Education Roundtable Discussion on the Challenges of Providing Education to Students with Special Needs

1 BEFORE THE NEW YORK STATE SENATE

STANDING COMMITTEE ON EDUCATION 2 -------------------------------------------------- 3 EDUCATION ROUNDTABLE 4 DISCUSSION ON THE CHALLENGES OF

PROVIDING EDUCATION TO STUDENTS WITH SPECIAL NEEDS 5

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Senate Capitol Building 7 172 State Street, Room 124 Cap.

Albany, New York 12247 8

October 12, 2011 9 10:00 a.m. to 3:00 p.m. 10 11 PRESIDING: 12 Senator John J. Flanagan

Chair 13 14 15 SENATE COMMITTEE MEMBERS PRESENT: 16 Senator Kenneth P. LaValle 17 Senator Carl L. Marcellino 18 19 ALSO IN ATTENDANCE: 20 Molly Breslin

Senator Flanagan's Office 21 22 23 24 25 1 ROUNDTABLE PARTICIPANTS: 2 Douglas Bailey

Coalition of 853 Schools 3

Ellen Bergman 4 Superintendent

Mt. Pleasant Blythedale, Coalition of Special Act 5 School Districts 6 Jim DeLorenzo

Statewide Coordinator for Special Education 7 New York State Education Department 8 Ed Durivage

Division of Budget 9 New York State 10 Heather Evans

Hinman Straub 11 School District of Special Acts 12 Valerie Grey

Senior Deputy Commissioner 13 New York State Education Department 14 J. Brad Herman

George Junior Republic Union Free District, 15 a Special Act School 16 Mary Kogelmann

Director of Fiscal Services 17 New York State Education Department 18 Richard Lasky

Coalition of 853 Schools 19

Lee Lounsbury 20 Associate Director

The Council of Family and Child Caring Agencies; 21 and the Coalition of 853 Schools 22 Pam Maderios

Greenberg Traurig 23 853 Freestanding Day Schools 24 Jessica Morelli

New York State Association of Counties 25 1 ROUNDTABLE PARTICIPANTS: 2 Raymond Schimmer

Vice President of the Coalition of 853 Schools; 3 and Executive Director of Parson Child and

Family Center, Albany, NY 4

Mark Silverstein 5 Superintendent of Schools

Hawthorne Cedar Knolls Union Free School District; 6 and Coalition of Special Act School Districts 7 William Wolff

Executive Director of LaSalle School; and 8 President of the Coalition of 853 Schools 9 David Wakelyn

Deputy Secretary for Education 10 Governor's Office 11 12 ---oOo--- 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 SENATOR FLANAGAN: I want to thank everyone 3 for coming, and I want to go through a couple of 4 different things. 5 If I -- I'll say it at least a couple of 6 times: I really appreciate everybody taking the 7 time of being here. 8 A couple of basic things, since I did this 9 almost right away: I would steer clear of walking 10 anywhere right in middle here. You can, not only 11 trip up the mics, but, trip. 12 So, that's number one. 13 Number two: Just so everyone's aware, we 14 have fashioned this to be a, quote/unquote, 15 legislative roundtable, and you'll have to use your 16 imagination. I know it's not particularly round, 17 but the gist is the same. 18 The idea was, not to really have a hearing, 19 not to have something more along those lines. 20 We are recording this, not to send it out to 21 people, but, rather, to just give everyone a copy. 22 So, when we're done, everyone can just have a -- 23 obviously, a complete summary of things that were 24 discussed. 25 And, what I would like to do, very quickly, 1 and I'm going to put Tim on the spot, to start, I 2 would like everyone to quickly introduce themselves, 3 and then we can try and get started. 4 Tim? 5 And, this includes everyone who is seated 6 away from the table. 7 (Back-row participants introduce 8 themselves.) 9 SENATOR FLANAGAN: Pam, why don't we start 10 with you. 11 PAMELA MADERIOS: Pam Maderios, with 12 Greenberg Traurig. 13 I'm with the 853 Freestanding Day Schools. 14 HEATHER EVANS: Heather Evans, Hinman Straub, 15 with the School District of Special Acts. 16 J. BRAD HERMAN: Brad Herman, George Junior 17 Republic Union Free District, a Special Act. 18 ED DURIVAGE: Hi, I'm Ed Durivage, from the 19 Division of Budget. 20 MOLLY BRESLIN: I'm Molly Breslin, from 21 Senator Flanagan's office. 22 SENATOR LaVALLE: Ken LaValle, Committee 23 members. 24 SENATOR MARCELLINO: Senator Marcellino, 25 Committee member. 1 VALERIE GREY: Good morning. Val Grey, 2 executive deputy commissioner at SED. 3 MARY KOGELMANN: Mary Kogelmann, director of 4 fiscal services, State Education Department. 5 JAMES DeLORENZO: Jim DeLorenzo. I'm the 6 state coordinator for special education for the 7 State Education Department. 8 ELLEN BERGMAN: Ellen Bergman. I'm from 9 Mt. Pleasant Blythedale. We're a Special Act 10 District. 11 MARK SILVERSTEIN: Mark Silverstein, 12 Superintendent of Schools, Hawthorne Cedar Knolls 13 Union Free School District, a Special Act School 14 District; and, president of the Special Act 15 Coalition. 16 BILL WOLFF: I'm Bill Wolff, the executive 17 director of LaSalle School; and, President of the 18 Coalition of 853 Schools. 19 RICHARD LASKY: I'm Dick Lasky, affiliated 20 with the 853 CAFCA Coalition. 21 DOUG BAILEY: And, I'm Doug Bailey, 22 affiliated with the 853 Coalition as well. 23 LEE LOUNSBURY: And, I'm Lee Lounsbury, from 24 the 853 Coalition; and, The Council of Family and 25 Child Caring Agencies. "CAFCA." 1 SENATOR FLANAGAN: Okay, great. 2 Let me start by thanking my colleagues: 3 Senator LaValle, who obviously is Chair of the 4 Higher Education Committee; and, Senator Marcellino, 5 who chairs the Investigations Committee, in the 6 Senate. 7 My colleague is deeply immersed in SAT issues 8 right now, gearing up for them. 9 Senator Marcellino has been doing yeoman-like 10 work with the MTA and the Long Island Railroad, and 11 LIPA, and issues like that. 12 So, I do appreciate the fact that everyone is 13 here. 14 And, again, let me -- I would respectfully 15 ask, if you are going to speak, just so everyone 16 else can hear you, because it was a little difficult 17 for me to hear everyone's name. 18 So, if you could just try and speak into the 19 mic, and speak up, that would, frankly, help 20 everybody out. 21 And, the point of this is, let me put it this 22 way: Imitation is the highest form of flattery. 23 Senator LaValle had done a legislative 24 roundtable earlier in the year on higher-education 25 issues. And, my only failure was, that I was unable 1 to attend his meeting, but the feedback from it was 2 very positive, because it was a candid, sort of that 3 I describe it, adult discussion about issues 4 involving higher ed, and the feedback was very good, 5 including from our staff. 6 What I would hope that we could accomplish, 7 is having a legitimate, detailed, frank discussion 8 about some of the issues affecting the financing 9 and the education of children in the types of 10 schools that we're talking about. 11 This is not meant to be adversarial in any 12 way, shape, or form. This is, hopefully, to foster 13 a dialogue. 14 And, I -- I gave this description yesterday 15 to some of the folks I work with, and, for the 16 attorneys in the room, this will have some 17 applicability. 18 When you go to law school, one of the things 19 you study, and you try and study, is the rule 20 against perpetuities. 21 And "rule against perpetuities" is a part of 22 the law, that, there's -- if there's 5 million 23 lawyers in the world, there's only about 5 or 24 6 lawyers who actually understand it. 25 And, I remember, taking the bar exam, and 1 they tell you: It's never on the exam. Never, 2 ever, ever on the exam. 3 And in the unlikely instance that it is, it's 4 only on the multiple-choice part. 5 I took the bar exam. And, I remember sitting 6 there, taking the bar exam, saying: This is -- it 7 was an essay. 8 It was one of six essays, and it was on the 9 rule against perpetuities. 10 And I'm thinking: It can't be. Everyone 11 said, it's never, ever, ever, ever on this exam. 12 P.S. I came out of the exam, and didn't know 13 if I passed, or not. But, fortunately, I did pass. 14 And, when one of my colleagues acknowledged 15 that on the Assembly floor a couple of months 16 later, former Assemblyman John Dearie came up to me, 17 and said: That's great, I'm so happy for you. And, 18 congratulations, you passed the bar first try. 19 He goes: You know, my guy in my office, he 20 got totally tripped on that -- up on that 21 "rule against perpetuities" question. 22 So, I learned, that it can be on there. But, 23 my real point is, that, these types of issues, I 24 think, are far more complicated, and technical, and 25 emotional in some ways, and very sensitive. 1 So, I don't want to sit here -- and I don't 2 want to speak for either of my colleagues. 3 I'm not going sit here and tell you that I am 4 intensely knowledgeable about how all this works. 5 Frankly, we want to hear what you have to say. 6 And, I'm not really sure I met anybody who 7 says that it's working really well. And, that's not 8 a value judgment, it's not a criticism of anybody. 9 I think you have various parties. Obviously, 10 you have legislators, you have the Executive. 11 David Wakelyn will be coming down later, but, 12 he's obviously the Governor's deputy secretary for 13 Education. 14 You have a role -- a critical role played by 15 SED, DOB, and, obviously, the people who are 16 delivering the services, which is what we're trying 17 to focus on. 18 So, I would just reiterate that the idea is: 19 How do we have some discussions about: What works 20 well? What doesn't? What are some of the ideas? 21 And, I would close on this point: Initially, 22 I would hope that if anyone has a particular 23 criticism, that it is joined by some solution that 24 you think might be helpful. 25 Whether it's in a regulatory capacity; I 1 think, if we come out of here and the only thing we 2 hear is, "That we need more money," then I won't 3 think that we're being as productive as we can. 4 So, I spoke to Val. 5 And, Val, I really appreciate you and your 6 colleagues joining us. 7 Could you start by sort of generally 8 describing the process; the rate-setting process. 9 And, can you include some, like, timeline 10 aspects, because, you know, one of -- in, 11 certainly, some of my initial review, it seems 12 like there are timing questions: When can you 13 appeal? And, how does it -- how is it supposed to 14 work, from your perspective? 15 VALERIE GREY: Well, Mary Kogelmann is the 16 expert in this area; so, maybe I'll just do a high 17 level, and then she can get into the timelines. 18 I think, from the outset, I think it's fair 19 to say that, oftentimes, the process takes far 20 too long, but, there are lots of different reasons 21 for that. 22 You know, there is -- I don't want to go into 23 detail about how the rates are constructed, since 24 I know the providers are here, and all the details 25 are in this reimbursable cost manual, but, 1 essentially, the way it's supposed to work is: 2 The providers report their costs. There 3 are limits on how much of those costs can be 4 administrative versus programmatic; 5 There are things that are allowable, and 6 things that aren't allowable. And, you go through 7 all of this, and you come up with what's left. 8 But, then, the "what's left" is limited by -- 9 what is it called? -- "allowable growth," which, for 10 the last three years has been zero percent, due to 11 the budget crisis. 12 So, it's almost like we -- and I think Mary 13 might disagree with me a little bit -- but I almost 14 feel like we have this whole tuition rate-setting 15 process, but it really hasn't changed anybody's 16 rates for three years, because, it's basically 17 been frozen. 18 I think that the way that the system works 19 now, I think that it's not very responsive, it's not 20 very flexible, in terms of enrollment changes. 21 And, that's an area we would like to look at. 22 I think that the process itself is 23 labor-intensive for everybody involved. 24 So, to the extent that we could, simplify it, 25 or remove some steps, I think that we would be 1 supportive of that. 2 That was really the big picture, but, Mary, 3 what are some of those crucial details, 4 particularly in terms of timeline, that I left out? 5 MARY KOGELMANN: Okay, well, the whole 6 process starts, every year, on April 15th. 7 SED is required to submit a rate-setting 8 methodology for the upcoming year -- upcoming school 9 year, which begins July 1, to Division of the 10 Budget. 11 And, within that, we recommend the growth -- 12 what the growth should be for the next year. And 13 that -- like I said, that's due, according to 14 Section 445 of the Education Law, that's due on 15 April 15th. The Division of the Budget has 16 45 days to respond to that, and make a 17 determination. 18 And once that -- and as Val said, for '9-'10, 19 '10-'11, to '11-'12, the growth rate has been zero. 20 And we notify the providers from them, that, what 21 the growth rate is. 22 And, for the, '11-'12 year -- so, for each 23 year, there is a prospective rate, and there's a 24 reconciliation rate. 25 So, for '11-'12, we'll have the prospective 1 rates, and that's what the growth would apply to. 2 So, again, for '11-'12, it was zero. 3 We -- the '11-'12 prospective rates; all 4 the prospective rates are built on actual costs from 5 two years prior. So, those are based on the 6 '9-'10 reconciliation rates. 7 And, so, once the growth rate is set, we go 8 ahead and determine what the rate should be, submit 9 them to DOB for approval, and then get them back out 10 to the providers and schools so that they can start 11 using them to bill. 12 That's it in a nutshell. 13 VALERIE GREY: It's probably, also -- it 14 might also be helpful to talk about, how, you know, 15 the schools and the counties do pay these rates in 16 the first instance. There's reimbursement. 17 I think the preschool is, what, 59 percent 18 for the county. 19 MARY KOGELMANN: 59 1/2 percent, the state 20 reimburses. 21 VALERIE GREY: And, then, on the school side, 22 I think that it deals -- it's excess -- 23 JAMES DeLORENZO: Private excess costs. 24 VALERIE GREY: -- private excess costs. And 25 the reimbursement percentages vary, based on the 1 school's wealth. 2 And, so, I just thought it was also important 3 to move it to, who ultimately pays, how that gets 4 reimbursed, you know, because it's all part of the 5 mix. 6 SENATOR MARCELLINO: How do you determine the 7 wealth? Use the wealth-factor index? 8 VALERIE GREY: Right, the wealth factor. 9 SENATOR MARCELLINO: There's no consideration 10 as to the number of children on reduced and free 11 lunch in a particular building that might have a 12 high wealth factor, like the small city that I 13 represent, which has a high wealth factor, but has 14 about 45 percent of the kids on reduced and free 15 lunch? 16 MARY KOGELMANN: I'm not a State Aid expert, 17 so... 18 SENATOR MARCELLINO: Well, that's what I'm 19 saying, is, the wealth factor is not indicative of, 20 necessarily, the wealth of the district itself. 21 VALERIE GREY: Yeah, I don't have my 22 school-aid person here, but we can look into that 23 more. 24 My understanding is, it's a fairly 25 straightforward, mostly wealth factor. But, that's 1 all contained within the statutes that get passed 2 each year. 3 So, I'll bring -- I'll get back to you. 4 SENATOR FLANAGAN: Mary, can I ask you a 5 couple of things? 6 You said that, by 445, the end law, you have 7 to set the rates by April 15th? 8 MARY KOGELMANN: No, no. We recommend the 9 methodology to the Division of the Budget by 10 April 15th. 11 So, we have to say, for example, for the 12 upcoming school year, which begins July 1, what we 13 think the growth factor should be. 14 That's one of the things we recommend to DOB, 15 and then, DOB has 45 days to get back to us. 16 SENATOR FLANAGAN: All right, so, your 17 obligation, by April 15th, you have to report to DOB 18 on what you think should happen? 19 MARY KOGELMANN: Correct. 20 I mean, we have -- we use certain CPI cost 21 indexes, and labor -- Department of Labor 22 statistics, to say, okay, so, we use those to 23 determine what we think the growth factor should be. 24 SENATOR FLANAGAN: Okay, DOB has 45 days to 25 then set the rate? 1 MARY KOGELMANN: 45 days to say: Okay, this 2 is what we -- you know, we think the growth; we 3 approve it. Or, we think it should be zero growth. 4 Or, we think -- we agree with, you know, whatever 5 they think the growth rate should be, they approve 6 it, they let us know what it should be for the 7 upcoming school year. 8 SENATOR FLANAGAN: And that's by June 1st? 9 MARY KOGELMANN: Yeah, 45 days. 10 Yeah, so, it would be around June 1st. 11 SENATOR FLANAGAN: Okay, are those 12 deadlines June -- 13 VALERIE GREY: No, no. Wait -- yeah, 14 June 1st. 15 SENATOR FLANAGAN: Are those deadlines 16 generally met? 17 VALERIE GREY: I think that there's sometimes 18 been delays. And, when there have been delays, 19 we have set interim rates, so that the -- there is 20 some rate in place as the final rate gets sorted 21 out. 22 SENATOR FLANAGAN: Okay, if -- 23 VALERIE GREY: So, to frankly answer your 24 question: No, there's often delays. But, we try 25 to ensure that there's some continuity, in terms of 1 what rates get paid. 2 SENATOR FLANAGAN: All right, so, if you -- 3 you make a recommendation by April 15th. DOB is 4 supposed to respond to that, at least on paper, by 5 June 1st. 6 VALERIE GREY: Uh-huh. 7 SENATOR FLANAGAN: Okay. 8 If there are delays, does it stem more 9 often from, State Ed not getting it to DOB, or is it 10 DOB sitting on it? 11 You know, what? That's -- I don't want to 12 characterize it that way. 13 -- DOB not responding by that date? 14 VALERIE GREY: I believe that SED has 15 submitted proposals by April 15th of each year. 16 SENATOR FLANAGAN: Okay. And, then, that -- 17 that's a combination of the prospective rate and the 18 reconciliation rate? 19 MARY KOGELMANN: No, no. We -- it's, just, 20 that's what the growth would be for the prospective 21 rate for the upcoming school year. 22 SENATOR FLANAGAN: All right, in your -- 23 And, Ed, feel free to jump in on any of this. 24 -- but, if I were to just jump out and say to 25 the schools, "Okay, you have a growth rate of 1 zero percent on the last three years," what would 2 you expect the response would be; that, you know, 3 that is, 15 percent below what our real costs are? 4 You -- is there a respective haggling back 5 and forth on what those rates are? 6 MARY KOGELMANN: Once it's -- it's the 7 zero -- once the growth rate is set, then that's 8 what it is. 9 So, if there are costs -- providers have 10 costs that are going up, they have to reduce other 11 costs so that their overall costs stay the same. 12 That's what happens with zero growth. 13 VALERIE GREY: I think, at one point, and I 14 think it might have been earlier this year, when we 15 went back and took a look at what the rates have 16 been, versus what they could have been, based on 17 reasonable COLAs, or the formula running through, 18 I think it was a 60-million difference. 19 But, again, that sort of comparing to -- 20 that's sort of similar to, you know, school aid 21 would have grown at X, but instead, it's Y. 22 So, it's -- it's not exactly a, what is the 23 difference between cost and what rates are paid, 24 but, it just gives you some sense of magnitude. 25 SENATOR FLANAGAN: So, the 60 million is sort 1 of a macro view of, what, I guess the schools 2 would say? 3 VALERIE GREY: I'm not sure what the 4 schools would say. 5 That -- that was -- if you took a look at the 6 last several years, if there had been some sort of 7 COLA in the system, it probably would have driven 8 about 60 million more in funding than what you see 9 today. 10 SENATOR FLANAGAN: Okay. 11 And, Mary, to follow up on the part of what 12 you were saying: If the rate gets set, is there an 13 appeals process? 14 MARY KOGELMANN: Yes. 15 VALERIE GREY: There's -- 16 MARY KOGELMANN: And, I think a rule of thumb 17 is, about 10 to 20 percent of rates are appealed 18 each year. And that's another thing that can -- you 19 know, can take some time. 20 And, in the meantime, while providers 21 are -- schools are waiting, then they don't really 22 know what the reimbursement's gonna be, because they 23 don't know if they'll be successful with their 24 appeal, or not. 25 And the appeal, first, would come to SED, and 1 then it would be submitted to the Division of Budget 2 for approval -- for review and approval, or action. 3 SENATOR FLANAGAN: So, the appeal comes to 4 you, but the decision is made by DOB? 5 VALERIE GREY: We make a recommendation to 6 DOB, and the final decision is DOB's. 7 MARY KOGELMANN: And we don't always forward 8 all appeals. I mean, we may not -- we may 9 disagree, that -- that there's a reason for an 10 appeal. 11 So, we may say: No, we disagree. We're not 12 forwarding that. 13 So, it's -- you know, there's some 14 decision-making going on at SED as well. It's not 15 automatic that it comes to SED, and it, 16 automatically, we agree with everything and submit 17 it to DOB. 18 SENATOR FLANAGAN: So, you -- SED has the 19 authority to essentially say no to an appeal, absent 20 it going to DOB? 21 MARY KOGELMANN: Correct, correct. 22 We can look -- we look at what the -- you 23 know, the rate-setting methodology says, the 24 parameters. We also look at the reimbursable cost 25 manuals. 1 So, if we don't think it's in compliance with 2 those, we may say: No, we disagree, and here's why. 3 And, you'll have back-and-forth with the 4 providers. 5 JAMES DeLORENZO: Everything's not 6 appealable. 7 VALERIE GREY: Yeah, that's a good point. 8 SENATOR FLANAGAN: I'm sorry? 9 JAMES DeLORENZO: Everything is not 10 appealable. There's certain parameters for what's 11 an allowable appeal. 12 SENATOR FLANAGAN: Okay, and that is guided 13 by, regulation, or by statute, or...? 14 MARY KOGELMANN: Both. 15 Probably more regulations and the 16 reimbursable costs manual. 17 SENATOR FLANAGAN: Okay. 18 SENATOR LaVALLE: I don't know whether you 19 have this or not, but, could you give us a thumbnail 20 of the three years before the freezes took place, 21 to see what those increases were? 22 MARY KOGELMANN: I definitely have that back 23 in my office, but I would say, somewhere around 2 to 24 3 percent per year. 25 SENATOR LaVALLE: For each year? 1 MARY KOGELMANN: Yep, yep. 2 '9-'10 was the first year with no growth. 3 SENATOR LaVALLE: Okay. 4 SENATOR FLANAGAN: And, Mary, I'm going to 5 probably continue to display a little bit of 6 ignorance here, but, when you are -- are you setting 7 a rate by individual school? 8 MARY KOGELMANN: And the program. 9 The program within the school. 10 SENATOR FLANAGAN: So, how -- 11 VALERIE GREY: A lot of rates. 12 MARY KOGELMANN: Lots of rates. 13 SENATOR FLANAGAN: Lots of rates. 14 MARY KOGELMANN: Lots and lots of rates, 15 yes. 16 SENATOR FLANAGAN: Give me a ballpark. 17 MARY KOGELMANN: I mean, I guess not -- 18 probably not -- if you're not including the BOCES, 19 and some of the school district programs, I think 20 we'd say, somewhere around 800 rates. 21 SENATOR FLANAGAN: Okay, so, that's for -- 22 are we talking about, Special Acts, 853s? 23 UNIDENTIFIED SPEAKER: And preschool. 24 UNIDENTIFIED SPEAKER: Yes. 25 SENATOR FLANAGAN: And "preschool," I heard 1 someone say. 2 MARY KOGELMANN: And preschool. 3 VALERIE GREY: Preschool. 4 MARY KOGELMANN: And also, then, BOCES can 5 provide some programs as well -- BOCES provide 6 programs, their summer programs. We set the 7 rates for the BOCES summer special education 8 programs. 9 SENATOR FLANAGAN: Okay, some of this may be 10 on your website. So, I know that I've worked with 11 our staff, and I've looked at some of this, in not 12 in excruciating detail, but, if you could just give 13 us a snapshot of the cases that you do have. 14 You know, for, maybe, if you take the last 15 two years, and just see how many times you've 16 had to set rates. 17 MARY KOGELMANN: So, how many rates we set, 18 per year, for the last two years? 19 SENATOR FLANAGAN: Yeah. 20 MARY KOGELMANN: Okay. 21 And we can break that out by type of provider 22 as well. 23 SENATOR FLANAGAN: Okay. 24 And, this is not meant to be a loaded 25 question at all: Do you think it is a proved course 1 to set the rate, for every school, and every 2 program? 3 VALERIE GREY: I think I would say, that, it 4 is definitely labor-intensive on everybody's part. 5 I think that, the individual -- the advantage 6 of rates per -- for each individual provider, is 7 that, one could argue, it tries to take into account 8 the unique situation of each of those providers. 9 But, I would also point out that, in other 10 arenas, in the Medicaid world, I think in some 11 others, some people have suggested a regional rate 12 for, particular types of services, might be a way 13 to go. 14 I just throw that out there. That's, 15 certainly, not SED's position, but they're -- you 16 know, you can -- I think in nursing homes, going 17 back to some of my experiences in the -- in a 18 prior life -- nursing homes were -- they're set 19 individually, for many, many years. And, it meant 20 hundreds of nursing home rates. 21 There was also a similar problem with 22 backlogs on appeals for the nursing home 23 rates. 24 And, one of the reform measures that was 25 moved forward is a construction of a regional rate, 1 that still, somehow, took into account the acuity of 2 the population that got served. 3 SENATOR FLANAGAN: Okay, I assume that there 4 are no legislative proposals on that yet? 5 VALERIE GREY: Not that I know of. 6 SENATOR FLANAGAN: I think it would be 7 helpful -- and, I mean, obviously, not today -- but, 8 if we could get some list of recommendations that 9 the Department may have, to make prospective 10 changes, that would be very helpful. 11 Now, I say that against the backdrop, that, 12 I'm not sure that anybody likes how rates are 13 set, because, you could make the argument that SED 14 and DOB shouldn't even be involved in this. It 15 should be a legislative function. 16 And, all the folks that we work, on our 17 side, say, like: We don't want to set the rates. 18 You know, you're just tossing the football 19 from one team to the other. 20 But -- so that's one of the -- if that's a 21 recommendation, I think that's something that we 22 should be considering. 23 VALERIE GREY: Yeah, it's -- honestly, it's 24 not a recommendation. It's just, uhm -- it's one of 25 the concepts that I've seen used in other 1 situations. 2 So, we'll go back, and we'll think about 3 that, as well as any other ideas that come up at 4 this discussion. 5 SENATOR FLANAGAN: If I could -- 6 And, obviously, if anyone has questions, 7 please, ask them. 8 -- but, could we just hear from -- sort of go 9 down the table here, on your general feelings, and 10 maybe with some specificity about, the rate-setting 11 structure, and the process. 12 And, if there's something that works well, 13 great. 14 If there's something that is in need of 15 revision, please, please share. 16 MARK SILVERSTEIN: Mark Silverstein, 17 Coalition of Special Act Districts. 18 Our main concern is timeliness. 19 We understand the current fiscal environment, 20 but, to be a proven fiscal planner, and Special Act 21 School Districts are public schools, so we have 22 fiduciary responsibility to manage our money as 23 well, the timeliness factor hurts us. 24 It hurts us in terms of cash flow. 25 Many of our districts have significant 1 amount of "RANs"; revenue anticipation notes. 2 We're paying interest on those RANs. That interest 3 get passed along, and the taxpayer is paying that. 4 A timely rate would alleviate some of that. 5 Not all of it, because cash flow is cash flow. But, 6 that impinges upon our ability to be good fiscal 7 planners. 8 And that's what -- 9 SENATOR MARCELLINO: So, what's wrong with 10 the system as it exists? 11 MARK SILVERSTEIN: It takes too long. 12 SENATOR MARCELLINO: Well, you're talking 13 about timeliness. 14 So, what's wrong with the timeliness, as you 15 see it? 16 MARK SILVERSTEIN: It takes too long to 17 generate the rate, or how the rate gets processed. 18 And, speaks to a lot of collaboration here. 19 This is not adversarial, so I want to make that 20 clear. 21 It takes too long. 22 And then, if you do an appeal, well, I had an 23 appeal that was four or five years out. And I 24 can't be a proven fiscal planner, and that impacts 25 positions. 1 As a public school, I'm mandated to provide 2 certain services to children. 3 I can't do it, and then, that leads me to be 4 out be out of compliance, and then, that starts 5 another -- another scenario going. And, it's not an 6 effective system to educate probably the most 7 neediest children in the state. 8 ELLEN BERGMAN: And another thing that hasn't 9 been mentioned -- 10 I'm Ellen Bergman from Blythedale. 11 -- is that, every time there's a rate change, 12 from perspective, to certified, to appeal, we have 13 to rebill. 14 And, so, if we have an appeal, or a 15 reconciliation, that's three years out, we're then 16 going back and rebilling all of the districts. 17 And -- you know, and I think all of us 18 represent many districts. 19 I represent upwards of 70 different counties 20 all over the state. And, we have to rebill. 21 Sometimes we actually receive the money, often 22 times we don't. 23 We're talking, three, sometimes five years 24 out, and we're asking them now to make us whole. 25 So, timeliness is a really serious issue, if 1 only for efficiency, and getting in the money that 2 we need in order to run our programs. 3 SENATOR FLANAGAN: You've made references, 4 you mentioned "certified." 5 Is that the reconciliation? 6 ELLEN BERGMAN: When the Division of Budget 7 approves it, it's called a "certified rate." 8 SENATOR FLANAGAN: So, once you get that, you 9 have to -- 10 ELLEN BERGMAN: We have to bill the 11 individual counties, and they, in turn, bill the 12 districts. 13 PAMELA MADERIOS: Can we jump around? Do you 14 have limitation? 15 SENATOR MARCELLINO: Sure, go ahead. 16 PAMELA MADERIOS: Okay, thanks. 17 I think Val's explanation was -- was an 18 adequate simplified version, because what they're 19 talking about is the methodology that gets sent over 20 to DOB. 21 The rates themselves aren't necessarily, 22 the individual rates, aren't certified at that 23 juncture. It's the plan that SED wants DOB to 24 approve, the methodology of: We're gonna do this 25 for regional (inaudible). New providers will be 1 treated this way. There's a 70/30 parameter of 2 direct and indirect. 3 So, it's much more than just the growth 4 factor. 5 So, all of that gets stuck to DOB, and they 6 comment on it, or, whatever. And, then, it goes 7 back to SED, who then churns out the individual 8 rates. 9 But, that's just -- that's like in the 10 perfect world, because what you also have at play 11 is, the reconciliation that we mentioned, which is, 12 we get a rate in '09. And, then, in 2011, that the 13 costs that we incurred that we reported on our CFR, 14 is going to be reconciled, measured against the 15 reasonable costs that SED determines were 16 reasonable. 17 So, I might have spent a million dollars in 18 '09. But, on recon, all the little -- not little -- 19 the accountants within SED measure that against 20 what they think are reasonable and allowable costs. 21 And it may not be anything that comes close to 22 what I actually spent. 23 So, not only am I working in current year, 24 of, I spent this amount of money pursuant to the 25 rate that was generated by the methodology, but I 1 also have this reconciliation process, which 2 means, that, I'm going to have a different rate, 3 that I will either, bill -- because I got to be 4 honest with you, guys, I'm not sure I saw the last 5 time a rate went up. It's usually the 6 disallowances that require us schools to pay 7 back money, or to have our rate reduced, 8 accordingly. 9 So, it's an oversimplification, that, just to 10 look at the methodology, and think that's all we're 11 worried about at any one given time. 12 It's the threat of reconciliation. 13 It's the threat of an audit year, because 14 there's some of that that goes on, which means, if 15 the comptroller comes in, and he says, "Let me 16 look at your books," and he disallows all of these 17 things, SED is going to have to go back and make a 18 change in the rate for that year, which can be 19 three or four years back. 20 So, there's lots of time issues, and time 21 periods, that we're all working with, which, to the 22 point, makes it practically an impossibility for 23 anybody to manage current-year fundings, and even 24 report on their financial statements what kind of 25 exposure they may have in terms of givebacks. 1 So, you know, the methodology is just one 2 part of it. You need look at the recon, and the 3 audit possibility. 4 And, you know, the appeals, they're -- they 5 once were a nice resource, to be able to have an 6 individual school challenge. But, the parameters, 7 the allowability of them, is: Are you unable to 8 provide IEP services? Is there a threat to health 9 and safety? 10 Those are not really large avenues for 11 schools to pursue because they're very, very narrow. 12 And, so, to just say, I don't have enough 13 money to do the things that I do, isn't reason 14 enough for SED to be able to create a package that 15 the Division of the Budget would look favorably 16 upon. 17 SENATOR FLANAGAN: Pam, one comment that I 18 would make, and I don't want to speak for my 19 colleagues, but, the idea of an audit, because you 20 characterized it, "the threat of an audit," I don't 21 have a problem with that. 22 PAMELA MADERIOS: Oh, no, no. I don't 23 have -- 24 SENATOR FLANAGAN: I don't have any problem 25 with the idea that there's an independent review. 1 PAMELA MADERIOS: No, no, absolutely. 2 But, that's another factor that goes into 3 the, they have to reach back into their data banks, 4 and go: Okay, for this audit year, I have to change 5 the rate. And since the base rate has changed, 6 then, for all intents and purposes, the methodology, 7 as it applied to that now-deflated rate, is going to 8 change as well, so that, they generally try to 9 isolate it in one year, so that the pain is only 10 felt for that audit year. But, they could apply the 11 methodology of zero growth thereafter. 12 So, the base has been diminished, then, 13 technically, all the subsequent years' rates 14 have been diminished as well. 15 So, that's why it's -- we welcome audits too, 16 because we think it's a teaching moment. But, it's 17 just one of those additional factors that we need to 18 be aware of. 19 SENATOR FLANAGAN: I'm sorry, Val. Go ahead. 20 VALERIE GREY: Yeah, I just, uhm -- I just 21 wanted to add, reconciliation, that we -- we are 22 supportive of removing the reconciliation. We 23 proposed that this past year. And, I think that the 24 OCFS rate-setting methodology doesn't include a 25 reconciliation. 1 That's not to say -- because, I know, when my 2 guys, when I first arrived at SED last year, when 3 they mentioned to me, Well, we should think about 4 removing that reconciliation step, my immediate 5 reaction was, Well, of course we want to reconcile, 6 because if, somehow, they didn't spend, or this 7 rate -- but, apparently, it really doesn't make a 8 significant difference, and there are ways to catch 9 up later. 10 And OCFS doesn't include reconciliation, so, 11 we would be supportive of doing something similar. 12 SENATOR FLANAGAN: Okay. 13 SENATOR LaVALLE: Let me make an observation. 14 I'm listening to everyone, and I'm going back 15 in my memory bank, and it seems, even under the 16 best of times, that the schools never liked the 17 rate setting. 18 Was never enough. Wasn't quick enough. It 19 was -- 20 Is that a correct observation? 21 BILL WOLFF: Yeah, I think -- 22 It's Bill Wolff from LaSalle. 23 I've been at LaSalle for about 25 years, and, 24 I can remember one of the big milestones in the 25 rate-setting changes was around the preschool 1 time. 2 And that, just -- you know, the -- with the 3 initiation of preschools, I think it added the 4 workload to the Department that was significant. We 5 tried to squeeze the preschool methodology into the 6 larger methodology. 7 There needed to be a methodology. There 8 wasn't any question about it. But, a lot of things 9 changed at that point. The feeling of 10 responsiveness, and so on, just complicated things. 11 And, at the same time, I think a perspective 12 that's important, I think, for this group, is, one 13 of the things that's changed in our business over 14 this kind of time, from the first evolution of the 15 rate-setting system, is the velocity on our end; the 16 velocity of children moving through our schools. 17 And without, "they come and they go," rolling 18 admissions, and a youngster leaving and returning 19 back to home, is not necessarily replaced by a 20 youngster of similar characteristics. 21 So, literally, my lowest period of population 22 in my school is in September. The end of August, 23 September, I'm ramping up. 24 I'm not sure if it's going to ramp. We 25 always watch, we kind of cross our fingers, we'll 1 see. 2 But, you know, there's a lot of volatility, 3 and a great deal of velocity, unlike when this 4 system was built, when we might have had 5 youngsters come for, 18 months, 2 years, and 6 things like that. 7 And, the system has tried to respond to that 8 with some changes. The waiver -- you know, the 9 opportunity for waivers and appeals. But, those 10 were rare. And, now, they're almost the way to try 11 to do business, to catch up. 12 So, we have -- we have a profile of kids 13 leave us, we have a different profile come in, we 14 need to shift our program around, and, maybe we've 15 got different kinds of classrooms we need to open 16 up. 17 To do that, we have to, generally, appeal, or 18 do some process that changes things. 19 So, I think that's one of the factors that 20 SED has really tried to deal with, and DOB. 21 And, it's been difficult; that, our business 22 is shifting. 23 Particularly -- if we were stable, if I said, 24 yeah, I've got -- yeah, we've got 100 kids in my 25 school, pretty much year round, they're gonna be the 1 same faces. But, it's not what's happening to us 2 anymore. 3 SENATOR FLANAGAN: Bill, can I ask you a 4 question? 5 Just, can you describe -- this is probably a 6 very lucid definition -- but, the typical kid that 7 is in your school? 8 Is there any such thing as "a typical kid"? 9 BILL WOLFF: Well, I want to first say, that 10 there's a real danger in saying "a typical kid" in 11 an 853 school. 12 The 853 bandwidth is pretty significant, to, 13 some of the most profoundly and medically involved 14 kids in the state that, we probably, some of us 15 can't imagine educating; to, kids who are over -- 16 you know, kind of on the "troublemaker" end, if you 17 will. They might be in juvenile justice for a 18 while, and in foster care sides. 19 Not all kids in 853 schools meet the 20 standards for educational with disabilities. Many 21 of them are with us because of a juvenile justice 22 placement or foster care placement, but they have 23 characterized, generally, by a significant 24 educational delays. 25 They're often undercredited and overaged as 1 adolescents, certainly. We see a lot of 14-, 15-, 2 16-year-old kids that can't read, but are bright, or 3 have very few credits. Those kinds of things. 4 So, it's very hard to exactly characterize 5 these kids. 6 What's common with them, what we're seeing 7 now, is the effects of these kids of trauma in 8 their lives, almost on the scale of -- well, 9 really, accurately, on a scale of PSTD kinds of 10 things of what they've grown up with. That's very 11 characteristic. 12 But you can have, you know, these profoundly 13 developmentally delayed kids in a program like 14 Anderson. 15 And in my shop, we're mostly dealing with 16 kids who are pretty high-functioning. Average IQ 17 even higher. 18 I've got an AP course running this year, and 19 then I've got kids who can't read. And, they're the 20 same-age kids. 21 So, it's bizarre. 22 So, we don't all look alike, and that 23 makes -- that's one of the dangers. 24 And I really have been pleased to hear SED be 25 a little hesitant about this regional-rate thing, 1 because if we try to characterize these kids all 2 alike, we're unwrapping the prescriptive kind of 3 programming that is the specialties that the 4 Special Acts and 853s are so good at: trying to 5 meet the youngster where they are. 6 So, I -- I am -- I did get nervous about the 7 regional rate. And I understand it would make life 8 easy, but it wouldn't be good for kids. 9 SENATOR LaVALLE: Can I just go back? 10 Having been a classroom teacher, I wish we 11 had a whiteboard or a blackboard, because I want to 12 jump up and I want to create a timeline. 13 And, I would like your input. 14 I want to see, because I think 15 Senator Flanagan opened the door. Right away, he 16 said: I think it would be helpful to the Committee 17 if we had in our mind what the process is; whether 18 we need to move dates back. 19 Now, we're not involved in it, but, it's a -- 20 it would be helpful -- and maybe you've already had 21 this dialogue with the State Education Department, 22 but it would be helpful for the Committee to 23 understand, when should the process start? 24 Are we starting it too late? 25 BILL WOLFF: Well, there is a limitation on 1 the front end of giving us enough time to prepare 2 our audited financials and submitting the CFR. 3 So, you know, we're already, basically, you 4 know, the rates set -- the rates that were set 5 for this year were based on the expenses of 6 two years ago, that were then put back in. 7 So -- meaning, you can go back, and then you 8 just keep -- eventually, you're gonna push back onto 9 us, and say: How soon can you get your audited 10 financials into the State so they can begin the 11 process? 12 And you can't go back much further. 13 I think they're due now, October 1st? And, 14 almost all of us get an extension to, November 1st? 15 Am I right? 16 MARY KOGELMANN: Till December 1st. 17 VALERIE GREY: Yeah. 18 BILL WOLFF: Or, it's the other way around. 19 So, that's hard to do. 20 SENATOR LaVALLE: This is an opportunity to 21 build -- to let us know what should be happening. 22 You're -- you've tied your hands. You got to 23 think outside the box. 24 Don't tell us two years -- goes back 25 two years. 1 Should it go back two years? 2 BILL WOLFF: Well, I think -- I think it has 3 to be based someplace on some historical clock 4 that's fair. 5 How are we gonna government money without 6 being account for? 7 SENATOR LaVALLE: Well, what is it? 8 RICHARD LASKY: Senator -- 9 SENATOR LaVALLE: Yeah? 10 RICHARD LASKY: -- my name is Dick Lasky. 11 I'm with the 853 Coalition. And, many years ago, 12 I was a rate-setter for the Office of Children and 13 Family Services. 14 The fiscal period that is chosen is based on 15 a July-June fiscal period that links to the school. 16 SENATOR LaVALLE: Right. 17 RICHARD LASKY: The earliest you can get a 18 financial statement certified by the public 19 accounting firms, is sometime between August and 20 November. So, the earliest that the state agencies 21 can get a document that's reliable, from their 22 perspective, is sometime in November, that document, 23 that is used to set the next June rate. 24 Historically, a way to get around the problem 25 of delayed rates, is move up the dates of when 1 the state agencies have to submit their proposals to 2 the DOB, so that the -- rather than April 15th be 3 the date of submission to DOB, April 15th be the 4 answer back to the state agencies on what the 5 acceptable changes to the rates will be, which 6 then gives the agency a 45-day window to issue 7 rates on June -- and -- in the month of June that 8 are effective July 1st, with the beginning of the 9 school year. 10 SENATOR MARCELLINO: Dick, can I ask a really 11 dumb question? 12 Why is DOB involved in it at all? 13 RICHARD LASKY: They wrote themselves into 14 law. 15 UNIDENTIFIED SPEAKER: We don't know. 16 SENATOR MARCELLINO: You get -- "We don't 17 know" is a good answer. 18 You get money. I understand the allocation 19 of the budget process. They get -- you get a 20 certain allocation to State Education, you get a 21 certain allocation to every department and agency in 22 the state. 23 DOB is intimately involved in determining 24 what your budget, overall budget, is going to be. 25 Now, why are they involved in how you spend 1 individual parts, so minutely? 2 I can understand them being involved in the 3 budget process, and creating it, but why do they 4 have to set the rate? Why do they have to approve 5 the rate? 6 Why can't do you that alone, with the school, 7 in determination, I guess, spending a set amount of 8 money? 9 You're not growing it, because you have no 10 right to grow it. You live within a budget. 11 So, once you're within that budget, what do 12 we need them for? 13 I'm just asking. 14 PAMELA MADERIOS: Yeah, I -- 15 SENATOR FLANAGAN: That was a rhetorical 16 question. 17 PAMELA MADERIOS: Yeah. 18 [Laughter.] 19 PAMELA MADERIOS: Actually, it's not 20 rhetorical, though. 21 SENATOR MARCELLINO: No, it was a rhetorical. 22 Because, it seems to me, everything goes back 23 to the Department of Budget determining rates. 24 And, what is their expertise in determining 25 the rates, other than their accountants? 1 PAMELA MADERIOS: Right, but the statute 2 requires that the rate be certified by DOB. So, 3 it's a statutory obligation. 4 SENATOR MARCELLINO: Why not the comptroller? 5 PAMELA MADERIOS: Well, by the comptroller -- 6 well, no, because, it says "As Certified By." It 7 doesn't say the State Comptroller, I don't think. 8 My recollection is, that it actually says the 9 "Division of the Budget." 10 SENATOR MARCELLINO: Doesn't the comptroller 11 have approve every check written? 12 PAMELA MADERIOS: I don't -- 13 VALERIE GREY: There's general 14 certifications, and then there's an OSC approval 15 process, but it's not usually at this microlevel. 16 PAMELA MADERIOS: And it's also important, 17 that, our reimbursement is not tied to that 18 current-year state budget. 19 That's why we're -- when they get a 20 million dollars for this -- SED's budget, that 21 isn't -- it doesn't include our -- the payment for 22 our current-year rates. That's almost as if to 23 pay back them, and to make resources and funds 24 available to them, but we're not tied to the budget 25 line, because of the reconciliation process. 1 And, when they are generating prospective 2 rates, that would be my current-year rate. 3 And, so, that's why -- our -- the methodology 4 isn't tied to the budget, where most other state 5 agencies, I think, are tied to that current-year 6 state agency's state budget. 7 But, for our methodology, that's not where 8 our funds are coming from. 9 MARY KOGELMANN: We reimburse on a lag. 10 PAMELA MADERIOS: On a (inaudible) lag. 11 MARY KOGELMANN: Remember, the providers and 12 schools are billing the school districts and 13 counties in the first instance. They bill the 14 school districts for school aid, the counties for 15 the preschool. 16 And, then, they submit information back to 17 SED, asking for reimbursement. But, the way we 18 reimburse, based on the budget and the 19 appropriations, we're reimbursing on a lag basis. 20 SENATOR MARCELLINO: That's not the only lag 21 reimbursement process that exists in State Ed. 22 MARY KOGELMANN: Correct. 23 SENATOR MARCELLINO: The instruction is 24 generally -- 25 MARY KOGELMANN: Correct, but if we -- 1 SENATOR MARCELLINO: -- lagging as well. 2 MARY KOGELMANN: -- right, if we set the 3 rates without DOB, then we would almost be 4 dictating the appropriation they need to build into 5 the budget in the following year, for reimbursing 6 the counties and the school districts. 7 So, if we just did it on our own, and said, 8 okay, whatever, 3 percent growth, and we built that 9 in, then, in order to make sure that there's enough 10 funding to reimburse the counties and school 11 districts, DOB would have to take that into 12 consideration in setting the appropriation. Or, if 13 they just set it level, it would just mean school 14 districts and counties are going to wait another 15 year to get reimbursed. 16 It would even -- it would put it even on a 17 further lag because the appropriation wouldn't be 18 sufficient. 19 So, it's all tied together. 20 SENATOR MARCELLINO: Doesn't that happen if 21 they say zero growth? 22 MARY KOGELMANN: If there's zero growth, 23 then, technically, they're -- 24 SENATOR MARCELLINO: The scenario you just 25 mentioned is zero growth. Three years they're 1 telling you, you can't increase anything. 2 MARY KOGELMANN: Correct, so that we -- 3 SENATOR MARCELLINO: So, that's basically 4 what you're talking about. 5 MARY KOGELMANN: Correct. So that means the 6 appropriation DOB would have to put in the budget to 7 reimburse is lower than it would have been if you 8 had -- if they had provided growth. 9 PAMELA MADERIOS: And it's not systems zero 10 growth, it's individual tuition zero growth. 11 So, I will get the same tuition, but, I'm 12 multiplying by the number of kids, so -- because 13 it's a per-child tuition. 14 And so, therefore, I might have had 20 kids 15 last year, but this year I have 30; so, therefore, 16 I'm going to spend more, and the State will owe me 17 more, but I haven't been able to spend more per 18 child. I might spend more in the aggregate because 19 I have more kids, but not on a per-pupil-tuition 20 basis, which is what we have. 21 BILL WOLFF: Just an observation, if I can, 22 too, on this, with the budget. 23 It's difficult sometimes, as the rates are, 24 from a provider perspective. 25 One very good thing about it, from a small 1 non-profit business, is that these are certified by 2 the State of New York, and valid to all of my 3 payers. 4 They -- they believe that my costs meet a 5 fiduciary standard and responsibility, and there's 6 no negotiations then about paying them. 7 We don't have -- I don't know how our 8 businesses -- some think they can, but I don't know 9 about that -- are able to successfully manage sort 10 of a free market, where we would want to charge 11 whatever we wanted. And, that could turn into a 12 very interesting situation otherwise. 13 So, I like the idea, one of the successes of 14 the rates, and the other rate system, is, in fact, 15 that once it's agreed upon, it's a solid deal. It's 16 a deal with the provider, with the placing authority 17 who sends a youngster to me, that I expect to be 18 paid that. 19 Now, we'd like some more negotiations about 20 how that is set, but I contract with, I don't know 21 how many school districts -- I'm one of the 22 smaller -- but, 35, 40 counties, and all kinds of 23 things, entering into private negotiations with 24 all of those folks about, whether my costs are 25 valid, and whether they were determined accurately, 1 is -- would be an immense cost, and waste of time, 2 generally. And I'd much prefer something that's, 3 once it's certified, it's good to go. 4 SENATOR FLANAGAN: Dick, can I go back to the 5 scenario you described? I want to see if I'm 6 following your logic, because it ties in, somewhat, 7 to what Senator Marcellino was talking about. 8 If you -- you get your certified financial 9 statements. By following you correctly, you've 10 got, the school year goes, you know, and then you 11 have that period of August to November. 12 Arguably, you'll get that data for 13 appropriate to -- submission to the State, the 14 earliest would be November. 15 RICHARD LASKY: Uh-huh. 16 UNIDENTIFIED SPEAKER: Right. 17 SENATOR FLANAGAN: And there's hundreds of 18 applications that they have to review. 19 So, when SED sends over their information to 20 DOB, on April 15th, that's more tied to the 21 methodology, as opposed to an individual tuition 22 rate for any one of your schools? 23 RICHARD LASKY: Correct. 24 SENATOR FLANAGAN: Okay. 25 How would you suggest speeding up that part 1 of the process? 2 Now, I know Val clearly referenced, on a 3 couple occasions, the labor-intensive aspect of 4 that. 5 And, from an outside perspective, looking in, 6 do you think there are not enough people in the SED 7 tasked with this work? 8 I mean, it could be a staffing issue. 9 But, do you -- how would you suggest 10 improving the timeliness? -- because everyone has 11 sort of alluded to, or spoken directly to -- 12 RICHARD LASKY: Well, one of the steps that 13 was discussed earlier was that, the cost increase of 14 zero COLA increase requests, how the methodologies 15 going to work, gets to DOB on April 15th, and then 16 they have a certain period of time. 17 Those decisions can be made earlier. You can 18 do that in January. There's to reason to wait, 19 other than the statute that says April 15th. 20 You -- it all depends on what proxies you're 21 going to use, for either increasing it, or inflating 22 the cost, or how you're going to change your 23 policies. 24 Certain things aren't going to change. The 25 way you treat new programs, that's going to be 1 static from year to year. 2 So, the only basic thing you're negotiating 3 is the cost-of-living allowance that you may be 4 allowing for the costs that you're going to be 5 applicable, are applying that methodology. 6 The rate-setting unit folks can still 7 process the papers, and get those into whatever 8 computer process they have to be, so when that 9 ultimate decision comes back about what the 10 inflationary factors are, that just gets plugged 11 into the system. 12 SENATOR FLANAGAN: I'm going to follow up, 13 and use a phrase that Senator Marcellino said. I'm 14 probably asking a dumb question, but, I'm going ask 15 it anyway. 16 RICHARD LASKY: There's no dumb questions. 17 SENATOR FLANAGAN: If you are -- if you're 18 making the reference to the clerical inflationary 19 factor, and everyone -- not everyone, but people 20 have spoken to the concept of the COLA, the way I'm 21 interpreting that is, it doesn't seem like there's 22 any detailed recognition of the cost of a given 23 program or a given school, for factors, like, the 24 acuity of the individual circumstances of new kids 25 (inaudible). 1 You take a kid that has one learning 2 disability, versus twelve learning disabilities, or 3 complications -- 4 MARK SILVERSTEIN: That's correct. 5 SENATOR FLANAGAN: -- is that -- 6 RICHARD LASKY: That's correct. 7 MARK SILVERSTEIN: That's correct. 8 That's point on. 9 ELLEN BERGMAN: That's right. 10 MARK SILVERSTEIN: That's right. 11 RICHARD LASKY: It's only looking at costs. 12 ELLEN BERGMAN: And, in fact, as Special Act 13 districts, because we're public, we follow the model 14 of public school districts. So, we start building a 15 budget in January, anticipating costs, in term of 16 class size and therapies and faculty. And, we have 17 to approve our budget. 18 My board approves our budget in May, but, 19 frankly, we don't get our rate until the following 20 November. 21 So, if we could back it up, even to match the 22 public school model, so that we have a 23 prospective -- you know, we submit all our budgets 24 to SED in February or March, like we do in a 25 public school, and you look at our projected costs 1 compared to our past costs, and build the rate that 2 way. 3 SENATOR FLANAGAN: I want to just go back, 4 because I think I'm following you, but I'm not sure. 5 If you have -- and I'm making a very general 6 description. 7 You have ten kids. Five of them have 8 two complicated factors. The other five have 9 seven. 10 Is it accurate to say that you're getting a 11 tuition rate set on the fact that you have ten 12 kids -- 13 ELLEN BERGMAN: Yes. 14 SENATOR FLANAGAN: -- not five kids? 15 ELLEN BERGMAN: That's it. 16 SENATOR MARCELLINO: Yes. 17 ELLEN BERGMAN: That's right. 18 And there is no mechanism for that 19 extraordinarily expensive student. You have, 20 somehow, absorb the costs, and then appeal the rate, 21 and hope that, in reconciliation, those costs aren't 22 excluded, which -- 23 You're right. 24 -- nine times out of ten, they are. 25 PAMELA MADERIOS: (inaudible), when the whole 1 methodology was designed, it presumed a 2 high-, medium-, and low-profile of kid; one with 3 very little needs, one with very complicated 4 needs. 5 But with the change and the redirection back 6 into district of a lot of these kids, what our 7 schools now are enrolling are the high kids. 8 So, our base was established 100 years ago, 9 based on, you know, a mix that doesn't exist 10 anymore. And, so, even if our costs could increase 11 slightly with a COLA or a trend factor, it's no 12 longer reflective of this student population. 13 So, we don't have that case mix anymore. 14 It's just -- it's all intense, because all the low 15 or medium ones are now back in district. 16 And there hasn't been any anything in the 17 methodology to reflect that or to accommodate it. 18 And, I think that that's another part, the 19 timeliness of the methodology, but, it's 20 insensitivity to the complexion of the kids that 21 we're serving. 22 SENATOR FLANAGAN: Okay. 23 VALERIE GREY: Could I just quickly go back 24 to timeliness? 25 SENATOR FLANAGAN: Sure. 1 VALERIE GREY: So, I had a couple of 2 observations, and then a couple of questions. 3 In terms of SED, I mean, bandwidth is an 4 issue. 5 Just generally speaking, we have over 6 400 fewer people than we did just two years ago. 7 So, it has an impact. 8 That being said, I think that the general 9 methodology proposal that goes over to DOB could be 10 done earlier. 11 I guess my question is: The laws that we're 12 referencing, and the April 15th, and the DOB 13 approval, also exist for the OCFS rates. 14 And, I'm curious if anyone is in that system, 15 and whether the delays are similar, or not? 16 UNIDENTIFIED SPEAKER: No. 17 VALERIE GREY: That's something I guess I 18 should -- 19 JESSICA MORELLI: Hi, I'm Jessica Morelli, 20 from NYSEC. I represent the counties -- 21 SENATOR MARCELLINO: I'm sorry, I couldn't 22 hear you. 23 JESSICA MORELLI: I'm Jessica Morelli, from 24 NYSEC. We represent the counties who pay for, you 25 know, not only preschool special ed, but we are in 1 the OCFS system as well, for many social services, 2 children and family services programs, such as 3 childcare. 4 And, the experience from counties with OCFS 5 and rate methodology, for daycare especially, has 6 been -- and I'm going be very careful how I choose 7 my words here -- concerning. 8 The methodology lends itself to retroactive 9 rate increases, which many counties received, 10 two years ago, a five-year retroactive rate 11 increase, to the tune of $69 million, per year. And 12 that was because someone retired from the 13 rate-setting unit, and it went unnoticed, or 14 undocumented, or whatever the reason was. 15 And, there were a lot of extenuating 16 circumstances, but I wouldn't say that that's a 17 model that counties would be supportive of. 18 And I don't want to turn the conversation to 19 our position on preschool special education, but I 20 think I should let you know, the county -- we don't 21 get involved, obviously, in the rate setting, 22 unless, you know, for very specific reasons, 23 obviously, SED -- but, we -- the NYSEC and the 24 counties' longstanding position on preschool special 25 education, is that we should be removed from the 1 fiscal programmatic and administrative duties of it. 2 We like to tell, when I go to do 3 presentations for local elected officials, I ask 4 them to raise their hand if they live in a county 5 with a department of education, which they can't do, 6 because there are no county departments of 7 education. 8 Counties are involved in preschool special 9 education because of a quirky little thing that 10 happened with the Family Court Act in the 11 late '70s, early '80s, where it switched the 12 fiscal responsibility to the counties. 13 So, we really have no role in preschool 14 special education, counties, other than to bankroll 15 40.5 percent of it. 16 With the 2 percent property-tax cap, I can 17 tell you that this is going to be extremely 18 problematic in the coming years. And, we've offered 19 a five-year takeover, we've offered a ten-year 20 takeover, of the preschool special ed program. 21 The school districts set the services. 22 They determine what level of services children will 23 get. 24 Counties have a very small role on the 25 committee on preschool special ed. But, ultimately, 1 the committee decides, without. They do not need, 2 by statute, they -- the role of the county person, 3 to determine what services will be included for the 4 child. 5 So, we would like to be removed from the 6 program altogether. 7 And, I did bring a copy of the 8 2007 Governor's report on preschool special 9 education, which is very informative. 10 None of the recommendations have been 11 incorporated yet, but, it was done by consensus, 12 through providers, through counties, and through 13 State, through the Division of the Budget. 14 And I encourage everyone to go back to those, 15 if you're looking to think out of the box and start 16 from the beginning. 17 One of the recommendations was, to remove the 18 counties. 19 And, I also brought one of our reports on 20 the nine programs driving 90 percent of the 21 property-tax levy in the state. I know that that's 22 a hot topic right now. 23 And, preschool special education, the 24 4410 program, is one of those programs. 25 And, just for a reference: In 2010, it cost 1 counties $420 million, just the preschool special ed 2 program. 3 New York State spends about $10,200 per 4 student on preschool special ed. Other states, 5 about twenty-five other states who responded to a 6 State survey, New York State-issued survey, they 7 spend about $6,000 per child for preschool 8 special ed. 9 So, sorry, that was a long answer to your 10 OCFS-methodology question, but, that's probably all 11 I'll say. 12 That's the big picture of preschool 13 special ed, from the county perspective. We don't 14 have too much with rate setting, but, again, I 15 thought it was important that I come and present the 16 county perspective on this, because we're sort of 17 the elephant in the room, because we pay for the 18 program, but it's really not -- not something we 19 should be involved in. 20 RICHARD LASKY: Just a point of information: 21 I think Ms. Grey was talking about the OCFS as it 22 related to the residential component of the agency, 23 versus the daycare component. 24 There are two different -- OCFS uses two 25 different methodologies in each of those areas. 1 Close OCFS methodology related to the 2 residential component of these schools is timely. 3 It's always, in a sense, they get the same COLAs 4 at the cost-of-living allowance increases, but 5 they have standards within their process which are 6 different -- established differently than SED. 7 So, there's no need to go back to the 8 Division of Budget. Once the cost-of-living 9 allowance is agreed, the methodology just flows, 10 and it's out there, because there's no reason to go 11 back to DOB with individual agency rates and 12 appeals. It's just not there. 13 PAMELA MADERIOS: And if I could -- 14 Do you want to talk? 15 UNIDENTIFIED SPEAKER: Go ahead. 16 PAMELA MADERIOS: Okay. Sorry. 17 In Jessie's point about, there's several task 18 forces that have been, you know, convened over 19 the -- for every year. 20 I think, maybe 15 years ago, Tom Hamill 21 brought one together, and that's when we all got 22 together the first time. And there was a set of 23 recommendations that were advanced. 24 Actually, none of which I think stuck. 25 And then, most recently, Spitzer had a 1 Governor's task force on special education rate 2 reform. And, again, it was primarily on the 3 preschool side because of the county interests. 4 But, there's been a lot of recommendations 5 that have been floating over the year. 6 One was to separate the school-age 7 methodology from the preschool methodology. And, 8 there was upsides and downsides with that, that that 9 would address the preschool problems, recognizing 10 that the school-age population, the school-age 11 concerns and dynamics, are a vastly different than 12 the preschool dynamics. 13 So, that has been recommendation that's 14 advanced. 15 There was a couple of pieces of a legislation 16 that we all are trying to press a couple of years 17 ago, around: Give us a three-year rate that's based 18 upon a rebasing of our current rate, with 19 experienced data. 20 I get it for three years; I live with it 21 for three years, I die with it for three years. 22 Perhaps you could give me the allowance of a 23 fund balance, like our school district colleagues 24 have. 25 And, so, there's -- there's lots of 1 recommendations that we have, that have been 2 advanced. And each one has, you know, some value 3 and some merit, all recognizing that, a 4 three-year -- three-year-old rate, I can do what I 5 do within those three years. I have the 6 consistency of being able to budget for those 7 three years, and know what costs I can absorb, and 8 what I can't. And, then, reconciliation at the end 9 of three years. 10 That goes to your timeliness issue. It 11 takes SED out of the equation. 12 Three years in a cycle. And you could 13 start those cycles at different staggered times 14 so that they're not having to deal with one, you 15 know, reconciliation of the, 700, 800 different 16 rates, or whatever. 17 So, you could stagger those (inaudible) 18 times. 19 SENATOR FLANAGAN: Doug, I'd like to hear you 20 from as well. 21 But, on the question that I was raising, and 22 this may tie into SED as well, the timeliness, 23 obviously, people keep referring to that. But, it 24 would seem to me, that, from your perspective, is 25 there any regulatory or statutory authority for SED, 1 and commensurate with the DOB, to look, and say: 2 All right, we are going to now, essentially, look at 3 each child, and look at the extent of their 4 individual circumstances, and reflecting costs? 5 Am I making sense? 6 DOUG BAILEY: Well, they -- there is 7 authority to do that because the statute establishes 8 that SED and DOB set the rate process. So, they -- 9 that's what the statute gives them the authority 10 to do. 11 The key to this whole thing becomes, if you 12 think of 853 schools, 853 schools serve 13 two different components, really. 14 They serve kids placed by school districts. 15 Those kids are IEP-driven. So, they're individual 16 services that are driving the needs of each child, 17 so that the rates, to a great degree, being with 18 an individual child sort of reflected that. 19 That's -- basically, that's the history of 20 it. It really was driven by the federal law, way 21 back to, it was the Education of the Handicapped Act 22 before it became the IDA. 23 And, subsequent, I mean, there's nothing, 24 also, that would prevent them from looking at, how 25 do you set the ratios at schools, how they serve 1 kids. 2 Right now, class ratios are established based 3 on public school structures. You could 4 restructure the schools in such a way as to give 5 them a lot more flexibility across the different -- 6 you know, if -- with the rolling admissions that 7 Bill talked about, kids in and out, classes change. 8 There are ways to do that where you could 9 restructure the whole process. 10 I think the message that I heard when I was 11 listening to a lot of this -- and my background is 12 primarily the program side of things -- so, what hit 13 me was, the question -- the original question you 14 asked, was: With moving the dates up, to get the 15 cost indications, and everything, set, would that 16 help? 17 That would help. I don't think there's any 18 question, people said you could do it, but it 19 wouldn't solve the problem. 20 The problem is: The rates are too 21 complicated. They take way too long to do it. And, 22 the staff; there's not enough staff to handle it. 23 Dick -- I always -- Dick was, actually, he 24 was very generous to himself -- kind to himself by 25 saying he was just a rate-setter. He was the head 1 of rate-setting. 2 The MSAR system that OCFS established, which 3 is not daycare, it's residential school stuff, he 4 set that. He'd been working with State Ed along the 5 lines for a while, to try to reestablish how you 6 might use it within the context of the State Ed 7 system, and replace the current structure, because, 8 if you look at what goes on -- there's multiple 9 rates, and reconciliations, there's appeals -- 10 there's not enough staff to handle all of that. 11 There's just not going to be, either. It was 12 set up to handle only the school-aid stuff. And now 13 it's handling preschool, and everything else. 14 There's no way that Val's staff is going to 15 be able to handle that. And they work very hard. 16 It's not about them. They're very, very good. They 17 work hard. 18 There's no way it can happen, though. It's 19 just not going happen. Way too much work, way too 20 many steps, way too many different schools to be 21 involved. 22 So, simplifying the process, similar to what 23 the MSAR does. 24 Or, Pam said -- Pam talked a little bit about 25 a three-year process. Pretty good idea, too. 1 There are options to change that, but just 2 moving dates up isn't going to solve the problem. 3 SENATOR MARCELLINO: So what I'm hearing, so 4 far I've heard two things that somewhat interest me. 5 One -- well, three things. 6 One: State Ed is in a problem of a staffing 7 crunch, because they're getting squeezed by budget 8 costs, and everybody's getting cutbacks. So, 9 they're losing people. 10 So, it's to their benefit to figure out a 11 simplified system that might work. 12 You're talking about a three-year rate system 13 that you think you could live with. 14 It would have to be evaluated every 15 three years. Perhaps, increase, whatever. Maybe 16 exceptions to that would come in. 17 Then you talked about a regional rate that 18 might be established. 19 Within that three? I don't know. 20 I'm hearing suggestions that might work, 21 but what I'm seeing is, that you don't have the 22 bodies. 23 In the near future, you're not going to get 24 them. That's the reality of it. 25 So -- and they've got to live within a 1 2 percent cap, as do all the schools and their 2 budgets, so, it's going to be a problem. 3 See, it behooves us to simplify the system, 4 in some way, shape, or form, that makes it move 5 faster and more timely, and cuts out some of the 6 stuff. 7 Hence, that's what I, strongly, with this 8 business about: Why do we need to keep going back 9 to the DOB? Keep going back to... (indicating.) 10 See, there's so much back-and-forth. 11 I mean, as far as I'm concerned, you guys are 12 geniuses. I don't know how you function at all with 13 the complexity of the system. It's next to 14 impossible to follow this without, you know, 15 17 hands and 4 arms. 16 I don't know what you do. 17 MARK SILVERSTEIN: And the short-term 18 solution, if I may -- just a guy with an idea -- if, 19 as -- as a special ed public school district, and a 20 public school, again, if I can walk away, knowing 21 that I'm subject to the same tax-cap formula, and 22 walk away with 2 percent, I'm going to shake 23 everyone's hand, and it expedites the number of 24 issues that don't have to be dealt with. 25 As stated, the previous rates that were given 1 to Special Act school districts prior to the 2 zeros, are lower than contingency budgets in every 3 New York State school district. 4 So, we are an example of fiscal efficiency, 5 but now we're at the point where survival comes 6 in. 7 The other part is, that our agency 8 counterparts -- and, I think Senator Flanagan raised 9 a good point -- the agency counterpart for the OCF, 10 they get a hard-to-place rate for that child, 11 because they know the services for that child is 12 such, that it goes beyond the norm. 13 In our settings, there is no such thing in 14 SED for a hard-to-place rate. 15 So, it really speaks to, on one side of the 16 town, that's acknowledged; but, on this side of the 17 town, there's one fee, and that's it. 18 So, if three kids come in needing "OP," 19 "PT" -- physical therapy, occupational therapy -- 20 I'm done. 21 ELLEN BERGMAN: You have to eliminate a 22 teacher. 23 MARK SILVERSTEIN: I eliminate the teacher, 24 or teacher aides, or a guidance counselor, and not 25 keeping in mind that there's staffing standards now. 1 So, this is a hell of a cake we're trying to 2 bake. 3 SENATOR FLANAGAN: Can I -- I listened 4 carefully, as I think everyone did, to Jessica's 5 comments on -- from the county perspective, but, 6 going back: 7 Doug, you -- I know Dick (inaudible) more 8 briefly -- but, on the MSAR that you referred to at 9 OCFS, one of the things I said in the beginning was: 10 Can we come up with some legitimate solutions, 11 things that are worthy of, maybe, more intense 12 discussion, and some things that could be possibly 13 in an executive budget proposal, or a budget that we 14 ultimately enact? 15 What is your assessment of the OCFS model as 16 something, akin to Val's question, that could be 17 used? 18 Is it -- is it much more palatable? 19 Is it only address a small part of the 20 problem? 21 DOUG BAILEY: My sense is, yeah. 22 MSAR, the way I've heard providers talk 23 about it for years, it's a much more simple 24 system. Like it said, you don't have to go back to 25 DOB. 1 It, in fact, forms a skeleton of a system 2 that you could start to be cut, to create, that 3 would fit the education model. 4 There's a couple of issues around it. You 5 know, utilization issues, and how you look at the 6 way schools are structured, and that kind of thing, 7 because OCFS uses, these are the certain number of 8 beds you have; whereas, in the education model, it 9 would be a little bit different. 10 But, there are methods to work that out. 11 There are ways people have already talked about to 12 make it -- to have that work. 13 SENATOR FLANAGAN: Sure. 14 LEE LOUNSBURY: And I just want to echo that 15 as well, Doug. 16 I mean, the 853 Coalition supports adopting 17 some sort of an OCFS-MSAR-type model. 18 Senator LaValle, I was intrigued about your 19 idea about taking a whiteboard and trying to graph 20 out the curve process. 21 I'm only two years into the 853 work. My 22 background is OCFS. 23 If we tried that, first of all, I think we'd 24 probably all throw up our hands, and we would have a 25 picture that looks like a spiderweb, at best. 1 We have schools that are dealing with 2 multiple years of appeals -- we heard a little 3 bit about that earlier -- and are, hundreds, and 4 even millions of dollars in debt, that they've 5 had to borrow. The interest, of course, is never 6 reimbursed. 7 Schools that have closed. Schools that are 8 in very precarious financial circumstances. 9 And, these issues, along with a zero growth, 10 have a real impact on program delivery and safety -- 11 and health and safety issues with kids. 12 We're hoping some of our providers will speak 13 to that. We have Ray Schimmer here from Parsons 14 (inaudible). 15 The zero-growth issue is huge for our 16 folks, but we don't have to reinvent the wheel. 17 OCFS has an MSAR system. There's, certainly, we 18 have to do a little work with it, but it's doable. 19 I think it just takes, will, and a commitment, to 20 make it happen. 21 SENATOR FLANAGAN: Lee, let me follow up -- 22 I'm sorry, go ahead. 23 SENATOR LaVALLE: My point with the 24 whiteboard would have been proven, that there was 25 such a morass there, that you need to create 1 something more simple. 2 And, you know, I challenged everyone to -- 3 and, no one -- we've gone around, you know, all 4 sorts of ways, so that, the one thing that I think 5 we've come out of this with, is that the process is 6 too complex, and we need to simplify it, so it 7 makes some sense. 8 And that's what I'm coming away from all of 9 this. 10 DOUG BAILEY: Senator, the one thing that 11 I think has -- I'm hearing things from other people 12 all the time around this. And, there is a pretty 13 deep consensus, that, if you took the MSAR, and you 14 modified it, it would work. 15 BILL WOLFF: Yeah, and we're -- you know -- 16 SENATOR LaVALLE: Is there a consensus on 17 this? 18 DOUG BAILEY: I believe there is. 19 UNIDENTIFIED SPEAKER: Based on the 853 -- 20 BILL WOLFF: There's a lot of folks, yeah. 21 State aid, for example, really, working with 22 DOB, and then with the providers, took one of the 23 key steps in the last few years to help to build a 24 basis for this, which is the staffing standards. 25 They've looked at -- there's a correlation between 1 the MSAR system and its analysis of beds and 2 ratios for safety and supervision, that relates, 3 and that's a core element of that rate-development 4 system. 5 How -- if you will: How challenging are the 6 kids? And, how many staff in your configuration of 7 where the kids sleep and live, and otherwise, in 8 residence, what's that makeup? What's the standard 9 for that that everybody's acceptable? 10 We've done the same thing. 11 Rather than simply be guided by an IEP, which 12 can be -- and I think that Doug's point is something 13 we really need to peel back -- the IEP is driven, 14 you know, it anticipates a public school 15 environment. 16 And even for the Special Act schools, to 17 public -- our environment's different. We've 18 changed that environment, and it has a big impact on 19 the youngsters when they come with us. 20 If we could figure out how to get some relief 21 from that rigidity, these staffing standards form 22 the basis of one of the key elements of a 23 rate-setting system, that allows for some notion of 24 what's the right number of people that are needed 25 here. 1 That's always been a very difficult, fuzzy 2 area. And, I think that's an area where DOB has 3 felt like they needed to really exercise some 4 oversight. 5 SENATOR LaVALLE: If we -- if we now have 6 agreement on a system that you would like, how much 7 more costly will that be? 8 Because, as I said to Senator Flanagan, we 9 start the process with how much money is on the 10 table, and then we kind of back into, you know, 11 where we're going to go. 12 So -- 13 BILL WOLFF: Yeah, let me say something about 14 that. 15 I have 25 percent fewer youngsters living 16 on my campus than I did ten years ago, because 17 this whole system is shrinking. We're working very 18 hard to try to reduce the numbers of children in 19 this very high level of care. 20 We're not talking about a system that's 21 growing, growing, growing. We're really working 22 very hard to reduce the numbers of kids, in 23 quantity, and also the lengths of stay. 24 And I'm not convinced -- and I've talked 25 about this a lot of times, and our good colleague, 1 Ray Schimmer -- we're very conscious about trying to 2 price ourselves out of business. 3 We don't want -- the first thing we're 4 here -- and you leaned over also -- we're not -- the 5 first thing is, you haven't heard us say, "We need 6 more money." 7 We were in New York City, with 8 Chancellor Tisch, and she said: What's the thing 9 you guys need the most? 10 And one of the answers was: We need to be 11 paid fairly for what we're asked to do, and we need 12 to be paid on time. 13 We didn't start by saying: We need 14 20 percent more money. 15 But what we do, we wait so long, sometimes, 16 to be paid for -- not for big excesses. 17 I mean, Ray wrote a letter that was great on 18 this, and said: Look, when we go to our budget, 19 we're not cutting the -- we're not cutting the 20 sports program, or the -- you know, the field 21 trips all over the place, or the -- or the 22 elective languages, and things, that public 23 schools are looking at when they're saying, We've 24 got to roll back. 25 We don't have those things. We're basically 1 driven by State standards of what is necessary. 2 So, it doesn't take us long before we've -- 3 you know, we've really have met some efficiency 4 standards. 5 So, we're not lining up here, to say, you 6 know, I'm not going to tell: LaSalle, that, I got 7 to have 25 percent increase in my rate to operate. 8 I just have to keep up with the people so I 9 don't lose them. So they don't look at me and say: 10 I've gone two years without a raise. 11 I'm not talking about step. I'm talking 12 about making the same money in 2010 that they were 13 making in 2008. 14 Not, oh, well, instead of COLA and step, 15 nope, no, zeroes. 16 That's the impact of this kind of stuff. 17 So -- we don't -- we could fix that if we 18 have some of this; if we're paid timely, and we can 19 understand what it was, and we can build our 20 budgets based on that. 21 VALERIE GREY: Senator LaValle, I just, 22 again, you know, we have taken a look at the OCFS 23 model. There are definitely, some advantages, 24 some challenges. 25 But, to your question: The last 1 three years, the SED providers received 2 zero percent growth. 3 In '09-'10, OCFS, with the model that they 4 use, provided 3.8 percent trend. 5 In 2010-'11 the trend was 3 percent. 6 I think, this year, I believe it was 7 zero percent, but, that model did drive, and the DOB 8 authorized, a higher percentage growth than what was 9 done in our system. 10 BILL WOLFF: And just for clarification, 11 that's a -- Ms. Grey, that's a two-year trend; 12 right? A trend of two years? 13 VALERIE GREY: Yes. 14 SENATOR FLANAGAN: Lee, can I go back to 15 something you said? 16 Speaking to your background, do you believe 17 that there are discussions -- forget today, for the 18 moment -- that there are discussions in earnest 19 about some of the things that you talked about? 20 Senator LaValle asked, and Doug spoke very 21 clearly, that there seems to be a consensus on 22 moving to a certain type of model. 23 Bill, you just talked about, speaking, or 24 listening, to Chancellor Tisch. 25 One of the things that I find frustrating 1 about working in Albany, and I'm sure everybody 2 feels the same way, is: It's always like, well, 3 "they" said. 4 What I -- what I like to do is, put all of 5 "they" in a room, and then have everyone say what 6 they think, and see if there's some positive 7 movement forward. 8 Are you -- do you feel that there's none of 9 that taking place the way it should? 10 LEE LOUNSBURY: Well -- 11 SENATOR FLANAGAN: Or do you think it is 12 taking place? 13 LEE LOUNSBURY: -- let me personally thank 14 you for putting all of the "theys" in the room. I 15 think that's really important. 16 I certainly am not privy to internal 17 discussions at, SED, DOB. I wouldn't be able to 18 answer that. 19 From sitting on the outside, looking in, no, 20 I've not seen movement in the direction that we're 21 talking about today. 22 SENATOR FLANAGAN: Dick, how about you? 23 RICHARD LASKY: There's been attempts, but 24 they've never come to fruition, ever, (inaudible). 25 SENATOR FLANAGAN: Do you think there's any 1 responsibility from legislative involvement? 2 You know, I mean, if we're doing something 3 like this, we obviously care about it, and want to 4 try and see something positive happen. 5 But, where -- without, like, throwing people 6 under the bus, so to speak, where do you think the 7 problem is? 8 Is it just not having serious negotiations? 9 Or, just, it starts, and then it stops, and ends 10 in a report? 11 Mark. 12 MARK SILVERSTEIN: If I may, and, again, 13 without throwing people under the bus: We've met 14 with Commissioner Steiner. We've met with 15 Commissioner King. We go to end task force. We've 16 met with the chancellor. 17 One meeting we go to, all due respect, 18 though, they say, it's administrative. 19 Then the next meeting we go to, it's 20 legislative. 21 So, if we're a little dizzy right now, you 22 would understand why. 23 I think the involvement of the legislature is 24 essential, and will drive what needs to be -- what 25 is an antiquated system into the 1 twenty-first century, and to help provide the 2 children the services they need, simply put. 3 VALERIE GREY: I've been behaving, and I'll 4 try to continue to behave, but, I guess, you know, 5 I think that everyone is interested in putting 6 together what is the best, most reasonable rate, so 7 that the kids can get served. 8 MARK SILVERSTEIN: Correct. 9 VALERIE GREY: But, I would be remiss not to 10 point out, that, the parameters that I have to 11 live within, in terms of budgetary issues, I -- 12 there's no point in going through, taking the few 13 people I have left at the agency, and have them 14 examine the OCFS model, which, as you could tell 15 from my remarks and my planted question, I think 16 there's a lot of value there. 17 But, to have the people I have left at the 18 agency put all their effort into, constructing, and 19 looking at, what is the right model with the OCFS 20 base, only to be told that there is no growth in the 21 system allowed, I think we need to -- that would put 22 us all even further behind, because, if we got 23 nowhere, then your rates would be, under the old 24 system, backlogged even further, and the appeals 25 would be backlogged even further. 1 So, I sort of feel like there is a 2 fundamental question that we're all going to have to 3 get to, at some point, which is, you know: What is 4 the right allocation of funding for the programs, 5 generally? 6 If I know that there's some room that I have 7 to work with, then I'm happy to roll up my 8 sleeves. But, if I have no room, in terms of 9 what's budgeted for the schools, then I -- 10 SENATOR FLANAGAN: Do you have an answer to 11 that question? 12 VALERIE GREY: Do I have an answer? 13 [Laughter.] 14 SENATOR FLANAGAN: Let me ask something that 15 I hope is related. 16 One of the challenges we have as 17 legislators, and all of you providing services, is: 18 How do you do it in the most, hopefully, 19 cost-efficient manner? 20 And, when budgets are tight, no matter what 21 level of government you're talking about, how do you 22 find ways to, potentially, give people an 23 opportunity to save money, without necessarily 24 giving them more money? 25 I'm not trying to do that on the cheap, but, 1 I don't think we really talked about: Are there 2 aspects to the system that are ridiculously onerous, 3 that don't provide any added value to the education 4 of any one of your students? 5 You know, are there, just, burdensome 6 bureaucratic things that add time and money to the 7 entire process, that bear no fruit? 8 VALERIE GREY: Or even if -- if providers 9 can identify savings and they do reduce costs, being 10 able to just keep a little bit of that to reinvest 11 in programs. 12 (Several comments made by several 13 participants.) 14 VALERIE GREY: You know, not all of it, 15 because we know we have to, you know, keep cutting, 16 keep cutting. 17 But, you know, to incentivize that behavior, 18 especially on the admin side; because, right now, 19 the way it works, there's a -- I think, no more 20 than 30 percent of your overall spend can be for 21 admin; right? 22 So, if you find ways to cut some costs, and 23 we all know there's creative accounting -- it's all 24 legit, but it still can be creative -- but, if you 25 can find ways to cut there, in some ways, you're 1 silly to show it, because you've got to -- you want 2 to hit your 30 percent. 3 But, if you were allowed to show it, and you 4 could keep a little bit of it, to maybe offset some 5 of the challenges on the programmatic side, you 6 know, that's a possibility too. 7 But, there's lots of, I think, ideas. I 8 think, just, the overall parameters get 9 challenged. 10 SENATOR FLANAGAN: Jim, you've been 11 remarkably quiet. Go ahead. 12 JAMES DeLORENZO: Yeah, I just want to add: 13 One challenge that the system entered into several 14 years ago, was, kind of shoehorning the preschool 15 system into what was really established as a 16 school-age system. 17 And, trying to establish a universal remedy 18 to this, for two systems that are very disparate, I 19 think would lead us into more complications in 20 trying to come up with something that would work 21 across the board, because, preschool programs, the 22 preschool system, the way they operate, the variety 23 of interventions that you have in preschool, is 24 not -- does not correlate with well with the 25 school-age system; yet, we have the same methodology 1 across the whole special education spectrum. 2 And, when you try to then remedy this with 3 one answer, you're going to not -- you're not going 4 to remedy the whole system well. 5 So, I would just added that caveat. 6 I think the folks that work in the preschool 7 system -- you know, you've heard a lot from the 8 school-age providers today, and they've 9 articulated very well, their issues. But, I think 10 if you heard from many of the preschool providers, 11 and Pam certainly could speak for them, you'll find 12 that there's unique issues, not only for our -- the 13 Department's ability to deal with the myriad number 14 of small preschool programs that are trying to 15 operate, and the individual service providers, 16 it's very different than what you have in the 17 school-age system. 18 And trying -- again, trying to remedy that 19 with one methodology, or one response, I think will 20 lead us in the wrong direction. 21 JESSICA MORELLI: Transportation is a big 22 issue for preschool special ed, for the counties. 23 About 20 percent of the cost of the counties' share 24 of preschool special education is just for 25 transportation. 1 I think there's one county in the state that 2 is able to contract with their school district to 3 provide transportation. Everything else is 4 coordinated through private providers. 5 RFPs, the cost is through the roof. 6 SENATOR FLANAGAN: How do you fix it? 7 JESSICA MORELLI: Well, we had a bill. It's 8 S5175 (Gallivan), that would require parents to 9 sign an affidavit, saying that they were unable to 10 transport their children. 11 Transportation would still be provided if 12 they couldn't, but, that they would be required to 13 say, you know, I can't, do it because: I don't have 14 a driver's license. I have a disability, mental, 15 physical. 16 And, they would also -- if they did choose to 17 transport their children, they would be reimbursed. 18 That exists now. It's, just, that parents 19 don't take advantage of that. 20 SENATOR FLANAGAN: The reimbursement -- 21 JESSICA MORELLI: Correct. 22 SENATOR FLANAGAN: -- for the parents, 23 exists now? 24 JESSICA MORELLI: Yes, it does. 25 PAMELA MADERIOS: And, if I could? 1 And, I think to Jim's point, and I had 2 mentioned it before, we really do have to treat 3 preschool entirely different than school-age, for a 4 number of reasons, not the least of which is, 5 fluctuations in enrollment, which makes the 6 methodology really inflexible. 7 There's more of a consistency, presumably, in 8 the school-age population, around, I generally get 9 in the neighborhood of 80 kids a year. Maybe 78, 10 maybe 82, but there's much more consistency, where 11 the fluctuations in enrollment in the preschool is 12 much more dramatic and much more pronounced. 13 So, the methodology that would be applied to 14 the school-age programs, especially using the OCFS 15 model, it says: We are presuming you're going to 16 occupy your beds at 98 percent. And, we come up 17 with that number, based upon experience, or 18 whatever. 19 We can't use that same kind of number, 20 necessarily, in preschool because of the 21 fluctuations. But... 22 J. BRAD HERMAN: While I would recognize the 23 lady's considerations relative to utilization, the 24 transiency of residential populations today is at 25 warp speed. 1 I have a school that has a license capacity 2 of 200. I serve 350 kids a year. 3 That also has vast implications, obviously, 4 on the residential side. 5 There is -- and Dick's creativity of the 6 OCFS-MSAR system, there are bands of utilization 7 that would make SED's rate setting-process so much 8 easier, and avoid so many appeals, the adoption of 9 that one element that's part and parcel of that MSAR 10 system, it would be absolutely incredible. 11 The assumption of the present system is, that 12 I have exactly the same number of kid-desk days 13 two years later from the bay share, exactly, in 14 order to have the same income revenue structure for 15 that budget. 16 Now -- 17 SENATOR LaVALLE: You're perfect, Brad. 18 We know that, come on. 19 [Laughter.] 20 J. BRAD HERMAN: You know, I served 21 62,000 days of care last year. The chances of me 22 being able to come up with exactly 62,000 days of 23 desk service, give or take day kids, is incredibly 24 special from any business standpoint. 25 I could be down 5 percent, counties, because 1 of tax considerations; or, school districts could 2 have -- could just reduce me by 5 percent. 3 It's insufficient for me to change any 4 classroom structures, but it's going to deplete my 5 revenue structure by 5 percent. 6 That system takes that into consideration. 7 This one doesn't. 8 I mean, 5 percent, you know, doesn't sound 9 like a lot, but, when you're running on, 8, 10, 10 you know, 15 million, that's a lot of money. 11 And the things are getting so tight, that one 12 of our school districts even has to have their RAN 13 guaranteed by the residential side's foundation, 14 with the bank. 15 School districts don't, technically, do 16 that. 17 You know, that agency has such a commitment 18 to the youngsters that we have, to, in fact, 19 guarantee that loan, at 1.75 times dollars. 20 A million dollar loan? Okay, we're going to 21 guarantee you by a million seven-five. 22 That's how committed some of these 23 residential agencies are to serve these kids. And 24 the risk level of the kids that are being served is 25 ever higher and higher. 1 Now, I'm not going to suggest that, for 2 instance, this isn't going to be a costly venture, 3 but I think one backdrop that's truly independent of 4 what we've been saying, as to what the cost increase 5 of this set of schools would be, take a look at 6 the special education programs of BOCES, the day 7 programs. 8 And, theoretically, our services on the 9 residential side are a more restricted, more 10 demanding set of populations. 11 Take a look at -- and I'm sure that Val can 12 get you the information -- as to what the 13 increases of those day programs have been over, 14 let's just say, the last three, much less -- in 15 fact, almost the last three -- last, three, 16 last six, whatever it may be. 17 That utilization piece is a very critical 18 item that's not been spoken to, and it bespeaks 19 the rigidity, and the fragility, of the 20 education-rate system. 21 And if -- some of these schools have 22 closed. A number of the special eds have closed. 23 You have bonds -- Dormitory Authority 24 bonds -- on some of these schools, that you had to 25 reach in and pick up. You've had to pick up the RAN 1 dollars on these circumstances. 2 So, I think it behooves everyone in the room, 3 to develop this system, to step up. 4 Quite, frankly, Mike -- while I hear Val talk 5 about shrinking resources to, in fact, structure a 6 program, there's talent on this side of the table 7 that, frankly, could develop a system, and present 8 it for critique and comment, without participation 9 by State Ed. 10 Dick understates his knowledge and depth of 11 skill in this meeting today. 12 The MSAR system is one that's survived 13 two centuries now. It's a great system. It's 14 worked, its dynamic. It will make their job much, 15 much easier. 16 It's not going to be without cost. It's not 17 going to be. 18 These are the most challenging set of kids 19 that you have in the entire educational system. But 20 you have, kind of a thermometer, as it were, in 21 looking at some of those BOCES day rates. 22 These kids are tougher than the BOCES rates. 23 SENATOR FLANAGAN: Can I ask you two 24 questions? 25 What was your first name again? I'm sorry. 1 J. BRAD HERMAN: Brad Herman. 2 SENATOR FLANAGAN: Brad, I'm sorry. 3 You spoke about, you -- I guess you have 4 200 slots, but you have 350 kids a year, and it's 5 moving at warp speed. 6 In a general way, what do you a attribute 7 that to? 8 Is it, districts pulling back? 9 Is it, just changing nature of -- 10 J. BRAD HERMAN: I deal -- 11 SENATOR FLANAGAN: -- the (inaudible)? 12 J. BRAD HERMAN: -- I contract for 13 47 counties, and probably about 20 school 14 districts. 15 It's -- it's -- once a kid starts to make 16 progress, they're going to take 'em back, and think 17 that they can continue to have them make progress. 18 Sometimes, that youngster is reintegrated 19 into the school district. 20 I think one of things that we should all look 21 at, from a policy standpoint, is to how many kids 22 are on home instruction in the entire state, that 23 really are going under the radar screen, and not 24 getting the appropriate education that they may, 25 some of whom may be handicapped, possibly. 1 I think that's a critical piece to look at. 2 But, if -- there are, clearly, family court 3 judges that have gotten marching orders from 4 respective county executives, who say: If you 5 show -- if you see a reasonable amount of progress, 6 if mom wants to become reconnected with their 7 child, bring 'em back. Be judicious about what 8 those costs are. 9 It's not always the best situation. 10 I think what's important to understand is, in 11 our families, at our school district, we recently 12 did the statistic: 13 81 percent of our families are single or 14 reconstituted; 65 percent are substance abusers; 15 and, 36 percent have an incarceration history. 16 You're not going back to suburbia. These are 17 intense, long-term investments in these at-risk 18 children. There is no question. And it's a costly 19 situation. 20 And it's -- in some cases, you know, it's not 21 really terribly optimistic, because of the fact that 22 this is not a kid in suspension. It's a kid that 23 has a family around it that's quite fractured, 24 actually. 25 SENATOR FLANAGAN: My second question, and I 1 want to make sure I follow your logic of BOCES: Are 2 you using that as an example to show that BOCES has 3 gotten more money? Or -- 4 J. BRAD HERMAN: All it is, is an objective 5 indicator; a sounding of board of what costs were, 6 set by somebody who doesn't have a bias. 7 You know, somebody might say, Dick and I 8 would come up with a structure -- of a rate-setting 9 structure, and somebody would say: Well, it's very 10 self-serving. 11 I'm trying to give somebody, you know, people 12 in the room, legislators, and administrative 13 folks, another place to look, to look at 14 objectivity by people who, in fact, served 15 handicapped kids. Kids that are about as -- as 16 congruent as those that we may serve. 17 Granted, our kids -- the majority of my kids 18 would be, considered, classified, "handicapped." 19 Those that may not, and there is an overlap 20 in the two populations, are, otherwise, JDs. 21 I have the highest JD population of a 22 non-profit agency Upstate. 23 SENATOR FLANAGAN: Not a trick question, but 24 a tough question: Do you do it better than BOCES? 25 J. BRAD HERMAN: I think that those kids are 1 kids that have different needs, and they can, in 2 fact, be served in a non-education-hours, back 3 home. 4 I think we do a similar job. 5 Typically, I think that the kids that are at 6 BOCES are more physically involved. 7 And, the kids that come to us might be more 8 aggressive, or have a more dynamic situation. 9 I have -- I have the largest program for 10 sexual offenders in the state. 11 Your local school district is not real warm 12 to have those 30 or 40 sexual offenders in your 13 neighborhood. 14 So, it's a little different. We each have 15 our niche, and I think they do it well. 16 I've run 853 schools, 853 preschools, and 17 Special Acts. I can't -- I don't have BOCES 18 experience directly, but from what I see, they do a 19 fine job. 20 But, budget structuring of those situations 21 is much more liberal than ours is. 22 JAMES DeLORENZO: It's important -- Senator, 23 it's important to understand, from a legal 24 perspective, the private -- the approved private 25 schools, by law, and regulation, must serve 1 children that the public entity is unable to serve. 2 So, children, if they could be served by 3 BOCES, or a public school, they would be served by 4 BOCES or a public school. 5 These are children who are unable to be 6 served at that level, and are -- their needs 7 transcend, or are beyond, the capabilities of BOCES. 8 RAYMOND SCHIMMER: Senator, I'm sorry, I'm 9 Ray Schimmer. I'm the CEO at Parsons Child and 10 Family Center here in Albany. 11 You asked earlier what the "typical child" 12 was. And, the typical child is "atypical." 13 If we just use back-of-the-envelope numbers, 14 we've got about 4 million kids under the age of 20. 15 In the 853 Coalition, we're only serving 16 about 8,000. So, you've got about 1 kid out of 500 17 in the entire state who reaches this level. 18 Most of our kids at Parson -- or not most -- 19 probably, 25 to 30 percent are coming to us from 20 psychiatric hospitals, hopefully, on their way back 21 into the district. 22 But, 45 different school districts send us 23 kids in the course of the year. 24 And if there's a unifying description of 25 those kids, it's that, their behavioral profile, 1 whatever the cause of that -- mental illness, 2 trauma, juvenile delinquency -- their behavioral 3 profile is more than the school district's entire 4 range of special education services was able to 5 manage. And, in many cases, more than what the 6 BOCES was able to manage. 7 I've got some numbers here I can share with 8 you later, about the number of regents competency 9 tests, and the number of regents tests we've been 10 administering, and what the passage rate on those 11 has been over the years, and it's increasing quite 12 a bit. 13 In most cases, you could say that those 14 youngsters would not have had the opportunity to 15 even attempt the test if it hadn't been for the 16 853 school. 17 Now, the point I want to make here, though, 18 is that this is -- and I don't want to overstate 19 this -- but this is dangerous work. 20 I did a peer review on a suicide in one of 21 our colleague agencies last year. 22 We have a large order pertubation in the 23 funding, either the amount we get, or the timing in 24 which we get it, it's dangerous. 25 Bill pointed out here, I don't have a 1 football team to cut, or an arts program. 2 If I cut, I'm going to be cutting the 3 teacher assistant who walks in the halls, trying 4 to be at a crisis spot before the crisis develops. 5 We follow kids who burst out of the 6 classroom. We have somebody walk around behind 7 them. We try like heck not to confront them 8 physically, and we've tried to drive down the number 9 of physical involvements that our staff and our kids 10 have. And, I think very successfully. 11 But, that's where we're shaving things off 12 right now. 13 I'm not here today to get more money, or to 14 improve the situation, I'm here to try to help us 15 survive. 16 We can't take a no-growth. It's just not 17 working. We can only pare our healthcare down so 18 far, we can only pare our retirement benefits down 19 so far, we can only cut that staffing so far, and 20 then it gets dangerous. 21 So, I -- I don't know, as Brad said, I think, 22 well done, BOCES does a fantastic work. There's no 23 question about that. And, this isn't an "us versus 24 them," but our situation is perilous right now. 25 SENATOR FLANAGAN: Okay, what we have -- 1 JAMES DeLORENZO: Just one more thing, I just 2 want to -- 3 SENATOR FLANAGAN: Sure. 4 JAMES DeLORENZO: -- so we can round out the 5 picture. 6 There's a group of schools that are 7 853 schools, that are not represented here, that 8 serve children with significant intellectual 9 disabilities, autism, medically involved, medically 10 fragile children. Very -- very vulnerable 11 population that you haven't heard an awful lot 12 about, but, that -- that profile of those children 13 is important for you to understand as well. 14 SENATOR FLANAGAN: Okay. 15 We were originally supposed to be up in 16 Room 332. 17 We're going to take a break right now. We 18 have food for everyone, up there. 19 And what I'd like to do is, come back -- it's 20 12:00. We'll come back here at 12:30, and then, try 21 to come up with some type of, starting, or working, 22 list, on things that could be next steps. 23 So, I would appreciate it if everyone would 24 stay. 25 It's up in Room 332. And, we will come back 1 here at 12:30. 2 Please. 3 (The proceeding recessed for the 4 noontime break.) 5 (The proceeding resumed, as follows:) 6 SENATOR FLANAGAN: Appreciate everyone's 7 patience. Hope the food was -- that's from Rades 8 (ph) which is always good. 9 (All participants say: Thank you.) 10 SENATOR FLANAGAN: Anyway, Senator LaValle 11 had to take off. 12 And, trust me, I have great respect for the 13 folks from SED. I gather they had other things to 14 do, but I think it was very helpful that they were 15 here. 16 What I would like to do -- I spoke to 17 Senator Marcellino -- we touched on a lot of 18 different areas. I don't want to walk out of here 19 just having had a meeting. 20 I would like to walk out of here with some 21 concrete ideas and steps about things that might 22 get gone. 23 And I'm mindful: Jessica put the task force 24 on there, Pam alluded to things that have been done 25 in the past. 1 I agree. A lot of things have been talked 2 about. And, I think we have an opportunity, and I 3 look at this in my own limited time here, being 4 Chair of the Committee, I want to try and do 5 something. 6 So, if we could just talk about several 7 different things. And, I'm going to take the 8 liberty of saying, some of what we would like to do 9 is, come up with some ideas for the Executive, to 10 see if we can convince the Executive to put items in 11 his proposed executive budget, because, if it's in 12 there, and you support, and we agree with it, we 13 don't have to negotiate it. 14 And, if they're positive steps, I think 15 that's part of what we should be doing. 16 So, when we talk about some different 17 areas, if you have concrete things that you would 18 like, that aren't -- don't get accomplished here 19 today, I can just say: Today is the 12th. 20 By the end of the month, can you forward 21 whatever additional ideas you have to the Committee? 22 And we'll have some before we leave here, 23 but, any additional ideas, something that may come 24 up that you hope could be fruitful. 25 And what we will do, is, compile those, and 1 share them with everyone who has been here, so you 2 can see each other's ideas if they don't come out 3 now. 4 But, I would like to focus on a couple of the 5 things. 6 Mark, I think you really started this with 7 the concept of timeliness. 8 How do we -- how do we get from Point A to 9 Point B? 10 And now I'm asking for, like, real 11 recommendations. 12 If there are -- if you have an idea, what is 13 it? 14 I mean: Is it prompt payment? Is it 15 changing a date structure? 16 What do you think that should be? 17 If we could just focus on that for the 18 moment. 19 MARK SILVERSTEIN: Well, I mean, you said it, 20 and I want to thank the Committee, because you've 21 actually -- you've impressed me; we know you've done 22 your homework. 23 So, we thank you. 24 Prompt payment and timeliness is essential to 25 all of this. And it's that simple. 1 And I know Val has staffing issues, but, if 2 we set up these parameters, and we know we can 3 respond. 4 A colleague here spoke to a multi-year rate. 5 Maybe that helps. Don't know. 6 We talked about a new system, similar to the 7 one OCFS is using. 8 I think those are options that we should be 9 exploring. 10 SENATOR FLANAGAN: Okay, since beauty is in 11 the eyes of the beholder, let me ask it with a 12 more succinct. 13 When you talk about prompt payment, DOB and 14 SED might think that's 18 months. You may think 15 it's 30 days. 16 So, is there something specific? 17 JAMES DeLORENZO: I'd like to know about -- 18 SENATOR MARCELLINO: Before you -- before -- 19 let me just redirect it, just a little bit. 20 SENATOR FLANAGAN: Yes. 21 SENATOR MARCELLINO: What's causing the lack 22 of prompt payment? 23 I think that's the key element. 24 To simply say, I want prompt payment, is one 25 thing. That's all well and good. And we all do. 1 But, what is the prime -- what can be done 2 to -- in the process, to get you where you want, and 3 that is the prompt payment? 4 BILL WOLFF: Part of is it prompt payment in 5 full. 6 Because, we're actually waiting to get the 7 final tuition for two years ago. And, then, we 8 bill that. And then it gets worked through again. 9 And because those changes cascade forward, then 10 we're billing last year's, back again. 11 And, so, it's those -- it's those -- you 12 know, it's those last dollars. 13 I mean, when we've got a rate in front of us, 14 frankly, we can send it out, and we get payment 15 pretty promptly on that. 16 That exchange is -- it's just that we're not 17 getting the actual rate that we're going to be 18 entitled to for the services in real-time. It takes 19 a long, long time for us to get that, if we're in a 20 waiver situation, or an appeal situation. Or, even 21 if -- and it's been better lately, because, 22 certainly, of the budget timeliness -- generally, no 23 rates were issued, or nothing really much 24 happened, until a budget was resolved, and then 25 things were promulgated. 1 So, in years past, it has been as normal, 2 sometimes, as for a rate to issue -- issued for the 3 regular year, in December or January, or well after 4 the first of the year, for a July 1 rate. 5 So, then, we're retro -- that's all. 6 The timeliness, it's not so much, that's part 7 of the relationship with our -- you know, the 8 purchasers. And those vary; they go up and down. 9 But, it takes us a long time to get to the 10 point where we've actually got, This is what you 11 need to pay me for what happened in 2008-'09. 12 And, who wants -- who wants to send that 13 bill, and who wants to receive it? 14 RAYMOND SCHIMMER: The appeals process is not 15 abnormal. That's normal. 16 So, you are issued your rate, you have to 17 appeal the rate. 18 Last year, we finished up a four-year period 19 in which we were owed $1.8 million. 20 After four years, that appeal was approved. 21 We then had to send out bills to -- 22 SENATOR MARCELLINO: What took them 23 four years? 24 RAYMOND SCHIMMER: I don't know. I don't 25 know. 1 SENATOR MARCELLINO: Sure you do. 2 RAYMOND SCHIMMER: All I know is -- 3 SENATOR MARCELLINO: You were involved. 4 RAYMOND SCHIMMER: All I know is, the rest of 5 my bills come in in 28 days. 28.6 days. 6 And this one took four years. 7 So, our line of credit goes up, blah, blah, 8 blah, all that. But then what happens is, the 9 school districts received an envelope from us, 10 with a letter, telling them that they owed 11 four years of back payment, on this rate. 12 Albany didn't budget for that payment that 13 year. They didn't even know that they had the 14 obligation. 15 So, that, anything we could do to get off of 16 that normal situation, which you have to appeal, 17 would be good. 18 Absent that, and I do think that we want to 19 do things that are simple, that we can actually get 20 done, as opposed to very complicated things that we 21 may not get done. 22 If the three-year issue at least reduces the 23 incidences of that by two-thirds, because now we 24 only have to appeal every three years instead of 25 having to appeal every one year. 1 As we talk today, the danger of that, and the 2 risk for us is, if we get a bad rate in year one, 3 we're gonna have to live with it for -- for 4 three years. 5 But, the anomaly of this rate-appeal business 6 is very tough. 7 And, again, in some of the situations that we 8 looked at last year, with agencies facing insolvency 9 and bankruptcy, part of it was internal management 10 that maybe wasn't as good as it was. But part of it 11 was because they were waiting for money that they 12 had earned, that had not been delivered yet. 13 SENATOR FLANAGAN: All right, so, let me just 14 go back -- 15 RICHARD LASKY: Can I get -- 16 SENATOR FLANAGAN: Yeah, go ahead. 17 RICHARD LASKY: -- Senator Marcellino, you 18 asked: Why does it take so belong for an appeal? 19 SENATOR MARCELLINO: Right. 20 RICHARD LASKY: A lot of the appeals that I 21 dealt with our group, regional associates were the 22 people who look at this, at individual schools, 23 may have made recommendations to the schools, 24 that's, uhm -- change your programs. And, are 25 they -- be out of compliance with a regulation. 1 So, the schools do that. 2 They submit the information to the 3 rate-setting unit, who then starts a process of 4 approving what the regional associates already 5 told the school to do. 6 As part of that process, they have to look at 7 these drafting standards, that aren't in place, and 8 they weren't in place four years ago, and they 9 start evaluating the program against those draft 10 standards. 11 Then, once they can get that, an appeal then 12 goes to the Division of the Budget. But, then, that 13 may have raised a question, which, then, it has to 14 go back to the agency, and they answer the question 15 at the Division of Budget. 16 So, you've got this constant churning of 17 paper to approve something that was required of the 18 agency two or three years ago. 19 Once all of that stuff is happily decided, as 20 approved, maybe not everything gets approved. And 21 only that portion that is substantiated by the 22 application retrospectively to standards, then the 23 rate gets changed. 24 Now, Ray's situation, he didn't get 25 everything he put on board that was required of him 1 to do three years ago, then he had to make a cut 2 against that. So, he was, you know, still in the 3 hole. 4 But, that's why it takes of long; you've got 5 all of these approval processes, and retrospective 6 reviews of programs, and reviews upon 7 reviews. 8 LEE LOUNSBURY: If I may just add to that -- 9 SENATOR MARCELLINO: Go ahead. 10 LEE LOUNSBURY: -- in other words, the 11 programmatic arm of the State Ed tells the program: 12 Add three more staff to do "X," or else you're out 13 of compliance. 14 The school does that. 15 They may or may not ever see a rate increase 16 to accommodate what they were told to do. And if 17 they do see it, it may well be several years down 18 the line. 19 That's prob- -- one big issue, I think, we 20 should -- 21 SENATOR FLANAGAN: Okay, so, let me -- I 22 don't want to interrupt Senator Marcellino. 23 SENATOR MARCELLINO: No, go ahead. 24 SENATOR FLANAGAN: On that very point -- now, 25 this is legislative -- if we had some type of 1 directive that said, if State Ed says you have to do 2 "X," they are required to pay you in "X" period of 3 time. 4 UNIDENTIFIED SPEAKER: Deal. 5 LEE LOUNSBURY: I mean, I -- I imagine we'd 6 all be supportive of that. 7 With all due respect to our colleagues at 8 DOB, would that legislation ever get signed and 9 enacted, I think is a pretty big question. 10 SENATOR FLANAGAN: Ed definitely told me he 11 would support it. 12 LEE LOUNSBURY: Thank you, Ed. 13 UNIDENTIFIED SPEAKER: Thank you, Ed. 14 PAMELA MADERIOS: I think a lot of the 15 question is: We have to work within parameters 16 of, everything we do has to be cost-neutral. 17 And I think what we're hearing is, that's not 18 practical, because there are going to be some -- 19 some costs that you're going to have to pay for. 20 And, if you've got zero growth that's in the 21 methodology, and, any ideas that we advance have 22 this overarching restriction on them that they have 23 to be cost-neutral, then we can't think outside the 24 box, to your invitation of earlier. 25 But, problematic with the way that the whole 1 methodology sets up is, there are no deadlines, 2 and there's no penalties. 3 So, you can say, April 15th, SED has to shove 4 over to DOB, the methodology. 5 Okay. 6 And DOB is supposed to react to it. 7 In our world, we find that it's better if you 8 say, and if you don't deny it, then it is deemed to 9 be approved. 10 Okay, so that there's a whole kind of way to 11 present information along that, and to kind of hold 12 agency people's feet to the fire, or hold DOB's feet 13 to the fire. 14 And the same way with SED; they can't 15 possibly do everything that they're asked to do. 16 However, there are no time limitations, so 17 that, if you say, if we submit an appeal, the appeal 18 has to be acted upon within, 45 days, 60 days. 19 The reasons why it goes on forever is 20 because, the RA died, or, you know, there's 21 something else that's going on. 22 So, all of the same people are not involved 23 in the process anymore, which means you have to go 24 reeducate people, which is problematic. 25 So, I think that there'd be -- one of the 1 main focuses should be, setting deadlines. And 2 when those deadlines aren't met, there's certain 3 sanctions or penalties that will ensue; either, if 4 a program puts in for this kind of modification, 5 or this rate appeal for an increase in its tuition 6 and its rate of reimbursement, if they don't 7 finalize it within a date certain, then it's going 8 to be deemed to be approved, and DOB is going to 9 have to certify whatever that application is. 10 So, to put the onus on those that -- it rests 11 all with SED, to crunch the numbers, and to fight 12 amongst themselves, programmatically, and fiscal, to 13 determine whether or not it's a legitimate, 14 reasonable expense. 15 And, then, SED fights with DOB, because 16 they've got their own standards of whether or not 17 they think it's reasonable and approvable. 18 And, we've always recommended a fast-track in 19 efficiency, so that, if it's 5 percent within your 20 current rate, then that should be fast-tracked with 21 DOB. DOB doesn't have to take it all apart, 22 dismantle it, and build it back up again, which is 23 what all the time is spent over at DOB doing. 24 So, a fast-track, like a Fast-Pass at 25 Disney World, that kind of thing, is like what we've 1 recommended, within a certain -- you know, 5 percent 2 of the existing rate, for instance. 3 And you would eliminate, probably, a third of 4 the rate of appeals if you do that. 5 LEE LOUNSBURY: The other piece to add on 6 rate of appeals is, right now, if a school appeals 7 Issue "X" from three years ago, and let's assume 8 it's resolved favor -- in the agency's favor, they 9 have to appeal the same exact issue for two years 10 ago. Start the whole process over again. 11 So, one concrete suggestion is, if you appeal 12 with an issue, and it's been an issue for several 13 years, that appeal holds, if you will. You 14 don't have to start the process all over again. 15 SENATOR FLANAGAN: Okay, in the -- and that 16 makes eminent sense, in the realm of appeals. 17 I listened to, we listened to, SED talk 18 about, prospective rates, and reconciliation 19 rates. 20 Do the bulk of the appeals happen on the 21 reconciliation rates, or on the perspective 22 rates? 23 PAMELA MADERIOS: Your perspective is 24 generated from your recon rate, as a matter of the 25 methodology. 1 So, what happens is, they'll come to you, and 2 say: Here's what I'm thinking is your recon rate 3 from two years ago. 4 And, then, you have, 10 days, 30 days, to 5 comment on it. 6 And then you fight back and forth. 7 And then that keeps going on and on and on, 8 until, some point, SED says: Okay, I'm done 9 talking. 10 They set the rate. And then the prospective 11 is automatically a function of whatever that recon 12 is, because it's -- it's with trended, if there's 13 any trend factors. 14 So -- 15 SENATOR FLANAGAN: So, if you -- what do you 16 appeal? 17 PAMELA MADERIOS: You're appealing your recon 18 rate, because that's the one that's being assessed 19 by SED. 20 SENATOR FLANAGAN: Right, and in your 21 experience, if -- I'll just pick a number -- out of 22 1,000 cases, how many get appealed? 23 Is it 5 percent? Is it 50? 24 PAMELA MADERIOS: I think SED has that 25 information. 1 And Tom -- 2 SENATOR FLANAGAN: Well, I am sure they do. 3 PAMELA MADERIOS: I think Tom Hamill said, 4 close to a third of all tuition rates. And that 5 might have been dated, like, maybe a couple years 6 ago. But, it might have been -- 7 J. BRAD HERMAN: I would guess it's much 8 higher than that now, especially because of the 9 zero-growth situations. And, let's say, higher 10 mandates of compliance issues, NCLB, and 11 otherwise. 12 RAYMOND SCHIMMER: A lot of this was 13 exacerbated by the attempt to bring kids in from out 14 of state; youngsters who had been placed out of 15 state by their school districts, because there was 16 no organization in-state that could care for them. 17 In order to do that, the regional 18 associates called for upgrades in the capacity 19 of a lot of the organizations. 20 So, as Dick has said, the organizations then 21 hired the staff for the upgrade, assuming they would 22 get paid. And then they, either, weren't paid, or, 23 they were paid a number of years later. 24 Smaller organizations didn't have the 25 reserves to keep going, and got into financial 1 trouble as a result of that. 2 But, the appeals process increased in 3 volume and intensity, along the time that we were 4 trying to bring kids back in from out of state. 5 SENATOR FLANAGAN: Okay. 6 To comment on something you said, Pam: I 7 respect everybody who is sitting in this room 8 whether it's DOB or SED. 9 Part of the reason I'm asking, is because, 10 oftentimes, you know, SED might actually have a 11 file that says: We have 578 appeals. 12 Your coalition may come, and say: No, 13 there's 830. 14 The reason I'm asking is, not to make work, 15 but to find out, are people actually seeing the same 16 kind of thing? 17 So, I would specifically ask, this, and it 18 doesn't have to be at this moment: Could you, 19 either, individually, or collectively, submit to us 20 what you think should be done vis-a-vis the 21 appeals process? 22 Whether it's, the timing, the submission, I 23 get the whole idea. 24 I like, Pam, the idea of, if it's not done by 25 a date certain, then it's deemed approved. 1 We've had that type of thing with the 2 Comptroller's Office on certain things. And, they 3 don't particularly like it, but, there, that has 4 some real value. 5 So, specifically, as it relates to that kind 6 of timeline. 7 And, as I said, whatever we get, we will 8 share with the people who are here. 9 So, it's not, if someone has a great idea, we 10 will be more than happy to take it. 11 PAMELA MADERIOS: Can I just ask for a 12 clarification, because, a rate appeal is a really, 13 really narrow thing. And that's -- I don't think 14 that that's what most of us use. 15 We negotiate, or challenge, the proposed 16 reconciled rate. And that's not the same as a rate 17 appeal. 18 A "rate appeal" is: I just give up. I need 19 to re-base, or whatever. 20 And that's with the very limited 21 justification of inability to provide IEP and life 22 and safety and hazard, or whatever. 23 So, I think what you mean to say is, that, 24 any challenge to a proposed rate, whether it's 25 through appeal or through the reconciliation 1 process. 2 SENATOR FLANAGAN: Okay, but -- 3 PAMELA MADERIOS: Because I think you're 4 going to get -- 5 SENATOR FLANAGAN: -- but, while I certainly 6 understand that, I think it would be important to 7 differentiate in terms of quantity -- 8 PAMELA MADERIOS: Okay -- 9 SENATOR FLANAGAN: -- because, if SED comes 10 back, and says, We have these proposed 11 reconciliation rates that only represents 12 5 percent, you may turn around, and say, No, it's 13 65 percent. 14 Okay, so, that, on the appeal. 15 And then, Mark, going back, and, Bill, you 16 commented on this, on, prompt, and timeliness. 17 It doesn't sound like there is a -- any type 18 of significant problem with your pay, was, your 19 school districts who are supposed to send you the 20 tuition, generally. 21 BILL WOLFF: Not systemic. I mean, there are 22 individual situations here that, you know, we can 23 navigate, generally, with, you know, like, 24 New York City, you know, the school board. You 25 know, those kinds of things, you know, on a 1 case-by-case by basis. 2 But, generally -- 3 SENATOR FLANAGAN: So, in terms of prompt 4 payment, I think that would tie into the appeals 5 process in the timing of those decisions. And, 6 then, the timeliness, quote/unquote, has a lot to do 7 with the lag issues that we were talking about. 8 ELLEN BERGMAN: Right, exactly, because, if 9 you don't have a certified rate, and you're billing 10 interim rates, waiting and hoping that, 11 eventually, you'll have the rate that will cover 12 your three-, four-, five-year-old expenses, then 13 you have to rebill again. 14 So, that, the last time I appealed my recon 15 rate, which was two years ago -- because, frankly, 16 we don't have the staff to do it, I have to do it 17 myself, and, I finally ran out of enough hours in 18 the day to put it all together -- but, the last time 19 I did that, we were looking at a rate that was 20 four years old. 21 And, in one year, we actually rebilled 22 three times. And I said, I'm done, because I had 23 to bill for, you know, six years ago, five years 24 ago, four years ago. I mean, it was ridiculous. 25 So -- 1 PAMELA MADERIOS: Do you turn out prompt 2 payment, though? 3 Because, you're right; it's not so much that 4 the districts aren't paying promptly, because, 5 like in 4410, we've got a "quarterly prompt payment" 6 rule, and that's just what it is. 7 UNIDENTIFIED SPEAKER: Right. 8 PAMELA MADERIOS: However, there is no teeth 9 in that. And so, that, if, in fact, a district is a 10 little derelict in getting its money to you, you'll 11 go to SED, and say: Hey, can you just whisper in 12 their ear that they need to pay me? 13 And SED says: I've got nothing. I have no 14 teeth. 15 We've suggested to them: Well, why don't you 16 withhold their State aid until they pay me? 17 So, you need to kind of make some kinds of 18 correlations for them, because, for those 19 districts that aren't paying promptly, there has to 20 be a sanction if they don't pay promptly. 21 And there isn't any one that exists. 22 SENATOR FLANAGAN: I'll be sure to tell the 23 school boards that that was your idea. 24 PAMELA MADERIOS: Okay. They know where to 25 find me. 1 SENATOR FLANAGAN: If we could -- all right, 2 so, on that point, if you could, again, submit what 3 you think is appropriate. 4 And, in talking to our own staff, I go back 5 to some very basic questions, and I had said this 6 one on the break, you know: Is this regulatory 7 authority? Is it statutory authority? 8 When someone's says, We have to do it, well, 9 why? 10 Like, why do you have to do? 11 And, what is your concept of what the appeal 12 process is, and how long it takes? 13 If we could switch to, regulations -- 14 Senator Marcellino and I were talking during the 15 break -- about administrative stuff. 16 Are there things that -- I don't know if they 17 may amount to next to nothing, but are there things 18 that you have to do, from an administrative and 19 regulatory standpoint, that add hours and hours, 20 in terms of paperwork, but don't do anything to 21 educate your students? 22 I'm sure that there's -- 23 ELLEN BERGMAN: (inaudible) issue, but, you 24 know, just -- and, it may not be an issue, I don't 25 think it's an issue for the 853s, but, we have to 1 pay the MTA tax, Special Acts, and we're not 2 reimbursed for it. 3 So, that's just clear dollars. 4 SENATOR FLANAGAN: Okay. 5 PAMELA MADERIOS: And, actually, it might be 6 helpful, because, when SED was doing its mandate 7 relief, SED did prepare an entire list of all the 8 regulations that were imposed on the special 9 education players, some of them that would have 10 been in excess of what the federal requirements 11 would have been. But, there was a whole regulatory 12 chart that they provided to the regents, which I 13 think we probably all have a copy of -- 14 Doug, you've got it. 15 [Laughter.] 16 -- that might be a helpful starting point for 17 you, because it does, about, how many; I have to 18 have, you know, seat time. I have to have, you 19 know, the kids are sitting down for 5 1/2 hours. 20 Do I really need 5 1/2 hours? I want to have 21 Arbor Day. 22 I mean, there's a whole list of things, that, 23 I think we've all been clamoring for is flexibility. 24 You give me $100, and tell me that you want 25 me to do -- that you want to move this kid, from 1 here to here, and then let me determine how to spend 2 those limited resources to do that. 3 So, we're talking about, like, the 70/30 4 parameter in the methodology. That's antiquated. 5 If I can manage it for only 10 percent, then 6 why don't I -- why can't I use that other 20 percent 7 towards more direct services? That's the best bang 8 for the buck. 9 So, those are our artificial constraints that 10 have been put in, either through the methodology or 11 regulation. 12 So, if (inaudible) that chart would be 13 helpful to you, I'm sure that we can get you a copy. 14 SENATOR FLANAGAN: I'm sure we get access to 15 it. 16 PAMELA MADERIOS: Okay. 17 SENATOR FLANAGAN: But, I think the challenge 18 in that area, for us, as legislators, and I've 19 said this before: You know, if I were to come 20 out -- 21 And let's put -- I'll put this proposal out 22 there, and Senator Marcellino will probably say, I 23 have to go now. 24 [Laughter.] 25 -- if you come out and say, We're gonna 1 repeal all the additional State requirements, as 2 it relates to special ed, and we're just going to 3 back to what the federal minimum standards are, 4 within 24 hours, you know, I, and anyone similarly 5 situated, would be castigated for not caring about 6 children or adults, and trying to obliterate the 7 system. 8 So, if -- "if" -- we were to go down that 9 road, even partially, we are going to need people 10 with us, people who are actually delivering the 11 services, to watch our backs, as they say. 12 UNIDENTIFIED SPEAKER: That's fair. 13 PAMELA MADERIOS: Well, can I just clarify? 14 I'm not really inviting you to remove 15 anything that's excessive -- 16 SENATOR FLANAGAN: I know that. 17 PAMELA MADERIOS: -- over federal. 18 SENATOR FLANAGAN: I know that. 19 PAMELA MADERIOS: I mean, 'cause my guys 20 would kill me. 21 But, I do think that we can identify things 22 that are restraints, artificial restraints, and 23 bind and tie our hands, and prevent us from doing 24 the things that we need to be able to do. 25 SENATOR FLANAGAN: That's fine. I get the 1 point. 2 DOUG BAILEY: Yeah, we've actually -- I mean, 3 we've already interacted with SED, and a number of 4 those. And, we're in the process now of the 5 follow-up, trying to refine it a little bit tighter. 6 One of the issues we face, I think, is SED 7 feels more focused on, if it's in reg, we really 8 don't want to change it. And that's difficult for 9 us. 10 I mean, the reality is, we're asking for 11 something simple. 12 Say, as an example of: If a child comes to 13 us, the current IEP says his class size is 6:1:1. 14 Well, what we'd like them so say, is, if they 15 came to the LaSalle school, the class size at the 16 LaSalle school is, generally, 6:1:1, but we're gonna 17 move staff around, based on the needs of the kids in 18 any given day. 19 As Ray indicated, some classes, they'll 20 become volatile real quick. That day, you're gonna 21 need more staff. 22 So, we're asking, say, make that type of a 23 change. Make it very simple. It would allow us to 24 take the staff we currently have, no additional cost 25 to all of that, and just use them more flexibly 1 within the program. 2 But, right now, they're fixated on, the IEP 3 has to say, the kid gets a 6:1:1 classroom. And if 4 the regional associate, the monitoring division, 5 comes in and see as a kid in the classroom, there's 6 no aide in the classroom, he gets cited for it. 7 And, to me, it doesn't make any sense. 8 SENATOR FLANAGAN: All right. 9 Doug, I would add to what you're saying, and 10 I want to keep things in perspective, and on 11 balance: I'm not necessarily looking to suggest 12 that we get immersed in every aspect of what goes 13 on. But, to the extent that you can keep us in mind 14 as you have these discussions, I think there should, 15 in many respects, be a continuing healthy friction 16 between and amongst the players, whether it's the 17 Executive or the legislature, there are certain 18 things that we're going to push hard on with the 19 Executive. There are certain things the Executive 20 is going to push hard very back -- back very hard on 21 us. 22 So, if we are knowledgeable, there are things 23 that perhaps we can do to help in that regard. 24 So, if there are regulatory components, and 25 some of these things may come out of the coalition 1 already, in terms of what you're advocating. 2 And, then, in relation to that, I was talking 3 to Bob Farley about, sort of the general concept of 4 best practices. 5 Now, despite all the problems that we may 6 have, and the challenges we have, in the state of 7 New York, in my humble opinion, we are vastly ahead 8 of many other states in the country, in terms of how 9 we do things. 10 But, that doesn't mean we can't learn from, 11 either, colleagues, or, if you think there are 12 things going on in other states that we should be 13 mindful of and be looking at, whether it's through 14 financing or program, or even from a regulatory 15 standpoint, that would be helpful as well. 16 BILL WOLFF: We have seen some of that with, 17 back earlier, to Ray's point, of the small universe 18 of kids, and the build up of best practice with this 19 exceptional group of kids who generally have failed 20 in a lot of other settings, we do see collisions 21 within regulatory standards, and what's emerging 22 best practice in the fields, in some of these -- 23 in some of our schools. 24 And, where emerging best practice is -- is, 25 basically, contrary to reg, and some of the best 1 things that are being tried with very, very 2 profoundly disabled kids, wind up being a problem in 3 regulation, even though, probably, if everybody 4 stepped back, they'd say, that this is a good idea. 5 And, folks who are closest to the service 6 system really know some of the best stuff that's 7 going on with autism treatment, for example, and, 8 yet, the regulations have fallen behind on what some 9 of those practices are, and they wind up being 10 defined as, not eligible for use, or, we get caught 11 in some sort of trap of running back into the IEP, 12 and it's not there, and it's all over the place. 13 SENATOR FLANAGAN: Well, let me ask you -- 14 BILL WOLFF: Those are complicated issues. 15 SENATOR FLANAGAN: -- as a parallel: One of 16 the -- when you first get to the Senate, you get 17 opportunities to serve in different capacities. 18 And, generally, if you're here for the first 19 time -- I don't know if Senator Marcellino did 20 this -- but one of the things I chaired was the 21 Administrative Regulations Review Commission. I 22 know it is extraordinarily exciting, in terms of its 23 title. 24 [Laughter.] 25 SENATOR FLANAGAN: But, in reality, in terms 1 of the work that you do, it has some real bearing. 2 My question is: Do you feel that the 3 regulatory process, from a perspective standpoint, 4 do you have decent input into that, and do you think 5 that process works? 6 Because, one of the things I've heard about, 7 SED -- believe me, I would say this if they we're 8 here -- is, that, they get blamed for a lot of 9 mandates. They get blamed for a lot of things 10 that they make people do. 11 But, in lieu of some things like that, 12 they'll come up with, what are directives. 13 UNIDENTIFIED SPEAKER: Uh-huh. 14 SENATOR FLANAGAN: It's not a mandate. It's 15 a directive. 16 And it's one of those things, where, you 17 know, like, you're the child, and if you don't 18 listen to the parent, then that can create 19 problems for you. 20 So, from a procedural standpoint -- 21 And, Bill, this may tie into the concept of 22 best practices. 23 -- is that part of it working at all? 24 I mean, do you have input only after the 25 fact? 1 Or, do you have some input on the upfront 2 part of the process, to say: Hold on a second. 3 Don't -- don't do it this way because it's not going 4 achieve the intended result. 5 MARK SILVERSTEIN: Well, it's time to put 6 foot in the mouth, so, let me do it well. 7 SENATOR FLANAGAN: I thought I was doing that 8 quite well. 9 MARK SILVERSTEIN: Well, staff -- let's take 10 the staffing stance, the classic example of someone 11 saying that we were involved. 12 I attended a number of meetings, but there 13 was no feedback. 14 The staffing standards were put in place, and 15 they just appeared. 16 Well, why, Mark? 17 Well, I went through an appeal that took 18 4 1/2 years. I had "X" amount of security staff, 19 difficult kids, as my colleague said. 20 So, by the time the appeal is finishing -- 21 was finished, staffing standards are in place, I 22 lost $250,000 because I had too many security staff. 23 Why? 24 Well, the staffing standards were here, but 25 they weren't there. 1 The rationale was: Well, they're in place 2 now. 3 I spent this money. It's my obligation to 4 keep my students and staff safe. 5 I lost a lot of money. 6 Now, I will never go through another rate 7 appeal again. That's -- 8 If you hear me, God. 9 -- but, that's an example of, we sat at 10 meetings. But I can -- you can ask my colleagues 11 here -- Who asked me about how many security staff I 12 need, or how many teachers I need, or how many 13 psychologists? 14 Nobody. 15 PAMELA MADERIOS: And to the point those -- 16 and we attended the same little workgroup meetings 17 on the staffing ratios, they decided that that's 18 what they wanted. 19 MARK SILVERSTEIN: Right. 20 PAMELA MADERIOS: They had a program, and 21 fiscal was kind of like watching on the side. 22 We engaged; we said: No, that's not going to 23 work. What about this? What about the other thing? 24 And, then, they just went through, with minor 25 revisions, implemented the thing, without the 1 benefit of a regulatory framework. 2 It just, is. 3 So, a lot -- 4 HEATHER EVANS: It's a considered draft. 5 PAMELA MADERIOS: Right. And, still -- and 6 that your reference about the draft and rate -- 7 staffing ratios, because they are implemented, 8 they are given to the RAs, they given to the 9 fiscal people, but they are nowhere in regulation, 10 they are not anywhere in any printed document that's 11 accessible, so that we could gauge our conduct 12 accordingly. They're just imposed upon us, period. 13 And we were engaged in the process, but our 14 input was minimized. 15 Part of the problem with SED, is because they 16 can't do -- they can't put a regulation out there, 17 even on an emergency basis, unless the regents has 18 an input to that, which means it's a very 19 protractive process, because the regents only come 20 in once a month. And, so, there's an unnecessarily 21 postponement of immediacy. 22 The only way they react quickly, is when, 23 you, the legislature, directs them to do something 24 by statute, and there, they got the 120 (inaudible) 25 days thereafter, where they have to do something to 1 develop the regulations. 2 And, otherwise, that's why they're resistant 3 to changing regulations without the direction of a 4 statute, because it's such a protracted process. 5 So, we would encourage you to, in fact, set 6 out the steps that you'd like it to take: We want 7 you to do "this," in statute -- because, then they 8 have to -- their response is, to promulgate the 9 regulations; as opposed to the converse, which is, 10 I'm trying to change policy through regulations, 11 which their institutional structure doesn't allow 12 for it -- 13 SENATOR FLANAGAN: Yeah, I would make two 14 comments, which are, perhaps, more personal in my 15 own philosophy. 16 I think one of the -- and this has been going 17 on for years, but one of the scariest phrases that 18 could ever be in a piece of legislation is, at the 19 end, outside of the effective date, is when the bill 20 says: The Commissioner shall promulgate rules and 21 regulations in accordance with this act. 22 Because, that is often diametrically opposed 23 to what the legislative intent was. 24 And then, second part, relative to the 25 State Administrative Procedure Act, in my humble 1 opinion, there is far too prolific a use of the 2 adoption of emergency regulations, because, I look 3 at it like, the kid who waits to do the term paper 4 until the last week of the semester, and then the 5 agencies just promulgate emergency regulations under 6 the guise of the public health, safety, and welfare, 7 and those who are affected don't have the 8 appropriate time to comment. 9 Am I getting it right? 10 J. BRAD HERMAN: Okay. 11 SENATOR FLANAGAN: Okay. 12 That -- that is clearly challenging. 13 Can I -- I want to ask more a specific 14 question. 15 On the -- your initial rate versus the 16 reconciliation rate -- and I know this is general -- 17 but, how often do they coincide? 18 Is there, like, a great disparity? 19 And I'll just pick a number. 20 If you have $20,000, and then your 21 reconciliation rate ends up being 14, is it, like, 22 20 and 19? Is it -- do you have -- is there often a 23 big disparity when you ultimately get your 24 reconciliation rate? 25 Does that make sense, the way I'm asking it? 1 ELLEN BERGMAN: In my experience, it's 2 generally been lower, but it's not 20 percent lower. 3 Maybe, 5 to 10 percent lower, because there's always 4 something that's been excluded. Either, the student 5 population was smaller, or -- the latest, we billed 6 for therapies, because IEP therapy frequencies went 7 up, but they said we had screened, and we had too 8 great an increase in -- in this case, vision 9 services. 10 I really couldn't help the fact that the 11 children needed vision services, but, because it 12 went up at too great a rate, for over a year, it was 13 excluded, because it hit what they call 14 "the screen," which is growth factor. 15 So, you always lose something. 16 And, then, used to appeal. I won't appeal 17 anymore. 18 I used to appeal, but it takes so many 19 years, that, it's just not worth it. 20 PAMELA MADERIOS: When the methodology was 21 first developed, the reconciliation was put in -- 22 And, Doug, tell me if I'm wrong. 23 -- with an eye towards being sensitive to the 24 fact that you may have incurred costs that were not 25 currently in your rate; and, so, therefore, it was 1 designed as a way to make you whole. 2 We've so long passed that. That doesn't 3 exist anymore. 4 Now, it's just a weapon by which our -- 5 ELLEN BERGMAN: They take back. 6 PAMELA MADERIOS: -- they take back. 7 ELLEN BERGMAN: Right. 8 PAMELA MADERIOS: And that's what it is. 9 I rarely see anybody's rate -- and I've 10 managed these all the time over at SED. I rarely 11 see anybody's rate go up as a response -- as result 12 of anything. 13 It's just another compression on the system: 14 I'm going to disallow that cost. I'm not going to 15 buy in that you needed to change. Or, build this 16 building, because the other one was, you know, 17 falling to pieces. 18 So, it's just a -- it's a weapon that's used 19 to disallow costs that you've already incurred and 20 spent the money on. So, you're always deficit 21 spending. 22 BILL WOLFF: You know, if I could? 23 SENATOR FLANAGAN: Sure. 24 BILL WOLFF: One of the things that I think 25 that we looked at -- and I'm not sure if this is in 1 regulation, or where it would fall, as we look 2 forward, but, we've looked for this with some of the 3 bills -- is, the ability to retain a small 4 reserve, because we're not perfect in operating 5 these things. 6 So, basically, the reconciliation system 7 sweeps up any efficiencies, or operating reserve, 8 or any income over expense. It zeroes it out. 9 And, you know, that's not a very practical 10 way, generally, to run a business. 11 I understand, that, in terms of 12 State-contracted dollars and government spending, 13 that there's some interest to be precise about that. 14 But it -- but, school districts are held to a 15 different standard, public school districts. 16 And our basic role is to fulfill this free 17 and appropriate public education for kids that are 18 in these, you know, extreme situations. 19 So, I think -- you know, generally, I think 20 our system ought to be no more -- I want to say the 21 right word -- the controls on growth, the controls 22 on such things, and the opportunity to run the 23 business, ought to be, probably, no -- it's not 24 exactly the same, but we ought to look to some of 25 the restrictions that we send to the public school 1 districts, with respect to their operating. 2 I was on this public school board for a long 3 time in my community, and I understand the balancing 4 effect of the community, and those who can vote with 5 respect to doing the good job representing them and 6 managing things. 7 We don't quite have that in our schools, 8 with the community. 9 But, you know, it's really -- it's really -- 10 the advice, I mean, you know, to the regents, 11 basically, I mean, SED has studied it, and said: 12 You know, we see real troubles in public school 13 districts, where, you know, the reserves are 14 unavailable, or that fund balance is not managed 15 properly, because it needs to be available to smooth 16 things out. 17 And, that's allowed for in the public 18 schools. 19 I understand the con- -- that the -- you 20 know, the idea that state government wants to 21 contract exactly for what it gets, but there needs 22 be some margin in there for us, because that's how 23 we can manage some of these periods more 24 effectively than through a waiver process, or a need 25 for an appeal process, or somehow to get around it. 1 We're zeroed out every year on that, so -- 2 RAYMOND SCHIMMER: Yeah, just to take that a 3 little further, and we've mentioned this before, 4 it's not in our best interest to end up with the 5 rate that's higher than the public school; than it 6 costs the public schools to do the same work. 7 We're non-profits. We're supposed to be 8 contributing here, above and beyond. We bring value 9 to the proposition. 10 But, if we don't at least stay parallel, bad 11 things start to happen. 12 We have a no-growth period right now. 13 It's not no-growth in public-school teacher 14 contracts. Their contracts continue to advance. 15 Our teacher compensation is flat, and it's 16 going to stay flat. 17 When the recession ends, I expect it any day 18 now, the difference in the compensation between the 19 public school and the non-profits are going to be 20 enormous, and we're gonna have an outflow. The 21 sucking sound will be our staff leaving. 22 We don't need to be equal to, but we need to 23 be parallel to, going down the road. 24 And I'm not sure why you would handle it 25 differently. We're executing the state's 1 obligations, under state and federal law, to educate 2 these kids. 3 We're not an Albany academy; we're not a 4 private school that a parent chooses on their own. 5 We're actually providing a public school service. 6 And this is going to distort a lot of things, 7 this variation. I think you all know now, the 8 property caps can -- the 2 percent property cap 9 can be pierced by changes in public-sector 10 pensions. 11 It's not the same for us. We're not getting 12 any 2 percent. We're getting zero percent no matter 13 what happens our pensions and what happens with our 14 healthcare. 15 So, when we come back to you with this 16 statement -- and I think we'd be delighted, will we 17 not, to put this together -- I think that's 18 certainly going to be one of the points; that 19 there's got to be some linking between the public 20 system and the 853s. 21 SENATOR FLANAGAN: Yeah, Ray, I agree with 22 what you're saying, but I want to go back to Bill's 23 point first. 24 RAYMOND SCHIMMER: Yep. 25 SENATOR FLANAGAN: Senator LaValle left, and 1 I want to take the liberty of speaking, essentially, 2 on his behalf. 3 He is an example. He has tremendous 4 reservations about the concept of the fund balance, 5 generally, much more, much more related to school 6 districts than anything else, because he thinks 7 that they've abused that. 8 So, you do have a number of legislators who 9 have an inherent bias against creating further 10 opportunities for taxing entities, right, putting 11 you in that category, so to speak, to go out to the 12 public, and start to build up their reserves. 13 In my opinion, the fact that the State of 14 New York has a structure like that for the state 15 itself, it makes it kind of hard not to give that 16 opportunity to a school district, or, the type of 17 situation that you're describing. 18 So, you'll have different opinions on this 19 subject. And, honestly, I don't see that changing 20 right now. But, it does -- you do make a good 21 point, because, you know, the level of reserves, 22 even if it were at 4 or 5 percent, if we said to 23 you, you'll have 2, that's a lot better than zero. 24 BILL WOLFF: We could ask for something 25 different than a fund (inaudible) -- 1 SENATOR FLANAGAN: Yeah. 2 BILL WOLFF: -- but, some of the other rate 3 methodologies, reward, or acknowledge, an efficiency 4 performance up against utilization, that gives you 5 some ranges in which -- obviously, you don't want 6 to create a fund -- if I have room for 100 kids, and 7 I said, I only want 50, and I'm living large, that's 8 not what any of us want. 9 SENATOR FLANAGAN: Right. 10 BILL WOLFF: You know, you want to say, if 11 you've got room for 100 kids, I'd like to think, at 12 about, maybe, 90, 95 there most of the time, and 13 that's what we're paying for. Can we do -- 14 And, so, there's ways, I think, that a rate 15 methodology can make that work, and it doesn't have 16 to be called "a fund balance," and there's ways 17 that it can be managed, so it doesn't go to excess. 18 We don't have a lot of money. We don't know 19 what to do with the little bit of dough we've got. 20 I mean, our staff are looking at us, saying, "Hey." 21 But, that preciseness of what we're left with 22 at the end, you know, is really an interesting -- 23 the business folks that are on my -- on our 24 boards, always ask: What? How do you do this? 25 How are you that good, that you can hit zero every 1 year? 2 SENATOR FLANAGAN: All right, can -- on the 3 preschool versus school age -- Jim DeLorenzo talked 4 this; Doug and I were talking about this during 5 lunch -- it doesn't have to be a concrete answer 6 right now, but, it seems that there's some type of 7 consensus that there should be a differentiation 8 between those two entities, and that would help 9 eliminate some of the problems. 10 So, I'm going to take that as a "yes," unless 11 we hear to the contrary. 12 PAMELA MADERIOS: Yes. 13 MARK SILVERSTEIN: Yes. 14 SENATOR FLANAGAN: Okay. 15 The other thing is, on the -- I'm going to 16 call it the "Lasky model," since he, apparently, is 17 the architect of a lot of this, if we moved to that 18 MSAR model, that seemed to be -- everyone seemed to 19 be generally supportive of that. 20 SENATOR MARCELLINO: What does that acronym 21 stand for? 22 RICHARD LASKY: Qualifications over the 23 course. 24 LEE LOUNSBURY: What's the acronym stand for? 25 SENATOR FLANAGAN: What does that stand for? 1 SENATOR MARCELLINO: What does that acronym 2 stand for? 3 LEE LOUNSBURY: Maximum State Aid Rate. 4 RICHARD LASKY: Maximum State Aid Rate. 5 That's -- that used to control the amount that the 6 State reimbursed local districts who purchased care. 7 SENATOR FLANAGAN: Okay? 8 SENATOR MARCELLINO: Okay. 9 LEE LOUNSBURY: Just to add to that that, 10 Senator, I think people, on their own, would be 11 willing to work on that. It doesn't have to be all 12 State Ed doing that -- 13 SENATOR FLANAGAN: Right. 14 LEE LOUNSBURY: -- all the work. You know, 15 we can certainly work in partnership with them. 16 And, I think it's, not only figuring out how 17 to use that model for these purposes, but, then, how 18 to manage the transition period. 19 It's really a two-step process: How do move 20 what is to the new world, if you will. 21 PAMELA MADERIOS: And if I could make a 22 suggestion? 23 The dynamics of the day programs for 853s 24 are different than the dynamics for the 25 residential 853s. So, there has to be 1 modification accommodations to that distinction, 2 because their population is a lot different than my 3 day program 853s. 4 So, just -- 5 SENATOR MARCELLINO: I don't know it's 6 absolutely necessary to work with State Ed in coming 7 up with some kind of ideas. You almost might be 8 better off if did you it apart. 9 They come up with their ideas, you come up 10 with your ideas, and see how it works. 11 Submit it to the Committee, and let us bang 12 it around a little bit, and let's see what plays; 13 because, otherwise, you're in a negotiation from 14 day one. 15 UNIDENTIFIED SPEAKER: That's a good point. 16 SENATOR MARCELLINO: And one side could kill 17 the other side off, by just not negotiating. 18 And, so, it's -- you don't want to do that. 19 I would -- keep it separate, and come up with 20 some thoughts that you think. 21 And I go back to my friends at the 22 Department of the Budget, and I'm not being 23 facetious, but, you guys are involved in too damned 24 much. 25 I understand. I understand the money. I 1 really do. I get it. 2 You're trying to keep a watchful eye over 3 things, but, in many cases, you're creating more 4 trouble than it's worth. 5 You're lengthening time frames, you're 6 creating extra paperwork. You're getting involved 7 in situations where you don't have the expertise. 8 So, why? 9 Isn't there a way that you can do your job, 10 and let other people do their jobs? 11 I'm pointing the finger, obviously, at you, 12 personally; but, carry the message back, because 13 it's a message that I'm going to sending back in 14 other ways. 15 You need to get out of the way sometimes, and 16 let these people do their work. 17 And, getting into situations where, this 18 rate, that rate; justifying positions, justifying 19 methodologies, and dealing with children, you're not 20 expert at that. 21 You're good at counting money, you're good at 22 putting the money out, you're good at managing the 23 money, but that doesn't mean you're good at doing 24 program, or analyzing program. 25 And I think you've got to get out of that 1 business. You're in it too much, at least from what 2 I'm hearing here. 3 What I said before is, that, when I -- at the 4 opening: We're trying to figure out who -- the way 5 that you have to go, back and forth up, and up and 6 down, and in and out. 7 I was so -- I mean, I taught school for 8 20 years. I thought I knew something about this 9 business. 10 I was on the school board for a number of 11 years. You know, I've been in the legislature for 12 seventeen. 13 I thought a knew a little bit about some 14 things. But, I was as confused as hell, as to how 15 anything ever gets done. 16 With appeals, it takes, four years, 17 five years, three years, because somebody's 18 dickering over this, that, and the other thing. 19 I don't know what you're saving. I really 20 don't. 21 After a while, you lose the savings for the 22 time lost, and organizations going out of business, 23 that shouldn't, and time wasted. People wasted -- 24 people-time wasted on things that doesn't have to be 25 done. 1 So, you know, the old adage, "Do more with 2 less"? That's crap. After all, you do less with 3 less. 4 And I think we're getting to that point in 5 the state government. A lot of different entities 6 and a lot of different agencies have reached a point 7 where they cannot manage what they're supposed to be 8 managing. They just don't have the bodies. 9 If someone goes on vacation, or someone gets 10 sick, for a week, the work of that person sits on 11 that person's desk for a week. No one is there to 12 pick it up. 13 You don't have backup anymore in the system, 14 that someone can pass it off because there's two 15 people doing the same work. Now there's, maybe, a 16 half a person doing that work. 17 So, now, you've got to, under -- now it just 18 sits there, and doesn't get done. That means, 19 they're not going to paid. That means, decisions 20 have to be postponed. Deadlines are not going be 21 met. 22 So, you know, I think everybody's got to take 23 a look at -- and that includes the executive 24 branch -- has got to take a look at getting out of 25 each other's way, in a lot of ways, and, 1 legitimately, scaling back, because it's just all 2 too complicated. We're getting too crazy here. 3 And this work shouldn't be all that difficult 4 to do. 5 The working with kids is the difficult part. 6 The money should be easy. 7 The managing of the money should be easy. 8 It's becoming the most complicated thing going, from 9 what I'm hearing. You almost want to get back to 10 the kids. They're simple, in comparison. 11 So, I think, there's a whole lot of things 12 that have to be looked at. 13 Perhaps, you people do your thing, come up 14 with some thoughts, some legitimate clean 15 suggestions. 16 Don't tell me to eliminate the income tax, 17 because that's not going to happen, and you know it. 18 Don't tell me to eliminate the MTA tax, 19 because you know we're trying to do that; we'd love 20 to do that. 21 If we can do that, we will, but, I don't 22 think that's the problem at this point in time. 23 Let's look at procedure, that you have to 24 live with on a day-to-day basis: What can be done, 25 what can be eliminated, that would make your job 1 simpler, cleaner, and easier to do, without costing 2 a fortune? 3 Maybe you can save you some money, and some 4 time, and get it done, so that the -- timely 5 payments and the budget, you know, how can we get to 6 this timeliness back? 7 They shouldn't have to wait. 8 And they're not alone. I'm telling you, I'm 9 hearing this from agency after agency: We're not 10 getting paid. 11 You know, I worked in the city of New York 12 for 20 years. Vendors with the City of New York 13 used to build in a delayed-payment factor, and the 14 City knew it. We were paying more for everything, 15 because, in effect, they were loaning us money, 16 because we wouldn't pay them on time. 17 We were not paying -- the City was not paying 18 anybody on a timely fashion, so the vendors built 19 it in when they put their bids in. 20 We're creating that. We're creating that 21 here. They're lending us time and money. 22 That's wrong. 23 So, we've got to streamline our systems to 24 make it -- you know, make it easier for everybody. 25 And, I think you'll save a lot more money and a lot 1 more time, that way. 2 I picked up some notes here, and I like 3 some of the things I heard. 4 I like the idea of this regional, the three 5 years. It makes some sense. 6 I don't know about penalizing. You 7 penalize -- you tell me I got a penalty, I'll veto 8 everything. I'll say no to everything. 9 That eliminates it. 10 If you tell me, I don't have enough time to 11 get to react to all the claims, I simply knock 12 them all down, in the time frame. 13 Then what are you going to do? 14 You're not going to get there by penalizing. 15 So, we've got to make -- those time frames, 16 there should be time frames, and they should be 17 realistic. And we should be able to work with them, 18 in that sense. 19 But, you're not going to punish anybody. 20 That doesn't work. You're punishing the same -- 21 it's the same dollar, it comes from the same 22 taxpayer. 23 So, it's not something, that, you're not 24 going to put anybody in jail for delayed payment, on 25 that basis. 1 So, I think we have some good ideas. 2 Regional, I like it. 3 But, eliminating some of this unnecessary 4 back-and-forth, approval/disapproval that, we can do 5 that. 6 And, if you can come up with some hard 7 numbers, I'd be really interesting in looking at 8 some really hard numbers, and getting the counties 9 out of this business. 10 As I said to John before, I think we should 11 be -- if we can do that, I don't see you have a role 12 in it, I don't see you have the expertise in it, I 13 don't see there's any reason for it. 14 Again, it's just -- and I know why it was 15 done. That's easy. Passing the buck is easy. 16 JESSICA MORELLI: I'm not offended. 17 SENATOR MARCELLINO: It's Okay. 18 SENATOR FLANAGAN: Jessica, she's going to do 19 the "wave" now (indicating). 20 SENATOR MARCELLINO: That's okay. 21 I'm not saying it can happen, I'm not saying 22 it's going to happen. But I'm saying, I'm 23 interested in looking at it, because I think it's 24 something that can be done. 25 I don't think there's any -- I don't think 1 there's any real -- other than just getting the 2 money off of somebody else's back, it's taking it 3 out of, this pocket, from that pocket. 4 JESSICA MORELLI: Sure. 5 SENATOR MARCELLINO: I don't see the gain 6 there. 7 JESSICA MORELLI: Right. 8 SENATOR MARCELLINO: So, if we could clean 9 that up, and make life better off for some of the 10 counties, then perhaps we should do that, too, and 11 take a look at it. 12 But, I thought -- John, thanks for the 13 hearing. I thought this was very informative. Not 14 that it's ending, but I thought it was informative. 15 I learned a lot. 16 I learned how little I do know. 17 I have more questions than I came in with, 18 but, that's okay, that's good. 19 That's good. 20 SENATOR FLANAGAN: I actually do have one 21 last question, and I'll use as a backdrop: I have 22 one kid who just got out of college last year, one 23 kid in, and one on the way. 24 So, when I hear people making reference to 25 the RAs, I'm thinking about the person who is 1 running the dorm, which may not be that far off. 2 J. BRAD HERMAN: It's pretty close. It's 3 pretty close. 4 UNIDENTIFIED SPEAKER: No parties, though. 5 SENATOR FLANAGAN: Seriously, what is -- 6 what's the role of the RAs? 7 This a field person from State Ed who is 8 just -- 9 DOUG BAILEY: Yeah, the RA has a -- the RA is 10 the monitoring -- quality assurance monitoring. 11 It's the person, the regional associate, within -- 12 for these schools, it would be within the 13 non-district unit that looks at non- --the 14 school -- they're not the public schools; 15 programs that are not the public schools. 16 Aside from the Special Acts, they're 17 included in that group. 18 And they're individuals who are under quality 19 assurance. They go out, they visit, they monitor, 20 they send reports. 21 MARK SILVERSTEIN: Resources. 22 PAMELA MADERIOS: They're program only. And 23 they have, no, or very little, understanding of the 24 fiscal components. They just are, program. 25 So, they know what the regulations require; 1 that, you need 14 fire extinguishers. 2 If you don't have 14 fire extinguishers, 3 they'll talk you to about that. 4 Or, what your CO is looking like. 5 So, it's purely programmatic, and that's part 6 of the disconnect. 7 I think everybody agrees, is that, fiscal and 8 program seldom talk. And when they do, they're not 9 speaking the same language. 10 And, so, program can say: Go out and do this 11 thing. 12 And then fiscal says: Well, that's great, 13 but I'm not paying for it. 14 So, that's the program people -- 15 SENATOR FLANAGAN: When I talk to people in 16 small businesses -- and I'm no different than my 17 colleagues -- I'm always asking them, "What's going 18 on?" 19 I think, probably, one of the groups that's 20 generally despised is the Health Department. 21 You know, Health Department will come into a 22 restaurant, and there could be 950 things that are 23 going just extremely well. 24 Well, that "EXIT" sign is a little bit off. 25 In your experience, the role that that 1 individual plays, do you feel, like, when they're 2 coming in, they're always look for something? Or, 3 are they, just, pretty straightforward? 4 RAYMOND SCHIMMER: I think, they've been 5 pretty straightforward, and reasonable. 6 There are a couple of problems. 7 The first one is: Their quality varies 8 enormously, from person to person. 9 So, that they will -- they're like baseball 10 empires, with different strike zones. And you 11 don't know what it's going to be from one to the 12 next. 13 This one -- this one cares totally about 14 your curriculum. 15 This one cares totally about your staffing. 16 So, that varies. 17 Big problem was, we went for almost 18 ten years with that unit disassembled. And it's 19 only been reassembled in the past five or 20 six years. 21 As I said earlier, one of -- our biggest 22 problem, and I'm so -- I'm so grateful we had this 23 opportunity today, because we're so tiny in the 24 universe of responsibility that SED has. 25 I mean, 8,000 kids out of 4 million, it -- 1 we're nothing. 2 So, it's been very difficult for them to 3 focus on what it is that we have going. And, 4 without the RAs, we were out in the wilderness. 5 Now we have the RAs, and it's gotten a 6 little better. 7 But one of the problems is, that their word 8 not their bond. They will tell you, you have a 9 deficiency and you should remediate it. 10 You pay to remediate it, and two years 11 later, you're not reimbursed. 12 Now you're in trouble, because you've 13 expended your resource on a promise that didn't get 14 fulfilled. 15 So, one of the things I'm going to advocate 16 that we write is, either: 17 That link gets taken out of the process, and 18 we speak directly with Senator Alessi. They either 19 say, yes or no, and we know it at that time; 20 Or, these RAs be given a little bit more 21 power than they currently have. 22 But, it is a -- it is a problem: more 23 expensive. We're a small unit. We're exceptional. 24 We can't fit into the larger formulas. 25 And I think that's at the bottom of a lot of 1 what we've got going on here. 2 But, then, I will agree with your earlier 3 comment: I think we do it as well here as it's 4 probably done in the country. The attention to 5 detail that we're able to pay is terrific. 6 SENATOR FLANAGAN: Thank you. 7 What I would respectfully ask is, if everyone 8 could forward their appropriate contact, including 9 e-mail information, to our office, we'll share it, 10 certainly, with Senator Marcellino. 11 And, I expect that we would, soon as we can 12 get tape for everyone, we'll get that out to you. 13 And, then, put the requests that I 14 specifically made, again, if we could have those by 15 the end of the month, that would be very helpful. 16 And, does anyone have any -- I'll put it in 17 quotes -- "brief" comments they'd like to offer 18 before we close up? 19 MARK SILVERSTEIN: Well, the obvious is: 20 Thank You. 21 And, I've said this you to, Senator: Thank 22 you for doing the homework. 23 Because, I've been in meetings with people 24 high up in the food chain. They didn't know what 25 you knew, and they were supposed to know. 1 So, I greatly appreciate that, because you 2 gentlemen have taken that time, and it validates 3 this process. 4 And, this is a collaborative relationship we 5 have with SED and DOB. It's not personalities. 6 It's a system that's not working. 7 And there's been a lot of good 8 conversations here, and in the past. 9 So, I just want to say, for the record, that, 10 the truth is the truth. 11 BILL WOLFF: I want to share one -- just a 12 fast story about kid on the ground, today. 13 He's been in our program. He's a 17-year-old 14 kid, African-American, from the capital district, 15 placed in our day-services program by the CSE, on 16 track for graduation. 17 In late August, his parents decided to 18 move. 19 This kid has been a pretty good citizen. 20 Probably not in his home. 21 Let's face that, he's a handful, but, he's 22 doing pretty well with us. 23 His parents decided that it was time for 24 them to move into an apartment complex that was for 25 seniors, 50 and older. Nobody under 50 can live 1 there. 2 He's 17. He's living in a home -- he's 3 living in a shelter right now in Equinox. 4 Today is his last day that Equinox can 5 provide emergency-shelter housing for this kid. 6 His parents are refusing to take him back. 7 We've talked to Child Protective Services, 8 saying: That's not what a parent can do with a 9 17-year-old youngster. He's a high school kid. 10 CPS's position is: Yeah, it's reportable, 11 but he's 17. He's really -- we can't process this 12 thing. We can't force the parents to do this 13 back. 14 That's -- that's the kind of stuff that's 15 going on. 16 This kid, you know, he's a special ed kid to 17 begin with. We know their graduation rates. He's 18 on track. 19 Those are the kinds of kids that we're 20 specialists in working with. 21 We're going to figure something out for that 22 kid. And it's hard to do. That's not going get 23 fixed in this kind of room. 24 But, the stuff we've been talking about all 25 day, we can work on that stuff. That's our -- 1 that's the stuff that we need you to help with, to 2 get fixed, so these other things, one kid at a time, 3 we touch on. 4 That's -- that's why all of us are -- that's 5 why there's this, really, dedication to this small 6 eight or ten thousand bunch of kids; because, 7 they've have been -- one of my colleagues says, 8 "There's at least the lost among us." 9 And that kid, right now, is lost, except for 10 us. 11 We're trying to figure it out. I don't know 12 exactly what we're going to do. But, no regulation, 13 no State thing. 14 No; and that's not where the solution is 15 going to come for this kid. 16 But, that's the stuff that we're up to your 17 eyeballs in all the time. And we need to have the 18 capacity to deal -- to be confident that we can have 19 the rest of the things in place so we can deal with 20 that kind of stuff. 21 But, that's a real live kid, on the ground, 22 this afternoon. He doesn't know where he's living 23 tomorrow. 24 He wants to come to school, though. 25 Like, holy crap. 1 SENATOR FLANAGAN: Dick? 2 RICHARD LASKY: I think it was a good 3 meeting, from my perspective, because everybody got 4 most of the issues out on the table, and on how to 5 fix the system. 6 And it's, the next steps are, whether we can 7 accomplish what we tried to set out here today. 8 I think some things can be done quickly, 9 related to the timeliness issue, and some of the 10 program stuff, that can be fixed without much 11 effort. 12 SENATOR FLANAGAN: Thank you. 13 DOUG BAILEY: You know, I thought it was 14 amazingly positive in listening to you talk about 15 what you've heard. You used the right language. 16 You obviously get it, what we're talking about. 17 That was very, very encouraging. 18 I think you mentioned, Senator Flanagan: 19 What could you do, short-term type of thing, and 20 long-term? 21 And we've talked about the MSAR in a number 22 of the variations that might be done within it, but, 23 help it work. And, we'll work hard on that with 24 everybody, and move forward. 25 But, a couple of short-term things, you also 1 spoke, What can we do right now? 2 And, I think it gets down -- and I apologize 3 to you -- but, if, with SED, you could revisit the 4 issue of no growth, that would be very helpful to 5 us. 6 I think that's a key issue for people, to 7 see, if, in fact, it's valid, given what the public 8 school systems, and everything, the parameters, 9 and the flexibility, they've been given, if the same 10 issue could be applied to the 853 Special Acts, and 11 the other schools. 12 And the other piece might be, revisiting that 13 administrative direct-instruction parameters, the 14 30/70 break, and maybe allow some flexibility; allow 15 for that to be a 100 percent. You can't spend more 16 than 30 on administrative, but, you could use those 17 moneys to improve instruction. 18 That would prevent some of the tightness of 19 the fiscal climate from directly impacting kids. 20 SENATOR FLANAGAN: Thank you. 21 LEE LOUNSBURY: Just, thank you, again, for 22 convening the day. 23 And, I assure you, that the 853 Coalition is 24 ready to work on its steps. And, we'll get you 25 what you've asked for by the end of the day. 1 SENATOR FLANAGAN: Okay. 2 Ray? 3 RAYMOND SCHIMMER: Again, thank you. 4 One point we didn't make, that I want to 5 leave you with, is that, there are a whole bunch of 6 other cards leaning on the 853s. 7 Our ability to operate foster care 8 programs, residential; group-home programs; 9 mental health, with residential treatment 10 facilities, which are a subclass of psychiatric 11 hospital -- all these things depend on having a 12 school where these kids can go and be educated while 13 they're being treated for various things. 14 So, while this is clearly a State Ed issue, 15 it's a statewide issue across departments as well. 16 SENATOR FLANAGAN: Thank you. 17 I just -- 18 You want to -- 19 JESSICA MORELLI: I'm going to do the "wave." 20 SENATOR FLANAGAN: Okay. 21 JESSICA MORELLI: I thank you very much for 22 the opportunity to represent the counties. 23 And, you know, we recognize that these 24 programs are essential, and services to be 25 delivered. 1 We just don't think that we need to be 2 involved. 3 And, we're happy to provide with you creative 4 ideas that don't just cost-shift, that are, you 5 know, transitional, and help get counties out of 6 this business. 7 PAMELA MADERIOS: I've got nothing. 8 SENATOR FLANAGAN: No pressure. 9 PAMELA MADERIOS: No pressure. 10 SENATOR FLANAGAN: Anyone else? 11 J. BRAD HERMAN: I could echo Ray's comments. 12 The lack of solution, should we be 13 unsuccessful, on the school side, penetrates the 14 residential programs of so many. And, the 15 implication of the lives, not only of the client, 16 but also of our staffs, is pretty critical. 17 You know, if, in fact, my school were to 18 fail, which I don't believe it to be, you know, 19 you're looking at 430 jobs, in that situation 20 also. 21 So, I think the answer that we get, to the 22 best interests of the at-risk kid, on the school 23 side, penetrates so many other circumstances and 24 populations. 25 And the education solution is absolutely of 1 critical time. 2 One only has to look at the number of 3 schools that have closed, and the RANs that you 4 folks had to pay, and the Dormitory Authority bonds 5 you had to make good on, that this solution is of 6 critical timing. 7 And we appreciate your leadership today. 8 SENATOR FLANAGAN: Thanks. 9 Ed? 10 ED DURIVAGE: I just wanted to say that the 11 zero COLA was not an easy decision for us. 12 Internal -- there's a lot of internal debate. And, 13 we've left it, you know, saying, we need to revisit 14 this next year. 15 I think this is a helpful start. And -- but 16 the challenge is always going to be for us, 17 affordability, because any great methodology change 18 usually comes with some type of fiscal impact. But, 19 we, certainly -- there's actually people, other than 20 me, on staff, especially at least with ten years 21 of institutional experience. 22 Hopefully we can tap into those brains, and 23 figure out a way to make it happening. But, we're 24 certainly open to talk. 25 SENATOR FLANAGAN: Yeah, and I appreciate 1 that. 2 I have a couple of observations. 3 SED, Val Grey, has proven to be terrific to 4 work with. 5 The new commissioner, I think is -- he's hit 6 the ground running. My interaction with him, he's 7 been delightful to work with on a lot of different 8 things. 9 And, this is going to sound like it's not a 10 compliment, and it really is: He's an extremely 11 intelligent guy. He is extraordinarily well read, 12 articulate. 13 So, hopefully, we can have some discussions. 14 And I think some of her opening comments, in 15 particular, you know, opened the door on some of 16 this things about reconciliation, and things of that 17 nature. And I -- I believe that's going to be 18 important, not only in the short term, but the long 19 term. 20 And, I spoke with Bob Menga last night. And, 21 he, of course, is always a gentleman to work with, 22 given the difficulty and depth and gravity of the 23 fiscal things we've had to deal with. 24 But, Senator Marcellino, obviously, takes a 25 deep interest in this. 1 And, we were laughing, because, when 2 Ken LaValle said he was a teacher, I'm looking at 3 Senator Marcellino: You taught for 20 years, in the 4 city. 5 But, we do take this stuff seriously. And I 6 am very hopeful that we can come up with some things 7 that will have some short-term benefit and some 8 long-term benefit. 9 And I don't know -- David, is that you 10 sitting in the back? 11 DAVID WAKELYN: It sure is. 12 SENATOR FLANAGAN: Okay. 13 David Wakelyn is with the Governor's office. 14 He's the deputy secretary for Education. 15 He and I have spoken on the phone, and we 16 look forward to working with him. 17 He had some cabinet meeting with the Governor 18 this morning, that, apparently, trumped his ability 19 to get here when we first started. 20 DAVID WAKELYN: (inaudible.) 21 SENATOR FLANAGAN: Okay, there you go. 22 But, appreciate the time, very much. 23 And, if you have any questions, feel free to 24 just forward them us to. We want to keep you as 25 informed as possible. 1 So, have a good day, and, thanks for coming. 2 (All participants say: Thank you.) 3 (Whereupon, the roundtable, held before 4 the New York State Senate Standing Committee on 5 Education, concluded.) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25