in special education classes and indicated it was a real concern that the State Board of Education voted to mandate something that had not been funded. Mrs. Cegavske asked how the department was going to pay for the reduced class sizes. Dr. Rheault stated the funding would come from the increased federal award. Mrs. Cegavske again expressed concern that the board had an unfunded mandate. Dr. Rheault stated the public hearings on the regulations took place two or three times, several legislators testified, there had been passionate testimony from special education teachers who had too many students in a class. Statutes indicated the state board had responsibility to set the class loads for special education and the board did what they thought was right at the time. Mrs. Cegavske referred to the textbook audit, which revealed no funds were set aside for books for special education students. Special education teachers who had been interviewed indicated the textbooks received were not selected by the teachers but were used books, or whatever was left over. Mrs. Cegavske questioned how all the money designated for special education students was spent and felt a review was needed. Mrs. Cegavske also expressed concern that the costs were much lower for a long-term substitute than for a qualified special education teacher, yet the budget included personnel costs for special education teachers. Mr. Thunder stated special education funding was on the revenue side and was intended only to cover the costs of the teacher and benefits – however, the funding was approximately half of that amount. Mr. Thunder stated there was no distinction made between special education students, as opposed to other students, in the funding for supplies and materials included in the budget. Mr. Thunder explained it was the responsibility of the local school districts in the budgeting and allocation process to determine the level of supplies and other materials. The current construction of the DSA did not provide separately for any operational expenses or other costs for special education students.
Senator Rawson indicated he was unclear if the increased Title VI funds would actually cover the costs of the class-size reduction regulation, if there would be a funding shortfall, and what the amount might be for any shortfall. Senator Rawson referred to the .5 FTE management assistant position that had been vacant for two years and wondered if the position was necessary. Mr. Thunder indicated the department was currently in the process of filling the .5 FTE, which would be located in the Las Vegas office. Mr. Thunder thought the position would be combined with another .5 FTE. Mr. Thunder stated the department had been assured sufficient federal funding would be provided to cover the additional costs incurred due to the class-size reduction.
Mrs. Rohrs referred to a note included in the Budget Account 2670 narrative that indicated the $250,000 reserve that had been in Budget Account 2715 for NRS 395 placements would be continued, however, the amount was not included as a line item and asked Mr. Thunder for clarification. Mr. Thunder stated the reserve had been in another budget account and all of the available funding was in the aid-to-schools account. At this point, not all of the money in the aid-to-schools account was obligated and the department held sufficient unobligated funds to cover that. In the past, the full amount of federal funding had been included as a revenue source and the full amount of state funding was included as an anticipated revenue source. The amounts began to be quite large, and in 1995 the program was developed to substantially reduce the state responsibility but then hold in reserve an amount of federal money in case there was a need to either borrow from the second year, which was allowed, or come back if necessary and request a supplemental appropriation. Mr. Thunder indicated the department could transfer that into Budget Account 2715, but the department did not feel it was necessary. Mrs. Rohrs asked if she understood correctly that even though the narrative indicated the funds would be held in reserve, the narrative was inaccurate and the funds had somehow been rolled up into aid-to-schools money in Budget Account 2715. Mrs. Rohrs asked Mr. Thunder to provide her with a response after the meeting.
BUDGET ACCOUNT 2712, IMPROVING AMERICA’S SCHOOLS
PAGE K12ED-85
Dr. Rheault stated Budget Account 2712 was totally federally funded and slight increases had been projected for each year of the biennium. The federal funding had federal requirements attached to the money, in particular, the testing programs where multiple measures of tests had to be addressed through Title I. Dr. Rheault indicated it was critical to get the grade 8 criterion-referenced test because “there was a hole there.” Chairman Goldwater said there was a .25 FTE management assistant position that had been vacant for more than two years and asked if the department planned to fill the position. Mr. Thunder responded the position was part of the combination of the other vacant positions.
BUDGET ACCOUNT 2676, OCCUPATIONAL EDUCATION
PAGE K12ED-90
Dr. Rheault stated the Carl Perkins vocational grant required state administrative match as well as maintenance of effort (MOE). The program included the Tech Prep grant (approximately $573,000), and the basic vocational grant ($5.7 million). Dr. Rheault referred to M-201, which provided funding for a half time grants and project analyst. An analyst had been employed for the Job Training program and the department wanted to retain the position under Carl Perkins funding to continue to assist the consultants with grants management. Chairman Goldwater asked if the MOE was sufficient, and Dr. Rheault indicated there had been a problem in FY2001 with the MOE. Dr. Rheault explained FY2000 had been a transition year for the new Perkins III Act, a revision to the Carl Perkins funding. Prior to the new Perkins III Act, the MOE requirements included administrative funding along with the base money. A statewide aggregate had been used for all funding school districts spent on vocational education programs and was the basis to meet the MOE and match. In FY2000, auditors advised Dr. Rheault the state administrative match had dropped by $1,000 from the prior year. Next year, the match would also be about $1,000 short and federal regulations required the funds be paid back from state administrative funds. Dr. Rheault indicated the department had not received the final audit report and was working with the auditors to resolve the issue. The state appropriation for FY2001 was $369,945 and would drop the next year to $343,823, a drop of approximately $26,000. The federal government allowed for a one-year waiver to the match due to extenuating circumstances. However, even with the waiver the grantee would be required to go back to the previous support.
Mrs. Cegavske stated one of the occupational education goals was to help students develop skills in technology. Mrs. Cegavske questioned why the computers in the graveyard in the south that Ms. Tiffany had referred to earlier were not being utilized for working technology. Mrs. Cegavske was concerned students had not received sufficient information on the availability of occupational education. Mrs. Cegavske felt it was important to provide more hands-on type of education programs to enable students to work in the real world and did not feel the department addressed the issue. Chairman Goldwater wanted to be comfortable with the MOE and requested that Dr. Rheault provide a good number to the subcommittee. Dr. Rheault indicated the department would work with the members.
BUDGET ACCOUNT 2678, SCHOOL TO CAREERS
PAGE K12 D-107
Dr. Rheault addressed Budget Account 2678 and indicated the program was initially funded with state funding as seed money along with the five-year federal money. The federal funding would end December 30, 2001. The department had requested $1 million for each year of the biennium; however, The Executive Budget included $1 million for the first year only in order to match the phase-out time for the federal funds. Dr. Rheault stated all of the positions would end December 30, 2001. The half-time grants analyst would be eliminated July 1, 2001, and the remaining two positions would be reduced to half-time positions and would then be phased out completely. Chairman Goldwater asked if there would be staff to administer the grant and Dr. Rheault indicated the federal commitment would be completed by FY2002, but staff had made a commitment to work on the closeout of the grant. In addition, a small grant had been received that could be set aside to hire a contractor to write the final report and closeouts if needed. The team leader of the Workforce Education Team had assured Dr. Rheault staff would be assigned to finish out the program.
Chairman Goldwater adjourned the meeting at 10:45 a.m.
RESPECTFULLY SUBMITTED:
Linda Smith
Committee Secretary
APPROVED BY:
Assemblyman David Goldwater, Chairman
DATE: