Peninsula administrators question method

The Kenai Peninsula Borough School District is one of few districts across the state that stands to benefit from a new geographic education cost study presented to the Legislature on Wednesday.

But even administrators in the district aren't sure what to think of the study.

"I'm doing a final analysis in order to make a recommendation to the (school) board," the district's chief financial officer Melody Douglas said Thursday.

But, she added, "I'm very concerned about the methodology."

Douglas was one of a handful of school district representatives from around the state who had input on the study while it was being conducted last year by the American Institutes for Research. But even she didn't have a say in the manner in which the study was conducted.

Douglas first heard the complete summary of the methodology of the study Wednesday afternoon, when AIR researcher Jay Chambers formally presented the study to members of the House and Senate Health, Education and Social Services committees and the House Special Committee on Education.

The study reevaluates the state's geographic cost of education index (GCEI), also known as the area cost differential, which is used to account for the fact that school district operations cost different amounts in various regions of the state. The index determines the division of about 10 percent of all state education funding between districts.

Kenai Peninsula educators have long held that their district is shortchanged by the current index, which they say does not account for the rural-urban mix of the peninsula. Borough schools currently are funded at a 1.004 area cost differential, meaning the state assumes it is about 0.4 percent more expensive to do business on the peninsula than in Anchorage.

The new study, which analyzed four different cost factors -- personnel, energy, goods and travel -- to create a revised index, recommends the district be listed at a 1.03 index value. (See related story, page A-1.) Administrators have said the new study would increase the district's state funding by about $1.3 million to $1.4 million a year.

Even so, Douglas said she is not sure the numbers are accurate. She said she saw potential flaws in the research methodology for three of the four factors studied.

The first problem she noted was in research for the personnel portion of the study. The study used average salaries for people working in the Kenai Peninsula Borough to determine the index for personnel costs. The problem, Douglas said, was that many people living on the peninsula work elsewhere.

"The way the formula was devised, we're not getting credit from a salary standpoint," she said.

She added that the study does not factor in people who are unemployed or work only part-time.

"So that element is problematic," she said.

The energy portion of the study also raised suspicions, she said.

The researchers used prototypes based on Anchorage buildings to determine energy costs throughout the state. However, Douglas said, the study did not adjust those prototypes based on the size of schools in different regions.

Douglas also said the travel portion of the study may have included pupil transportation numbers, which would inflate the data.

"I'm suspecting problems in three of the four areas, and they're the three I consider major components," she said. "I have concerns, and I suspect I'm not alone."

Legislators who heard the presentation Wednesday echoed many of Douglas' concerns in questions to Chambers, though few of the questions were answered.

Overall, Douglas said, correcting the problems she noted would likely increase the Kenai Peninsula's index value, and therefore, state funding.

But the fact that the peninsula might be shortchanged in the study's formula isn't her only concern, she said.

"If the idea is to hold funding status quo, then if you increase funding for the Kenai Peninsula, the rest (of the districts' funding) goes down," she said. "That's problematic for the rest of the state."

It is crucially important for the state to correct inadequacies in the formula, Douglas said.

But, she added, "I'm interested in seeing it addressed in an appropriate way based on accurate information."