Budgeting For Results Comm - Nov. 09, 2009

[Guest sullinss]

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

November 9, 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, November 09, 2009. Committee Chair Joel Guthals called the meeting to order at 5:17 p.m. and led those assembled in the Pledge of Allegiance. Budgeting For Results Committee members present were: Paige Darden, Deana Elder, Rod Gottula, Bruce MacIntyre, Joan Sleeth, Joel Guthals, Peter Gesuale, Sandi Mammenga, and Barbara Bryan. Members Peter Grass, Kelly Donovan, Don Stanaway, and Ross Johnson were absent. Member Jane McCracken has resigned from the Committee. Also present was CFO Thomas Harper, Executive Directors Kathy Olson, Scott Anderson, Gail Surwill, Dave Williams, and David Munson.

 

Communication From the Public

 

No one wished to address the Committee.

 

Consent Agenda

 

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

1. Minutes of October 12, 2009

Joan Sleeth seconded the motion. The motion carried unanimously.

 

Bills Paid – October, 2009 (summary sheet)

 

Rod Gottula moved to recommend Board approval of the bills paid for October, 2009. Bruce MacIntyre seconded the motion. The motion carried unanimously.

 

Financial Quarterly Reports – ending September, 2009 (unaudited)

 

Committee members reviewed the Financial Reports and the Cash Investment Report from Yellowstone County. Our Health Insurance Fund reports a total revenue less expenditure negative balance of (30,223.48) for September. The year-to-date three-month negative balance is (131,595.29). This is significant as we are only about 25% into this fiscal year. A Joint Sub-Committee meeting on November 23rd will begin a detailed analysis of the insurance fund for cost savings. A 12% cost increase is anticipated in the insurance fund. We are 25% into this fiscal year, and approximately13% of the General Funds have been spent. 35% of expenditures occur in the last few months of the year. This year ARRA funded $1,530,052 in the Elementary District and $963,042 in the High School District. We will receive ARRA funding FY2011; but funding beyond next year is unknown. We have two big unfunded liabilities as disclosed in the Comprehensive Annual Financial Report (CAFR) for Postemployment Benefits (GASB 45) and Service Credit and Termination Pay Benefits (GASB 27).

 

Budgeting For Results – Program/Budget Review:

 

Thomas reviewed our budget challenges as follows:

 

FY 2011 FY2012

Elementary General Fund (1,896,978) (2,444,187)

ARRA Revenue 1,137,054 0

Net Surplus/Deficit (759,924) (2,444,187)

High School General Fund (1,040,809) (2,970,862)

ARRA Revenue 317,893 0

Net Surplus/Deficit (722,916) (2,970,862)

 

 

Rod requested a live excel format of the budget model to get an idea of the effect of changes like workers comp. Rod questioned the Milliman GASB 27 actuarial report on Service Credit and Term Pay Benefits using assumptions of 3.5%-4.5% wage increases when our report uses 2%. Thomas explained the actuaries used historical data going back to 1998 for wage increases based on Montana statistics. Rod would like to see a report based on Billings Public Schools statistics.

 

Chair Guthals stated that with the challenge the District has with budget deficits, this Committee will consider budget resolutions on a long-term basis. It is a never ending budgetary problem caused by lack of State funding and mill levy support. The Elementary, Secondary, Curriculum and Activities Executive Directors were present to address the Committee with their program descriptions, cost, necessity, what they accomplish, what changes can be made, and that impact as related to budget and results.

 

Executive Director of Activities Dave Williams stated this year they raised participation fees from $30 to $45. More students came out for MS football than in the prior year; but, there were fewer students involved in other sports like cross-country. Increased fees resulted in less participation. Wendy’s scholarship funds decreased from $5000 last year to $2500 this year. Applicants for scholarship funds increased. Dave asked if they envisioned cutting activities, should he set up meetings with community organizations to investigate if they would be interested in taking them over. For example, Parks & Recreation could take over Girls Basketball, and the YMCA could take over softball. They would run things differently – perhaps charge more, and scholarships and behavior standards may change. Agreement would have to be reached on use of our facilities, help with coaching, field preparation, etc. Bruce said it makes sense to explore all options and not just what activities we can cast off. He suggested there is a large number of service clubs in Billings that may be interested in taking over some activities.

 

Bruce MacIntyre moved to recommend the Board direct Administration to examine all funding sources for middle school and high school extracurricular activities. Joan Sleeth seconded the motion. This was clarified to include middle school and high school, and that it is activities and not athletics which means it includes music and clubs, etc. Discussion included the need to be proactive when looking at options rather than waiting until late in the year and trying to find money to sponsor an activity. Rod said the District’s mission is all kids are able to participate and achieve. We need to be cognizant of the fact that we may disenfranchise some kids if an activity is taken out of the schools; but, on the other hand if we pay for scholarships it’s reasonable to expect a certain level of GPA to participate. It is for this reason Rod said he would vote against the motion. Voting for the motion was Deana Elder, Paige Darden, Bruce MacIntyre, Joan Sleeth, Sandie Mammenga, Joel Guthals, Barbara Bryan, and Peter Gesuale. Voting against the motion was Rod Gottula. The motion carried.

 

Dave Williams said since activity fees were raised from $30 to $45 there is an increase in the request for scholarships. Money paid out in scholarships from the Activities’ reserve fund exceeds revenue from fees. Dave asked if the Board wants to continue running scholarships in the deficit to be paid from reserve funds. Chair Guthals said that item should be put on the Board agenda. Peter Gesuale said at some point we become revenue neutral; so, perhaps we should lower fees to encourage participation. Bruce suggested we look at the correlation between drop-out rates and participation levels because of the potential to lose ANB.

 

Rod Gottula moved to recommend the Board reconsider fees being charged for middle school and high school activities and their crossover threshold as correlated to cost and participation. Bruce MacIntyre seconded the motion. The motion carried unanimously.

 

Chair Guthals asked for Dave’s recommendation to this Committee to trim the budget FY2011. Dave said the least important activities are varsity activities since there are more participants at the lower level. That would mean changing from interscholastic to intramural, which is not likely to happen. MS activities are very important.

 

Dave was asked if any personnel adjustments can be made such as number of coaches assigned, etc. Dave replied that two years ago they worked out 80% on stipends with the union and this might be something to negotiate. Other options might be intramural at the middle school level, and cut the number of games played. Chair Guthals requested a list of these options be given to the Board. Joel said there is no State requirement to provide activities, and the State does not provide funding for activities.

 

Executive Director of Elementary Education Kathy Olson and Executive Director of Curriculum Gail Surwill presented the Committee with information on the Elementary recovery programs. They reviewed current levels of demographics, staffing, and accreditation levels. Poverty in Billings is significant based on the number of children that qualify for free and reduced lunch. 12 of the K-6 schools have 36% or more of their student population that qualify for free and reduced lunch. 35% is the cut off point for federal funds. The K-8 Title 1 funding allocation for this year is $2,613,536. 10% of the Title 1 funding must be set aside at District level for staff development. Actual allocation comes from the State based on census figures. We don’t receive the money based on free & reduced; however, we distribute the funds based on free & reduced numbers. The K-6 ARRA funding for this year is $2,146,900. Testing results demonstrate significant improvement in reading, language, and math skills for students engaged in early intervention programs. The following are the K-6 Intervention Programs and FTE and number of students involved in these programs:

 

Chair Guthals asked if it is possible to assign team administration to some of the schools for cost savings. Kathy doesn’t recommend it because of concern for the internal safety of staff and students. There are daily issues to handle plus state reports, etc. Chair Guthals asked what other expenditures the K-6 Department has in addition to personnel. Kathy noted expenses for computers, license fees, etc. Joel requested a list of K-6 expenditures be given to the Board, split into total personnel and total other expenditures.

 

Chair Guthals asked what the impact on students would be if they put 413 Read 180 students back in their general classrooms. Gail responded student growth far exceeds what it was when they were just in the general classroom. Kids are experiencing success in these intervention classes, and putting the students back in the general classroom would not benefit students or teachers.

 

Sandie said at Big Sky Elementary students went from 62% to 92% reading proficiency due to intervention programs. If we took away the 9.5 FTE in Read 180 we would still get the funding but it’s still necessary to spend it on reading. If you get rid of the program and the kids go back into the general classroom the teachers would still have to teach the remedial reading.

 

Scott reported the District received $62K from the State for Summer Credit Recovery that has 360 students participating in this program. We are also partnering with Adult Ed in Nova Net for efficiency. If we didn’t service these recovered students it would probably cost us an extra $120K to educate them.

 

Joel asked if there were any permanent program cuts we can make in FY2011 to help bridge the deficit. Kathy agreed we are going to have serious problems with eight FTE funded from Title I money that will not be available next year, and some funded out of ARRA money that will not be available in FY2012. You still have to serve Title I; and, it must be used for intervention. Joel is concerned with associated overhead costs.

 

The concept of cluster schools was raised. Kathy said it is a very efficient way to operate schools and would create significant savings of well over 25-30 teachers based on this years numbers. This model allows centralized resources, staff development, centralized mentality of principal and staff, and economy of scale. The negative aspect is parents have kids in different schools, grades dismiss at different times, busing would increase, parental involvement in schools is limited, increased transitions for kids between schools, and it is not a neighborhood school.

 

Bruce left the meeting at 7:52pm.

 

Chair Guthals requested K-6 proposals to balance the budget FY2011 be placed on next month’s agenda. The proposals must be a permanent change and have the optimum educational impact.

Peter Gesuale is interested in seeing more information on larger classrooms as an alternative. He asked if there are opportunities for classroom teachers to teach more of the intervention programs. He asked why we aren’t looking at changing boundaries for grades 4-6. Gail responded that not every school has room to do that. Paige also asked if we can look at changing boundaries to increase classes to maximum sizes.

 

Scott reported the High School Department could look at some of the following items for budget savings: dropout prevention programs, contracts, Rimrock & Tumbleweed within the schools, elective choices, the at-risk programs, and single section courses. Middle school items to examine for budget savings might be: student teacher ratios, elective duplication, band choir orchestra, 8 period vs. 7 period or 6 period vs. 7 period days. Peter Gesuale would like to know the impact on the budget measured against student success.

 

Administration has been requested to present concrete concepts to address budget problems, programs and staffing and their impact at the December BFR meeting. The BFR committee will discuss these concepts and make recommendations to the Board. The Special Education Department budget discussion will be scheduled for another meeting.

 

Adjournment

 

There being no further business, the meeting was adjourned at 8:17pm.

 

 

 

 

 

Joel Guthals, Chair

 

 

 

 

Sherrill Sullins, Recorder