Budgeting For Results Comm. - Jan. 12, 2009

[Guest sullinss]

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

January 12, 2009

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, January 12, 2009. Chair Goodrich called the meeting to order at 6:00 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, Joan Sleeth, Bruce McIntyre, Kelly Donovan, Ross Johnson, and Malcolm Goodrich. Members Don Stanaway and Shanna Henry were absent. Also present was CFO Thomas Harper.

 

Communication From the Public

 

No one wished to address the Committee at this time.

 

Consent Agenda

 

Bruce McIntyre moved to recommend Board approval of the Consent Agenda items as follows:

1. Minutes of December 08, 2008

2. Addition of Library Club Trust Fund Account at Alkali Creek

3. Addition of Burlington Social Fund trust Account at Burlington

4. Addition of Beartooth Social Trust Fund Account at Beartooth

Peter Grass seconded the motion. The motion carried unanimously.

 

Qualified Zone Academy Bond (QZAB) Program

 

Thomas reported the Qualified Zone Academy Bonds for $773,250 closed on December 29, 2008. The bonds were issued for the purpose of paying the costs of improving, repairing, or rehabilitating existing facilities at Beartooth Elementary, Ponderosa Elementary, and Riverside Middle School, including, but not limited to, replacing, upgrading, adding, or repairing heating, air conditioning, and ventilation units and related controls; boilers and hot water systems; and related improvements. We will need to spend 10% of the bonds in the first six months and the balance within three years.

 

Thomas reported we are on the waiting list as a place holder for a future bond program allocation for year 2008 for $1.4M. Qualifying schools must have 35% of their students on free and reduced lunches. Two middle schools and 13-14 elementary schools would qualify. We pay no interest on QZAB funds, and it has a single maturity which means we can invest the money in a sinking fund resulting in us paying only $.80 on the dollar. Any new allocation for bonds would require Board approval. Ross Johnson advised that Rocky Mountain Bank would buy back the bonds for $1.4M if the allocation becomes available and is approved by our District. The bank benefits from tax credits.

 

Joel reported that upon learning the Obama administration was planning on major stimulus money to be allocated for school facilities, the Board authorized the Superintendent to submit a list to Washington, D.C. of our deferred maintenance projects for their consideration when this money is authorized. Administration and CTA Architects updated the list of projects totaling $120M. These are major building repairs, and they exceed criteria of “safe, warm, and dry” but still do not meet educational functionality needs. If money is received priorities will be set based on a building plan. The list of deferred maintenance projects will be posted on the website under the Facilities Planning link at: http://www.billingsschools.org/?page=fpid_d

 

Update on Budget Forecast

 

Thomas reviewed his projected General Fund Budget Forecast FY2010 and FY2011 based on the Governor’s budget. Assumptions used to prepare the estimates were a 3.75% salary increase FY10, a 3.6% salary increase FY11, a 7% insurance increase for both years, and no estimate of vacancy savings or retirements. Some deferred maintenance and minimal reserve levels are built into the budget. FY2010 the Elementary District ANB increased by 203, revenue increased 3.3% and expenses increased 5.3% resulting in a $1.2M shortfall. FY2011 the Elementary ANB decreased by 107, revenue increased 1.5%, and expenses increased 3.6% resulting in a $2.5M shortfall. FY2010 the High School District ANB decreased by 99, revenue increased .8%, and expenses increased 4.9% resulting in a $1.5M shortfall. FY2011 the High School ANB decreased by 140, revenue increased .3% and expenses increased 3.3% resulting in a $2.6M shortfall.

 

Rod asked how much control the high school principals have over spending their budget. Thomas said high school principals control personnel and their site budgets of approximately $1M per school. In addition, each high school gets $150K of At Risk money.

 

Mill Levies

 

Chair Goodrich asked for Committee members’ opinions as to community support of mill levy elections in May, 2009. Bruce reported that the Yes For Kids Committee is ready to support promotion of mill levies if we go forward.

 

Some opinions expressed are as follows:

• A good job of explaining the schools needs is required – transparency

• Uncertain about success of Technology levy – keep to General Fund

• Keep number of levies to minimum – don’t dilute message

• A fall bond issue may discourage voters from passage of General Fund mill levy

• Some say School Board should have kept up buildings rather than give raises to teachers

• We do a poor job of media presentation – public doesn’t understand not passing levies compounds yearly

• Huge public misunderstanding on how schools are funded

• Be specific on ballot wording and list what we’re going to buy and its cost

• Don’t believe building reserve levy will pass

• Better long-term planning through cuts and levies to reduce shortfall

• Focus on positive rather than negative

• Demonstrate good stewardship of funds and promote honest communication

• Take major public misconceptions and put in Q&A form

• Combine technology levy with general fund levy if possible

 

Chair Goodrich said we are capped at what we can ask for on a mill levy, so budget cuts will be necessary. The cost of not passing a mill levy will have a direct effect on students; there will be a loss of services and programs. Many programs are federally mandated which is a difficult concept to relate through the media. Committee consensus is to recommend mill levy elections.

 

Thomas said internally there is a preference to opt for a High School Technology levy rather than the minimal $200K High School General Fund levy. There are technology related General Fund expenses that could be paid from Technology levy money which would then release some General Fund money for other uses.

 

Joel moved to recommend to the Board that there be an operational Elementary mill levy for the amount to be decided by the Board and this Committee recommends the maximum amount.

 

Malcolm confirmed that the motion at the elementary level targets specific non-salary items for operational funds, this Committee would recommend that the Board consider authorizing the maximum amount that is allowed and exploring the concept of whether the ballot language can be combined so that the Technology Fund could be run within the same ballot language description.

 

Jane seconded the motion. The motion carried unanimously.

 

Joel moved to recommend to the Board that it shall run a High School Technology Fund levy in the amount of $1,000,000 with the specific uses of the fund to be itemized. Rod seconded the motion.

 

Joel amended the motion to mirror the Elementary District motion to talk about the maximum amount instead of the $1,000,000; and, to the extent that we can do a combined ballot for the High School General Fund and the High School Technology Fund, we would do that. This would be $1,200,000. Rod consented to the amendment. The motion carried unanimously.

 

Chair Goodrich stated it’s difficult to communicate May levy election information to the public when we don’t know what our budget is going to be until the Legislature is done in April. In the last 16 years we have not received an increase from the State Legislature that’s commensurate with inflation in any one of those years; and, mill levies still do not compensate for inflation. The Budgeting For Results process will have administrators come in and explain their programs, justify their budgets, and see if there are other ways of looking at these programs for creative ways to affect savings. Numbers are still subject to flex, the budget process is subject to review; and, to the extent the Board doesn’t actually need to get mill levy money because we’ve affected cost savings, the Board may then decide not to go ahead with the levy.

 

Bills Paid – December, 2008

 

The Committee reviewed the bills paid for December, 2008. Peter asked what the $6K expenditures to the Gazette and KTV2 were. Thomas said those for the “We Are Billings Public Schools” campaign.

 

Rod Gottula moved to recommend the Board approve the bills paid for December, 2008. Bruce McIntyre seconded the motion. The motion carried unanimously.

 

Financial Reports – December, 2008

 

The Committee reviewed the financial reports for December, 2008.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:33 p.m.

 

 

 

 

 

Malcolm Goodrich, Chair

 

 

 

 

Sherrill Sullins, Recorder