Budgeting For Results Committee - Aug. 11, 2008

[Guest sullinss]

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

August 11, 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, August 11, 2008. Chair Malcolm Goodrich called the meeting to order at 5:52 p.m. and led those assembled in the Pledge of Allegiance. Committee members present were: Shanna Henry, Joan Sleeth, Joel Guthals, Mary Jo Fox, Don Stanaway, Malcolm Goodrich, Paige Darden, Kelly Donovan, Jane McCracken, and Bruce MacIntyre. Member Peter Grass was absent. Also present was CFO Thomas Harper, District Clerk Leo Hudetz, and Trustee Peter Gesuale.

 

Chair Goodrich welcomed new and returning members to the Committee for the new fiscal year.

 

Communication From the Public

 

No one wished to address the Committee at this time.

 

Consent Agenda

 

Shanna Henry moved to recommend Board approval of the Consent Agenda item as follows:

1. Minutes of June 09, 2008

Joan Sleeth seconded the motion. The motion carried unanimously.

 

Policy 4310: Community Relations, Second Reading

 

The Audit Committee requested that District policy be amended to provide for the opportunity for an individual to report any financial or operational irregularities and to be able to do so anonymously. The Board of Trustees approved this policy on the first reading at their July 21, 2008 Regular Board Meeting.

 

Joel Guthals moved to approve Policy 4310: COMMUNITY RELATIONS on second reading and forward it to the Board for third reading. Jane McCracken seconded the motion.

 

Leo Hudetz advised John Jacobsen, EideBailly LLP, approved this format. The motion carried unanimously.

 

Member Mary Jo Fox joined the meeting at 6:09 p.m.

 

Draft Bond Timeline and Ballot Language

 

The District at the July Board meeting declared its intent to run a General Obligation Bond Levy in both the High School and Elementary Districts. The issues to be resolved are whether to run the General Obligation Bond Levy with the General Election on November 4, 2008, or run the General Obligation Bond Levy at a later date.

 

Thomas explained that financial advisor D.A. Davidson along with bond counsel Dorsey Whitney believe it would be difficult to finalize ballot language to meet the November, 2008 election date. Chair Goodrich explained there would be a special Board work study session on bond levy issues.

 

Committee members voiced reasons why a November, 2008 bond election might be problematic:

• Tax increase in current economy

• No exact dollar amount has been determined

• Need for a finalized Facility Improvement Plan before a levy is presented to voters

• Capacity to satisfy above concerns and explain the needs for a mill levy at the same time

• Numerous statutory requirements to meet for a bond election in a short time frame

 

Joel explained the District received a letter from the Yellowstone County Election Administrator citing concerns of going forward with a November bond election. These concerns include a short timeline; putting the school bond levy on the bottom of the General Election ballot in a Presidential election year; and, the extra cost to the District for the election if it adds a page to the ballot.

 

Bruce would like to see the mill levy election in May and the bond election in November, 2009 to allow time for a good public education program regarding the District’s needs. Bruce believes a March, 2009 bond election is too close to the May 2009 mill levy election.

 

Thomas explained after voter approval of a bond levy, the District must go through a credit review process which takes from 60-90 days. As a part of this process, Standard & Poors requires a Comprehensive Annual Financial Report (CAFR) and a Capitol Improvement Plan from the District. The Board is in the process of writing a Facilities Plan. Leo said a mail ballot election requires a simple majority voter approval to pass.

 

Joel explained the Board is making significant progress in the preparation of a comprehensive Facilities Plan to meet the District’s basic goals and objectives for facilities. It should be completed this fall.

 

Joel Guthals moved to recommend to the Board that the General Obligation Bond levies be scheduled for a later date than November, 2008. Bruce MacIntyre seconded the motion.

 

Joel said enrollment of the District is a very important factor in making decisions about what to do with our schools. We need to ensure we have operational money to pay for these schools. This is another reason to take our time to determine our District’s needs. We have ten years to do something with Cottonwood.

 

The motion carried unanimously.

 

Chair Goodrich asked members for a sense of when the bond election should be held. Mary Jo suggests November, 2009 allowing more time to prepare and educate the public. No one was aware of any crises at McKinley or Broadwater that would not allow the District to wait another year for renovation. Shanna suggested finishing the Facility Plan and adhering to that plan. Paige believes we have a huge amount of communication to be done to build a new school when we have $85M of deferred maintenance and enrollment is stable or declining. Paige said we will need to inform the public we’re making a fundamental shift in education going from 23 elementary schools to 450 student size mega schools which will eliminate 7-8 neighborhood schools and increase bussing.

 

General Obligation Bond Issue Alternatives

 

Chair Goodrich said if we move the bond election from November, 2008 to a later date it would give us a chance to be creative in looking at bonding and financing alternative concepts. We need to maximize the State support share paid and minimize the impact on the local taxpayer. Jane cautioned against bonding via methods that are not standard.

 

Preliminary Budgets FY2008-09

 

Trustees met on August 11, 2008 prior to this meeting to consider the Elementary and High School Budgeted Funds FY2008-09; and, they continued the Budget Hearing to the Regular Board meeting on August 18, 2008 for adoption of the final budgets. The budgets are brought forth to this Committee to review and make a recommendation to the Board for final adoption.

 

Thomas clarified that since the K-6 Reading Tutor positions were eliminated from the Flex Fund budget; therefore, this allowed us to move the Instructional Aide positions into the Flex Fund budget from the General Fund.

 

Joel Guthals moved to recommend to the Board they adopt the budget FY2009 as set forth on Page 41 of the agenda. Mary Jo Fox seconded the motion.

 

The budgets for 2008-09 are estimated as follows:

 

 

Elementary High School

General Fund $ 58,684,268 $ 36,762,677 Transportation Fund 3,364,198 1,832,174 Tuition Fund 300,000 300,000 Retirement Fund 8,400,000 4,800,000 Adult Education Fund 500,000 1,600,000 Technology Fund 249,402 134,935 Flexibility Fund 451,760 495,483 Debt Service Fund 0 0 Building Reserve Fund 271,716 284,975

 

Joel stated this Committee and the Board had a very good discussion and analysis with regards to the reductions and changes necessary to balance the budget. Joel would like to see this Committee proceed with the concept and process of Budgeting For Results as we go forward, and have presentations to the Committee by different departments detailing what services will be provided for various levels of funding. The Board cut Reading Tutor positions and kept Teachers on Assignment to coach teachers; therefore, Mary Jo would like to see this Committee review some of these positions and their functions for future budgeting purposes. Malcolm said with the limited funding we’re receiving which does not meet the rate of inflation, its necessary to be creative in the budgeting process and its time to start implementing the Budgeting For Results process.

 

Thomas will provide a basic information packet on budgeting and funding to new Committee members. Thomas explained all positions funded from one-time-only Deferred Weatherization & Maintenance money in the FY09 budget have been moved back to the General Funds; positions funded by MAC money were moved to the General Fund; General Fund money was budgeted in Facilities for contracted services; and, both the Elementary and High School General Fund Reserves will be at approximately 5.4% at the end of the year. A reserve level above 5% is important for a bond credit rating.

 

The motion carried unanimously.

 

Bill Paid – July, 2008

 

The Committee reviewed the bills paid for July, 2008. Joel Guthals moved to recommend Board approval of the bills paid for July, 2008. Mary Jo Fox seconded the motion.

 

Don suggested due to the volume of bills to review that they might be broken into sections for different members to view in depth. He also liked the report we used to receive showing the percent actual expenditures to budget each month.

 

The District Clerk and Thomas review the bills each month and authorize them in accordance with District regulations and controls to ensure they comply with laws, policies and procedures.

 

The motion carried unanimously.

 

Health Insurance – Financial Statements – June, 2008

 

The Committee reviewed the Health Insurance Financials for June, 2008. The fund balance is $4,395,044.36.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:32 p.m.

 

 

 

 

Malcolm Goodrich, Chair

 

 

Sherrill Sullins, Recorder