Special Board Mtg - March 31, 2008

[Guest sullinss]

Proceedings of the Board of Trustees

District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

March 31, 2008

 

Call to Order

 

The Special Board Meeting of the Board of Trustees of School District No. 2, Yellowstone County, Montana, and High School District, Yellowstone County, Montana, was duly held at the Lincoln Center, 415 North 30th Street, Billings, Montana, March 31, 2008, at 5:30 p.m.

 

Chair Goodrich led those assembled in the Pledge of Allegiance.

 

The following trustees and officers were present: Malcolm Goodrich, Katharin Kelker, Tim Trafford, Sandra Mossman, Peter Gesuale, Joel Guthals, Mary Jo Fox, Dawn Acton, Kathleen Aragon, Superintendent Jack Copps, District Clerk Leo Hudetz, and Chief Financial Officer Thomas Harper. Also in attendance were Dan Martin, Scott Anderson, Rich Whitney, Kathy Olson, Gail Surwill, Nancy Hines, Dave Williams, John Jacobsen, Jane McCracken, Jerry Hansen, and Laura Tode.

 

Communication from the Public

 

No one wished to address the Board at this time.

 

Comprehensive Annual Financial Report FY2007 (Audit)

 

Jane McCracken, Audit Committee Chair, and John Jacobsen, Partner with EideBailly LLC in charge of the audit, reported to the Board that the audit FY2007 was the best audit report they’ve seen in many years for the District. The District implemented GASB 45 standards this year, which was one year before it became required. The District implemented the Comprehensive Annual Financial Report (CAFR) for the first time, which is a year over year data comparison and includes more statistical and financial data than standard annual reports previously completed. Better information is communicated to the public on how our District funds are used, and it presents an achievement in credibility in the world of government entities. The opinions are unqualified “clean” which means the district is in full compliance with state and federal accounting laws and there are no questioned costs. Thomas Harper and his staff were given credit for the improvements in the accounting department and how they’ve been able to tighten up their controls.

 

The District implemented both GASB 45 and GASB 27 standards this year. They both deal with recognition of the School District’s obligations for non-funded employee benefits. They are made up of health care for post-retirement employees addressed by GASB 45, and service credit and Option 1 employee benefits at retirement which are addressed by GASB 27. Our financial statements over the next 30 years (adopted amortization period) will recognize the unfunded obligation year-by-year. The currently unfunded (actuarially outstanding) amount is about $72M; this includes everything the District is liable to pay into the future for current employees (actuarially determined numbers). At the end of 30 years there will be the obligation on our financial statements for all these unfunded benefits. Every two years we are required to have an actuary recalculate these obligations. As we adopted these two standards we opted to go back to the earliest year available to restate the obligation and a prior period adjustment was made for year ending June 2006. We recognized and corrected the service credit portion as being independent from compensated absence and recognized the actuarially determined amount over 30 years. We will still pay the annual expenses (average $2.3M) on a pay-as-you-go basis; but we will recognize our long term liability.

 

Katharin Kelker moved that the Board accept the Comprehensive Annual Financial Report FY2007 and commend the Audit Committee, Jane McCracken, Thomas Harper and staff, and Leo for doing an extraordinary job. Peter Gesuale seconded the motion. The motion carried unanimously.

 

The Board gave special recognition to community member Jane McCracken and commended her for serving many years as Audit Committee Chair. This is Jane’s last year on the Committee.

 

 

Adopt Resolution of Intent to Reimburse Expenditures with Proceeds of Clean Renewable Energy Bonds

 

Joel explained this item is being brought forward from a prior meeting to change the dollar amount on the resolution. The IRS approved the Clean Renewable Energy Bond allocation in full. If the feasibility studies on the wind energy projects are positive and as a result if the projects are funded and built, the Board needs to adopt the following reimbursement resolution to ensure project expenses are reimbursable from bond proceeds:

 

Resolution Expressing Official Intent Regarding

Certain Expenditures to be Reimbursed with

Proceeds of Clean Renewable Energy Bonds

 

BE IT RESOLVED by the Billings Public Schools District No. 2, Board of Trustees (the “Commission”) of Billings, an educational subdivision and governmental entity located in the State of Montana (the “Issuer”) as follows:

 

Section 1. Recitals.

 

1.01. The Issuer intends to apply for an allocation of Clean Renewable Energy Bonds to finance the costs of planning, engineering, procuring, and constructing a facility using wind to produce electricity (the “Project”).

 

1.02. The Issuer expects to pay certain expenditures (the “Reimbursement Expenditures”) in connection with the Project prior to the issuance of indebtedness for the purpose of financing costs associated with the Project on a long-term basis.

 

1.03. The Issuer reasonably expects that Clean Renewable Energy Bonds in an amount not to exceed $1,628,157 will be issued and that certain of the proceeds of such debt obligations will be used to reimburse the Reimbursement Expenditures.

 

1.04. Section 54(d) of the Internal Revenue Code (the “Code”) requires the Issuer to declare its reasonable official intent to reimburse prior expenditures for the Project with proceeds of a subsequent borrowing.

 

Section 2. Findings. The Issuer finds and determines that the foregoing recitals are true and correct.

 

Section 3. Purpose; Not Binding. This declaration is made solely for purposes of establishing compliance with the requirements of Section 54(d) of the Code. This declaration does not bind the Issuer to make any expenditure, incur any indebtedness, or proceed with the Project.

 

Section 4. Declaration. The Issuer hereby declares its official intent to use proceeds of indebtedness to reimburse itself for Reimbursement Expenditures.

 

Section 5. Effective Date. This Resolution shall be in full force and effect immediately upon its adoption.

 

PASSED AND ADOPTED by the Billings Public Schools District No. 2 Board of Trustees, Billings, Montana, this 31st day of March, 2008.

 

//SS// Malcolm Goodrich

Board Chair

 

Joel Guthals moved that the Board adopt the Resolution Expressing Official Intent Regarding Certain Expenditures to be Reimburse with Proceeds of Clean Renewable Energy Bonds. Kathleen Aragon seconded the motion. The motion carried unanimously.

 

Retrofitting 13 of 2002 Buses with Low Temp DPF, CFS, and DPF Cleaning Systems

 

On June 25, 2007 the U.S. Environmental Protection Agency (EPA) awarded Billings Public Schools the Clean Schools Bus USA grant in the amount of $131,129. The award provides funds to the District to improve air quality through the retrofit of 13 school buses with EPA verified devices. These school buses are part of the fleet that belongs to First Student, Inc., which transports about a quarter of students enrolled in the District. The retrofit project will reduce the exposure of students and personnel to toxic emissions and improve air quality.

 

Two bids were received from Cummins Rocky Mountain LLC and Donaldson Co., Inc. as follows:

 

Donaldson Co Cummins

Part 1 – Diesel Particulate Filter 92,989.50 130,914.12

Part 2 – Crankcase Filtration Systems 7,345.00 8,385.00

Part 3 – DPF Cleaning Systems 17,979.30 21,742.74

Total $118,313.80 $161,041.86

 

Administration recommends awarding the bid to Donaldson Company, Inc.

 

The Chair questioned if the District can obtain a grant and hand the funds over to another business. Thomas assured the Board that EPA has approved this and it’s written in the grant. There is no cost to the local taxpayers.

 

Joel Guthals moved that the Board award the bid for retrofitting 13 buses to Donaldson Company Inc. in the amount of $118,313.80. Kathleen Aragon seconded the motion.

 

Ron Messman, Contract Manager for First Student, Inc., spoke to the Board relating that the 13 buses to be retrofitted are 2002 series buses with an electronic engine that’s most common to the fleet. The traps and filters belong to the school district if for some reason the contract terminates. There are 83 bus routes and 93 buses in SD#2 routes.

 

The motion carried unanimously.

 

Study Session for District Facilities

 

Jerry Hansen addressed the Board stating when we think of a school “neighborhood” concept we need to keep in mind that each school facility has a different size neighborhood based on functional capacity. His opinion of McKinley Elementary functional capacity is zero and that facility needs immediate attention. If we remodel buildings we need to bring the facilities up to standard, including ADA, so we can increase the life of the schools 50-60 years. Mr. Hansen stated the 45% State reimbursement for bonding applies to the annual debt service payment and is a current rate that may change.

 

Chair Goodrich clarified that Trustee Guthals did not make a motion regarding size of schools, it was only a suggestion. There has been no action taken on any topic in the last several sessions.

 

Chair Goodrich stated this study session is a continuing discussion of what direction we go in terms of our District facilities from a strategic standpoint. The decision matrix from the last study session was presented as a starting point for discussion as follows:

 

1. Define “neighborhood schools” (elementary schools only)

a. Neighborhood schools versus “collector” schools – preference for neighborhood schools agreed at last session

b. Nature of Neighborhood school – agreed at last session

c. Equality of schools as decision element for improvement and refurbishment – agreed at last session

d. Size of a neighborhood school – to be discussed

e. Effect on present elementary schools under final definition of neighborhood schools – to be discussed

f. If students currently being bused are returned to neighborhood schools, what would be the effect upon neighborhood schools – to be discussed

2. Determine standard for priority placement on deferred maintenance/improvement list

3. Determine whether to bond and/or finance and/or dispose of surplus property for deferred maintenance/improvement

4. Determine size, structure and timing of bond/finance/sale of surplus property

5. Discussion of high school size

 

At the previous study session, Joel collected discussion ideas and presented a definition of a neighborhood school for consideration as follows:

 

A neighborhood elementary school is a school that has facilities to provide quality education for 450-500 K-6 students, with class sizes at accreditation standards, serving the students and families of a neighborhood. A neighborhood is a geographical area in the District, within 3 miles of a neighborhood school that has a population of between 450-500 K-6 students. There may be more than one neighborhood school serving a neighborhood. Neighborhood boundaries are subject to change in order to maintain a student population of 450-500 students for the neighborhood school.

 

Joel believes it should meet accreditation standards and be large enough to have full sections of classes to optimize staffing of those classes, and that boundaries should be fluid and dictated by the need to fill the school. The District is not required to bus students within a 3 mile limit. As much as we want smaller class size, it is not happening and we need to plan for it.

 

Superintendent Jack Copps stated neighborhood schools are places where people sense a belonging and a connection. He proposed the following definition:

 

A neighborhood school is a K-6 elementary school of quality located in a geographic area generally recognized as a neighborhood by its residents. It captures the notion that the strengths of families and their surrounding neighborhood can provide a social foundation of norms, networks, and relationships upon which the school can best function. A neighborhood is a place of familiarity making it easier for families to develop a sense of pride and community in that neighborhood. In this regard, neighborhood schools can become the best linkage between public education and families. Cost efficient and learning effective neighborhood schools range in size from 300-450 students. With this in mind, a neighborhood school may incorporate adjoining neighborhoods. Likewise, a greater neighborhood area may include more than one school. Because of constraints neighborhood school attendance areas are subject to change.

 

Jack said accreditation standards are not a standard that says it is the optimum size for a classroom. The number of students in a classroom is contingent upon what kind of students you have in that class. 9 of 10 dropouts come from lower socio-economic settings; so, wherever you have at-risk students you need to have smaller classrooms and a smaller size school.

 

Katharin Kelker believes the Board needs to determine a size range for a school. A study of Montana schools shows that the size of the school and not the size of the classroom impacts achievement levels. Katharin believes the maximum size of an elementary school should be 450. We need to balance school size against the cost to operate the building; this includes questioning if we have any schools too small to operate for efficiency.

 

Jack said there are 860 schools in Montana, 40% of them have fewer than 50 students in them. 50 schools in Montana exceed 500 students (K-12). Billings has 7 of these schools (middle & high schools) over 500 students.

 

Mary Jo Fox suggests consideration be given to a K-8 configuration (as opposed to K-6 only) of 500 students for certain areas (pods) for cost savings.

 

Jack believes we need to be receptive to charter schools – perhaps a special school authorized by this District to include enrollment in K-8 that may utilize different strategies and instructional styles and configurations that might be appropriate to that neighborhood.

 

Kathleen Aragon believes we need to add factors of infrastructure, density, and safe-street crossing to the neighborhood definition. We need to look at the operating budget to see what it will support and sustain and then look at criteria.

 

Peter Gesuale agrees with consideration of Trustee Aragon’s factors. He believes we should consider drop outs and the lower socio-economic area. Operating costs are not the final factor. We should not create a definition for neighborhood schools we cannot live within.

 

Katharin Kelker agreed safety is a huge issue, but if we try to achieve certain elements of quality, they should be for all kids. Major areas in the Heights have no sidewalks, etc. and are beyond our control.

 

Tim Trafford stated Lockwood is a good example of shared resources in a larger school setting. A neighborhood school should be a learning community and not just based on building size.

 

Trustee Mossman left the meeting at 6:57 p.m.

 

Chair Goodrich said the Board agreed at the last session that one primary criterion for determining school size was based on equality of schools as we go forward in any refurbishment, improvement or new construction. We need to define size as an outgrowth to deal with budget constraints; that’s why we put a definition on a building for efficiency. Administration said at the last meeting there is a size range that a school can be operated efficiently from a building maintenance and administrator standpoint; and, we wanted to make sure we weren’t putting dollars into facilities that weren’t efficient. Two learning communities in an efficient facility would not necessarily be a problem.

 

Katharin Kelker stated she added to the neighborhood schools definition that if a new school was built it would be for over 400 students at a 94% capacity concept allowing for some growth.

 

Jack believes that in schools over 500 the students don’t have the same access to things as smaller schools. Parking, playgrounds and busing become issues. A 300 student school is an efficiency number for the minimum number. Achievement does not change with numbers; the exception is minority and socio-economic impacted family areas. This range allows consideration for the building and the population served. Peter is comfortable with this range of school size. The Board discussed the impact of density in certain areas and how it might be used as a criterion.

 

Chair Goodrich stated we need a consistent vision on what we might refurbish as to specific buildings if we ask the public for an $80M bond issue. Kathleen Aragon suggested we use a professional school planner to integrate all aspects of the information. Chair Goodrich believes we have academic and facilities experts at hand and do not need an outside planner. Mary Jo Fox thinks Administration should bring forward recommendations for the Trustees to consider. Jack advises when you consider attendance and boundary areas, it’s best to involve and engage people living in the core, west end, and Heights areas that would be impacted the most and secure their input as to what may be appropriate for their neighborhood. It would be inappropriate for us to disregard current boundaries and administratively create new boundaries without involving those people. We’re able to identify obvious schools that are in desperate need of attention. We should not delay but move forward to address issues; and, perhaps at the same time engage a planner to work with Administration and facilitate the discussions that need to take place in the neighborhoods. If we don’t start now to prepare for a bond issue in November, we are neglecting some critical issues facing this community.

 

Chair Goodrich requested Administration to come back with a proposal on specific school structures of concern such as Broadwater and McKinley. He directed Peter Gesuale and Katharin Kelker to work with Administration to facilitate a discussion on Newman/Miles Ave/Washington schools.

 

Chair Goodrich asked that the range of 300-450 size school be added to the description of neighborhood schools to include a consideration of K-8.

 

Chair Goodrich said we need to have the City Council, the business community and the public involved; but, we need to have a vision first. We need to make decisions by July or August if we want to proceed with a November bond issue.

 

The Chair asked Leo to establish a date for the next study session meeting.

 

Jack thinks that besides making decisions on Broadwater and McKinley, we also need to look at a new school on the West end. As of July, 2008, we will no longer as a community be making any investment in our infrastructure as all of our bond issues will be retired. At some point in the very near future we need to make a decision on how we are going to invest and when we are going to do it.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:53 p.m.

 

 

 

 

Malcolm Goodrich, Chair

 

 

 

Sherrill Sullins, Recorder