John Hoeven: Governor of North Dakota

North Dakota Commission on Education Improvement

Commission Meeting Minutes
July 6, 2006
Minot High School Library, Minot, North Dakota

The sixth meeting of the North Dakota Commission on Education Improvement was called to order at 9 a.m. by the commission's chair, Lt. Gov. Jack Dalrymple.

Commission members in attendance included Lt. Gov. Jack Dalrymple, Warren Larson, Jack Maus, Martin Schock, Jon Martinson, Mark Lemer, Doug Johnson, Paul Stremick, Sen. Tim Flakoll, Wayne Sanstead, Sen. David O'Connell, Rep. Rae Ann Kelsch and Rep. David Monson. Nancy Sand with the North Dakota Education Association attended as a designee for Joe Westby.

Commission members presented and discussed various changes to the minutes from the June 8 commission meeting in Bismarck. Mark Lemer made a motion to approve the minutes as amended and Rep. David Monson seconded the motion. The June minutes were approved as amended.

Lt. Gov. Jack Dalrymple outlined a plan for rolling out the draft report at the August 9 commission meeting in Devils Lake. Dalrymple suggested that small drafting groups be created to work on the report during the month of July. Each subcommittee facilitator would take the lead on submitting recommendations resulting from the work of their respective subcommittees. Dalrymple reported that he had met with the attorney general's office and legislative leadership to discuss possible statute changes that might result from the commission's recommendations. Anita Thomas with Legislative Council is currently working on developing a draft of the bill.

Lt. Gov. Dalrymple suggested a format for the report narratives that would include four key areas:

1. Background
2. Principles for change
3. Recommendations
4. Legislation required

Rep. David Monson suggested that commission members begin thinking about possible sponsors for the bills. Sen. Tim Flakoll added that the subcommittees should include Anita Thomas in their discussions so that she is aware of all the material that will be included with the purpose of keeping the final draft succinct and free of repetition. Anita Thomas added that she would like the formula articulated to her in concise terms and she would then incorporate the legal information to meet legislative requirements. Lt. Gov. Dalrymple and Joe Morrissette with the Office of Management and Budget will work on that.

No additional commission business was brought forward.

Bob Rutten, director of special education for the Department of Public Instruction (DPI), provided the commission with an overview of the state's current special education funding program and background information on a report commissioned by DPI that outlines the state's current program and provides recommendations for enhancement.

Warren Larson presented the five specific recommendations involving special education funding that were presented in the consultants' report:

1. Bring the state's special education funding to adequate levels of provision.
2. Combine increased ADM special education monies with the General Fund allocation.
3. Convert the current special education high cost risk pool to an overall education high cost risk pool.
4. Form an audit team to review all contract claims, both agency-placed and high-cost contracts.
5. Over time, regionalized education service provision (e.g. through Joint Powers Agreements) should be fostered for a broad array of educational services that might be made more cost-effective through regional provisions.

Larson reported that overall, the special education subcommittee members agreed that some of the recommendations outlined in the report could possibly be included in the commission's funding proposal and that they would work with the main formula subcommittee to discuss in more detail the consultants' recommendations.

Regarding the ADM distribution side of special education funding, Lt. Gov. Dalrymple brought forth for discussion whether or not the distribution should be calculated by ADM or weighted analysis based on a tiered approach of mild, moderate and severe. Paul Stremick presented a report that showed little or no variation between the two distribution methods. Based on that finding, it was suggested that the state use the easier of the two methods to reduce reporting and paperwork at the local and state level. Sen. Tim Flakoll added that similar legislation has been defeated in the past, so history shows that legislators do not approve of a tiered system.

Regarding the contract side of special education funding, the DPI report suggests that the state fully fund the highest 1 percent of students requiring special education and then fund others from there as monies are available. With this approach, funding is not being reduced, only repositioned. Recommendations outlined in the report do not impact contracts for agency-placed students, only school-placed students. The report suggests raising the threshold to fully fund the highest 1 percent of contracts.

Lt. Gov. Dalrymple said the current legislative commitment for special education contracts totals $15.5 million per biennium, and by focusing dollars on the excess costs incurred by districts, the added cost to the state is manageable. He added that the consultants' recommendation for contract funding is acceptable for achieving more equity, and additional focus can be placed on the ADM distribution side of the funding allocation to help address adequacy.

Tom Decker and Girish Budhwar with DPI presented for discussion purposes a special education funding plan for agency-placed students that goes beyond the DPI study. Mark Lemer commented that in agency-placed situations, the courts determine where students will be placed; the schools do not. With the plan proposed by Decker and Budhwar, there is a disconnect over who is paying the bill and who is making the decision. In this scenario, schools would pay more, but have no input.

Warren Larson updated the commission on the progress of his subcommittee regarding English language learners. At the subcommittee meeting in June, members reviewed section 15.1-27-12 of the Century Code regarding the current funding process for ELL and suggested that the current process could be incorporated into the main formula with some options for improvement or modifications.

Dan Rood, Jr., director of the Southeast Region Career and Technical Education Center, provided a status report on that center's efforts to regionalize career and technical education services and programs.

Lt. Gov. Dalrymple presented a CTE program discussion paper that would appropriate $9 million to the state's current CTE program with no changes and appropriate an additional $3 million to be distributed to all school districts on the basis of ADM and require that the funds be used to contract with an educational association under a Joint Powers Agreement (JPA) to provide CTE services. His proposal also recommended that each biennium $3 million in funding would be shifted from the current program to a regional JPA-administered program.

Martin Schock suggested a pilot program in southwestern North Dakota with at least 12 schools participating. Wayne Kutzer, director of the Department of Career and Technical Education, added that the Lt. Governor's proposal could impact existing CTE centers if funds go through an ADM program. Lt. Gov. Dalrymple suggested that the existing centers would more than likely receive the contracts since they are experienced and better prepared.

Rep. Rae Ann Kelsch asked whether JPAs can keep up with the increase in services and programs. Are JPAs the best venue? She expressed her concern that CTE could get lost within JPA responsibilities. Lt. Gov. Dalrymple responded that JPAs have to be ready to absorb the additional responsibilities and that CTE could be incorporated in the short term, but special education services would need to be phased in over time.

Commission members discussed various funding options for CTE services and programs, including seed money for a pilot program in the western part of the state. Concerns were raised about shifting money from centers in the east to fund the development of centers in the west and about providing funding to schools to develop programs instead of funding existing programs. Paul Stremick suggested an option where a portion of the funding would be allocated in the first year of the biennium for program development and a larger portion of the funding would be applied the second year to fund the actual programs. He offered that Dickinson is interested in becoming a CTE center for southwestern North Dakota.

Rep. David Monson suggested developing a plan for a pilot program that could be operated through the JPAs. He added that those schools that are behind in offering CTE services and programs would receive a larger portion of the funding to reach equity with other schools, and once the gaps have been addressed, an ADM system could be implemented for distributing funds.

Rep. Rae Ann Kelsch asked about federal funding and whether or not those monies could potentially be lost if CTE is integrated with JPAs. Currently, the federal government provides $9.5 million per biennium to North Dakota for CTE and those dollars could be jeopardized if not maintained for such programs. The funding could possibly be distributed to a JPA, but would have to be earmarked for CTE programs. Further research will need to be conducted to ensure a pass through will be viable without jeopardizing federal funding. Warren Larson suggested researching what other states are doing with CTE and JPAs so North Dakota doesn't have to reinvent the wheel.

Minot Public Schools Superintendent David Looysen provided commission members with a tour of Minot High School's new Career and Technical Center, which when completed, will provide CTE programs to school districts in the region, including Rugby, Williston, Crosby and Bottineau.

The commission broke for lunch at 12:10 p.m. and reconvened at 1:20 p.m.

Lt. Gov. Dalrymple presented for discussion terminology options for the new formulas. Commission members agreed on the following terminology:

Mark Lemer provided an update on his subcommittee's progress in developing the main formula and the equity payment plan, and reiterated their proposed framework for the new funding formula. Commission members discussed caps on funding for summer school programs, a more effective definition of at-risk students, and the possibility of using categorical weighting factors as place holders for future funding. Lt. Gov. Dalrymple suggested that the commission's report may include some factors as "0" and narrate that the state is not funding them in the short term, but could in the long term. However, any bonafide recommendation should include suggested weighting factors and funding.

Sen. Tim Flakoll suggested that instead of considering school size, we could look at student to teacher ratios and possibly apply a weighting factor to that ratio. The state would determine a preferred class size and schools would receive a factor depending on whether they were over or under the preferred size.

At 2:30 p.m., several members of the public, as well as representatives from school districts and interested organizations provided comments during a public input period.

Jon Martinson reported that the subcommittee reviewing JPAs, capital construction and transportation did not meet in June, and that its members would provide recommendations to be included in the funding draft proposal. A majority of the subcommittee members support funding JPAs at $3 million and would be willing to discuss how some of that funding might be available to cover administrative costs, with most of it allocated to actual programs.

Lt. Gov. Dalrymple offered that the funding could support half an FTE for administering JPAs, but not a full FTE. Jack Maus suggested that there would need to be someone at the state level overseeing all JPAs. Wayne Sanstead suggested that DPI could assume that management role.

Commission members discussed the possibility of combining special education units with JPAs and Lt. Gov. Dalrymple suggested that the units be reduced from 31 to 18 by 2009. Can the state move from 31 special education units to 9 within a few years? Concerns were raised regarding whether or not funding should be provided for planning and administration, and whether it would be more effective to have the local JPA leadership provide the state with ideas about how to consolidate governance of various education programs. It was discussed that an additional $1 million be allocated for funding JPAs to achieve more equity for school districts.

Lt. Gov. Dalrymple reviewed the capital improvement assistance program again with commission members and it was agreed that the needs based and "Schools for the Future" vision incentive programs should move forward and be included in the draft proposal. Sen. Tim Flakoll suggested that the eligible project costs should include architectural and engineering fees.

Regarding recommendations for special education funding, Sen. Tim Flakoll said that special education costs are increasing faster than the state is funding and the commission has to recommend at least as much as last biennium. Rep. David Monson added that he didn't feel the commission needed to tackle the issues of agency-placed student contracts and that perhaps some legislation would be necessary to bring the respective agencies together to provide schools with more input regarding costs. Lt. Gov. Dalrymple said he would check with the Department of Human Services to see if they could offer any recommendations. The Lt. Governor asked what amount of increase in special education funding might be achievable and the figure of $4 million was suggested.

Regarding CTE funding, Rep. David Monson suggested allocating $12 million - $2 million of new money on top of the $10 million the Legislature allocated for CTE services last biennium. He also suggested the development of at least one pilot project in western North Dakota at a cost of $800,000, and that the project operates through the Department of Career and Technical Education, but also with JPA involvement in some way. Sen. David O'Connell suggested that a second pilot project may be needed if Minot is able to expand participation in its new Career and Technical Education Center.

A preliminary budget proposal was discussed for the additional $60 million proposed by Governor John Hoeven:

$28 million - per student payments
$32 million - equity payments and other adjustments ($27 million net of current supplemental payments)
$1 million - special education excess costs
$1 million - JPAs
$2 million - CTE
$1 million - other

Total: $60 million net

The commission's next meeting will be held August 9 at 9 a.m. in the Devils Lake High School Library, 1601 College Drive North in Devils Lake.

The meeting was adjourned by Lt. Gov. Dalrymple at 4 p.m.

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