Budgeting For Results Committee - August 10, 2009

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Proceedings of the Budgeting For Results Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

August 10, 2009

 

CALL TO ORDER

 

The Budgeting For Results Committee Meeting of School District No. 2, Yellowstone County, Montana, and the High School District, Yellowstone County, Montana was duly held at The Lincoln Center, 415 North 30th Street, Billings, Montana, Monday, August 10, 2009 at 6:45 p.m. after a special meeting of the Board of Trustees

 

Chair Joel Guthals presided and led those assembled in the Pledge of Allegiance.

 

ROLL CALL

 

The following members of the committee were present: Trustees Joel Guthals, Peter Gesuale, Barb Bryan.; Thomas Harper, Joan Sleeth, Peter Grass, Kelly Donovan, Deana Elder, Paige Darden, Bruce MacIntyre, Jane McCracken. Teresa Stroebe attended beginning at 7 p.m. Clerk Leo Hudetz entered the meeting at 7:10 p.m.

 

Chair Guthals thanked those assembled for agreeing to serve on the Budgeting For Results Committee for another year. He asked about the schedule and time of the meetings. Everyone was agreeable to meet on the second Monday of the month at 5:15 p.m. They would like to have cheese and crackers, fruit, water and sodas available at the meetings. Mr. Guthals also asked about materials for the meetings. It was agreeable to those present that they be sent an email with a link to the full agenda in pdf format. They would not need to have paper copies available but would like to use a computer to put information on a screen during the meetings. They agreed that they would like to see more managerial information with the detail available if they want it. They would like to have the agenda available sooner.

 

Paige Darden asked that she be given more time to ask questions ahead of time. It was decided that questions could be emailed to the budgetingforresults@billings.k12.mt.us address, or called in to Thomas Harper’s office (Sherrill Sullins or Sheri Weidinger if Thomas is unavailable) for answers to be available at the meeting.

 

Kelly Donovan asked for a mission statement of this committee. He feels some of this is Board’s business and this committee should be to give suggestions on the future. Chair Guthals stated that this committee was originally defined as finance committee and the mission was to review proposed financial decisions. This committee gets into more detail than the Board and was charged with the budget. The Board appreciates the time and effort of this committee. It provides public commentary for the Board.

 

Paige Darden feels like the committee is being asked to make decisions without discussions. Mr. Guthals stated that we are moving towards full implementation of the budget process. Deana Elder agreed with Ms. Darden and stated that COLT had made the suggestions and BFR did not have input. Mr. Guthals stated we had to cope with the Legislature, waiting until the last minute, adjustments had to be made right away. Board Chair Malcolm Goodrich gave a mission to COLT and the department heads to balance the budgets and present to the BFR Committee. Joan Sleeth would like to see more options instead of just one page.

 

Joel said the intent is to get the budget process moving right away for next year. Thomas Harper stated that decisions need to be made in October or November. He stated that fixing the 09-10 budget involved one-time money and one-time cuts. Joel stated there will be structural changes in our school district. Barb Bryan and Peter Gesuale are in a subcommittee to discuss future planning and facility issues and that will be important to this committee. It will be helpful to look at the mission of the committee and to streamline some of this information. Ms. Bryan would like to see more community involvement at the committee level. A statement of the mission of the committee was provided by Mr. Hudetz.

 

Mr. Guthals reminded those present to turn off their cell phones or turn them on vibrate.

 

CONSENT AGENDA

 

Mr. Guthals reminded those present that if they want to remove an item from the consent agenda, they need to notify Thomas Harper before the meeting. Peter Gesuale made a motion and Bruce MacIntyre seconded the motion to approve the items in the consent agenda. The motion was approved unanimously. Items in the consent agenda included:

1. Minutes of June 8, 2009

2. Addition of Rina Moog Educator Scholarship Trust Fund at Skyview

 

SKYVIEW HIGH SCHOOL CHILLER REPLACEMENT AND NEW HEAT EXCHANGER

 

Mr. Guthals stated that the Board and this committee had previously considered this item but no funding was available in the past. Now funding is available and this improvement will result in a savings to the district. Bruce MacIntyre made a motion to approve awarding the Skyview High School chiller replacement and new heat exchanger project to Precision Plumbing and Heating for $258,491. The motion was seconded by Jane McCracken.

 

Thomas Harper stated that some of this will be paid by insurance money because of an electrical failure. This replacement will save about $11,000 annually. The High School District should get $650 thousand from deferred maintenance. There is also about $400 thousand in Building Reserve carryover or dollars are available in Building Funds from the land sale at the Career Center.

 

Jane McCracken asked about deferred maintenance. It is supposed to be based on quality educators. The Skyview chiller was proposed in the Quick Start projects, but was not given approval. The deferred maintenance is based on the number of educators last year.

 

Paige Darden asked about McKinley and Broadwater Schools. She stated that Superintendent Copps had previously said those schools were first on the list for deferred maintenance. Mr. Guthals stated that rebuilding schools is not the same fixing things that are broken.

 

Mr. Guthals called for a vote on the motion. The motion passed unanimously.

 

Ms. McCracken stated that she is concerned if the funds are used and would like to keep a running total. Thomas Harper will keep track of expenses.

 

BILLS PAID – JULY 2009

 

Thomas Harper stated that detail is not normally provided for this item. Mr. Guthals stated that there is a certification with this item given by Thomas Harper and verified by Leo Hudetz, Clerk and Independent Auditor. Don Stanaway moved and Peter Grass seconded approval of the bills paid for July 2009. The motion passed unanimously.

 

FY2008-09 YEAR-END REVIEW OF FINANCIALS

 

Mr. Harper reported that they are still in the process of closing the books for the year. He mentioned that because of a contract with Energy Education, Inc. there has been no increase in utilities, and there will be no increase in the utilities budget for FY2010. There was also money left in retirements. Part of the savings were used for the budget solutions for FY2010. There will be an increase in the Elementary Compensated Absence Fund and some in the High School Compensated Absence Fund with some going into High School Reserves. There are less than five percent reserves in the high school. If bonds are let, each district has to have at least five percent in reserves in order to get a decent bonding rate. This is also necessary for emergencies. No budget amendments were necessary this year.

 

Don Stanaway mentioned that he had spoken with Legislator Essman about funding for teachers’ retirement. Politically, there is no chance to get that increased. There is $80 million of unfunded liability for sick and vacation pay. Thomas Harper stated that we are continuing to work on that issue.

 

Peter Gesuale asked about revenues. We have collected more than budgeted. This could be due to people not paying taxes on time in FY 08. Also, the Department of Revenue mobile home tax statements were handed out late. The Guaranteed Tax Base will be funded 100 percent.

 

Thomas Harper explained how it is possible in some cases to transfer expenditures to basically reappropriate funds. We would have to find expenditures in another fund that could be reappropriated and carried forward then transfer to another fund. This is limited.

 

Financial reports are presented for information only.

 

PRELIMINARY BUDGETS FY2009-2010

 

Thomas Harper explained that by law it is necessary to start the public budget hearings on or before the 15th of August. Next Monday at the Regular Board meeting the Board will consider the budgets. What is different about this year is that we won’t have our taxable value until the end of August because we won’t know the number of mills until the end of August. There has been much discussion about the General Funds in this committee, but not a lot of discussion about the other budgeted funds. He explained that the shortfall is being addressed by shifting some of the General Fund costs into ARRA (federal stimulus money). Indian Education For All is one time money, one year only. There is a budget savings in retirements, one time only. The only real cut is a reduction of overcrowded aides in grades K-6. Textbooks were also reduced. The other cuts were mostly one time money.

 

The Transportation contract was up for renewal at the July meeting. The annual contract was approved with a three to five percent increase for First Student.

 

The Tuition Fund is being increased basically because of special education charges.

 

Joel Guthals reminded the Committee that the transportation issues are mostly determined by state law.

 

The school taxes are actually going down because with the city growing they are being split between more people. Kelly Donovan stated that school taxes are capped so school don’t get more dollars when new houses are built. The City portion goes up with new building.

 

Joan Sleeth asked about daycare expenses in the Retirement Fund. Thomas Harper will check on this and send an email explaining these costs.

 

Don Stanaway stated that he and Thomas Harper had gone to a meeting on reducing health care costs. Some of these ideas may be used to reduce our health care costs or at least to not increase our health insurance. This will need to be an agenda item and a motion for recommendation made to the Board. Joan Sleeth asked if the Insurance Committee should be involved in this discussion. Mr. Guthals feels this should come to BFR first, then the Board will decide.

 

Thomas Harper stated that we are actually paying less than in 2004 because of the RFP process. Ms. Bryan asked for a dollar amount for the 12 percent increase in insurance costs. Mr. Harper stated that it is about $700 thousand.

 

Mr. Stanaway mentioned that special education is approximately 13 percent of the total General Fund. Mr. Harper stated that this is offset by ANB and approximately $3.3 million revenue from the state. He stated that it is actually regular education which is underfunded by the state.

 

Peter Gesuale stated that an increase in special education has been higher than other lines in our budget. Are we providing services efficiently and well? We need to look at these issues. Mr. Guthals stated that there have been presentations by special education personnel in the past and this could be done again.

 

Peter Gesuale moved to recommend that the Board adopt the FY2009-10 budgets for the budgeted funds for Billings Public Schools as present. He further moved to recommend that the Board authorize and direct the Chief Financial Officer to, upon receipt of the certified taxable values from the Montana Department of Revenue, calculate the mills necessary to support the budgets and report such mills to the county superintendent. Peter Grass seconded the motion.

 

Peter Gesuale noted that we don’t normally adopt the budget according to mills but according to dollars. Mr. Harper stated that the budgets may change a couple of dollars but will remain essentially the same. He and Leo Hudetz work closely with the county superintendent and Scott Turner of the Treasurer’s office to establish the dollars.

 

Paige Darden stated that she did not feel the presentations connected to the recommendations.

 

Jane McCracken stated that it is not this committee’s job nor responsibility to create a detailed budget. It is not our job to micromanage. We rely on the professionals employed to do that. She is not comfortable if the committee starts with zero and works up. We are trying to build a basis of knowledge to give more extensive recommendations at this point. We rely in great deal on the professional staff. We are the start of the process and not the end. Joel stated that the committee is much better informed than in previous years. Thomas Harper stated that no one was happy with the recommendations.

 

Mr. Guthals called for questions on the motion. An explanation of flex funds was requested. Thomas Harper explained that this is a grant of about $170 thousand annually. This allows for some carryover of funds which is being used to solve some of the problems. It is a state grant which allows for requalifying expenses.

 

Mr. Guthals asked about the Debt Service Fund. Thomas Harper stated that it is for bond issues. The bonds were paid off about two years ago. This will be closed out soon and transferred to building funds or flex funds.

 

Peter Grass asked about having extra money in the budget versus actually budgeting every dollar. Peter Gesuale stated that any extra has been put in board contingency in the past. This covers any unexpected and necessary costs. He feels decisions should be based more on priorities. Joel Guthals is concerned there is no board contingency and concerned about reserve levels.

 

A vote was called on the motions. The motions passed unanimously.

 

The meeting was adjourned at 9:20 p.m.

 

 

 

_________________________________

Joel Guthals, Chairman

 

 

________________________

Nancy Coe, Recorder