May 9, 2005

[Guest sullinss]

Proceedings of the Business Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

May 9, 2005

 

The May 9, 2005 Business Committee meeting was called to order at 5:30 p.m. by Chair Malcolm Goodrich. Members in attendance were Curt Prchal, Judy Herzog, Jerry Hansen, Dale Getz, Kari Altenburg, Peter Grass, Malcolm Goodrich, Shanna Henry, and Joan Sleeth. Absent was member Bob Whalen. Also in attendance were Business Manager Thomas Harper, District Clerk Leo Hudetz, Trustee Sandra Mossman, Counsel Jeff Weldon, Principal Randy Morrison, and Executive Officer of Homebuilders Association Maryann Seilstad.

 

Home Builders Association/Career Center Construction Project Agreement

 

Career Center students are involved in building a house each year and these projects have been in partnership with the Billings Home Builders Association. In September 2004, the Board concluded the District would continue to support the project and act as general contractor. Jeff Weldon presented a final version of an agreement between the District and the Home Builders Association to govern the construction project for the school year 2005-06. The agreement says our District will indemnify the Home Builders Association and our volunteers on the project. It has been reviewed and approved by our insurance agents and by the HBA legal counsel.

 

HB747 passed the Legislature and was signed by the Governor to limit liability associated with these projects to hosting school districts.

 

Jeff will amend the contract to say the three District representatives on the Steering Committee will be appointed by the School District Superintendent and the Career Center Principal. Jeff noted that HBA being the owner and the entity transferring title, also has the duty of disclosure. He will amend the contract to state they are required to give Section 1 disclosure. It was questioned who would be responsible if the project resulted in a loss. Jeff stated there is an understanding that the HBA is responsible for the bottom line of the project.

 

Dale Getz introduced a motion to recommend the Board accept the agreement subject to clarification on the District Superintendent and Career Center Principal, subject to clarification of indemnification of losses, and changes relating to the disclosures required by HBA. Judy Herzog seconded the motion. The motion carried unanimously.

 

Request for Additional 3 FTE

 

Randy Morrison reported Castle Rock projected decreased enrollment in 2003/04 and staff was reduced from 55.1 FTE to 52.9 FTE. Staff was further reduced to 48.9 FTE for year 2004/05 for a projected enrollment of 660. Enrollment is currently 691. The Heights area is growing and new data projects enrollment to be 30-40 students more than what was originally forecasted for next year. Randy is requesting an additional 2.0 FTE next year for his eighth grade core classes to allow a 25 student per class ratio.

 

Will James anticipated 560 students this year and ended with 615 students. Will James is limited with the number of elective classes they can offer. For example, art has 28 students per class. High student numbers in tech ed. classes present a liability issue. Principal Kip Farnum is requesting 1.0 FTE next year.

 

Chair Goodrich said we had a hiring freeze and agreed on a number of FTE with the union. He asked if hiring three staff would be over the FTE number we froze. Thomas said they would be within that number.

 

Peter Grass asked if there would be more requests or would we be giving FTE to the first to ask for it. He suggested that administration should make the recommendations to balance requests.

 

Dale believed the budget was built on the elimination of those positions. Thomas said those three FTE were requested by Carol Wicker and so were built into the budget. Curt said it looks like these three FTE are over what was in the budget and asked how we could cut in the high school district and add in the elementary district. Randy said the situation has now reversed where historically the elementary has had to cut when the high school had a sufficient budget to add FTE for increased enrollment. It was noted that middle school accreditation standards are 30 students per class and 50 per class in P.E.

 

Chair Goodrich confirmed that even though the elementary budget showed a slight surplus, it did not reflect the MPEA increase. However, administration said they could fix it without cutting programs or staff. Jerry believes all middle schools should be looked at together to see if FTE could be reallocated between schools. Randy confirmed that Riverside and Lewis & Clark do not need any increased FTE next year due to enrollment.

 

Discussion was held on what level of FTE the District was currently at and what impact this decision would have on the freeze level set by the Board. Dale asked if the Board by its action to reduce those positions set a new lower level for the freeze; and, if it didn’t this action would still be in the freeze level. Dale believes we did by defacto set a new freeze level because the budget was built on that dollar amount less those nine positions of $300,000. Curt said the budget is still based upon 1127 FTE positions. The Chair stated there was a net decrease of six to bring it to 1121.

 

Shanna introduced a motion to recommend Board approval of the additional three FTE. Dale Getz seconded the motion.

 

Dale Getz said we need to know how FTE is balanced at the other middle schools. In the future the Executive Director should present these proposals so that schools are considered as a whole when these decisions need to be made.

 

The question was called. Voting for the motion were Curt Prchal, Judy Herzog, Dale Getz, Kari Altenburg, Peter Grass, Malcolm Goodrich, Shanna Henry, and Joan Sleeth. Voting against the motion was Jerry Hansen. The motion carried.

 

The Chair stated the Business Committee believes when this goes before the Board: 1) the Director should present it to the Board, and 2) the Superintendent needs to clarify that there are no other teacher increases in the budget that they do not know about.

 

Curt related that personnel issues regarding the cuts were poorly managed with the domino effect it had on staff. There was little or no input from the building level and some people cut were not notified until they read it in the paper. The Chair said this will be brought to the Board’s attention by Trustee Moses.

 

Jerry urged future consideration of zero based budgeting basically following accreditation standards.

 

Rimrock Stages Contract Renewal

 

Due to conflict of interest Chair Goodrich passed the gavel to Dale Getz to Chair this item.

 

Our current five year contract with Rimrock Stages for school activities transportation expires August 14, 2005. Bids were received from Rimrock Stages and Powder River Transportation Services for a three-year contract renewal.

 

Judy Herzog introduced a motion to recommend the Board accept the three-year renewal contract with the low bidder Rimrock Stages. Joan Sleeth seconded the motion. Voting in favor of the motion were Curt Prachal, Judy Herzog, Dale Getz, Kari Altenburg, Peter Grass, Shanna Henry, Jerry Hansen, and Joan Sleeth. Abstaining from the vote was Malcolm Goodrich. The motion carried.

 

Minutes – Business Committee – April 11, 2005

 

Chair Goodrich presided over the rest of the meeting.

 

Dale Getz introduced a motion to approve the Business Committee minutes of April 11, 2005. Judy Herzog seconded the motion. The motion carried unanimously.

 

Grants: Safe Schools/Healthy Students & Jacob K. Javits Gifted & Talented Grant

 

Committee members reviewed the grants that were submitted for information only.

 

Tuition Rates 2005-2006 School Year

 

The Office of Public Instruction has set the maximum out-of-district tuition rates for the 2005-2006 school year at 20% of the new entitlement. The cost of educating a student is higher than the maximum tuition allowed by the Office of Public Instruction.

 

Dale Getz introduced a motion to recommend the Board approve the maximum allowable tuition rates FY 2005-2006 to be $436.60 for Pre-K and Kindergarten, $873.20 per K-6 elementary student, and $1116.80 per student grades 7-12. Jerry Hansen seconded the motion. The motion carried unanimously.

 

Financial Reports – April, 2005 (Unaudited)

 

Financial Reports for April, 2005 (Unaudited) have been reviewed by Committee members.

 

Thomas reported that the new Indirect Cost Rates have been approved by OPI. The high school rate is 7.93% and the elementary is 8.64%. Thomas said Tuition Fund 113 is over expended for our students receiving services at Yellowstone Treatment Center. The number of students and related services has increased. We budgeted $75,000 this year and will overspend by approximately $115,000 this year. We may need to do a budget amendment to cover this and make it up with a permissive levy next year.

 

Other Budgeted Funds FY2006

 

Thomas is still working on these budgets and the Committee will review final budgets in June. Thomas said when the Skyview bond is paid off in June 2005 the High School Debt Service Fund balance of approximately $600,000 will be closed out to the Building Reserve Fund, the Technology Fund or the General Fund.

 

Budgeting Process

 

Chair Goodrich said in his discussions with the Board and administration, there is a willingness to look at some form of zero-based budgeting for the 2006-2007 year budget recognizing that certain programs need to be funded. The Business Committee needs to examine the budget process. Benefits of zero-based budgeting accomplish two things: 1) mandatory need for budget developers to explain needs at the beginning of the process; and, 2) trustees will understand the budget from the beginning of the process.

 

Jerry wants a positive budget process starting with zero-based budgeting; examine expenditures in all areas to minimize impact on students; and, examine alternatives and establish priorities,

 

Curt is concerned with committing to zero-based budgeting when common sense could make a big difference in the existing budgeting process. Some set priorities were not adhered to when the process left the Business Committee and COLT/Board final decisions were made. A priority was “cuts furthest from the classroom,” and the only cuts made were at the classroom.

 

Chair Goodrich said we need to proactively look at the budget early in the process. The 2005-06 year budget was changed considerably in the last three weeks. Zero-based budgeting should force budget managers to state their needs and priorities in the beginning of the budget process.

 

Thomas recognizes the benefit of zero-based budgeting. We can’t have two competing budgets. The Business Committee and COLT need to determine their fundamental roles and responsibilities in budget development.

 

Dale was surprised how the budget numbers changed in a short period of time from a large deficit in March, to April when we looked a lot better independent of the Legislature; we voted to go forward with a mill levy, and then a mill levy was determined to be unnecessary with a combination of money from the legislature and administrative changes in the expenditure projections. This process tends to dilute our credibility to the public.

 

The Chair stated there is a reduction of 9.0 FTE in the budget, but the budget still needs trimming because of the MPEA settlement and insurance increase at a minimum. Administration said they could make adjustments in terms of cuts that do not affect programs and that do not cut any other staff.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:28 p.m.

 

 

 

 

Malcolm Goodrich, Chair

 

 

 

 

 

Sherrill Sullins, Recorder