Budgeting For Results Comm - Nov. 12, 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

 

November 12, 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, November 12, 2007. Chair Katharin Kelker called the meeting to order at 5:33 p.m. and led those assembled in the Pledge of Allegiance. Committee members present were: Katharin Kelker, Shanna Henry, Kari Altenburg, Peter Grass, Dan Farmer, Joan Sleeth, Curt Prchal and Joel Guthals. Absent were members Mary Jo Fox, and Duane Smith. Member Don Stanaway advised he will be absent for a few meetings. Also present was CFO Thomas Harper, Executive Director of Facility Services Rich Whitney, Skyview English teacher Rod Gottula, and Jerry Hansen from the community.

 

Communication From the Public

 

Jerry Hansen addressed the Committee and asked what Building Reserve projects were complete, what the budget amount was for each project and how much it cost to complete each project and whether we were over or under budget. He would like a clearer accounting for the public of the $15M. He would like to see an on-going inventory of the deferred maintenance projects of the district to show what projects are complete, which ones are in progress and which ones remain to be completed. Jerry questioned the Board spending of the Deferred Weatherization & Maintenance funds to supplement the General Funds in the 2006-07 year. Jerry asked the number of vehicles the District owns; and, he would like to see a five-year plan to purchase vehicles.

 

Consent Agenda

 

Joel Guthals moved to approve the Consent Agenda. Dan Farmer seconded the motion.

 

Joan Sleeth requested item A-5, District Clerk – Add contract Hours FY2007-08, be pulled from the Consent Agenda to be acted upon separately.

 

Joel amended his motion to remove item A-5 from the Consent Agenda. Dan Farmer agreed to the amended motion. The motion to approve the Consent Agenda items A-1 through A-4 was unanimously approved. The items are as follows:

 

1. Request to Cancel Outstanding Warrants

2. Addition of Advanced Activities Extracurricular Account at West High

3. Addition of WHAM Extracurricular Account at West High

4. Minutes of September 10, 2007

 

District Clerk – Add Contract Hours FY2007-08

 

Joel moved to approve the District Clerk – Add Contract Hours FY2007-08. Dan Farmer seconded the motion.

 

Thomas explained this is a proposal to add contract hours to the .5FTE position of the District Clerk up to 416 hours to be charged to the Business Office budget under the supervision of the CFO at a rate of $35.08 per hour plus benefits from November, 2007 to July 1, 2008 only, to work on outstanding projects such as:

1. Compliance with the final IRS regulations regarding 403(b) employee voluntary retirement plans

2. Transition to a paperless check/warrant system

3. Textbook inventory control

4. VEBA Plan Analysis

5. Technology Needs Analysis

 

Jerry Hansen addressed the Committee to say he believes the District needs a full time internal auditor; and, that auditor could examine the Special Education program for efficiencies.

 

The Chair clarified the Committee is voting on the items listed in the agenda, only. The motion was approved unanimously.

 

Deferred Maintenance

 

The Chair explained at the October Board Retreat the BFR Committee was assigned the problem of how to address Deferred Maintenance, and to decide whether or not to recommend the Board offer a Building Reserve Levy to the voters as a funding source for major repairs to the schools.

 

Rich Whitney stated the Building Reserve Levy Project approved in year 2001 was a very long and successful process with a list of projects totaling $64,531,900. The goal addressed through the projects was to provide a “warm, dry, safe and accessible” school to every student in town. It did not include projects for educational adequacy and enhancing instruction. The committee that established the project list included Steve Corning and Rick Leuthold from the community, Principal David Munson, Rich Whitney, and Head Custodian Jim Miller. Projects utilized local contractors, local designers, and local suppliers whenever possible.

 

Rich reviewed the Building Reserve Summary report and the projects at each school. There was also a grant done in connection with the Election Office that provided some funding for ADA accessibility. When a project came in under the budgeted amount, they proceeded to the next prioritized item on the project list. The project list will be resorted to show the uncompleted items and any new items required. An example of new items on the list might be added plumbing requirements and newer technology at the high schools for public address systems and security cameras. Several schools have roofs that are in very poor condition and they are inspected every year. Rich has a master plan for roofs that spans 10-15 years. The heating system at Senior is a 1939 vintage and it has the original boiler which is connected to 78 year old pipes. Even if we had the funding, it would be 6-7 summers before they could take all that old equipment off line. Facilities can only complete $2-3M projects a year in the summer because of the need to accommodate the school year. Contracting is affected by inflation and availability of contractors.

 

The Chair requested the following from Rich to be presented at the December Committee meeting:

1. A list of only those projects completed with the Building Reserve money showing estimated and actual cost.

2. Prioritize what remains to be completed from the old list. Add any new items needed in another color.

 

If this Committee recommends a Building Reserve levy they need to address the value of options in terms of existing or different configurations, i.e., fixing vs. replacement. Dan stressed the need for a long-term facilities plan. The Chair advised the Chamber is receptive to working together with the District on a master plan for our schools in terms of financial support.

 

Joel added to the list of inquiry:

3. Capitol investment projects that result in investment savings, which we may decide have higher priority, i.e., energy savings, etc.

 

Curt emphasized the need for flexibility in the project list to allow for new technologies or emergencies that may arise.

 

Approve Purchase of Facilities & Warehouse Vehicles

 

Thomas explained that we have approximately 100 vehicles in our fleet. The District has solicited bids for purchase and/or lease of 20 vehicles for the Facilities Dept. and Material Handling Center (Warehouse). The average age of the vehicles is almost 20 years old, and the average mileage is almost 95,000. The District is incurring significant cost on repair and maintenance due to their age and high mileage. The District also incurs risk from a safety standpoint when we put unreliable vehicles on the road. We do not have an overall vehicle replacement plan; we currently replace vehicles on an individual basis. Administration recommends purchasing the vehicles as listed for a total of $408,563.98 using the INTERCAP loan for funding.

 

Rich explained that they do as much in-house repair and maintenance on vehicles and equipment as possible. The plan is to replace the oldest vehicles to have a manageable fleet. Rich incorporated his planned replacements through the Budgeting For Results process in developing schedules for vehicles and large equipment purchases.

 

Joel Guthals moved to table this item to the December meeting to allow Thomas to prepare a comprehensive plan for replacement of vehicles owned by the School District. Curt Prchal seconded the motion. The motion carried unanimously.

 

Committee consensus is to fund replacements with an INTERCAP loan.

 

Shanna Henry left the meeting at 7:25 p.m.

 

Bills Paid – October, 2007 (summary sheet)

 

Dan Farmer moved to recommend Board approval of the bills paid for October, 2007. Joel Guthals seconded the motion. The motion carried unanimously.

 

Financial Reports – October, 2007 (Unaudited)

 

Jerry Hansen addressed the Committee requesting that the expenditures for miscellaneous program funds 115 and 215 be included in the financial reports. He suggested the format and timing of the financial reports be changed to a quarterly reconciled and completed report.

 

The Financial Reports for October, 2007 have been reviewed by the Committee. Thomas noted the High School Building Fund 260 has a negative balance of $372,066 which includes both the cost of Skyview repairs, which will be invoiced to the insurance company for reimbursement, and expected donations for the high school track. The Elementary Day Care Program Fund 170 has a negative balance of $19,603, and a plan is being prepared to address this problem.

 

Discussion on the timing and content of the financials will be followed up on by Thomas and the District Clerk.

 

Health Insurance – Financials – September, 2007

 

The Health Insurance Financials for September, 2007 have been reviewed by the Committee. Thomas explained that the District initiated early adoption of GASB 45 which requires us to recognize Other Post Employment Benefits. This is a long-term payable to recognize the postretirement benefit plan cost for the current period. There is an implicit subsidy of retirees and an assumption it will continue in the future since State law allows an employee that works so many years for a public entity to participate in their health insurance plan. Our Health Insurance Financial Balance Sheet recognizes a liability of $1,491,000 ($31M gross liability) which reduces our fund balance; but, GASB 45 does not require this liability to be funded.

 

Curt reminded Thomas that in the September 10, 2007 Committee meeting there was a request for the Health Insurance Committee to investigate the MTSBA Health Insurance Program; but, the Health Insurance Committee has not received that request.

 

Budgeting For Results

 

The Chair advised the Board has adopted Strategic Goals FY2007-08. Responsibilities assigned to the Budgeting For Results Committee were:

1. Provide advice on the Building Reserve

2. Provide advice on whether or not to run a mill levy.

3. Provide the structure for the budget sessions at the Board level regarding preliminary budget information and public information by February.

Jerry Hansen addressed the Committee recommending increasing reserves for credit ratings and a public accounting of planned expenditures from the revenue derived from the permanent mill levies. The Chair advised that the Superintendent will speak to the budget at our December Committee meeting. We have received additional monies for school funding from the Legislature in the last two sessions, but we are still close to the bottom in relation to the rest of the states.

 

Thomas related he attended the AA School meeting and they came up with a common set of cost factors, and the group is going to pull information together for the next legislature. Thomas provided our Committee with charts showing our District’s Deferred Weatherization & Maintenance expenditures.

 

Adjournment

 

There being no further business, the meeting was adjourned at 7:52 p.m.

 

 

 

 

Katharin Kelker, Chair

 

 

 

 

Sherrill Sullins, Recorder