BFR Committee - March 10, 2008

[Guest sullinss]

Proceedings of the Budgeting For Results Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

March 10, 2008

Call to Order

 

The Budgeting For Results Committee of School District No. 2, Yellowstone County and High School District No. 2, Yellowstone County, Montana met at Lincoln Center, 415 North 30th Street, Billings, Montana, on Monday, March 10, 2008. Chair Katharin Kelker called the meeting to order at 5:15 p.m. and led those assembled in the Pledge of Allegiance. Committee members present were: Katharin Kelker, Shanna Henry, Peter Grass, Joan Sleeth, Joel Guthals, Mary Jo Fox, and Dan Farmer. Absent were members Don Stanaway, Kari Altenburg, and Curt Prchal. Also present was CFO Thomas Harper, Skyview English teacher Rod Gottula, and Jerry Hansen from the community.

 

Communication From the Public

 

No one wished to address the Committee at this time.

 

Consent Agenda

 

Joel Guthals moved to recommend Board approval of the Consent Agenda item as follows:

1. Minutes of February 11, 2008

Joan Sleeth seconded the motion. The motion carried unanimously.

 

Peter Grass arrived at 5:17 p.m.

 

Budgeting For Results

 

Thomas reported the budget forecast FY2009 was still gloomy; however, the forecasted increase for health insurance has changed from 9% to 2% based upon the recommendation from the actuary, Gallagher Benefit Services, Inc. As a self-insured unit, our past 2-3 years of low claims has benefited our fund balance which is currently over $4M. The Insurance Committee will meet in April to review the data and recommend rates for next year. Joel asked what our health insurance expense is compared to other districts under other programs that are available. Thomas related his conversation with MTSBA was that they stated we have a benefit rich health insurance plan, and there could be a huge cost savings if we were to cut benefits utilizing a plan with a high deductible (catastrophic policy), or if employees managed their own health savings plan (consumer directed). We will try to schedule a joint committee meeting with the Insurance Committee for May.

 

Mary Jo Fox arrived at 5:25 p.m.

 

Thomas provided comparisons between AA school districts of elementary expenditures as a percent of total General Fund expenditures. Gail Surwill will be asked to bring achievement comparisons between the AA school districts to a future meeting.

 

Bills Paid – February, 2008 (summary sheet)

 

Jerry Hansen addressed the Committee to question why total warrants paid in February were listed on the web at $4,365,103.41, when the amount in the agenda for approval was shown as $3,550,160.45. Jerry stated last month the Procurement Card purchases were approved without the detail and this month the amount is $331K and the details have not been posted. The Chair stated the e-mail system was down for a period of time and the Board delayed approving the financials to a Special Board meeting for that reason. Thomas will check out the differences in the bills paid amount and e-mail the answer to Committee members. The Chair stated no recommendation to the Board to approve the February bills paid will be made at this time to allow Thomas to check on the numbers.

 

 

 

 

Financial Reports – February, 2008 (Unaudited)

 

Jerry Hansen addressed the Committee to question why the year-to-date expenditures of the high school building fund decreased by $134K from the January to February financials. Thomas stated we had a deficit to begin with because we’re waiting to collect about $140K from the insurance company for repairs at Skyview; expenditures incurred from the Lincoln water break problem; outstanding collections from donors for the West High track; and, outstanding donations for repair/maintenance of Daylis Stadium. By year-end that fund will be in the black and reflect our true cash balance. Chair Kelker would like a list of those outstanding items available for the Regular Board meeting.

 

Joel would like budget managers to report to this Committee with proposals of how they could save money from next year’s budget. Even with passage of the mill levy, our deficit budget will require cuts. He would like to see if there are areas for budget cuts other than personnel. He would like our Committee to hear about program costs from their providers, and what that program could provide along with what reduction in services would be necessary if there was a 10% cut in funds. Chair Kelker said the easiest programs to begin with are operational ones such as energy costs, facility costs, etc., and then look at the educational programs. Rod would like the committee to look at how much our grant related programs are costing the General Funds to sustain them. Peter Grass would also like the grants reviewed to see if they are self-sufficient and justified. Chair Kelker believes an audit of grant costs should be done by our District Clerk rather than this Committee. Thomas gave an example of the possibility of examining the cost of our remedial reading programs at K-3 and Grades 7-8 levels as compared to improvement in student achievement. Thomas explained the Budgeting For Results process, whereby the Board adopted 6 objectives, and indicators of outcomes, and then reviewed operational program budgets. Energies became focused on passage of the mill levy and other programs were not reviewed last year. We are trying to initiate internal programs that invest capital to secure savings through productivity, such as energy programs and PaySchools, etc. Thomas believes another Board endorsement would help to fully activate the program. Joel believes we already had Board commitment. Joan and Shanna believe there are programs to review that don’t impact kids, like coaches training others, etc.

 

Chair Kelker summarized by saying the District Clerk would be asked to do a grant audit; and, three operation managers will be asked to come and report to the Committee on their programs. Joel would like to reinvigorate the mission of the Committee and get all support departments to report to this Committee.

 

Health Insurance – Financials – January, 2008

 

The Committee reviewed the Health Insurance Financials for January, 2008. The fund balance is $4,065,049.33.

 

Jerry Hansen addressed the Committee saying he would like to see the Health Insurance Committee’s minutes published; and, he would like our financial statements to agree with the actuary’s report.

 

Thomas explained at the end of every fiscal year there always remains unpaid claims that have been incurred but not yet paid. From a financial standpoint we show a month-to-month estimate of $1.3M. The actuary is trying to estimate what amount would be needed to pay off those claims if the plan should shut down. They estimate we need $1.7M to cover these claims. The long-term benefit payable of $1.4M is the implicit future cost of Other Post Employee Benefits for one year. We do not have to cover the total liability of $32M; these are covered on a pay-as-you-go basis.

 

Update on Board Study Session on Bond Projects

 

Chair Kelker reported on the Board Study Session discussion on February 25, 2008 in relation to potential bond issue projects and deferred maintenance. The Board discussed decision matrix items that our Committee saw last month that were to be developed for the purpose of guidance on bond issues. Board consensus for defining neighborhood schools is: they are of value, they wish to keep them, it has a geographic meaning, and is most likely a K-6 grade configuration. School size was discussed along with the effect on core downtown schools if a new outlying school is built. Renewal projects and consolidation of schools was also discussed at the Board level. A member from D. A. Davidson will be invited to our March Committee meeting to address questions on bond issues.

 

Adjournment

 

There being no further business the meeting was adjourned at 6:40 p.m.

 

 

 

 

 

Katharin Kelker, Chair

 

 

 

Sherrill Sullins, Recorder