August 8, 2005

[Guest sullinss]

Proceedings of the Business Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

August 08, 2005

 

Call to Order

 

The Business Committee Meeting of School District No. 2, Yellowstone County and High School District No. 2, Yellowstone County, Montana was held at Lincoln Center, 415 North 30th Street, Billings, Montana, on Monday, August 8, 2005. Chair K. Dale Getz called the meeting to order at 5:35 p.m. and led those present in the Pledge of Allegiance. Committee members present were Bob Whalen, Jerry Hansen, Dale Getz, Joan Sleeth, Shanna Henry, Joel Guthals, Peter Grass, and Kari Altenburg. Committee members excused from the meeting were Curt Prchal and Katharin Kelker. Also in attendance were Business Manager Thomas Harper and Nancy Hines of H20 Consulting.

 

Call to the Public

 

There was no one present who wished to address the Committee at this time.

 

Consent Agenda

 

The Chair removed item A-2, Addition of CEC Trailer-Trust Account at West High from the Consent Agenda at Joel Guthals request, to be considered later in the agenda.

 

Joel Guthals moved to approve the items in the Consent Agenda with the exception of item A-2 as follows: A-1) Request to Cancel Outstanding Warrants; and A-3) Business Committee Minutes of July 11, 2005. Jerry Hansen seconded the motion. The motion carried unanimously.

 

Upgrade of BCEA Accountant I to Accountant II

 

The Business Committee is being asked to consider a reclassification of a position from Accountant I to Accountant II. The person in this position has been asked to assume duties beyond the Accountant I job description and, more appropriately, belongs in an Accountant II position. The annual cost of this upgrade will be $2,683. Upgrading this position will also allow for more cross-training in the office. Thomas Harper stated this has been budgeted for in the General Fund. Joel asked what the annual salary was. This BCEA position would increase from $10.72 per hour to $12.01 per hour. This position is probably paid below comparable positions in the market.

 

Peter Grass moved to approve the reclassification of an Accountant I to an Accountant II position for an annual increase of $2,683.20. Shanna Henry seconded the motion. Voting in favor of the motion were Peter Grass, Shanna Henry, Bob Whalen, Dale Getz, Joan Sleeth, and Kari Altenburg. Voting against the motion were Joel Guthals and Jerry Hansen. The motion carried.

 

Communication Plan Implementation Proposal

 

In June of 2004, SD#2 Trustees created a strategic plan that included a District-wide communication plan as one of the priorities to help make the District more effective and successful. Nancy Hines, H2O Consulting, was hired to develop the plan. The School Community Committee approved and recommended its approval to the Board, which formally approved the plan in April, 2005. Nancy Hines was present to explain that implementation of this plan requires the District to hire a Communications Director.

 

This proposal will be funded by a 4 to 1 match of private donation to District funding. This will be for a three-year period with a budget of $100,000 per year. This payment will flow through an enterprise fund of the District, with the private donations having a taxable deduction status. The funds will flow to the advertising agency. Business Manager, Thomas Harper, stated we have sufficient Indirect Funds to pay the estimated $20,000 District portion for the program. Thomas explained that most of the Indirect funds are generated from elementary grants.

 

Shanna Henry moved to recommend Board approval of the Communication Plan Implementation Proposal as presented. Jerry Hansen seconded the motion. The motion carried unanimously.

 

Legal Report

 

Chair Getz relayed some District concerns to the Committee for consideration. He reviewed annual legal costs with the thought that there may be cost savings utilizing inside counsel. The District previously employed inside counsel and also retained outside counsel. Advertising for inside counsel has not been successful. The advertised rate may have been unattractive; and, there is some concern that we need an attorney that understands school law. Chair Getz asked if this is an area that needs further consideration, and if there needs to be more direction to administration on how to advertise for this position.

 

Joel reviewed our billing statements from Felt & Martin. He believes the hourly rate to be reasonable; however, he believes it would be less expensive to hire a lawyer in-house. He believes we need to offer a higher wage to attract prospects but don’t need an attorney specialized in school law, just one willing to commit to becoming specialized in school law. Joel believes we should ask for a multiple year commitment and provide secretarial assistance. We need more careful management on how we handle cases and be careful to get involved in defending cases. In many cases we are defending the validity of State law which should be a burden born by the State and not the School District.

 

Dale believes in-house counsel may make a greater effort to settle or get involved in litigation, and more oversight is needed to decide on in-house vs. retaining outside counsel. Dale suggested a legal sub-committee of the Board that would be: 1) a search committee for in-house counsel; and, 2) involved in advising and working with that in-house counsel, once hired, and set scope of work and review cases and provide guidance to in-house counsel. Joel Guthals would be willing to lead the sub-committee in that capacity.

 

Jerry asked what happens if we do not have any attorneys on the Board to provide that guidance to in-house counsel. Dale sees guidance from attorneys on the Board to be used mainly as a first step to set procedures in place.

 

Joel Guthals moved to recommend to the Board the formation of a Board committee to oversee and supervise the School District’s legal expenses and management of legal issues and head the search efforts for in-house counsel. Shanna seconded the motion. The motion carried unanimously.

 

Modified Zero-based Budgeting Plan

 

Thomas Harper said the Business Committee was asked to make a recommendation to the Board on a budgeting process. Most districts he surveyed produce a centralized budget with some input from site managers, but no one seems to be satisfied with the budgeting process they use. Thomas proposes hiring someone to come in and examine our process and make a recommendation on how to move forward.

 

Dale stated some progress was made in the budget process last year by starting the process early. Revenue figures were delayed due to the Legislature’s turmoil and the Supreme Court decision. In March the budget was short, and we thought a mill levy was necessary. Two months later, the Board gave mixed signals and Administration responded and the budget was balanced, also in part from more money from the State. Concern remained on how the budget was balanced, i.e., nine positions eliminated and returned and the public discussion of the Technology positions. Before deciding on a specific process, we need to agree first on our objectives and what are we trying to achieve. Budget process objectives might be to start the budget process early, eliminate inefficiencies, and format it so potential budget cuts can be easily identified.

 

Peter suggested it may be beneficial for an outside person to look at the budget process and make a recommendation. Joel said at the last meeting there was a resolution approving the IDU budget process. Joel believes we need to build our budget on the cost of each increment of our operation without regard to revenue we may or may not be receiving. Joan expressed that our problem has been we tell voters what we need for specific items and when we don’t get the mill levy dollars, we find a way to buy it anyway; for example, if we still get Read 180 when the levy did not pass. Thomas said there are no extra dollars in the budget. Shanna asked what IDU budgeting would accomplish since the sample just showed the individual school budget. Dale understands the IDU approach is to allow each site to prepare a budget rather than it being allocated by COLT, and there would be no per pupil allocation. Certain program items are in addition, and budget packages are combined. The level of budgeting is known and makes it easier to see where cuts and/or additions can be made. Shanna and Bob prefer per-pupil allocation at the building level over IDU budgeting. Jerry is frustrated with last year’s budgeting process, i.e., administration cut nine positions and then put them back; then they asked for a mill levy for special education and dropout prevention and then said they would spend it on textbooks, computers for technology, and maintenance. Jerry prefers an expenditure budget where needs are known and priorities can be set. He wants zero-based budgeting with more participation from building managers and staff. Jerry said we’re down 1100 students since 1993 and today we have 59 more teachers than we had in 1993.

 

Dale said whatever the philosophies are, we need to decide what we want to achieve and what the objectives are. There is wisdom in listening to staff in what they like; yet there’s wisdom in trying to build trust in the community and making this process more predictable and more visible.

 

Dale suggested a sub-committee of the Business Committee to revise the budget process. They need to try to build consensus among all groups including bargaining units, staff and Board so there is a unified approach on building a new budget process, whether it’s IDU or maintaining status quo. Jerry Hansen, Joan Sleeth, Curt Prchal, Shanna Henry, Peter Grass, and Dale Getz volunteered for the sub-committee to formulate objectives needed in the budgeting process and also to make a recommendation as to that process. Thomas Harper will be an adjunct member of the group.

 

Peter Grass left the meeting at 6:54 p.m.

 

Financial Reports – June (Unaudited)

 

The Business Committee reviewed the June (Unaudited) Financial Reports. Thomas reported the General Fund balance for year ending 2005 is about $1500 in elementary and $1500 in high school. The compensated absence funds need to be monitored. This fund is replenished by year-end money from General Funds. This year we had only five high school retirements. We have a large number of retirement age employees, and if retirements next year are normal, we may have a potential problem funding them. General Fund Reserves can be used to fund retirement payouts but require a budget amendment. We only have $3.4M in the Elementary Reserve Fund and $1.1M in the High School Reserve Fund. A couple normal retirement years could exhaust the High School Reserve Fund. If the District runs a bond levy, our level of reserves affects our credit process and interest rate.

 

Other items questioned were: the $61K shortage in the H.S. Board of Trustees line item is from legal fees; and, the $66K shortage in HS utilities and $17k unexpended in elementary utilities. Shanna questioned why McKinley and other buildings each had several thousand unexpended Elementary General Fund dollars on June 30th when they were required to spend General Fund dollars down to zero first before spending MAC money. Thomas will check on this. Thomas said next year there will be no split funding at the schools.

 

Preliminary Budgets FY 2005-2006

 

The Preliminary Budgets FY 2005-2006 are presented to the Business Committee for review. The Board will adopt the Final Budgets FY 2005-2006 on August 15, 2005. Thomas said there will be minor changes to the Building Reserve, Flex and Tech Funds in the Final Budgets.

 

Thomas was complimented on preparing a budget book that the public can understand. Some suggested changes were to add accreditation numbers to enable the public to understand the positive side of smaller classroom size; reflect only classroom FTE; explain “PIR”; explain why General Fund expenditures do not equal revenues.

 

Administrative Matrix – Clarification of Placement

 

Bob Whalen moved to recommend the Board allow the Superintendent to maintain authority to place an administrator on the administrative matrix, based on his discretion, within a job classification cell, subject to experience and consistent with the approved budget. Jerry Hansen seconded the motion. The motion carried unanimously.

 

Request for .6 FTE Increase at Will James Middle School

 

The Business Committee is being asked to approve a request for a .6 FTE increase at Will James MS due to increased enrollment demands. Committee concerns were: no FTE cost provided, the Department Head should address the Committee and justify requests collectively rather than individual schools requesting their own staffing, the funding source should be named, and it should say if it’s funded in the budget.

 

Jerry Hansen moved to table this item. This motion died due to lack of a second. Joel Guthals moved to refer this proposal to the Board for action and recommends that the Board be given complete information in order to allow the Board to make a decision. Joan Sleeth seconded the motion. Voting for the motion was: Dale Getz, Joel Guthals, Joan Sleeth, Bob Whalen, Shanna Henry, and Kari Altenburg. Voting against the motion was Jerry Hansen. The motion carried.

 

Request for Additional Military Leave Time

 

A request was received to grant additional military leave time to staff members due to the war in Iraq. Article VIII, Section 5, of the Master Labor Agreement with the BEA states that military leave shall be granted pursuant to applicable laws. Administrative Rule of Montana 2.2.412 defines Military Leave as a leave of absence with pay of up to 15 working days in any calendar year. The District presently grants 15 days per calendar year with pay.

 

Shanna Henry moved to recommend the Board grant permission to Administration to “discuss” this one issue with the BEA to attempt to reach an appropriate response for our affected troops. Keri Altenburg seconded the motion. The motion carried unanimously.

 

Request for Tuition Waiver

 

A resident in our SD#2 area has paid tuition for the past two years for their granddaughter from Arizona to attend school here. They have requested Trustees to waive tuition for next year.

 

Joel Guthals moved to confirm the Board’s decision to charge tuition for out-of-district students attending SD#2 next year per adopted Board Policy and State law and not grant a waiver of tuition as requested in the letter. Bob Whalen seconded the motion. The motion carried unanimously.

 

Strategic Plan 2005-2006

 

The Draft Strategic Plan for 2005-2006 was reviewed by Committee members and there were no comments or suggestions.

 

Bob Whalen moved to recommend Board adoption of the Strategic Plan 2005-2006. Joan Sleeth seconded the motion. The motion carried unanimously.

 

Yellowstone County School Preparedness Project – Grant Application

 

The grant was presented as “no matching costs required.” The Committee questioned the costs for travel and subs for training.

 

Jerry Hansen moved to recommend Board approval of the Yellowstone County School Preparedness project grant application subject to fiscal analysis. Shanna Henry seconded the motion. The motion carried unanimously.

 

Status of Building Reserve and Elementary Bond Projects

 

Shanna stated the elementary projects are moving very slowly and is concerned about additional costs the District is incurring. She questioned how the $1M shortfall will be funded. Thomas said some will be covered from contingency. Dale said the delays are due to the unanticipated length of time in securing building permits. The bid submitted by contractors is based on a certain construction period. When that period is delayed, they have to worry about winterization and having to work around students and the start of school. Shanna asked if Ponderosa would require temporary housing. Dale reported that this item would go to the Board next week and Dave Williams would be present to report on all of the projects.

 

Health Insurance Update

 

Committee members reviewed the health insurance reports. The reserves have increased to $1.7M.

 

Calendar/Agenda Items

 

This section is for items to be scheduled for future Business Committee meetings.

 

Thomas explained a law was passed encouraging governments to enter into agreements with providers for energy conservation upgrades. Rich gave us an update of what was done in a past meeting. There is no organized plan regarding alternative energy sources in place.

 

Each Business Committee member was encouraged to recruit a potential Business Committee member from the community.

 

Addition of CEC Trail – Trust Account at West High

 

Board approval is required to set up a new trust account. Principal Sulser is requesting a trust account be set up for CEC trailer. This is a Billings Public Education Foundation grant awarded to John Miller at West High School.

 

More information was requested regarding what this item was for. It will be forwarded to the Board for approval with that information included.

 

Adjournment

 

There being no further business, the meeting was adjourned at 8:40 p.m.

 

 

 

 

K. Dale Getz, Chair

 

 

 

 

Sherrill Sullins, Recorder