Budgeting For Results Committee - April 09, 2007

[Guest sullinss]

Proceedings of the Budgeting For Results Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

April 09, 2007

 

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, April 09, 2007. Chair K. Dale Getz called the meeting to order at 5:30 p.m. and led those assembled in the Pledge of Allegiance. Committee members present were: K. Dale Getz, Duane Smith, Joan Sleeth, Jerome Chvilicek, Katharin Kelker, Shanna Henry, Kari Altenburg, Peter Grass, and Stan Barr. Absent were members Curt Prchal, Don Stanaway, and Dan Farmer. Also present was CFO Thomas Harper.

 

Communication From the Public

 

There was no communication from the public.

 

Consent Agenda

 

Katharin Kelker moved to recommend Board approval of Consent Agenda items as follows:

1. Minutes of March 05, 2007

2. Addition of Chemistry/Physics ECA Account at West High

3. Addition of Library Funds ECA Account at Bench Elementary

Jerome Chvilicek seconded the motion. The motion carried unanimously.

 

Financial Reports – March, 2007 (Unaudited)

 

The Committee reviewed the unaudited Financial Reports for March, 2007. Thomas Harper reported this year’s expenditures are right on track. Our utility costs are less than last year, and our budgeting $1.4M for an estimated 42 retirements and severance this year is right on target. If the budget stays on track we may realize a savings of approximately $225k in the high school general fund and slightly more in the elementary general fund. There are no significant issues from a revenue standpoint. If the levy passes, we may be able to forward purchase some items out of this year’s budget for the opening of Beartooth. Any surplus in the high school budget will go into reserves. We project a 12.4% increase in health insurance costs for next year. Chair Getz stated steps taken last year to make the budget more structurally sound are now reflected in this year’s budget results.

 

Chair Getz calendared for the June meeting, an agenda item to discuss major areas of compensation such as severance, health care, benefits, etc.

 

Bills Paid – March, 2007

 

Katharin Kelker moved to recommend the Board approve the bills paid for March, 2007. Shanna Henry seconded the motion. The motion carried unanimously.

 

Health Insurance – Financials – February, 2007

 

Even though costs are running about 12%, the cash balance looks good at $2.3M.

 

Report on GASB 45 – Unfunded Liability in our Health Plan

 

Billings Public Schools retained Gallagher Benefit Services, Inc. to perform a valuation of its required disclosure information under GASB 45. The Committee reviewed the report which presented the results of their actuarial valuation of our post-retirement benefit plan (other than pensions) as of January 1, 2007. This refers to items such as health insurance, vision, dental, etc. If an employee of the District is able to benefit from that type of benefit post employment, they are actually earning those benefits while they are employed. Currently financial statements track dollars paid for health, vision, dental, etc. coverage for people and book them as a cost. Now there will be some other cost associated with that payable in the future period for someone rendering services earning a benefit they’re going to earn post employment. Retirees get the benefit of a pooled rate they wouldn’t get if they were paying as an individual going into an open market for those benefits. This applies until age 65 when they go to a Medicare rate. Shanna pointed out that our District’s 30-year full buyout plan encourages an earlier retirement which extends the period of time to carry that liability.

 

This report developed the expected plan liability and annual expense assuming implementation on January 1, 2007; and, documented actuarial assumptions and plan provisions. We will be required to implement this process beginning July 01, 2008; and, our financial statements FY2008-09 will need to recognize any liability regarding this issue to get a clean audit opinion. We will opt for early adoption, and report it on the 2007 financials. Thomas estimates our liability at $2.5M for the first year.

 

Future discussion might address a need for establishing reserves for this unfunded liability, funding sources, reserve limits, and types of investments.

 

Budgeting For Results

 

Thomas reported the Legislature is still in session which leaves school funding for 2007-08 unresolved. The second year of funding proposals from the Legislature is very lean with only inflationary increases.

 

Even without passage of the mill levy, our General Fund budgets are balanced. There is no intent to use the mill levy funds to cover current operating costs; and, there are no expectations to lay off employees. If the mill levies pass we will implement action to: 1) reopen Beartooth and alleviate overcrowding in some areas, 2) increase Career Center offerings, and 3) shore up our financial position with increased reserves.

 

Our District will not implement full-day Kindergarten if it is optional and not fully funded. If the Legislature fully funds full-day Kindergarten, the short time frame may not allow start-up by next fall.

 

Adjournment

 

There being no further business, the meeting was adjourned at 6:07 p.m.

 

 

 

 

K. Dale Getz, Chair

 

 

 

 

Sherrill Sullins, Recorder