Budgeting For Results Comm - Dec. 08, 2008

[Guest sullinss]

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

December 08, 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, December 08, 2008. Vice-Chair Joel Guthals called the meeting to order at 5:20 p.m. and led those assembled in the Pledge of Allegiance. Committee members present were: Joel Guthals, Mary Jo Fox, Paige Darden, Deana Elder, Rod Gottula, Jane McCracken, Peter Grass, Shanna Henry, Joan Sleeth, Bruce McIntyre, Kelly Donovan, and Malcolm Goodrich. Members Don Stanaway and Ross Johnson were absent. Also present was CFO Thomas Harper, Dan Martin, Eunice Vance, Sheri Weidinger, Jeff Greenfield, Jerry Hansen, and EBMS representatives Rick Larson, Kevin Larson, and Billie Weston.

 

Communication From the Public

 

No one wished to address the Committee at this time.

 

Consent Agenda

 

Rod Gottula moved to recommend Board approval of the Consent Agenda items as follows:

1. Minutes of November 10, 2008

2. Addition of Social Committee Trust Fund Account at Arrowhead

3. Addition of Tournament/Playoff ECA fund Account at West High

4. Addition of Social Trust Fund Account at Eagle Cliffs

5. Reopen Close Up ECA Fund Account at West High

Bruce McIntyre seconded the motion. The motion carried unanimously.

 

Workers’ Compensation

 

Dan Martin reported that we subscribe to MSGIA for Workers’ Compensation Insurance. MSGIA is an affiliate of the Montana School Board Association. Cost of coverage is based upon a “mod factor.” A mod factor of 90 is considered acceptable, and our District’s mod factor is 65. This is indicative of people taking care of themselves.

 

We have a Safety Committee that meets to address concerns. Two specific concerns the Committee is addressing are: 1) slips and falls, and 2) striking and reaching.

 

Health Insurance and Health Insurance – Financials – September, 2008 (Unaudited)

 

The meeting was turned over to Chair Malcolm Goodrich upon his arrival at 5:32 p.m.

 

Dan Martin oversees daily operations of the Health insurance program and chairs the Health Insurance Committee. Dan reported our District has a self-funded Health Insurance program with EBMS as our third party administrator to process claims. Benefits are subject to bargaining and the BEA contract contains a Maintenance of Benefits clause. The Insurance Committee has 11 members representing all bargaining units, and they meet monthly to monitor claims and revenues. The Board is charged with operating the Health Insurance Fund in an actuarially sound manner. A consultant, Gallagher Benefit Services, Inc., prepares financial records that eventually results in a recommendation for future premiums; and, they periodically recommend changes to plan language. Our fund is solvent and we have a two-month run-out on claims. The September 30th fund balance is $3,799,087 less $1,902,782 estimated incurred but not reported reserve leaves a fund balance of $1,896,305. Rick Larson, from EBMS, said most of the EBMS administrative costs are based on a per employee per month basis plus some extra charges for mailings, COBRA, etc.

 

Committee member Paige Darden arrived at 5:40 p.m.

 

Dan reported that as part of a Wellness Plan, trends from the employee wellness blood analysis tests will be evaluated for ways to address negative trends (i.e., cholesterol, smoking, etc.). Our Stoploss benchmark is set at $160K, and employees have co-pays and deductibles. An outside firm’s study of our insurance plan determined our plan ranks high regarding benefits and premium costs. We need to cover the cost of claims and the third party administrator cost. This amounts to a 5-7% cost for us vs. an 8-12% profit level required by a private company.

 

Rick Larson of EBMS said their claims management program includes CARE-link management, preventive medicine, contracts with hospitals tied to Medicare reimbursement, a large staff with specialized RN’s, and a new “value-based medicine” program as a tool to estimate risk factors by individual. The biggest health challenge in our District is the demographics of our age factor.

 

Dan related that we went out for bid to insurance companies twice in the last 10 years. Other insurance companies cannot meet our bargained agreement language, and the low bidder ends up being EBMS. In the past going out to bid resulted in an increased rate of 8% over the existing rate. The District pays 100% of the single coverage premium. If we don’t have comprehensive membership we experience adverse selection which is very costly.

 

Jerry Hansen addressed the Committee saying the Accounts Payable-Claims figure of $1,300,000 should agree with the actuary’s figure of $1,902,782 recommended incurred but not reported reserve. He said the post-employment benefits of $1,491,000 must be accrued every year for the next 30 years. He believes this number should be double since it’s the second year and we should start funding this liability. Jerry requests the Health Insurance Committee start noticing their meetings to the public and publish their minutes.

 

Dan offered to start public notice of Insurance Committee meetings, even though it is not legally required. Thomas said the fund is solvent. We are required to do an actuary study and amortize the other post employment benefit cost over 30 years. The difference in numbers is an accounting difference and not cash.

 

Budgeting for Results

 

Jerry Hansen addressed the Committee saying the objective of the new budget process was to identify all programs and have the Board and public understand what we can do, rather than what we’re going to cut. Jerry’s calculations attempt to show numbers of staff required to meet accreditation standards. He said we need to establish costs and understand why we’re spending money and what it is for.

 

Chair Goodrich said the Budgeting For Results process was started in 2006 but never fully implemented. This Committee will begin to address this process over the next four months beginning with the baseline educational priorities needed for accreditation through development of initial budget proposals presented by administrators. This process will allow the Board to establish educational priorities and make proactive decisions on the budget.

 

Thomas reported on the impact of the Governor’s recommended budget on our District’s general funds to be an estimated increase of 5.84% in elementary and 1.51% in high school with the assumption that we pass a mill levy. Without passage of a mill levy our estimated general fund budget would increase 3.42% in elementary and .95% in high school. FY2009-10 our elementary ANB is increasing and our high school ANB is declining. In projecting expenses for 2010 we included the contracted wage increase of 3.75% and a projected 7% increase in insurance benefits. We maintained a flat budget for utilities and supplies, and expect a 2-3% increase in liability insurance.

 

Joel reported there is not much hope for funding a quality education as it is not on the legislators’ agenda.

 

Chair Goodrich called for two BFR Committee meetings per month for the next three months. The first meeting will remain scheduled on the second Monday of the month for regular business items; and, the second meeting will be scheduled for the last Monday of the month to address the Budgeting For Results process.

 

Jerry Hansen addressed the Committee requesting that all funds be accounted for in the budget process rather then just the general funds.

 

Paige and Jane stressed the importance of getting all information out to the public and establishing priorities on a long-term planning basis; for example, how does remodeling of two old schools and building a new school at Cottonwood impact the other schools boundaries and size and programs. Malcolm and Joel explained the facilities planning studies are being studied by the Board as a whole. The studies are a project in the process of evaluation and no Board decisions have been made. The study sessions are public meetings, and there no plans have been decided on to close or sell a school or issue a bond. The Board has approved a summary of the criteria and objectives and goals of the Long-term Facilities Plan and Phase 1 of that plan regarding Broadwater, McKinley and Cottonwood in order to gather information to make a decision.

 

Mill Levies

 

Discussion on mill levies will be addressed at a future meeting.

 

Bills Paid – November, 2008

 

The Committee reviewed the bills paid for November, 2008. Bruce McIntyre moved to recommend the Board approve the bills paid for November, 2008. Kelly Donovan seconded the motion. The motion carried unanimously.

 

Financial Reports – November, 2008

 

The Committee reviewed the financial reports for November, 2008. Thomas said in February he will give a semi-annual report on the status of the current year budget.

 

Adjournment

 

There being no further business, Rod Gottula moved to adjourn at 7:22 p.m. Joan Sleeth seconded the motion. The motion carried unanimously.

 

 

 

 

Malcolm Goodrich, Chair

 

 

 

 

Sherrill Sullins, Recorder