Budgeting For Results Committee - May 14, 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

 

May 14, 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, May 14, 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, Joan Sleeth, Katharin Kelker, Shanna Henry, Kari Altenburg, Peter Grass, Don Stanaway, and Dan Farmer. Absent were members Curt Prchal, Duane Smith, Jerome Chvilicek, and Stan Barr. Also present was CFO Thomas Harper, and Superintendent Jack Copps.

 

This is Chair Dale Getz last Committee meeting. His term as trustee ends on May 17th with the reorganization of the Board after the May 8th election. Dan Farmer congratulated Dale Getz for his excellent results on the School Board. As a Chamber of Commerce member, Dan believes each year will get tougher due to demographics, and hopes the lessons learned and follow-through with the public will apply in the future. Dale believes the mill levy was successful due to the good work done to help the voters understand the issues and the community effort involved.

 

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 April 09, 2007

2. Addition of Trust Accounts for BPEF 2007 Classroom Grant Recipients

3. Add Enterprise Fund 70 for CARE Academy

Peter Grass seconded the motion. The motion carried unanimously.

 

Castle Rock Middle School Reroof – 2007

 

A bid was let for the Castle Rock Middle School Reroof – 2007 project and opened on April 26, 2007. Bids were as follows:

 

Contractor Base Bid

Summit Roofing $184,128 (low bidder)

Empire Heating and Cooling $224,919

Commercial Roofing $292,000

 

Facility Services recommends the project be awarded to the low bidder Summit Roofing. Rich explained this is over the main classroom wing which is the section of the roof that blew off last summer. It had been temporarily repaired. This will replace the entire section over the main classroom wing which is the original 30 year old roof. Summit Roofing was able to submit a lower bid as they were doing other projects in Billings. They do all their own work and Rich is confident they have the people to get the job done. There was about $50k damage with a $10k insurance deductible.

 

Katharin Kelker moved to recommend the Board award the Castle Rock Reroof 2007 project to the low bidder, Summit Roofing for $184,128 from the Elementary Building Reserve Fund. Dan Farmer seconded the motion. The motion carried unanimously.

 

 

 

Beartooth Remodeling For School Opening

 

Rich Whitney reported that with the passage of the mill levy we have a commitment to the voters to reopen Beartooth Elementary. They will replace two of the 30 year old HVAC units on top of the school at a cost of $252,000 from the Elementary Building Reserve Fund 161. The City of Billings has agreed to allow us to occupy Beartooth without bringing it up to current building codes. Young Families did some renovation when they moved into Beartooth by putting up interior wall partitions that changed the building occupancy. The City will allow us to demolish those interior walls back to the original open building concept. The demo costs are estimated at $20K.

 

Rich was directed to request the $20K from Young Families to demo the interior walls they put up. Shanna pointed out that the Castle Rock roof project and this Beartooth project will lower the Elementary Building Reserves by one-half. Thomas Harper reported that the Legislature is giving us all day Kindergarten money which will include startup costs of approximately $1M. Some of this startup money can be used for work at Beartooth. Joan questioned what we were going to do in the future to repair this very old building if we use most of the Building Reserve Funds.

 

First Student Contract renewal FY2008-2012

 

At the June 20, 2005 Board Meeting, trustees voted to accept First Student’s proposal of lowering the rate increase FY2006-07 to 1.5% (instead of 3.7%) in exchange for not going out for bid and automatically giving them a five (5) year contract renewal effective July 1, 2007 to June 30, 2012. The annual increase in the Transportation Budget for First Student is 2%. Thomas advised they have a fuel clause that when the price rises to a certain level, we reimburse them for the additional cost of fuel. This agenda item was presented for information only.

 

Drivers have school sponsored clinics twice per year for safety training on handling special circumstances. Superintendent Copps will check on the extent of the training. Thomas will e-mail the response to Committee members.

 

Financial Reports – April, 2007 (Unaudited)

 

The Committee reviewed the unaudited Financial Reports for April, 2007. 83% of the year is complete with 63% of the budget spent. Thomas explained the lag in spending is due to the fact that 45% of the budget is spent in May & in June on three teacher payrolls. Don asked if there was a way to report these expenditures on an annualized basis so we know where the budget stands on any given month. Thomas will check into accruing these expenditures monthly.

 

Bills Paid – April, 2007

 

Katharin Kelker moved to recommend the Board approve the bills paid for April, 2007. Shanna Henry seconded the motion.

 

Peter asked if it would save the District money by booking our own airline travel rather than paying fees to an agency for that service. It was questioned if we bid this service out to agencies for competitive fees. Thomas will check on this and e-mail the answer to Committee members.

 

The motion carried unanimously.

 

Health Insurance – Financials – March, 2007

 

Katharin noted the decrease in revenue and claims in the health insurance fund and questioned if the group of retirees choosing alternative insurance coverage was in the age group before Medicare. Thomas will find out and e-mail the answer to Committee members. We carry individual stoploss rather than overall stoploss coverage. Don suggests we obtain a quote on overall stoploss for the District.

 

 

 

 

Impact of Procurement Card on Purchase Order Volume

 

Thomas reported the Procurement Card has decreased the number of purchase orders processed by about 20% and we’re able to review transactions on a “real-time” basis. It costs from $25-$150 to process each purchase order. Shanna likes the freedom of the Procurement Card but notes it doesn’t encumber purchases like the purchase order does, and the schools must maintain separate accounting to track purchases. Don asked how the Visa Rewards from the Procurement Card is accumulated and spent. Thomas reported this is our first year, but depending on our purchasing volume it may potentially generate $60K cash back to the District. Katharin asked how the PCard will affect the need to maintain a Warehouse. Thomas explained the PCard program will allow us to examine the large volume of low dollar purchases to enable us to negotiate better purchasing discounts. Schools lack storage space, and the Warehouse has the ability to store large quantities of textbooks and paper and also perform printing functions. They are always examining Warehouse processes for efficiencies. Dale believes warehouses are antiquated in today’s business world. With the ability to order and transport things so quickly there are few needs to store things and carry costs associated with them. Dale asked what the District was doing with the savings from processing fewer purchase orders. Thomas said the savings are spread out through the whole procurement process.

 

Warehouse and Purchasing Information

 

Information on our Warehouse and purchasing system and a comparison with other school districts was reviewed by Committee members. Shanna commented that as an elementary school Principal, she does not want to take her time to get quotes for purchases and look through catalogs; she prefers our current procedure and convenience of letting the Warehouse do the bids. Dale noted there is a distinction between purchasing and warehouse functions.

 

Update on 2006 Audit Findings and Recommendations

 

Thomas explained the Audit Committee charges the Budgeting For Results Committee with follow-up to ensure corrective action is continuing on items from the prior year’s audit. The current status report on the audit items was reviewed by Committee members. Corrective action has been taken on all items. The electronic approval process for central warehouse requisition purchases is in the final stages of testing and the system will be operational by July 1, 2007.

 

Preliminary Budget FY2007-08

 

Thomas gave an update on changes to expected revenue as a result of the Special Legislative session. Quality Educator payments increased from an expected $2790 to $3036 in the first year and $3042 in the second year. Legislators approved funding for Full-Day Kindergarten; so we will have 550 additional ANB. We will receive about $1M in start-up costs for Full-Day Kindergarten. We will receive one-time funds for capital improvement projects and deferred maintenance that will be deposited in a miscellaneous fund. Funding is based on a “per-unit” entitlement. The State estimated the units based on the assumption that there is a building for every 250 elementary students, for every 450 middle school students and for every 800 high school students. Each unit will receive about $33,500. We will receive about 36-37 units which will be approximately $1.2M in elementary and $250K in high school funding. The State funding package includes a 3% increase in funding for next year, but only a 1.5% increase in funding for the second year. This may cause some serious funding shortages in the second year.

 

Thomas said if we opt to go to full-day Kindergarten, we will be short about $292K because we made a decision with our mill levy to go without full-day Kindergarten, which is $400K under the Cap. Superintendent Copps said legislation states school districts must provide half-day Kindergarten, but full-day Kindergarten is optional. If districts provide full-day Kindergarten, they must also provide half-day Kindergarten, which we can’t do in the same setting. We will need to identify some sites as half-day sites, and usually over two years everything will move to full-day Kindergarten. Rimrock Elementary may end up being a Kindergarten center.

 

Thomas presented preliminary budgets. The revenues are conservative. The expenditures include the base budget, and Beartooth and Full-day Kindergarten costs. Committee members were charged with reviewing the preliminary budgets.

General Comments/Announcements

 

Don expressed his support for before and after school day care programs. He asked if anything was being done for the middle school students. It was noted that United Way and the Boys & Girls Club have activities. Superintendent Copps noted that the before and after school programs will expand rapidly but must be limited at first due to resources.

 

Chair Dale Getz term as trustee is ending. He thanked Committee members and community volunteers for their participation saying it speaks volumes about this community. Dale said member’s questions and observations are excellent; and, their independence in asking questions is valuable and causes the Board to examine issues further. Each Committee member brings their own experience and background to the Committee to make it valuable, and he encouraged them to fill out applications to serve on the Budgeting For Results Committee next year.

 

Committee members thank and recognize Chair Getz for his excellent leadership on the Board and the Committee.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:12 p.m.

 

 

 

 

 

K. Dale Getz, Chair

 

 

 

 

Sherrill Sullins, Recorder