Budgeting For Results Committee - May 11, 2009

[Guest sullinss]

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

May 11, 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, May 11, 2009. Acting Chair Joel Guthals called the meeting to order at 5:23 p.m. and led those assembled in the Pledge of Allegiance. Committee members present were: Malcolm Goodrich, Paige Darden, Deana Elder, Rod Gottula, Ross Johnson, Bruce McIntyre, Peter Grass, Shanna Henry, Joan Sleeth, Joel Guthals, and Jane McCracken. Members Don Stanaway, Mary Jo Fox, and Kelly Donovan were absent. Also present were CFO Thomas Harper, Trustee Barbara Bryan, and Trustee Teresa Stroebe.

 

Communication From the Public

 

No one wished to address the Committee at this time.

 

Consent Agenda

 

Joan Sleeth moved to recommend Board approval of the Consent Agenda items as follows:

1. Minutes of April 13, 2009

2. Minutes of April 27, 2009

3. Addition of Social Trust Fund Account at Bench

4. Addition of Trust Fund Accounts for BPEF 2009 Classroom Grant Recipients

Bruce McIntyre seconded the motion. The motion carried unanimously.

 

Tuition Rates 2009-10 School Year

 

The Office of Public Instruction has set the maximum out-of-district tuition rates under MCA 20-5-343 and ARM 10.10.301 for the 2009-2010 school year at 20% of the per-ANB entitlement. The cost of educating a student is higher than the maximum tuition allowed by the Office of Public Instruction.

 

Bruce McIntyre moved to recommend the Board approve the maximum allowable tuition rates FY2009-2010 to be $485.70 per student for pre-K and ½ time kindergarten, $971.40 per student for full-time kindergarten and grades 1-6, and $1243.60 per student grades 7-12. Ross Johnson seconded the motion. The motion carried unanimously.

 

Bills Paid – April, 2009

 

Peter Grass moved to recommend the Board approve the bills paid for April, 2009. Bruce McIntyre seconded the motion. The motion carried unanimously.

 

Financial Reports – April, 2009 (Unaudited)

 

Committee members reviewed the Financial Reports for April, 2009. Thomas reported there was nothing in the reports to cause concern. There are not as many employees retiring this year as anticipated resulting in $20k net savings in severance pay-off. 25% of the year’s expenditures occur in the last month with the 3-month teacher payroll.

 

Committee member Paige Darden arrived at 5:33 p.m.

 

Thomas said the funds that usually have cash reappropriated are Transportation, Adult Education, Retirement, Tuition, Flex, Technology, etc. The cash reappropriated in Building Fund 160 is from the sale of the Grand Avenue property. Cash has not been reappropriated to the General Funds; if there is any cash left in the General Funds it flows into reserves. The negative balance in Fund 170 is the CARE Academy. That fund is no longer negative and that program is being transitioned out of our District to serve under United Way.

 

Malcolm Goodrich arrived at 5:37 p.m. and assumed the duties of Committee Chair.

 

Program/Budget Review

 

Chair Goodrich reviewed the Committee calendar timeline for budget review. At the next Budgeting For Results Committee meeting on May 26, 2009, the Elementary and Secondary Districts will return to present budget solutions. Committee members can ask questions and present concerns. Administration will return with answers at the June 8, 2009 Committee meeting. This Committee will then prepare an opinion on appropriate budget solutions to be presented at the Board’s Regular meeting in June with the goal that any budget trimming will produce efficiency and may even enhance education. The final budget needs to be adopted in August.

 

Thomas Harper explained the District spends about $900,000 per year from all sources for substitutes. Per the master contract, teachers contractually have the potential of 12 discretionary days X the number of qualified educators = 15,000 substitute days. They use approximately 4,000 of those substitute days per year; 1600 of which are discretionary days and the rest are sick days, professional leave, and critical family illness/bereavement. Unused discretionary days roll over into sick days, which in turn if unused, become part of their termination pay.

 

Committee member Jane McCracken arrived at 5:47 p.m.

 

Thomas said we only budget $900,000 per year for substitutes. Certified staff earns discretionary and sick days, but no vacation days. BCEA and MPEA employees and Administrators earn sick and vacation days. Upon retirement they get paid one-fourth of their sick days. There is a 60-day cap on accruing vacation days. Deana asked if anyone has been paid for vacation days over the 60-day cap or if they lose them? Thomas answered under certain circumstances we do pay for them (i.e., 9,10, &11 month employees have an option to be paid at the end of each fiscal year; and, PERS employees can be paid for over 60 accrued days upon approval). Chair Goodrich directed Thomas to look into this issue and provide copies of sections of the contracts pertaining to these issues to the Committee at the next meeting.

 

Thomas explained non-certified substitutes for teachers are paid $65 per day, and certified substitutes are paid $70 per day. An increase to $100 per day could cost the District several hundred thousand dollars. Malcolm asked if OPI/accreditation required substitutes in the classroom. Thomas doesn’t believe it’s required unless it is a long-term absence over 30 days. Cutting the substitute budget does not seem feasible in elementary grades; and, more high school students would be forced to go to study halls. Rod suggested having a pool of salaried substitutes to fill absences. Thomas said from prior discussions regarding a pool of substitutes, it would have to be offset by giving up a classroom teacher. Paige questioned if there were any public/private partnerships with colleges to provide subs. Shanna said there were some student teacher days provided by the colleges that did help. Deana related the BCEA would not allow a private company to come in and provide substitutes for special needs students. Ross asked about the possibility of Rocky Mountain Bank offering as a partner to donate a certain amount of substitute days to the District as a community service. Chair Goodrich asked Thomas to examine if we can obtain private partnership substitute work since we do not have a sufficient number of substitutes and this may assist in reducing costs. Jane suggested the Partners in Education at the Foundation level could help with this item.

 

Thomas reported our utility gas bills average $3M per year. We entered into a five-year contract with Energy Education, Inc. to manage our utilities. This allowed us to maintain our FY09 utility budget at the same level as our FY08 budget even though rates and usage increased. Joel explained we pay Energy Education $12K per month to implement a behavioral modification program for energy savings. For greater energy savings we will need to make capital improvements as finances allow. Energy Education analyzes our systems and makes suggestions on capital improvements. It’s a system-wide education program and implementation of controls to improve efficiency. Joan reported that changes she sees in the building could have been implemented by the District without hiring Energy Education. Joel said the education process is on-going and started with the custodians and administrators who are doing a good job in initiating suggested energy program savings.

 

Joel explained the Clean Renewable Energy Bonds (CREB’s) project. This is a Federal bond program that provides tax credits for investors for alternative energy projects. These projects must produce energy either to be used by the qualified governmental agency or the energy is sold. The bonds are repaid in principal only over the 15 year life of the bond. There is no interest; therefore, revenues are realized from power produced in excess of the payment. We sent three proposals for windmills to the Federal Government; however, two of the three locations were not approved since they were too close to bird refuges. The third Skyview site is not promising due to lower energy performance and a lot of community site opposition. These projects are on hold.

 

Thomas advised in year 2004 we were paying $744K for comprehensive liability insurance. This year we are paying $562K. We secured significant savings by going out to bid. Next year this insurance will increase 10%. Our liability deductible is $50K on Errors & Omissions, $25K on property, and auto is $25K liability and $2K Comp/Collision. General legal issues are usually handled by Felt & Martin legal firm. Employee related issues are often handled by Crist Law Firm.

 

Our Workers’ Compensation premium through Montana School Boards Association will increase next year. Our mod risk factor of 65 is increasing to 70 due to a lot of slips and falls by employees. Dan Martin is in charge of our Safety Program. We currently pay about $550K in premiums.

 

Our health insurance will increase 12% next year. Chair Goodrich directed Thomas to prepare a revised budget and include all possible increases such as comprehensive insurance, health insurance, Workers’ Compensation, utilities, and also vacancy savings for the next meeting. Thomas said they are still trying to sort out revenue sources. Chair Goodrich asked that the Elementary and Secondary Education Districts identify in their budget recommendations what the source of revenue is, if the program is discretionary or mandatory, and if they are using one-time money what their proposal is for the following budget year. Administration will make budget recommendations, then this Committee will provide input, and the Board of Trustees will make the decisions on the final budget.

 

Jane would like to see Committee discussion on capital issues as well as operational issues. Deana would like to see a final report on where the one-time money was actually spent. Bruce cautioned that we need to be careful of how we use one-time-only funding sources since there is an end to that funding.

 

Thomas explained that the stimulus package funds will come from two sources: Quick Start Grants, and $20M for Montana for deferred maintenance. Both need to be applied for through a grant, and they will require Board approval. There will be an estimated $700K for the High School District and $1.2M for the Elementary District. There will be an application process and the projects must be specific. There is less flexibility with this process, which in turn will create a challenge in balancing the General Funds. The funds must be spent as intended or we may not get any funds the second year.

 

Joel recommended after Administration makes their recommendation on expenditure of these funds that the Budgeting For Results Committee and the Energy and Environmental Innovation Committee have a joint meeting to review the proposals, rank them, and make recommendations to the Board.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:00 p.m.

 

 

 

 

 

Malcolm Goodrich, Chair

 

 

 

Sherrill Sullins, Recorder