Education Committee House

Everybody here. Again good morning let everyone here we have a pretty short agenda today just got a couple things we need tops loose ends and the we're here to do that. And so what I think I've got one more that's walking this way will let's will lead the and get Percy there she is and I think we're ready to go get back to our agenda of Mr last year you would expect for. All right here we go so we're here discuss the adjustments to the matrix recommendations. And so number one on our list today is to set a target salary for our teachers set the average target salary that we did not do in October early we were here at fifty one thousand eight hundred twenty two dollars for purpose of distributing the enhanced teacher salary recommendations so we need a motion to do that. I have a motion any discussion on the motion. If not. All in favor say aye. Any opposed. All right. Our second one is a little more of what we really came to do is to talk about our partnership funding program and you have four options that we sent out to you and those or I'll open Mike ever wants to ask questions talk about one of the we're gonna open on. The Committee talk about these and see what you want to do. Budget you want to talk. Anybody. No this is this to be a put square foot footage for reportable facility so right now it's all just the rule is to run asset two hundred. And so if it's a. It's a very personal genetics on the very. It's so it's it's it. Exhibited the I thought it just on the second page so so would run acid two hundred so we know that Costa Brown and I have been checking cost across the state and probably the cheapest that I have found it is two seventy two to seventy five age and SO Hosp Reagan probably maybe down south it might be a hair cheaper maybe not northwest Arkansas. Where what you are yes building calls Northwest Arkansas running upwards of four hundred dollars square foot and every contractor that we talked to whether it was a general contractor specialize in school or where there was an architect said that every contract that they're seeing is also building a five to ten percent escalator into that over the next twelve to eighteen months. Representative makes low. So if we did the three hundred and this proposal would be looking at a. So the new total would be would be funding. Two hundred and almost three hundred million dollars total into this fund this act married not correctly on make sure operating that so we wanna the option for the increase. We would be. Increased for the new total would be two hundred and eighty nine million would be the total funding we would be providing right and then on that funding. it would use the current funding and grant models as far setting priorities and so forth we have any idea if we went with that one which it sounds like that's gonna be our maybe our only choice here given the the for the. Inflation What percentage of the total need does that help we have an idea of total medias or is that something we need to get for the department. Would have to ask the Mr came that I know of it in the United you have some answers for some that. You showed up so you get to get answer questions right. If the the deed was only fifty million dollars we would have to do that said how I suspect it's a lot bigger if you state your name and who you're with for the record please yes Mister chairman Tim Kaine facilities and transportation. Even as well as a so so my question is it what what what is the current anticipated need from the sponsor was a current and just or what is the current ask from this one from school districts. Well what we looked at the planetary projections for twenty three twenty five and. We don't have all of our cost factors in yet those are be coming towards the end of the year so we a lot of it's going to depend on that and that's going to be the biggest biggest. I just wanted to make right but do you know the current need is. Or have a ballpark figure what carnitas Rask. I I can get that to you but it'll be it'll be an estimate at this point projection this is that is that are at least for me you know I'm. Okay for wanting if if the the ask here's to increase this and double it over a hundred million dollars on the two three hundred million dollars it be good for us to know what the. What the need is because if if the needs only a hundred million dollars and we don't need to do this obviously I suspect the needs much greater it's and and for us to make an informed decision we need to know what the need is if the need is you know only you know we only need to raise a twenty million dollars then the. Can see what I'm getting at yes Sir those or any way that we can get that number what the need is yes ma'am if the office you'll have submitted a two year plan already of what is in the I believe it was in that spreadsheets that secretary Kiseki. Okay we don't have in front of us so does anybody know what that is. So what I guess what my question is do you all have a square footage price that you were planning for for the next two years you also come up with that we didn't we didn't have one we're planning for we looked at several different options. So you want us to set an option for you probably yes there you go. So From what we understand what we see it's pretty it doesn't very a lot across the state on the low in the low in being real close to two seventy five is going to be an influx of contractor I talked to three hundred is going to be really quick coming up to twenty three so so anyway we'll start of levy of representative Johnson you don't hear. Well I don't I don't have you on my screen here McKenzie said okay let's start there. All right so the the educational facilities partnership on drugs revenue from general revenue right yes but it also draws revenue from. The Public School Fund bonded debt in this. What's that account and how you know what that balances in that account or does anyone. What the balance is great with know that it is right up my point is if we're gonna put pressure on this fine I'd like to know where the money's coming from constructing general revenue that's one thing but I'm curious about what that specific account is so your your time of Public School Fund with me specifically what references in the Atticus report is not registration ninety with clothes on Greg I just want education. Actually calls it something different. It may be the same thing that actually because of the. Mmhm. Earned in remaining in that public school fund for bond debt assistance program correct so there's three programs that were in Public School Fund there were general facilities funding bonded bonded debt assistance and supplemental funding those were created when the partnership fund first started to help those school districts that had those different funding debt close those out to continue going on with partnership fund so those are with those are set those are closed we have a time line that we're paying those off anything we do in the public school for the partnership prime won't affect those three programs in fact they are paid off I think bonded debt is eighteen million dollars and that is transferred to partnership fund ever fiscal year so so there's no unexpended balances correct in the public school fund for bond debt assistance that that program is paying off there's no in there will be no increase in that okay as are unfunded balances or an. Really the right word and it's and expended balances in the public school for the unexpended balances and public school fund so I'm not sure I understand your question well I mean I I again I'm just referencing the document that was provided to us by bill our it says that the educational facilities partnership fund the. Get sized funding sources from general revenue end unexpended balances of funds allocated in the public school correct thanks any if there are any tax so that's the the bonded debt assistance images facilities funding those two. They had those two programs whatever's not paid off to pay off those bonds those existing bonds before partnership started that funding is transferred to the put to partnership fund at the end of the fiscal year so that's another funding stream besides general revenue that goes into the partnership program okay so if we increased and I'm not trying to be difficult but if we increase funding. To the partners fund is that going to press is that is that increase can be put the pressure from that increased put the put specifically on general revenues specifically general revenue okay so there's no other funding source that this increase would be correct it would just be general revenues correct okay that's that was the question I have this all thank you and represent makes early if the total cost for the plans for twenty three twenty five the total state dissipation cost right now at two hundred dollars per square foot was a hundred ninety three. And change million dollars so any increase that we so what we're trying to say that she trying to say is any increase above that would be the total state to station cost tenant. VOL you. Okay I still kind of want to piggyback off of representative makes how many schools are we talking about I think that's what. The number of schools it's in construction right now that needs money to finish out a project. So like like is it that's difficult that's difficult questions asked because it when the partnership plan was approved it was approved at two hundred dollars per square foot with that state participation amount established in the needs list and in their wealth index list if you change that for twenty three twenty five I can't say how many would need the money and who doesn't because we have had some a some school districts have either delayed starting the construction the program due to cost or rescinded programs to the calls so takes a list of who all needs the money right now is is a really good and hard questions and we have to look at that how many projects we have going on right now. For the next cycle man is that the money that we're talking about for the next cycle well for the next cycle approximately seventy nine right now but again like like Greg said that can change if their projects rescinded. You'll have to remember that this does not affect the cycle we're in right now this is for the future that we're setting yes yeah I guess it goes into the twenty three twenty four or twenty four twenty five cycle other schools so that we're going to have to help that they didn't. Ask for enough money that's. Think of during the session and and try to do appropriation we do that and I think if I understand right and something and Labor Day livid per back the ones that are turning their money back or will be able to turn around if those that maybe are I don't know we'll have to see a I have to sit down with him and Reagan's. And Secretary key to see exactly what we're talking about on that but I know we've had a call your body cross the status had a call from somebody that they need help with their funding because they're not they don't have enough to do what they want to do so I think it's an address need we need we just can't do it here we can do it in the session for appropriation bill or our work with the department to do that in some form or fashion so what we're what we're trying to do today is that one set of certain amount for the next funding cycles which would be the twenty four twenty five cycle. So if you don't make a real make a recognized will vote on it to me it's just kind of hard to do Mr chairman we don't know there's so many variables to understand. Will the real variable is that you know if you're building a building you can't of two hundred right now so we don't know who's gonna be doing a bill in a twenty four but we know is least gonna cost more money so you know whoever it is they're gonna need money. The problem I think we've had is we just don't have enough for the amount of people that are applying for for a cycle for each cycle and a other similar legislation we need to change on the rolling off of that cycle and and going to the very tail end so we know when you go back to the old formula that used to be that way so it's it's sort of side we have to just come up with the number that we can we can thank that the schools could be able to do the things I need to do out Northwest Arkansas the bill is a bill is a lot different we build out here some of those are but they do a lot of a partnership they have a lot of a of a militia to use along with with with that yet so with that figure out how much it is a hard question is once in a limited appeal. All right. Womack so based upon what I'm what I'm hearing my question is this if we approve this three hundred million dollars. Is all that going to be spent. Because the needs going to be at least three hundred million plus or is it possible that a lot of this is gonna be turned back to us because that's beyond what the need is that question makes sense. Are we fairly confident we're gonna need at least three hundred million dollars to fill this need. Representative Bob I believe the answer your question is three hundred dollars and able to help me that that cap of three hundred will help those projects that are that are you big space projects. but like Greg said earlier it's just hard to tell where you're going to be when you have projects in be rescinded because for example if the voters don't approve the millage so there are so many factors that go into that. Hello so we may not need the three hundred million dollars I'm not talk about the square footage I'm I'm talking about the total dollar amounts three hundred million other the the square footage job that works at that site I'm looking at the total cost to the Arkansas taxpayers right now it's going to be close to three hundred million dollars. Is that three hundred million dollars are we confident. That we need three hundred million dollars loss or could we get away with only you know as a possible we won't be three hundred million dollars and if we don't need a three hundred million dollars what happens to say well we need to under million dollars what happens at her million dollar difference so. All the excellent question so when you're looking at the partnership program projects they start putting in those project need request and now November's our first review for the for the the US facilities Division startling because projects once they go through that and they develop the needs list they developed the once a drive is they look at the wealthy with indexed dissipation by the school district so we have a list of school issues that we need that we know what they need what they put in there then once we put the wealth index on the we know how much it's going to be the state's share that until teams teams at a time for that twenty four I mean the twenty three twenty five process to go to no twenty twenty twenty twenty twenty five twenty seven process to go through that I can't say that that would or would not cover on it all we know is that now we had it's a two hundred we funded seventy nine projects just came back and got him at the hundred ninety three million dollars because that's what the state has established as the state to station right now obviously if ya elect to increase that state to station the cost of the state will go up you will meet the needs of those twenty. Five twenty seven projects is I've I mean I would say yes but I mean are we going to have any left over. Probably a this is really hard to know until we go through that review and know how many projects and what kind of projects are out there okay and if there was any left over that would be turned back to state general revenues and how that would work for a while so hard partnership fund has carried forty forty so once those funds were allocated to the partnership on they would stay there to be used for a future projects okay all right thank you thank you rolled rolls over. All right representative back. Thank you Mr we'll have. Sell. I'm I'm having a little bit of trouble here because it seems like we're saying okay we don't really know how big this thing is we know that probably costs are going to go higher and twenty four twenty five but now which somewhat challenge that to say hopefully we'll get this supply chain straightened out. Maybe in twenty twenty four prices will go back down to where they were well that are lower but. Not so my question is is. When we do this it's a pretty substantial increase. And. We're saying I'd I'm I'm for increasing the funds if they're needed I truly am but it doesn't seem like we know what we need and then you're saying well but what you given to us they're not coming back they're going to be put they're gonna be projected forward shall I have some concern that that how would you address that. Yet the inflation rate in representative backup project your question. You know when we look at cost I'm here and some of the same numbers that the chair and vice chair chair. Shared I know at this time last year at the end of last year and it showed that it won up anywhere from fifteen to thirty percent. And it's continued and you know to climb so to answer your questions best I would say that although we don't. Know exactly. What the need is right now we're projecting but the but the decision before you all today is decide how much you're gonna find per square foot. So for example right now it's at two hundred dollars a square foot. In the school districts have to absorb the rest of that. Because the local district does so depending on how much you all approve the districts will have to have to find the rest of that so. If the cost average appears to be statewide. Three hundred north of three hundred dollars a square foot and that should meet. You know projected need at this time but it's just it's just so hard to detail I will say this that every dollar we get will we'll use efficiently and effectively to help districts in their construction so follow up please. Our so. It seems to me like a good place to start. Would have been the name out I'm sure there are national agencies out there that are saying this is kind of where we're at now and this is what we thank all happened have you guys have we done any of that is that what is up with that is what the thing is what is driving the right what is driving the three hundred thousand so so with the three hundred dollars per square foot so. The question is this all right are we saying that and I'm just going to throw some numbers out here pretty soon discussion so we're gonna increase of let's say fifty dollars per square foot is the calculation that we're looking at saying that okay the cost of increased construction is gonna be fifty dollars a square foot so you guys. You guys speak the legislators you guys the terms so when you throw in an extra fifty dollars a square foot and then we're gonna make everybody right again or is it or is it a case where. Was the cost is going to increase X. percentage immersion we're splitting that somehow or. It I don't know if it. I don't know if inflation's going to go I certainly hope it dropped the inflation rate drops down consider words that that of I'm really concerned about throwing money out there because what's going to happen is contractors. You know. What will use all this three hundred thousand I mean three hundred dollars per square foot that there's no doubt about that but it whatever increase we put in use in my example fifty dollars per square foot we'll need a big store so I have some concern about that unless we have some data that says that this is right well nationally were saying this is what we think will happen and then I'd feel a lot more comfortable using those numbers and also maybe a little bit more and I understand that you guys can't determine exactly how many how many projects to go forward if we did this but But at least the numbers what other states are doing as far as is because the other states must have the same situation that we have. Yes representative back I would I would say the last national data I've seen from that contractors group was they estimated between fifteen and thirty percent. Of an increase in inflation from the previous year and that that came out I believe back in March. So it was it was between fifteen and thirty was closer to thirty percent thirty percent number at the time we were talking with districts in hearing from districts a lot of discussions with them it was it was close to thirty percent increase at that time. Thank one of the option you have been talking about more today is is the three hundred dollars a square foot and that's that's talking about the increased it would be if you raise the cap from two hundred which so. Basically the latest data I've seen is that is around that thirty percent and I've had conversations with districts all over the state and in the last year and that's that's about that's about right. On average others say it fluctuates round state the cost sell the national contractors because I I I like I'm glad you brought that four but you're saying the national contractors organizations is saying that building costs is going to go up fifteen percent annually no Sir they had said that it would one up it won at between fifteen and thirty percent in the previous year so as of December twenty twenty one going back to the December twenty twenty. In that one year they had seen it increase between fifteen and thirty percent and at that time I was talking districts and that was some of the same figures I was singing in the spring was around was around thirty percent in that and that's why we gave you were given several options to look at. So. He. We're we're increasing third we're looking at thirty percent here in the projections are we went up fifteen percent but there's no projections that they didn't making projections for the future or they just said this is what it was type of deal. Yes Sir they were they were looking back I think Yeah. Out of hyper inflation right now and and hopefully that that'll come down but now we do have cost factors that we will get those in December and we have those actual cost factors that we pay a vendor to get in we will get those and that was will be for every region of the state all twelve regions with different sides and classifications of schools and that's what we use. For a cost factors yes Sir all right so I have a question we've been appear brainstorm a little bit but so this really has no effect on how many schools you let building building because that's just how much per square foot is what is the number of money that we set aside for facilities to build with every year. A generator is ninety million dollars then we transferred twenty million from public school for okay four hundred ten million. And that won't change now okay all this will do just allow. More building on a building. To do so is that is selectively we're all we're doing is changing the number for the school but we're not changing the number of schools second build our number buildings have built I mean it yes unless there was a change in the RSA and change in funding there wouldn't be an increase in the funding for unless that's something the General Assembly elected to date based off increasing square footage amount okay so does everybody understand that we do not change the amount that we're spending but they're gonna spend on school projects just amount that the school would be able to apply for a little more more square footage price wise so it's milk still may have a scholar of a partnership part of it or not so. Okay I want to move on to the next one. represent McKenzie stand in S. Meeks awesome so I'm also trying to make sure I understand the program so that I understand what we're talking about so I the the academic facilities partnership program is a program designed to subsidize school districts to estates portion of the funding for facilities are being built yes and that portion is is decided based upon the academic facilities wealth index which is a calculation designed to offset the district's ability to raise its own money. Yes so in this long question of you there so regardless of what it costs in the district to build so let's say Northwest Arkansas cost forty fifty dollars a square foot. After we do the calculations are contributions may be zero for a particular school district because that school districts can raise enough money to build the building on its own thank you Sir is a minimum calculation that per square foot I don't know what that is if any then it and it also I guess to me it I'm going to go way deeper than a step on but it depends on the type of project to because different wealth index I mean a different cost analysis for each project you're just replacing firearms as opposed sexually whether a project in a particular part of Arkansas cost more or less per square foot to build that really is factored out through the that there's we try to factor that out to the wealth that's what the programs to do correct our whatever we set this at this the total different questions whatever we set this at I'm assuming that's not set in stone I mean I'm assuming that if we set this today at three hundred three hundred square foot and we get in the fiscal year twenty four twenty five and we're as a state in fiscal distress we've got an opportunity to pull this back this is not a once and forever decision that I'm good with whatever it was I would. Up to the do you put it into legislation or change change recommendation because then we need to know what we're going to be telling schools they can apply for so we don't need to once we see if you and we're not and none of these are our recommendations that's just what but the cost of what we encounter but if you go out and say we're going to do that and try to pull it back it would make it harder on the districts to already plan on trying to partnership program trying to analysis now lies figure out how much cost they need. Rosa makes. Okay so I wanna make sure I'm getting my head wrapped around this. So we sat so in this case two hundred eighty nine million dollars if we go with this fourth option two hundred eighty nine million dollars what the state's gonna put in yall then say to the school district. Based upon this formula we can help provide up to three hundred dollars per square foot. On the cost of whatever that is. And and then Fund accordingly. So we're not necessarily this body. Is there some sort of law that or some sort of policy decision that we have to make that such that three hundred dollar threshold. So in other words we keep the finding the same M. move the threshold of the three hundred dollars a square foot words can be helping fewer people. So do we set that three hundred dollar per square foot threshold. Because there's not a formula that says or there's nothing in law that says as a state we're gonna help fund ten thousand square feet so ten thousand square feet we're gonna move this up to thirty or three hundred so we need X. amount of dollars where we actually have two different numbers were working with your from understanding correctly we're setting a total amount and then we're setting a square foot amount that we're going to allow the schools are those two separate numbers that were due to separate okay because the project is I'd like this early look at northwest Arkansas four hundred but they probably wouldn't get the three hundred dollars based off the well today so you've got you had to have two different numbers looking okay and so do we do we set that three hundred dollar yes so so we set that maximum number so we could set the three hundred and leave the funding flapped yes if we want to okay if you if that's that that's the will of the General Assembly answer okay so I just wanna make sure everyone understands what we're doing here so it's not. One affecting the other we got to independent numbers were actually two different in reality we have to decisions we need to make care not just walk. We need to set a total funding amount and we need to set a score total funding that you would be able to set because that's going to depend on local factors what they're doing that that that area what you what the General Assembly has the ability to set how much the state participation in that projects going to be and how much fun a general revenue funding you're going to associate with that all that costs that three dollars per square today we're just sitting that's where we're just sending this to the square footage cost but later what level but later will set the the actual dollar numbers to go with that square footage. Yes yes if I'm understanding you correctly so if your recommendation is to to increase it to two twenty five to fifty whatever you all decide on that then we go to the budget process go through a LC and you shall have our budget on the night the the appropriation and the funding will be reviewed and budget at that time so if you wanted to increase both you could if you only know if you want to increase the status based on the two hundred twenty five two hundred fifty whatever that is and then leave the funding in a L. C. the same then you could that is something the general so we can do if I understand it that's right right yeah and that's kind of the question I'm I'm getting at that the two are not tied to each other so it's not like we created three hundred correct we're gonna multiplier and suddenly we get X. amount of number out here it's just or setting that the the three hundred recommendation and then the budget committee will decide how much they want to fund our double how much they want to go on the partnership fund that three hundred dollars if we go through dollars per square foot correct okay so I I just wanna make sure with everyone's got a handle on what's what's what's going on here. Represent all Mister chair I'd like to make a motion to your motion I would like for us to move the square footage from two hundred to two seventy five which would make it an option five instead of option five I think I ask for that we just to get us all right. I probably have it somewhere it's all right we we can we can figure the number out on that okay so the they're gonna motion made to make that to seventy five instead of three hundred or two fifty kind of move in the middle of that are there any questions on the motion. I know your question but I will read your talk so. Any questions on the motion. Seeing none. All in favor say aye. Any opposed no. All right. Next item. We're gonna set the rate for the contribution of the Division of elementary secondary education to E. B. D. for public schools employee health insurance at a hundred and forty seven million two hundred fifty four thousand in FY twenty four and a hundred fifty two million seven hundred and two thousand three hundred and ninety eight dollars and FY twenty five to reflect the Siegel recommendations of adjusting by the medical CPI. That is to move the contribution rate for the schools. Any questions before we go any. If not I need a motion. I have a motion any discussion on the motion seeing none all in favor say aye. Any oppose. Seeing none. Last thing on the agenda that I have set the rate of contribution for the school district participated employee B. D. for public schools employee health insurance at three six six seven Celeste read thousand six hundred sixty seven dollars for FY twenty four and three thousand eight oh two for FY twenty five reflecting the single recommendations of the medical CPI. Any questions. The motion. The motion any questions on the motion saying none all in favor say aye. He opposed. That is all I have today. Anything else Megan will recognize you. Yes thank you thank you Mr just kinda procedurally I know that this is just the House Committee is is the Senate planning on meeting to do the same recommendations are these just going to be in the house of mold I put their recommendations out and we did ours okay thank you thank you all right seeing no more questions thank you all for coming we are adjourned.