State to consider contracts totaling $600,000 for firms that would help with education funding formula

Update at 10:50 a.m. on 11/12/19: The Board of Examiners approved the contracts for Applied Analysis, APA Consulting and WestEd on Tuesday morning with little discussion, aside from a wording change within one contract.

***

The Board of Examiners on Tuesday will consider approving three $200,000 contracts for companies that could play a key role in implementing the state’s new education funding formula.

The companies recommended by the Department of Education to receive the contracts are: Applied Analysis, a Las Vegas-based fiscal and data research firm; Augenblick Palaich and Associates, a Denver-based consulting firm specializing in school finance; and WestEd, a nonprofit education research organization headquartered in San Francisco. Each contract would run through June 2021, with a combined price tag of $600,000.

There are no other companies competing for these sole-source contracts, a situation education officials described as necessary given timing constraints within Senate Bill 543, which created the new education funding formula. The firms will be involved in cost modeling — showing the effect funding formula variables will have on school districts — as well as overall guidance and research related to how other states have handled a similar transition.

“Valuable time will be lost if the Department must go through the competitive bid process,” education officials wrote in the Applied Analysis funding request. “As noted previously, the workload to be completed within the next year, in order to be compliant with SB543, are tremendous.”

Similar explanations appeared in the two other funding requests as well. 

If the companies sound familiar, that’s because they’ve all had some connection to the Nevada education world in recent years. Jeremy Aguero, a principal with Applied Analysis, became a regular face in the legislative hallways while helping craft SB543; Augenblick Palaich and Associates, sometimes referred to as APA Consulting, in 2018 conducted a Nevada school finance study, which informed lawmakers during the development of SB543. And the state education department has worked with WestEd over the years, sometimes in a professional development-like capacity, department spokesman Greg Bortolin said.

Some education stakeholders had raised questions  about Applied Analysis’s role in crafting SB543 — specifically, who was paying the company. Aguero addressed that concern during a Commission on School Funding meeting earlier this month, saying he had separate contracts with the Clark and Washoe county school districts. He said both were relatively broad in scope.

Aguero said his involvement with the funding formula overhaul came about because state Sens. Joyce Woodhouse and Mo Denis asked for his assistance, and the analyst — a product of the Clark County School District, where his three children attend and his wife works as a teacher — considered it a worthy cause.

Asked by The Nevada Independent whether the state or anyone else was paying for his SB543-related work, he responded “no” via email. Much of the firm’s work on the legislation led to a “significant amount of uncompensated time,” he wrote.

The Nevada State Education Association was among those that had expressed concerns about Applied Analysis’s pay arrangement during the session, but the union’s lobbyist, Chris Daly, said it supports the approval of the three new contracts. He noted that the companies — one local and two out-of-state — already have laid some of the funding formula groundwork.

“We think that it’s important that the funding commission has access to the research and support that they need to do the work in front of them,” he said.

The three companies stand to aid — and really jumpstart — the work of the Commission on School Funding, which SB543 created to guide the implementation of the new K-12 funding formula. The legislation outlined the parameters of the new formula, such as placing revenue streams in a single funding pot and moving toward a weighted funding model, but some of the key calculations haven’t been determined yet. 

For instance, the legislation calls for “cost adjustment factors” that take into account the cost of living and labor in various districts. 

Heidi Haartz, the state’s deputy superintendent for business and support services, said Applied Analysis, APA Consulting and WestEd likely will run various models to show the commission how certain decisions — such as the cost adjustment factors — affect education funding distribution throughout the state. Ultimately, the commission is charged with providing recommendations to the Legislature and Gov. Steve Sisolak by July 15. 

The Commission on School Funding has met three times so far and has received presentations from both Applied Analysis and APA Consulting. It has more meetings scheduled Thursday and Friday. If the contracts are approved, more information about the firms’ role likely will emerge later this week. The commission plans to discuss its expectations for subject-matter expertise, including what information and resources members anticipate needing.

SB543 included an appropriation worth roughly $6.6 million to the Interim Finance Committee’s contingency account for the purpose of implementing the new funding formula. The state education department has hired two full-time staff members to assist with the transition, in addition to the contracts it would be entering into with Applied Analysis, APA Consulting and WestEd, which are considered subject-matter experts.

The Board of Examiners, which consists of the governor, Attorney General Aaron Ford and Secretary of State Barbara Cegavske, reviews payments authorized by the Legislature.