Budgeting For Results Committee-May 12, 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

 

May 12, 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, May 12, 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, Dan Farmer, Kari Altenburg, and Don Stanaway. Member Curt Prchal was absent. 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 April 14, 2008

2. Addition of Eble & Rickard Scholarship Trust Fund Accounts

3. Addition of Trust Accounts for BPEF 2008 Classroom Grant Recipients

4. Addition of Professional Development (U.S. Bank) Trust Account at Riverside

5. Addition of Recycling Partnership Trust Account at Lincoln Center

Dan Farmer seconded the motion. The motion carried unanimously.

 

Tuition Rates 2008-09 School Year

 

The Office of Public Instruction has set the maximum out-of-district tuition rates under MCA 20-5-323 and ARM 10.10.301 for the 2008-09 school year at 20% of the per-ANB entitlement.

 

Joel Guthals moved to recommend the Board approve the maximum allowable tuition rates FY2008-09 to be $471.60 per student for Pre-K and ½ Time Kindergarten, $943.20 per student for Full-Time Kindergarten and Grades 1-6, and $1207.40 per student for Grades 7-12. Dan Farmer seconded the motion. The motion carried unanimously.

 

Budgeting For Results

 

Thomas reviewed the May, 2008 elementary levy election results. He presented the budget forecast FY2010 using the same revenue assumptions he used in FY09, flat enrollment, assumed use of OTO in FY09, same insurance costs and slightly higher cost of living. This resulted in a General Fund deficit FY2010 of $3.3M in elementary and $1.4M in high school.

 

Some discussion and comments from members, and also some comments they heard from the public regarding failure of the mill levy were:

1. Need greater emphasis on getting levy information to specific geographic areas of the city where the levy failed.

2. Last year’s successful levy had over $100k in advertising vs. a typical levy year.

3. Last year’s successful levy had something to sell for different areas of town vs. this year’s request for salaries and supplies.

4. Many ballots received too late to count?

5. Mail ballot elections are desirable due to the higher level of response from the community.

6. Need to change funding system through the Legislature; we are only entity required to ask for funding from the public on a yearly basis.

7. Get accurate information to the public, and follow through on information given out.

8. Negative sentiment about closure of Crossroads, potential closure of Rimrock, Yes For Kids, Celebrate Billings.

9. An increase in the aging population of Billings that have no children in school.

10. Caution against drawing huge conclusions on the failure of the levy by 500 votes; and a reminder that only 250 more people had to vote yes to get the levy to pass; and each voter has a different set of values.

11. “transparency and accountability” with more clearly defined items of what will happen if the levy would pass may give the voter a sense of what they will be getting for their dollar.

12. A need for public discussion on all funds rather than just the General Fund to avoid the perception we’re hiding money in other funds.

13. Avoid using one-time-only funds to balance the budget.

 

Thomas reported the Elementary General Fund budget FY2009 has a projected $2.7M shortfall. The Central Leadership Team is forwarding to the Board a list of potential items for savings to the budget FY2008-09. The $2.7M shortfall is based on the assumption the District will not commit one-time-only money for on-going expenditures. If all of the one-time-only money of $1.1M is used, the shortfall is reduced to $1.6M and a $1.1M deficit is transferred to the FY2010 budget.

 

At the request of the Board of Trustees, district level administrators have identified the following "options" for consideration as Elementary General Fund Budgets are determined to offset a projected *$2.7 million shortfall. The *$2.7 deficit is based on 3% negotiated compensation packages for the 2008-09 school year. Each percent represents a $510,000 adjustment. The projected shortfall will require adjustment when negotiated packages are completed.

 

A summary of the different savings options totaling $3,842,259 were discussed by Committee members as follows:

 

 

 

 

 

 

Board Contingency - $206,542: This fund is typically available for emergencies. This will reduce the Elementary Board Contingency to zero.

 

Teaching Positions – 10 FTE - $666,193 est.: These positions are covered by retirements. We currently have 369 elementary classroom teachers. The impact will be increased class size and about 10 more combination classes.

 

Close Rimrock School – 4.5 FTE - $218,513 est.: This option is to close, not to sell. Little impact to kindergarten students; larger class sizes at home schools; lose advantage of centralized kindergarten.

 

Library – 1.0 FTE - $40,000 est.: It will cut a small amount of library hours from several schools with smaller populations. It may affect some tech support services required at the schools.

 

K-6 Specialists (art, music, health) – 2.0 FTE - $80,000 est.: there will be fewer classrooms to cover with increased combination classes; so, fewer specialists will be needed.

 

Band and Orchestra (Grade 5-6 – 1.5 FTE - $30,000 est): again, there will be fewer classrooms to cover; the elementary schools only have 1-2 hrs. per week now, and all classes will still be covered.

 

Convert Middle Schools to Junior High Schools – 8.0 FTE - $320,000 est: this would eliminate the 7-period day which means fewer electives for the students to choose from with more emphasis on core subjects.

 

Member Peter Grass arrived at the meeting at 6:25 p.m.

 

K-8 Counseling – 24.0 FTE - $618,901 est.: this would eliminate all counselor positions K-8. Shanna and Rod spoke to the importance of retaining K-8 Counselors for the benefit of elementary students. This would not meet accreditation requirements.

 

Middle School Activities - $400,000 est: this involves anything paid by stipend such as sports, honor band, and honor orchestra. There are alternatives for these activities with outside clubs and programs. Loss of Middle School sports would impact those that can’t afford clubs.

 

Human Resources/Business Ofc. – 1.34 FTE - $40,000 est.: one employee in Human Resources and one employee in the Business Office are retiring and they will not be replaced. Implementation of Time Card On-line should reduce Payroll’s workload in the Business Office.

 

K-8 At Risk Non-Title Schools – 14.0 FTE - $673,228 est (Read 180 and Early Literacy Intervention): these programs involve small student populations. Early Literacy is a professional development training program. Shanna and Rod spoke to the importance of retaining this intervention program for the benefit of the students. We pay annual fees, and a couple years ago we invested $1.2M in the Read 180 software.

 

K-6 Reading Tutors – 8.8 FTE - $192,736 est.: these are the Para-pros and most of them provide first grade intervention.

 

K-6 Extended Studies – 6.0 FTE - $106,146 est.: elimination of the higher achievement programs except what the teachers provide in their classroom.

 

Textbooks $250,000 (retains $30k for replacements): this item is for new editions of textbooks and it would stop the reordering cycles.

 

The Chair asked Committee members for suggestions for other areas the Board should consider for budget savings. The following items were discussed at length:

 

• Teachers on special assignment which do not affect students, i.e., math and literacy coaches. It was determined these are Title funded and not General Fund dollars.

• Go back to one-half day Kindergarten classes

• Salary and benefit negotiations (less than the 3% budgeted, insurance contribution, etc.).\

• Dollars spent on substitutes for school related days

• Utility savings estimated at $268K FY2008-09

 

Don Stanaway left the meeting at 7:13 p.m.

 

The Chair requested Committee members to vote on each item as discussed if they consider it to be a reasonable item to cut from the budget. Seven Committee members voted; the Chair did not vote. The results are posted below:

 

BFR Comm.

FTE Savings Activity (# votes for cuts)

 

206,542 Board Contingency 5

 

10.00 666,193 est. Teaching Positions 6

 

218,513 est. Rimrock School closure. Savings include: 6

1.00 principal

1.50 custodian

0.50 librarian

1.00 secretary

0.50 resource teacher

Utilities

 

1.00 40,000 est. Library 7

 

2.00 80,000 est. K-6 Specialists (art, music, health) 6

 

1.50 30,000 est. Band and Orchestra (Grade 5-6) 7

 

8.00 320,000 est. convert Middle School to Junior High School 6

 

24.00 618,901 est. K-8 Counseling (7 Non-tenure, 17 Tenured) 0

 

400,000 est. Middle School Activities 7

 

1.34 40,000 est. Human Resources/Business Office 6

 

14.00 673,228 est. K-8 At Risk Non-Title Schools

Read 180 0

Early Literacy Intervention 3

 

8.80 192,736 est. K-6 Reading Tutors 2

6.00 106,146 est. K-6 Extended Studies 2

 

250,000 Textbooks (retains $30k for replacements) 4

 

►half-day Kindergarten 3

 

268,000 est. ►Utility savings

 

►compensation

 

TOTAL 81.14 4,110,259 est. ►Added by Budgeting For Results Committee

 

 

Financial Trend Monitoring System

 

Thomas stated one objective of the Budgeting For Results process dealt with the fiscal condition of our District. He used a template from the International City and County Management Association to develop this report as a tool to report on our District’s financial condition. Trends were developed using data from our Comprehensive Annual Financial Report and our financial system.

 

One trend shows our revenue is not keeping up with the CPI. Our revenue structure has changed with more one-time-only funding. Our local tax revenue does not keep up with the cost of service. The value of property and business climate is up and our ability to tax is down. The Chair stated this Committee should be making recommendations in terms of management practices to the Board. We will revisit this information at a future meeting.

 

Comprehensive Annual Financial Report (CAFR) FY2006-07

 

Thomas reported the Budgeting For Results Committee has the responsibility to follow-up on audit findings and recommendation. The audit FY2006-07 had no findings or recommendations. The CAFR Transmittal Letter and MD&A and Footnotes detail accounting pronouncements GASB 45 and GASB 27 we had to implement which talked about our retirement service credit plan and our unfunded liability.

 

Bills Paid – April, 2008

 

Jerry Hansen addressed the Committee stating the PCard transaction detail was not available yet. Thomas stated it would be available before the Board meeting.

 

Dan Farmer moved to approve the bills paid for April, 2008. Mary Jo Fox seconded the motion. The motion carried unanimously.

 

 

 

Financial Reports – April, 2008 (Unaudited)

 

The Committee reviewed the unaudited financial reports for April, 2008. Thomas reported Fund 170 for the Day Care program has a $20+k deficit. They are conducting a fund raiser and will borrow from other funds to close out the year. We will probably continue this program next year. Retirements are right on the estimate. Utilities did not under-run, but it does not mean they must do a budget amendment.

 

Health Insurance Financials – March, 2008

 

The Committee reviewed the Health Insurance Financials for March, 2008. The fund balance is $4,345,557.17.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:40 p.m.

 

 

 

 

 

 

Katharin Kelker, Chair

 

 

 

 

Sherrill Sullins, Recorder