In 2017, our firm published a summary of new legislation affecting Connecticut’s schools and public sector employers. http://www.pullcom.com/news-publications-929.html However, the 2017 “regular session” of the Connecticut General Assembly was not the final word. Due to the absence of a state budget, the General Assembly had to convene a “special session” and it was not until October of last year that a bipartisan budget was passed by the General Assembly and signed into law by Governor Malloy.
Whenever a budget is enacted, the General Assembly must pass a bill to “implement” the budget (i.e., the so-called “Implementer”). The 2017 Implementer, which is 881 pages long, and is officially entitled Public Act 17-2 (June Special Session): “An Act Concerning The State Budget For The Biennium Ending June 30, 2019, Making Appropriations Therefore, Authorizing And Adjusting Bonds Of The State And Implementing Provisions Of The Budget,” https://www.cga.ct.gov/2017/ACT/pa/pdf/2017PA-00002-R00SB-01502SS1-PA.pdf, contains many provisions that will affect Connecticut’s schools and public sector employers. The following is a brief description of significant education, labor and employment provisions contained in this year’s Budget Implementer Act (hereinafter, “the Act” or “the Implementer”).
PLEASE NOTE: This summary provides a concise description of the new law with relevant commentary regarding its impact. For more detailed information regarding these legislative changes, please contact one of our attorneys.
SCHOOL DISTRICTS AS MEDICAID PROVIDERS
Sections 51 through 54 of the Act contain several provisions addressing the new expanded role of school districts as “Medicaid providers.” Effective December 1, 2017, local and regional board of educations are required to: 1) enroll as Medicaid providers, 2) participate in the Department of Social Services' ("DSS") Medicaid School Based Child Health ("SBCH") Program, and 3) submit billable service information to DSS (or its billing agent). School districts can meet these obligations by entering into agreements with third-party vendors. Such third-party vendor agreements may provide that costs for these services be paid from, and contingent upon receipt of sufficient funds from grants DSS makes to school districts based on Medicaid claims for special education services provided to students in the district.
School districts will now also be required (as opposed to being permitted) to determine a child's Medicaid enrollment status. In this regard, planning and placement teams will be required to comply with federal parental consent and written notification requirements prior to billing for services under the SBCH Program. Finally, private schools, hospitals, and other institutions that provide special education instruction under an agreement with a school district will be required to submit all documentation required to submit claims to the SBCH Program to the school district.
SPECIAL EDUCATION COST TASK FORCE
We need not state the obvious: special education costs can greatly challenge a school district. Section 70 of the Act establishes a “special education cost model task force” to conduct a feasibility study regarding the creation of a state “special education predictable cost cooperative” or other alternate funding/cost models in order to minimize volatility in special education spending and costs. A special education predictable cost cooperative’s purpose is to offer a special education funding mechanism that: 1) aggregates special education costs at the state level and provides cost predictability to school districts, 2) maintains current state funding for special education, 3) differentiates funding based on student learning needs, 4) equitably distributes special education funding, 5) provides school districts with flexibility and encourages innovation, and 6) limits local financial responsibility for students with “extraordinary” needs.
This proposed cooperative would be funded by: 1) a “community contribution” from each school district, calculated based on the number of special education students enrolled in the district and the district’s previous special education costs, with each town paying the community contribution of its resident students, reduced by an “equity adjustment” based on the town’s ability to pay, and 2) the state contribution, which would be a reallocation of the special education portion of the equalization aid grant and the excess cost grant. The stated goal of the cooperative would be to 1) provide all school districts with some state support for special education services; 2) ensure that a school district’s community contribution will be lower than the district’s actual per pupil special education cost; and 3) reimburse school districts for 100% of their actual special education costs for a fiscal year.
The task force will conduct an actuarial analysis of the cooperative model (and other possible models), consider school district contributions to and compensation from these models, consider the legal status, governance structure and staffing and funding needs of the cooperative, and analyze state and federal special education laws and their effect upon the proposed cooperative. The task force must report back to the General Assembly’s Education and Appropriations Committee by January 1, 2019.
ABUSE AND NEGLECT CLAIMS FOR CERTAIN INDIVIDUALS
On July 1, 2017, the Office of Protection and Advocacy (“OPA”) was eliminated. In this regard, Section 86 of the Act makes the Department of Developmental Services the successor to the OPA for the purposes of receiving and investigating complaints of alleged abuse or neglect of persons: 1) with intellectual disabilities, or 2) who receive services from the Department of Social Services’ Division of Autism Spectrum Disorder Services.
BEHAVIOR ANALYST LICENSURE
Sections 187 through 199 of the Act address the licensure of behavior analysts, and will now specifically require behavior analysts to be licensed by the Department of Public Health. To obtain a license, an applicant must be certified by the Behavior Analyst Certification Board or be eligible for licensure by endorsement. The Act establishes various exemptions from licensure requirements, such as for individuals who provide behavior analysis while acting within the scope of practice of their license and training (as long as they do not hold themselves out to the public as behavior analysts). The Act provides that assistant behavior analysts must work under a licensed behavior analyst's supervision. More germane, the Act eliminates current provisions in the state special education statutes on the required qualifications for individuals providing applied behavior analysis as part of special education services for students with autism spectrum disorder. Instead, such individuals will be subject to the new licensure provisions.
MUNICIPAL COOPERATION (AND POSSIBLE SAVINGS)
SHARING OF ADMINISTRATIVE PERSONNEL
Section 152 of the Act will permit (but NOT require) local boards of education that meet certain specified “small town” criteria (i.e., fewer than 10,000 residents, fewer than 2,000 resident students, or fewer than three public schools) to receive direction from another local board of education's superintendent, rather than having to employ their own local superintendent. If a local board of education for such a “small town” decides to exercise the option of sharing the superintendent of another school district, then the legislative body of the other town must authorize the use of its town’s superintendent.
Interestingly, existing law (Connecticut General Statutes §10-157a) already allows boards of education to jointly employ a superintendent of schools. In this regard, Section 267 of the Act allows boards of education that jointly employ the same superintendent to hold regular joint meetings at least once every two months for the purpose of reducing expenses and aligning the provision of education for each board.
Section 153 of the Act allows the legislative body of a municipality and local board of education of the same municipality, upon joint approval, to enter into a cooperative agreement for the provision of administrative and central office duties for both the municipality and school district.
Section 154 also allows two or more boards of education, upon written agreement, to enter into a cooperative arrangement for the provision of administrative and central office duties. Parenthetically, boards of education already have the power under current law to enter into cooperative arrangements for programs, services, and activities.
REPORTS CONCERNING SCHOOL DISTRICT ADMINISTRATIVE PERSONNEL
Section 155 of the Act requires local boards of education to notify their municipal legislative body before the start date of any person hired to fill a central office administrative personnel position: 1) with an annual salary of $100,000 or more and 2) for which the proposed or approved education budget does not provide funding. This new requirement does not apply to positons paid for with grants, gifts, or donations to the board. Section 157 requires local and regional boards of education to file “forthwith” with their town clerk (or clerks, in the case of regional boards) a signed copy of any contract for “administrative personnel”; the town clerk must post a copy of the contract on the town's website.
MUNICIPALITY/SCHOOL DISTRICT COOPERATION AND CONSULTATION
Section 160 of the Act requires municipal legislative bodies and local boards of education to consult when possible about jointly purchasing property, casualty, and workers' compensation insurance. Section 161 requires local boards of education, whenever they go out to bid for a good or service, to consult with the host municipality's legislative body if the municipality provides or uses such good or service. If the municipality has a lower cost option than the lowest qualified bid received by the board of education, the board must then consider a cooperative agreement with the municipality for the provision of such goods or services. For purposes of this law, a “good or service” includes portable classrooms, motor vehicles, and materials and equipment, such as telephone systems, computers and copy machines. Section 162 requires local boards of education to consult with the legislative body of its municipality before purchasing payroll processing or accounts payable software in order to determine whether such systems may be purchased or shared on a regional basis.
REGIONAL SCHOOL DISTRICTS FINANCE COMMITTEES
Section 156 of the Act permits (but does NOT require) a regional board of education to establish a finance committee for the regional school district to provide: 1) information to the board about the member towns' local budget issues, and 2) assistance in the preparation the district's proposed budget, if so requested by the board. If the regional school board chooses to establish such a finance committee, each member town’s board of education (or the legislative body in a member town without a local board of education) must then appoint two representatives to the committee.
SCHOOL CONSTRUCTION PROJECTS AND GRANTS
Besides the usual authorization of state grant commitments for specific projects which were made in Sections 237-246 of the Act, elsewhere in the Implementer Act, the General Assembly made numerous changes to the formulation of funding of school building projects. See Sections 62-67, 83 and 236. Specifically, the Act expands the types of projects for which the Commissioner of the Department of Administrative Services (“DAS”) may provide emergency school construction grants (within the limit of available funds) to include skylights as part of a roof replacement project, limited use and limited access elevators, windows, photovoltaic (solar power) panels, wind generation systems, building management systems and a public school administrative or service facility. The Act requires school districts to notify DAS of the emergency condition within seven days of discovering the condition in order to be eligible for an emergency grant and requires the grant application to be submitted within six months of said notification. The Act increases, from 5% to 11%, the amount of a project's reimbursement grant that DAS may withhold pending the completion of a final audit. The Act additionally provides that that when a regional school district dissolves, the local boards of education or member towns may remain responsible for any financial obligations or responsibilities related to school building project. The Act also changes the definition of a “renovation” project by: 1) requiring that the renovation cover at least 55% of the square footage of the completed building project, and that said project have a useful life comparable to a new construction, and 2) removing the requirement for a “total” refurbishment.
The Act would require DAS to utilize a three-year rolling average of the “equalized net grand list per capita” wealth ranking for purposes of calculating a town’s school construction reimbursement percentage for new construction grant applications. The Act replaces the current requirement of having a DAS assessment on enrollment projections for a school building project with a reporting of the following factors: 1) an enrollment projection and capacity of the school, 2) a substantiation of the estimated total project costs, 3) the readiness to begin construction, 4) efforts by the applying board of education to redistrict, reconfigure, merge or close schools prior to submitting an application, 5) specified enrollment and capacity information for the applying board of education’s schools, and 6) the state's education priorities related to reducing racial and economic isolation for the school district.
Section 223 requires the School Building Projects Advisory Council to conduct a study on developing and implementing blueprints for prototype school designs for new construction projects and submit a report, by January 1, 2019, to the General Assembly’s Education and Finance, Revenue and Bonding Committees.
EDUCATION FUNDING AND BUDGETING
ALLIANCE DISTRICT DESIGNATION
Section 224 renews the “alliance district” designation/program for the state's “lowest performing” school districts. Pursuant to the Act, the Commissioner of Education is required to designate 33 school districts as alliance districts, for a period of five years. This will include: 1) the 30 districts with the lowest accountability index scores, and 2) any district previously designated as an alliance district.
MINIMUM BUDGET REQUIREMENT
The so-called “Minimum Budget Requirement” or “MBR” generally prohibits a town from budgeting less for education that it did in the previous year. Section 252 would extend the MBR through the 2018-2019 fiscal year; it would also extend the various permitted statutory reductions and exceptions to the MBR. Alliance school districts are still prohibited from reducing their MBR. The Act further amends the MBR to permit a town to reduce its budgeted appropriation from the previous year’s amount when it experiences an Education Cost Sharing (“ECS”) decrease, with this permitted reduction being no more than an amount equal to the ECS decrease.
CALCULATIONS FOR ECS GRANT INCREASES AND DECREASES
Section 253 revises the method for determining whether a town has received an ECS increase (or ECS decrease, as the case may be) in the 2017-2018 and 2018-2019 fiscal years.
LOCAL BUDGET AND TAX ADJUSTMENTS DUE TO DECREASED AID
Section 265 generally authorizes municipalities to amend an adopted budget if state aid to the municipality is reduced below the amount projected for the adopted budget as long as the budget amendment: 1) does not exceed the amount of the reduced state aid, and 2) is approved in the same manner as the original budget (e.g., the town meeting). Specifically, municipalities that adopt a budget or levy taxes for the 2017-18 and 2018-19 fiscal year before the State adopts its budget may:
- amend their education budgets in the same manner the budget was originally adopted, as long as the amendment does not exceed the ECS grant decrease;
- amend their non-education budgets in the same manner the non-education budget was originally adopted, as long as amendment does not exceed the state aid decrease (excluding ECS grant decreases);
- make transfers between accounts without following their normal budget processes, as long as the transfers are approved by a majority of the legislative body; and
- by February 1, 2018 (for 2017-18) or January 1, 2019 (for 2018-19), adjust tax levies and any remaining tax installments or issue supplemental bills.
These provisions apply regardless of conflicting: 1) statutes affecting municipalities, property tax levy and collection and the minimum budget requirement; 2) special acts; or 3) municipal charters or home rule ordinances. Please note: Budget amendments or account transfers made pursuant to this section, except those made by an alliance district, will not impact future ECS grant or MBR calculations.
LOCAL BUDGET AND TAX ADJUSTMENTS DUE TO INCREASED AID
Section 266 allows municipalities and regional boards of education that adopted a budget (or levied taxes, as may be applicable) for the 2017-2018 fiscal year before the state adopted its 2017-2018 budget, to change their budgets and levies if the state's budget provides over $100,000 more in state aid than projected in the municipality’s or regional school board’s budget. Municipalities and regional school boards must amend their budgets in the same manner the budget was originally adopted, in an amount not exceeding the increase in state aid to the municipality or regional school board. The deadline for municipalities and boards to adjust tax levies and any remaining tax installments was January 1, 2018. Municipalities that collect taxes in a single installment may also issue supplemental bills reflecting the change in the motor vehicle mill rate cap. This section applies regardless of conflicting: 1) statutes affecting boards of education, municipalities, and property tax levy and collection (including the provisions concerning installments), 2) special acts, or 3) municipal charters or home rule ordinances.
EDUCATION COST SHARING GRANTS
Section 225 through 230 makes numerous revisions to the ECS grant formula by changing (and adding) several major formula components, including the amount of district “need” students (e.g., students eligible for free and reduced lunch, or from families receiving welfare payments) a town has as well as the town’s “base aid ratio.” The Act phases in ECS increases and decreases beginning with the 2017-2018 fiscal year and ending with the 2026-2027 fiscal year.
EDUCATION GRANT CAPS
Sections 575-582 of the Act makes the following state education grants to school districts and regional education service centers (“RESCs”) subject to proportional reduction for the 2017-2018 and 2018-2019 fiscal years if state budget appropriations do not cover the full amounts required by the statutory formulas: 1) health services for private school students, 2) adult education programs, 3) RESC operations, 3) special education costs for public agency-placed students (under an order of temporary custody), 4) excess special education “excess cost,” 5) excess regular education costs for state-placed children educated by private residential facilities, pursuant to Conn. Gen. Stat. §10-253, and 6) transportation costs for school districts, including grants for costs for transporting students to private schools within a school district.
GRANTS LIMITED TO “AVAILABLE APPROPRIATIONS”
The Act provides that the following grants are subject to or limited to funding within “available appropriations”: grants for bilingual education programs (Section 170); grants for adult education programs (Section 171); special education excess costs grants (Section 172); and public school feeding programs to ensure that nutrition standards are met (Section 173).
CHARTER SCHOOL GRANTS
Section 583 of the Act: 1) increases the per pupil grant for state charter schools from $11,000 to $11,250 for the 2018-2019 fiscal year, and 2) in a return to a prior funding process, requires the state to make the per pupil charter school grants directly to the fiscal authority for the local and state charter schools (as opposed to the town where the charter school is located).
MAGNET SCHOOL TUITION
Section 61 continues the long standing ban on “Sheff” region magnet schools charging tuition.
EDUCATION FUNDING: THE FUTURE AND FURTHER STUDY
Section 71 establishes a 16 member “Connecticut Achievement and Resource Equity in Schools Commission” for the purpose of providing analysis and recommendations concerning state funding for education and resources necessary to ensure that all public school students in the state have an opportunity to succeed. The Commission must issue a report on its findings and recommendations by April 1, 2018 to the General Assembly’s Appropriations and Education Committees, the Governor, and the Secretary of the Office of Police and Management. The Commission is to develop a strategic plan with recommendations for implementing a system for distributing state public education funding that: 1) includes a funding formula that (a) addresses the issue of unequal local tax burdens and reduces the reliance on unequal local property taxation to fund services, (b) increases equity and fairness, and (c) reduces segregation; 2) depends on a stable, fair, reliable, and identifiable funding source; 3) addresses students' educational needs from preschool through grade 12; and 4) provides predictability and sustainability in grant allocations to towns and school districts.
TECHNICAL EDUCATION AND CAREER SYSTEMS
Building off changes from the 2017 Regular Session, by which the newly renamed Technical Education and Career System (the “System,” formerly the technical high school system) is transitioned over a three year time frame into an independent state agency, Sections 72-82 of the Act makes further revisions to this transition process. In particular, these sections of the Implementer Act require that the System offer students full-time, comprehensive secondary education and provide that no employee of the System may accept any gift, grant or donation as an individual, or on behalf of the System, that is for personal use. The Act further provides that the State Department of Education review the System’s use of placement tests and wait lists, admissions policies relating to the enrollment of students with disabilities, students who are receiving or eligible to receive special education and related services, and students who are English language learners and diversity standards for the inclusion of minority students when it conducts a review of the System’s admissions policy.
EMPLOYMENT LAW-RELATED REVISIONS
RETIREMENT AND PENSION ISSUES
Out of concern over the State’s mammoth pension liabilities, the General Assembly sought to attempt to address this long term issue. In this spirit, Section 109 of the Implementer requires the Office of Policy and Management to report annually on the results of a stress test analysis for the teachers’ and state employees’ retirement systems. Section 180 creates the “Connecticut Pension Sustainability Commission”; Section 59 establishes the “Teacher Retirement System Viability Commission” for the purpose of developing and implementing a plan to maintain the System’s financial viability. Of greater substance and practical effect, Section 559 increases the amount of required contributions that public school teachers must make into the Teacher Retirement System by 1% (commencing in 2018). Section 68 will further require that a member of the Teacher Retirement Board (“TRB”) must be a municipal chief elected official. Section 320 reduces the amount of payments that the State must make to the TRB for the costs of retiree health insurance plans offered by: 1) the TRB and 2) by local or regional boards of education for the 2017-18 and 2018-19 fiscal years to only those “within available appropriations.”
In the same spirit of at least attempting to achieve long term cost savings (and address issues that affect Connecticut’s competitiveness), Section 179 of the Implementer requires the Office of Policy and Management and the Department of Administrative Services to recommend ways to reduce workers’ compensation costs.
COLLECTIVE BARGAINING: MUNICIPAL EMPLOYEES
In this time of reduced aid, the State had to at least consider providing some mandate relief (and potential costs savings) for municipalities. Section 158 of the Implementer establishes an irrebuttable presumption that 15% of a municipality’s budget reserve cannot be used to pay for any item subject to arbitration in the interest arbitration proceedings conducted under the Municipal Employee Relations Act (“MERA”). PLEASE NOTE: A proposal to revise the “last best offer” system of arbitration by allowing arbitrators the flexibility to issue a ruling different from either party’s last best offer did not make it into the final version of the Implementer Act.
Sections 349 through 376 of the Implementer describe a process by which financially distressed municipalities may submit to state oversight (via the “Municipal Accountability Review Board”) in exchange for being able to access additional state financial assistance and use existing statutory debt financing tools. In turn, the Municipal Accountability Review Board will be given the same power as the municipality’s legislative body in the collective bargaining approval, rejection, and arbitration process.
COLLECTIVE BARGAINING/TERMS OF EMPLOYMENT FOR STATE EMPLOYEES
The terms and conditions of employment of state employees has been a hot button issue. The State is required to negotiate state employee pension and healthcare benefits with a coalition committee that represents all unionized state employees (i.e., the State Employee Bargaining Agent Coalition, or “SEBAC”). Section 218 of the Implementer will limit all future agreements with SEBAC to four-year terms. Section 332 will require the General Assembly to affirmatively vote to approve (as opposed to approval by inaction) state employee collective bargaining agreements and arbitration awards; it will also establish caps on the time allowed for the legislature to debate the approval (or rejection) of collective bargaining agreements and will require arbitration (as opposed to further negotiation) after the legislature rejects an agreement or award.
Section 643 will allow state employees to take seven days of paid leave for donating bone marrow, and 15 days of paid leave for organ donations. This is in addition to other authorized leave.
PAY FOR ARBITRATORS
Section 209 of the Implementer increases the additional fee an arbitrator for the State Board of Mediation and Arbitration receives for writing the arbitration panel’s award from $175 to $500.
After years of discussion, there will finally be some long sought modification of the “prevailing wage” statute, which mandates the wage rates (and/or benefits) that contractors working on public works and municipal construction projects must provide to their employees. Sections 566 and 567 of the Implementer increase the prevailing wage law thresholds for public works and municipal construction projects from $400,000 to $1 million for “new construction:” the Act also temporarily exempts certain projects in a certain New Haven County city (Derby) from prevailing wage requirements. Conversely, the implementer will apply prevailing wage requirements to certain Department of Economic and Community Development (“DECD”) funded projects (i.e., those projects receiving at least $1 million in DECD assistance).
EMPLOYMENT BACKGROUND CHECKS FOR CHILD CARE PROVIDERS AND EMPLOYEES
Sections 174-176 of the Act provides that the Commissioner of the Office of Early Childhood ("OEC") shall require, within available appropriations, comprehensive background checks (in addition to the state and national criminal history records checks already required by existing law) for prospective employees of child care centers and group child care homes, along with initial applicants and prospective employees of family child care homes (including each household member who is 16 years of age or older), or any person providing child care services to a child receiving a child care subsidy from the OEC. The Act further specifies that a prospective employee of a child care center or group child care home cannot have unsupervised access to children in a child care facility until the background checks are completed and the OEC Commissioner permits the prospective employee to work at the facility.
Section 177 further specifies that these comprehensive background checks must be conducted every five years. However, such background checks shall not be required for any applicant who 1) is currently an employee or was an employee at a child care facility in the state in the past 180 days, and 2) has successfully completed such a background check in the previous five years. The Act gives the OEC the discretion to require a child care facility employee or prospective employee to submit to background checks more than once every five years.
EMPLOYMENT BACKGROUND CHECKS FOR STATE EMPLOYEES
Section 129 of the Act requires criminal background check requirements for state employees in positions involving exposure to federal tax information. In particular, the Act provides that an employing state agency must require each applicant for, each employee applying for transfer to, and (at least every ten years) each current employee of such position to: 1) state in writing whether the applicant or employee has been convicted of a crime or has criminal charges pending against him or her at the time of application for employment or transfer and, if so, to identify the charges and the court in which the charges are pending; and 2) be fingerprinted and submit to state and national criminal history records checks.
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Alerts, commentary, and insights from the attorneys of Pullman & Comley’s School Law practice on federal and Connecticut law as it pertains to educational institutions, whether those institutions be public school districts, private K-12 schools, or post-secondary colleges and universities.
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