EDU-14-08-00010-P Reasonable and Necessary Expenses

4/2/08 N.Y. St. Reg. EDU-14-08-00010-P

NEW YORK STATE REGISTER

VOLUME XXX, ISSUE 14

April 02, 2008

RULE MAKING ACTIVITIES

EDUCATION DEPARTMENT

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. EDU-14-08-00010-P

Reasonable and Necessary Expenses

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed action:

Addition of section 100.15 to Title 8 NYCRR.

Statutory authority:

Education Law, sections 207 (not subdivided), 211-b(2)(a), (b) and 211-c(7); and L. 2007, ch. 57

Subject:

Reasonable and necessary expenses of distinguished educators, and members of school quality review teams and joint intervention teams.

Purpose:

To establish criteria for determining the reasonable and necessary expenses to be paid by school districts to distinguished educators and members of school quality review teams and joint intervention teams appointed pursuant to Education Law sections 211-b and 211-c.

Text of proposed rule:

Section 100.15 of the Regulations of the Commissioner of Education is added, effective July 17, 2008, as follows:

100.15 Reasonable and necessary expenses of members of school quality review teams and joint intervention teams, and distinguished educators, appointed pursuant to Education Law sections 211-b and 211-c.

(a) Definitions. As used in this section:

(1) “Consulting fees” shall mean reasonable and necessary wage compensation paid to individuals in accordance with paragraph (1) of subdivision (c) of this section for the hours worked in the performance of their official duties as members of school quality review teams and joint intervention teams, and as distinguished educators.

(2) “Replacement costs” shall mean those costs including, but not limited to, salary and benefits of an individual employed by a school district or charter school to replace a teacher and/or administrator who takes a leave of absence to serve as a distinguished educator pursuant to Education Law section 211-c(8).

(b) Payment and reimbursement.

(1) A school district or charter school, for which a school quality review team, a joint intervention team and/or a distinguished educator is appointed, shall pay consulting fees to members of such teams and/or to such distinguished educator and reimbursement for their meals, lodging and travel expenses, in accordance with subdivision (c) of this section and no later than 60 days after receipt of each invoice for such expenses and fees.

(2) Notwithstanding the provisions of paragraph (1) of this subdivision, nothing in this section shall be deemed to require a school district or charter school to pay such consulting fees to:

(i) State Education Department staff who are appointed as members of such school quality review teams or joint intervention teams, or as distinguished educators; or

(ii) staff contracted by the State Education Department to provide support and assistance to schools and districts who are appointed as members of such school quality review teams or joint intervention teams, or as distinguished educators, except where such contract provides that the school district or charter school shall be responsible for the payment of such consulting fees to contracted staff.

(c) Criteria for payment and reimbursement.

(1) Consulting fees. Consulting fees shall be paid in accordance with an annual schedule of hourly consulting fees established by the commissioner and based upon the following factors:

(i) the regional costs of labor in related occupations;

(ii) the current market salaries paid New York State teachers and educational administrators, based on available wage data from the New York State and/or federal departments of labor; and

(iii) the expected duration of the intervention or school improvement consulting, as determined by the length of time that the school or school district has been in accountability status and the severity of the accountability status of such school or district.

(2) Meal Expenses.

(i) A team member or distinguished educator shall be reimbursed for receipted expenses for the dinner and breakfast meals which precede and follow, respectively, an evening during which they are lodging in the performance of their official duties.

(ii) Team members or distinguished educators shall be reimbursed for receipted expenses for breakfast and/or dinner meals in cases where their departure from their permanent residence for purposes of performing their official duties or their arrival at their permanent residence after completion of their official duties for that day, shall take place before 7:00 AM or after 7:00 PM, respectively.

(iii) Reimbursement for meals shall be paid at a rate not to exceed the applicable rates paid to State employees.

(3) Lodging Expenses.

(i) Team members or distinguished educators shall be reimbursed for receipted lodging expenses, provided that the travel distance from their permanent residence to the school or school district in which they perform their official duties exceeds 50 miles.

(ii) Reimbursement for lodging shall be paid at a rate not to exceed the applicable rates paid to New York State employees.

(4) Travel Expenses.

(i) Reimbursement to team members or distinguished educators for the use of a personal vehicle in the performance of their official duties shall be paid at a rate not to exceed the applicable rates paid to State employees.

(ii) Reimbursement to team members or distinguished educators for travel by bus, subway, train or rental car, in performance of their official duties, shall be paid if travel by personal vehicle is not economical, possible or feasible.

(iii) The mode of travel selected should be the most economical available; provided that the determination of the appropriate mode of travel shall balance the needs of team members and distinguished educators, including but not limited to flexibility to perform their official duties, with the needs of the schools and school districts, including but not limited to economy, predictability and cost efficiency.

(d) Employment Status. Members of school quality review teams and joint intervention teams, and distinguished educators, in performance of their official duties, shall be deemed to be consultants to the school district or schools, including charter schools, to which they are appointed, and not employees of such school district or charter school.

(e) Replacement Costs. Replacement costs shall not be included in the calculation of reasonable and necessary expenses.

Text of proposed rule and any required statements and analyses may be obtained from:

Anne Marie Koschnick, Legal Assistant, Office of Counsel, Education Department, State Education Bldg., Rm. 148, Albany, NY 12234, [phone], e-mail: [e-mail]

Data, views or arguments may be submitted to:

Johanna Duncan-Poitier, Senior Deputy Commissioner of Education - P16, Education Department, 2M West Wing, Education Bldg., 89 Washington Ave., Albany, NY 12234, [phone], e-mail: [e-mail]

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

STATUTORY AUTHORITY:

Education Law section 207 empowers the Regents and the Commissioner to adopt rules to carry out State education laws and the functions and duties conferred on the Department by law.

Education Law section 211-b, as added by section 1 of Part A of Chapter 57 of the Laws of 2007, provides for the appointment of: (1) school quality review teams to assist schools in school improvement, corrective action, restructuring status or schools under registration review (SURR) status; and (2) joint intervention teams for schools in restructuring status or SURR status that have failed to demonstrate progress as specified in their corrective action plan or comprehensive education plan.

Education Law section 211-c, as added by section 1 of Part A of Chapter 57 of the Laws of 2007, provides for the appointment of distinguished educators to assist low performing districts in improving their academic performance.

Education Law sections 211-b(2)(a) and (b) and 211-c(7) provide that the reasonable and necessary expenses of teams and distinguished educators in performing their official duties shall be a charge upon the school district, or charter school, operating the school.

LEGISLATIVE OBJECTIVES:

The rule is necessary to implement Chapter 57 of the Laws of 2007, by establishing criteria for determination of reasonable and necessary expenses of members of school quality review teams and joint intervention teams, and distinguished educators.

NEEDS AND BENEFITS:

The rule establishes criteria for determining reasonable and necessary expenses of members of school quality review teams and joint intervention teams, and distinguished educators.

Four statistical and scientific studies were used as bases for the rule:

(1) The federal Department of Labor's Bureau of Labor Statistics (BLS) operates a nationwide survey of employers, the Occupational Employment Statistics (OES) survey. This statistical study data source was one of three used to estimate the consulting fees. The wage estimates are generated from a sample of 1.2 million business establishments nationwide and the sample is large enough to generate reliable state and industry-specific estimates. The wage estimates of the occupations of educational managers and teachers, at both the elementary and post-secondary levels, employed in the State in May 2006, at the 75th and 90th percentiles were downloaded from the BLS website (http://www.bls.gov/oes/current/oessrcst.htm). The same data at the 95th percentile of the wage distribution were obtained by a customized analytical report provided by the BLS' economists in the New York City regional office.

(2) In order to trend forward - to reflect inflation from 2006 to January of 2008, the nationwide CPI-U (consumer price index, all urban consumers) was downloaded from the BLS website (http://www.bls.gov/cpi/home.htm) and applied to the data yielded by source (1); and

(3) To generate regional specific consulting fees to reflect the geographic distribution of professional titles similar to teachers and administrators, we applied the Regents Regional Cost Index (RCI), based on research by the Department (http://www.oms.nysed.gov/faru/Articles/RCI_2006update.htm.) to the values generated by data source/stage (2).

(4) Federal Census Data on the average commute time in the State was used to generate the commute distance at which the right to receive lodging reimbursements will be granted. The American Community Survey of the Census Bureau (http://www.census.gov/acs/www/) reports that the mean travel time to work in the State is 28 minutes, while 1 standard deviation is equal to 21 minutes. Statistical theory based on the normal or bell-shaped distribution would predict that 84% of commuters would have commute times of less than 49 minutes. Because of a lack of population density outside the NYC metropolitan area, commuters can expect to travel 60 miles in an hour. Therefore, in setting this standard of only reimbursing lodging for commutes of distances greater then 49 miles, payment is authorized only for those for whom the commute would be unreasonably long.

COSTS:

The rule implements Chapter 57 of the Laws of 2007, and will not impose any costs beyond those inherent in the statute.

(a) Costs to State government: None.

(b) Costs to local government: The statute imposes a cost on certain school districts, charging them for the reasonable and necessary expenses of distinguished educators and members of school quality review and joint intervention teams assigned to them. The costs will vary by the extent of the involvement and number of schools engaged by these teams and individuals.

The Southern Tier and the North Country have the lowest labor prices for consulting fees. Assuming a school district there has a single school in accountability status (such as a school in its first year in need of improvement), and further assuming that a supply of school quality review staff is available within a 49-mile radius of the school district (such that there would be no meal or lodging expenses incurred by the district but only the travel expenses for the use of one's personal vehicle), the amount of involvement would be very minimal: there might be just two reviewers for one week in this school, driving their own cars each day for a round trip distance of 30 miles from their homes. The annual cost to the district for this hypothetical scenario would be $4,705: ($57 per hour × 8 hours worked a day × 5 days × 2 school quality reviewers) + (15 miles × 2 school quality reviewers × 2 trips per day × 5 days × $.485 [current GSA mileage rate]).

At the other extreme, a district that has academic performance problems that are more widespread, of greater severity and which have persisted for a longer period may have a distinguished educator assigned by the Commissioner. If we assume this district is located in Westchester County (a higher priced labor market area) and that a distinguished educator was not available within the 35-mile area of the school (such that the district would be responsible for paying for the travel, meal and lodging expenses of the distinguished educator), the cost to the district for just a single school assigned a distinguished educator, could exceed $135,000 annually ($112 per hour × 40 hours per week × 25 weeks = $112,000) + (travel expenses for the use of one's personal vehicle at $.485 per mile × 150 miles per week × 25 weeks = $1,825) + meals (2 days at $44.50 per day and 3 days at $59 per day = $ 266 per week × 25 weeks = $6,650); + lodging ($154 per night × 4 nights a week × 25 weeks = $15,400).

(c) Costs to private regulated parties: None.

(d) Costs to regulating agency for implementation and continued administration of this rule: None. It is anticipated that any costs associated with the preparation of annual schedules of hourly consulting fees will be absorbed using existing staff and resources.

LOCAL GOVERNMENT MANDATES:

The rule imposes no mandates on school districts beyond that required by the statute - that the reasonable and necessary expenses of distinguished educators and members of school quality review and joint intervention teams be borne by the school districts to which they are assigned.

PAPERWORK:

The rule imposes no paperwork or other reporting requirements beyond those inherent in the statute. Some additional paperwork by school districts will be needed in order to account for, record, and pay the expenses of distinguished educators and members of school quality review and joint intervention teams assigned to them.

DUPLICATION:

The rule is necessary to implement Chapter 57 of the Laws of 2007 and does not duplicate, overlap or conflict with State and federal legal requirements.

ALTERNATIVES:

One alternative related to allowing a school district that might temporarily lose the services of an employee who is assigned as a distinguished educator to another school district, to be compensated for the employee's ‘replacement costs’, i.e., the expenses associated with backfilling and paying for a replacement for this employee. However, it was determined that this would be an undue burden on school districts that are assigned distinguished educators, and that there is nothing in the statute that requires payment of such replacement costs by school districts that are assigned distinguished educators, or that requires a school district to continue to pay the salaries and benefits of an employee who takes a leave of absence to serve as a distinguished educator.

There was discussion as to whether the consulting fees proposed were generous enough to obtain the desired competence and expertise that would be necessary to effect positive change in struggling schools. Concern was expressed that the fees would not be competitive with many of the salaries of superintendents of schools, particularly those located in Downstate. However, the countervailing arguments which ultimately were persuasive are several-fold. The authorizing statute explicitly mentions both teachers and school administrators as those occupations that would be eligible to serve as distinguished educators and members of school improvement and joint intervention teams. For this reason, teachers as well as administrators are included in the labor classes in the Bureau of Labor Statistics (BLS) dataset that were used to estimate appropriate consulting fees, which has the practical effect of deflating the salaries that would have been generated had education administrators only been included.

Because of the relationship between years of tenure - and by extension, competence - and salary ‘steps’ in teacher contracts, the Statewide BLS wages used to generate the consulting fees were staggered or tiered based on the assumed expertise and corresponding level of intervention. Since the school quality review process is the least intensive of the three, we chose wages at the 75th percentile. Insofar as schools and districts requiring the assistance of a joint intervention team would probably present with more intractable achievement problems, and would thus require greater competence to solve them, the consulting fees were generated by using the wage at the 90th percentile. Distinguished educators' consulting fees, requiring the greatest intervention, were estimated using the 95th percentile wage - the highest level available in this data series.

Moreover, economic incentives are generally most effective when the relationship of ‘sticks and carrots’ or rather, penalties and incentives, respectively, is proportional. In this particular case, the penalties or by extension, costs could be seen as the totality of administrative burdens, which are not insignificant, imposed on contract for excellence schools and districts, including the requirement this rule effectuates - that districts pay for their own school improvement responsibilities. In light of these costs, the Department felt that an even more generous consulting reimbursement would create an imbalance, when compared to the incentive side of the equation - i.e., the new, enhanced foundation aid amounts, which although reflect historic gains in State education aid, and particularly for high need districts, are only a small share of the total cost of the K-12 educational enterprise Statewide.

Finally, in the absence of a useful precedent elsewhere in New York State law for a definition of ‘reasonable and necessary’ expenses which could guide the Department in the task of promulgating this rule, a federal treatment was available, which was useful and persuasive if not compelling. The Federal Office of Management and Budget (OMB), in its Circular A-87: Cost Principles for State, Local and Indian Tribal Governments, states that “in determining reasonableness of a given cost, consideration shall be given to: market prices for comparable goods or services” among other factors.

FEDERAL STANDARDS:

The rule is necessary to implement Chapter 57 of the Laws of 2007 by establishing criteria for the determination of reasonable and necessary expenses of members of school quality review teams and joint intervention teams, and distinguished educators. There are no applicable federal standards for the same or similar subject areas.

COMPLIANCE SCHEDULE:

The rule imposes no compliance requirements on local governments beyond those required by the statute - that the reasonable and necessary expenses of distinguished educators and school quality review and joint intervention teams be borne by the school districts to which they are assigned. The proposed rule merely establishes criteria for the determination of such expenses. It is anticipated that regulated parties may achieve compliance with the proposed rule by its effective date.

Regulatory Flexibility Analysis

Small Businesses:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007, by establishing criteria for determining the reasonable and necessary expenses to be paid by school districts to distinguished educators and members of joint intervention and school quality review teams who will assist schools and districts in improving their academic performance. The proposed rule does not impose any economic impact, or other compliance requirements on small businesses. Because it is evident from the nature of the proposed rule that it does not affect small businesses, no further measures were needed to ascertain that fact and none were taken. Accordingly, a regulatory flexibility analysis for small businesses is not required and one has not been prepared.

EFFECT OF RULE:

The proposed rule applies to each public school district and charter school in the State for which a school quality review team, a joint school intervention team or a distinguished educator has been appointed pursuant to Education Law sections 211-b and 211-c. Currently, 31 community districts and one charter school, all located in the New York City School District, have been assigned a school quality review team. No joint school intervention teams or distinguished educators have been assigned.

COMPLIANCE REQUIREMENTS:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007 imposes no compliance requirements on school districts beyond those required by the statute: i.e., that the reasonable and necessary expenses of distinguished educators and school quality review and joint intervention teams be borne by the school districts to which they are assigned. The proposed rule merely establishes criteria for the determination of such expenses. Some additional paperwork by school districts will be needed in order to account for, record, and pay the expenses of distinguished educators and school quality review and joint intervention teams assigned to them. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources.

PROFESSIONAL SERVICES:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007, by establishing criteria for determining the reasonable and necessary expenses to be paid by school districts to distinguished educators and members of joint intervention and school quality review teams who will assist schools and districts in improving their academic performance. The proposed rule imposes no additional professional services requirements on school districts beyond those inherent in the statute.

COMPLIANCE COSTS:

The statute imposes a cost on certain school districts, charging them for the reasonable and necessary expenses of distinguished educators and members of school quality review and joint intervention teams assigned to them. The costs will vary by the extent of the involvement and number of schools engaged by these teams and individuals.

The Southern Tier and the North Country have the lowest labor prices for consulting fees. Assuming a school district there has a single school in accountability status (such as a school in its first year in need of improvement), and further assuming that a supply of school quality review staff is available within a 49-mile radius of the school district (such that there would be no meal or lodging expenses incurred by the district but only the travel expenses for the use of one's personal vehicle), the amount of involvement would be very minimal: there might be just two reviewers for one week in this school, driving their own cars each day for a round trip distance of 30 miles from their homes. The annual cost to the district for this hypothetical scenario would be $4,705: ($57 per hour × 8 hours worked a day × 5 days × 2 school quality reviewers) + (15 miles × 2 school quality reviewers × 2 trips per day × 5 days × $.485 [current GSA mileage rate]).

At the other extreme, a district that has academic performance problems that are more widespread, of greater severity and which have persisted for a longer period may have a distinguished educator assigned by the Commissioner. If we assume this district is located in Westchester County (a higher priced labor market area) and that a distinguished educator was not available within the 35-mile area of the school (such that the district would be responsible for paying for the travel, meal and lodging expenses of the distinguished educator), the cost to the district for just a single school assigned a distinguished educator, could exceed $135,000 annually ($112 per hour × 40 hours per week × 25 weeks = $112,000) + (travel expenses for the use of one's personal vehicle at $.485 per mile × 150 miles per week × 25 weeks = $1,825) + meals (2 days at $44.50 per day and 3 days at $59 per day = $ 266 per week × 25 weeks = $6,650); + lodging ($154 per night × 4 nights a week × 25 weeks = $15,400).

PROFESSIONAL SERVICES:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007, by establishing criteria for determining the reasonable and necessary expenses to be paid by school districts to distinguished educators and members of joint intervention and school quality review teams who will assist schools and districts in improving their academic performance. The proposed rule imposes no additional professional services requirements on school districts beyond those inherent in the statute. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources.

ECONOMIC AND TECHNOLOGICAL FEASIBILITY:

The proposed rule does not impose any new technological requirements on school districts. Economic feasibility is discussed in the Compliance Costs section above. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources.

MINIMIZING ADVERSE IMPACT:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007, and imposes no compliance requirements on school districts beyond those required by the statute: i.e., that the reasonable and necessary expenses of distinguished educators and school quality review and joint intervention teams be borne by the school districts to which they are assigned. The proposed rule merely establishes criteria for the determination of such expenses. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources.

The proposed has been carefully drafted to meet statutory requirements, while minimizing the impact on school districts and small businesses. Where possible, the regulations have incorporated existing State standards.

There were alternatives considered in the creation of the rule. One alternative related to allowing a school district that might temporarily lose the services of an employee who is assigned as a distinguished educator to another school district, to be compensated for the employee's ‘replacement costs’, i.e., the expenses associated with backfilling and paying for a replacement for this employee. However, it was determined that this would be an undue burden on school districts that are assigned distinguished educators, and that there is nothing in the statute that requires payment of such replacement costs by school districts that are assigned distinguished educators, or that requires a school district to continue to pay the salaries and benefits of an employee who takes a leave of absence to serve as a distinguished educator.

There was discussion as to whether the consulting fees proposed were generous enough to obtain the desired competence and expertise that would be necessary to effect positive change in struggling schools. Concern was expressed that the fees would not be competitive with many of the salaries of superintendents of schools, particularly those located in Downstate. However, the countervailing arguments which ultimately were persuasive are several-fold. The authorizing statute explicitly mentions both teachers and school administrators as those occupations that would be eligible to serve as distinguished educators and members of school improvement and joint intervention teams. For this reason, teachers as well as administrators are included in the labor classes in the Bureau of Labor Statistics (BLS) dataset that were used to estimate appropriate consulting fees, which has the practical effect of deflating the salaries that would have been generated had education administrators only been included.

Because of the relationship between years of tenure - and by extension, competence - and salary ‘steps’ in teacher contracts, the Statewide BLS wages used to generate the consulting fees were staggered or tiered based on the assumed expertise and corresponding level of intervention. Since the school quality review process is the least intensive of the three, we chose wages at the 75th percentile. Insofar as schools and districts requiring the assistance of a joint intervention team would probably present with more intractable achievement problems, and would thus require greater competence to solve them, the consulting fees were generated by using the wage at the 90th percentile. Distinguished educators' consulting fees, requiring the greatest intervention, were estimated using the 95th percentile wage - the highest level available in this data series.

Moreover, economic incentives are generally most effective when the relationship of ‘sticks and carrots’ or rather, penalties and incentives, respectively, is proportional. In this particular case, the penalties or by extension, costs could be seen as the totality of administrative burdens, which are not insignificant, imposed on contract for excellence schools and districts, including the requirement this rule effectuates - that districts pay for their own school improvement responsibilities. In light of these costs, the Department felt that an even more generous consulting reimbursement would create an imbalance, when compared to the incentive side of the equation - i.e., the new, enhanced foundation aid amounts, which although reflect historic gains in State education aid, and particularly for high need districts, are only a small share of the total cost of the K-12 educational enterprise Statewide.

Finally, in the absence of a useful precedent elsewhere in New York State law for a definition of reasonable and necessary' expenses which could guide the Department in the task of promulgating this rule, a federal treatment was available, which was useful and persuasive if not compelling. The Federal Office of Management and Budget (OMB), in its Circular A-87: Cost Principles for State, Local and Indian Tribal Governments, states that “in determining reasonableness of a given cost, consideration shall be given to: market prices for comparable goods or services” among other factors.

LOCAL GOVERNMENT PARTICIPATION:

Comments on the proposed amendment were solicited from school districts through the offices of the district superintendents of each supervisory district in the State, and from the chief school officers of the five big city school districts.

Rural Area Flexibility Analysis

TYPES AND ESTIMATED NUMBERS OF RURAL AREAS:

The proposed rule applies to each public school district and charter school in the State for which a school quality review team, a joint school intervention team or a distinguished educator has been appointed pursuant to Education Law sections 211-b and 211-c. These districts include are those who have schools in need of improvement or otherwise in accountability status and include those located in the 44 rural counties with less than 200,000 inhabitants and the 71 towns in urban counties with a population density of 150 per square mile or less. Currently, no school quality review teams, joint intervention teams or distinguished educators have been assigned to school districts located in rural areas.

REPORTING, RECORDKEEPING AND OTHER COMPLIANCE REQUIREMENTS; PROFESSIONAL SERVICES:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007 imposes no compliance requirements on school districts beyond those required by the statute: i.e., that the reasonable and necessary expenses of distinguished educators and school quality review and joint intervention teams be borne by the school districts to which they are assigned. The proposed rule merely establishes criteria for the determination of such expenses. Some additional paperwork by school districts will be needed in order to account for, record, and pay the expenses of distinguished educators and school quality review and joint intervention teams assigned to them. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources. The proposed rule imposes no additional professional services requirements on school districts beyond those inherent in the statute. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources.

COSTS:

The statute imposes a cost on certain school districts, charging them for the reasonable and necessary expenses of distinguished educators and members of school quality review and joint intervention teams assigned to them. The costs will vary by the extent of the involvement and number of schools engaged by these teams and individuals.

The Southern Tier and the North Country have the lowest labor prices for consulting fees. Assuming a school district there has a single school in accountability status (such as a school in its first year in need of improvement), and further assuming that a supply of school quality review staff is available within a 49-mile radius of the school district (such that there would be no meal or lodging expenses incurred by the district but only the travel expenses for the use of one's personal vehicle), the amount of involvement would be very minimal: there might be just two reviewers for one week in this school, driving their own cars each day for a round trip distance of 30 miles from their homes. The annual cost to the district for this hypothetical scenario would be $4,705: ($57 per hour × 8 hours worked a day × 5 days × 2 school quality reviewers) + (15 miles × 2 school quality reviewers × 2 trips per day × 5 days × $.485 [current GSA mileage rate]).

At the other extreme, a district that has academic performance problems that are more widespread, of greater severity and which have persisted for a longer period may have a distinguished educator assigned by the Commissioner. If we assume this district is located in Westchester County (a higher priced labor market area) and that a distinguished educator was not available within the 35-mile area of the school (such that the district would be responsible for paying for the travel, meal and lodging expenses of the distinguished educator), the cost to the district for just a single school assigned a distinguished educator, could exceed $135,000 annually ($112 per hour × 40 hours per week × 25 weeks = $112,000) + (travel expenses for the use of one's personal vehicle at $.485 per mile × 150 miles per week × 25 weeks = $1,825) + meals (2 days at $44.50 per day and 3 days at $59 per day = $ 266 per week × 25 weeks = $6,650); + lodging ($154 per night × 4 nights a week × 25 weeks = $15,400).

PROFESSIONAL SERVICES:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007, by establishing criteria for determining the reasonable and necessary expenses to be paid by school districts to distinguished educators and members of joint intervention and school quality review teams who will assist schools and districts in improving their academic performance. The proposed rule imposes no additional professional services requirements on school districts beyond those inherent in the statute. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources.

MINIMIZING ADVERSE IMPACT:

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007. Consequently, the major provisions of the proposed rule are statutorily imposed and it is not feasible to establish differing compliance or reporting requirements or timetables or to exempt school districts in rural areas from coverage by the rule. Nevertheless, there are ways in which the differing needs or problems of, rural areas were accommodated in the creation of the proposed rule. For example, it is expected that the vast majority of teachers and administrators who would be willing to and/or wish to serve as distinguished educators, joint intervention and school quality review team members will reside not in rural, but rather metropolitan New York, insofar as these are the State's population and economic centers. However, the creation of the proposed rule anticipates that there will be several regional ‘hubs’ from which teams can be developed and recruited, so that travel time and therefore, administrative costs and burdens can be minimized for rural areas. Moreover, the consulting fees and travel and meal expenses have been created to reflect the regional costs of living in rural areas, so as to create an incentive to teachers and administrators to serve as distinguished educators and team members there.

The proposed rule merely establishes criteria for the determination of such reasonable and necessary expenses of distinguished educators and members of school quality review and joint intervention teams. It is anticipated that similar tasks and functions to track, record and pay expenses are already in place in school districts and charter schools and that the additional tasks and functions engendered by the statute and proposed rule will be carried out using existing staff and resources.

The proposed has been carefully drafted to meet statutory requirements, while minimizing the impact on school districts and small businesses. Where possible, the regulations have incorporated existing State standards.

There were alternatives considered in the creation of the rule. One alternative related to allowing a school district that might temporarily lose the services of an employee who is assigned as a distinguished educator to another school district, to be compensated for the employee's ‘replacement costs’, i.e., the expenses associated with backfilling and paying for a replacement for this employee. However, it was determined that this would be an undue burden on school districts that are assigned distinguished educators, and that there is nothing in the statute that requires payment of such replacement costs by school districts that are assigned distinguished educators, or that requires a school district to continue to pay the salaries and benefits of an employee who takes a leave of absence to serve as a distinguished educator.

There was discussion as to whether the consulting fees proposed were generous enough to obtain the desired competence and expertise that would be necessary to effect positive change in struggling schools. Concern was expressed that the fees would not be competitive with many of the salaries of superintendents of schools, particularly those located in Downstate. However, the countervailing arguments which ultimately were persuasive are several-fold. The authorizing statute explicitly mentions both teachers and school administrators as those occupations that would be eligible to serve as distinguished educators and members of school improvement and joint intervention teams. For this reason, teachers as well as administrators are included in the labor classes in the Bureau of Labor Statistics (BLS) dataset that were used to estimate appropriate consulting fees, which has the practical effect of deflating the salaries that would have been generated had education administrators only been included.

Because of the relationship between years of tenure - and by extension, competence - and salary ‘steps’ in teacher contracts, the Statewide BLS wages used to generate the consulting fees were staggered or tiered based on the assumed expertise and corresponding level of intervention. Since the school quality review process is the least intensive of the three, we chose wages at the 75th percentile. Insofar as schools and districts requiring the assistance of a joint intervention team would probably present with more intractable achievement problems, and would thus require greater competence to solve them, the consulting fees were generated by using the wage at the 90th percentile. Distinguished educators' consulting fees, requiring the greatest intervention, were estimated using the 95th percentile wage - the highest level available in this data series.

Moreover, economic incentives are generally most effective when the relationship of ‘sticks and carrots’ or rather, penalties and incentives, respectively, is proportional. In this particular case, the penalties or by extension, costs could be seen as the totality of administrative burdens, which are not insignificant, imposed on contract for excellence schools and districts, including the requirement this rule effectuates - that districts pay for their own school improvement responsibilities. In light of these costs, the Department felt that an even more generous consulting reimbursement would create an imbalance, when compared to the incentive side of the equation - i.e., the new, enhanced foundation aid amounts, which although reflect historic gains in State education aid, and particularly for high need districts, are only a small share of the total cost of the K-12 educational enterprise Statewide.

Finally, in the absence of a useful precedent elsewhere in New York State law for a definition of reasonable and necessary' expenses which could guide the Department in the task of promulgating this rule, a federal treatment was available, which was useful and persuasive if not compelling. The Federal Office of Management and Budget (OMB), in its Circular A-87: Cost Principles for State, Local and Indian Tribal Governments, states that “in determining reasonableness of a given cost, consideration shall be given to: market prices for comparable goods or services” among other factors.

RURAL AREA PARTICIPATION:

The proposed rule was shared with the members of the Rural Education Advisory Committee for their input as to the feasibility of its provisions and its impact on rural schools and their operations.

Job Impact Statement

The proposed rule is necessary to implement Education Law sections 211-b and 211-c, as added by Chapter 57 of the Laws of 2007, by establishing criteria for determining the reasonable and necessary expenses to be paid by school districts to distinguished educators and members of joint intervention and school quality review teams who will assist schools and districts in improving their academic performance. The proposed rule will not have a substantial adverse impact on job or employment opportunities. Because it is evident from the nature and purpose of the proposed repeal that it will have no impact on jobs or employment opportunities, no further measures were needed to ascertain that fact and none were taken. Accordingly, a job impact statement is not required and one has not been prepared.