BETHLEHEM AREA SCHOOL DISTRICT	                                   MAY 14, 2001 
BOARD OF SCHOOL DIRECTORS 
BUDGET HEARING #2


BUDGET HEARING #2 

The Bethlehem Area School District held a Budget Hearing on Monday, May 14, 2001,
beginning at 6:08 p.m. in the Auditorium at East Hills Middle School, 2005
Chester Road, Bethlehem, Pennsylvania.


MEMBERS PRESENT

Members present:  Directors Amato, Craig, Gallagher, Glancy, Heske, Venanzi, 
Williams, and Koch - 8.  Members absent:  Director Leeson - 1.


OTHERS PRESENT

Others present:  Thomas J. Doluisio, Superintendent of Schools; Stanley J.
Majewski, Jr., Board Secretary; administrators; members of the press and other
interested citizens and staff members. 

Director Glancy stated that the preliminary adoption of the budget is scheduled
for May 21.  At that time there will be opportunity for comments and questions
from the community.  Final adoption will be at the June 21 meeting, at which the
community will also have opportunity for comments and questions.

Director Glancy stated that at the last budget hearing, the board asked several
questions of the administration.  The administration now has answers for those
questions.  After hearing these, the board will ask any additional questions. 
The floor will be opened for community comments and questions.  If questions
cannot be answered at tonight's meeting, answers will be provided on May 21.

Mr. Doluisio stated the first question was asked by Director Heske.  He wanted to
know what the administration could reduce in order to make up for the $1,400,000
that the charter schools are costing in this budget.  A handout was provided
showing a list of potential reductions totaling $1,400,000 by category.  Category
1 is the expenditures that least support district priorities directly.  Category
2 is closer to supporting district priorities directly.  Categories 3 and 4 are
extremely important.  The administration took the liberty of putting $113,270 in
increased value of a mill into the proposal.

Mr. Majewski explained that, periodically, updates are received from either
Lehigh or Northampton Counties to the taxable assessed value of our properties. 
Subsequent to the last budget hearing, the district received an update from
Northampton County which increased its taxable assessed value of our property. 
That would have had a value of $113,270, so we would be able to add that amount
on the revenue side.

Mr. Doluisio asked Mr. Majewski to explain why Intersystem Payments - IU
Transportation appears under Category 1.  Mr. Majewski stated that the IU
transportation had been discussed in some detail.  Since then, the district has
received information from the Intermediate Unit stating that even though their
budget has gone up, our percentage of the IU transportation cost has gone down. 
We are able to reduce about $100,000 from our budget because we anticipate using
their service less during the next year.

Mr. Doluisio asked Mr. Majewski to speak on the next item in Category 1 -
Intersystem Payments - BAVTS.  Mr. Majewski reported that in our budget it was
anticipated that we would need approximately $4,200,000 for the vo-tech budget
next year.  Their budget has since been released.  As released, our share of
their budget will be less than that amount.  We can reduce our amount for this
item.

Mr. Doluisio stated that Categories 2, 3, and 4 are self-explanatory.  However,
he felt he would be remiss if he did not indicate to the board that everything in
these categories is important to the running of this school district.  These
categories are listed to comply with Mr. Heske's request and should not be
treated as recommendations on the part of the administration.  There will be
difficulty if those cuts are incurred.

Director Craig stated that state law says if a student is expelled from a school
district and parents can't provide an alternative education, the district must
provide it.  He asked how the district would provide it if we did not have the
CA/MP program.  Mr. Doluisio pointed out that CA/MP is the day-time in-school
suspension program.  The L/AMP program is an after school program paying the
teachers hourly.  Mr. Doluisio stated that without the L/AMP program, these
students would probably be handled as they were in the past.  Teachers would be
sent into the neighborhood and homes.  There would be one-on-one instruction. 
L/AMP affords some degree of efficiency because five to six students are assigned
to one teacher.  L/AMP is an educationally sounder way to do it.

Director Williams inquired about reductions included under Curriculum Enrichment
for elementary and secondary.  Dr. Nelson stated elementary reductions include
items such as the Kemmerer Museum, Burnside Plantation, Weller Center, Children's
Theater, the Tannery, and Planetarium.  Mr. Perfetti stated the secondary items
fall into two categories.  Of the $67,000, there is approximately $7,000 which is
expended for the middle school trips to the Weller Center and Allentown Art
Museum which are related directly to the curriculum.  The remaining $60,000 funds
student trips for activities such as Pennsylvania Junior Academy of Science,
National History Day, Science Olympiad, DECA, Math Counts, and other competitions
that our students get involved in that are directly related to our curriculum
providing the opportunity to advance to either a regional, state, or national
competition.  Director Williams commented that these and Arts In Motion would
really be unfortunate cuts from the programs.

Director Glancy asked what the $100,000 for capital reserve would leave us.  Mr.
Doluisio explained that the cabinet placed that money there in order to begin to
accrue funds for regular ongoing maintenance or large expenditures not currently
in the budget.

Director Amato referred to page 28 - Curriculum Enrichment Activities, asking who
the $40,000 salaries covers.  Mr. Majewski stated it is the cost of the bus
drivers that are charged to this program.  Director Amato asked if we did not
have the same number of opportunities for our students last year when only
$13,687 was budgeted.  Dr. Nelson stated that last year there were bus costs that
were not reflected in that item.  The item was underbudgeted.  The district had
not been paying our fair share towards Historic Bethlehem activities.  An
increase for that group is included.  The amount budgeted includes no additional
experiences.  Funds needed to be taken from other accounts to cover the expenses.
 Director Amato asked Mr. Majewski how we took care of the expense if it actually
cost $71,000 instead of $51,687 on E-3 $51,687.  Mr. Majewski explained that at
the end of the year any left over money from related accounts will be transferred
into that budget in order to cover it.

Mr. Doluisio stated that a question he is unable to answer would be to know why
we put $51,000 in this year, less than we typically spend, when the previous year
we spent $71,000.  Dr. Nelson stated he believes the answer is that the $51,000
reflects the services, not the transportation and drivers.

Director Amato referred to page 45, line item 530.  In 1999-2000 it was at
$101,000.  The line item has over doubled in two years.  Mr. Perfetti explained
that as the network has evolved across the district those payments are made from
that line item.  It is a reflection upon how much more significant use of the
Internet and our Technology division has become over the last several years.  Mr.
Majewski stated that what is not seen here, but related to that, is that we
changed service and for the next three years the expense will be at an elevated
level.  Then, it will drop down almost $22,000 a year.  We are paying for the
engineering and the new service over the next three years.  That has been for the
wide area network and new local area network installation.

Director Amato asked the number of Internet users in 1999-2000 versus the number
in next year's budget.  Mr. Doluisio will supply that information.  Mr. Majewski
stated that the expense is more than just the users.  We have gone to a different
service, changing to fiber-optic lines which are better carriers.  Dr. Garrigan
can probably supply better answers as to the technological changes he has made in
order to have better service.

Director Heske asked whether that item might also be affected by the fact that
Service Electric has given us a lot of free items, particularly when things were
installed in some of the new schools.  They had informed us fairly recently that
they could no longer afford to do so.

Mr. Doluisio stated that at the April 23 budget hearing, Director Amato asked
about the early childhood programs offered for special needs children.  Mr.
Agretto responded.  He stated that, basically, the costs are derived based on a
per mileage per district proration.  The intermediate unit budgets a certain
amount of money per year, calculates the miles that are utilized per district,
and the cost is prorated based on that.  In our district, we will transport the
children we are able to transport, which will reduce the costs.  It is cost
effective for the intermediate unit to transport the children who are small in
stature and have specialized needs such as car seats and other specialized kinds
of transportation because the intermediate unit has the types of buses to handle
those situations.  The district sees a reduction in costs for next year based on
the fact that our services will be down, meaning our costs will go down.

Director Amato stated he thought the situation, as discussed at the last meeting,
was additional costs due to the way the transportation was scheduled and that the
scheduling of transportation in a more expeditious manner was to be researched in
order to more utilize buses during their normal runs for some of these students. 
Mr. Agretto replied that the early intervention programs follow schedules that
differ from the school year.  Director Amato explained that he was questioning if
these programs need to be on a different schedule.  Mr. Himmelberger stated that
the preschool that the intermediate unit runs is scheduled on a Monday, Thursday,
and Friday for some students; for others on Tuesday and Wednesday, depending on
the needs of the children.  It is a very specialized type of transportation with
a lot of variables.  They do not have a normal school year.  Their programs
change throughout the year.  Where practical and feasible, our district is
transporting students to these programs.  Where it is not practical, for example
a multihandicapped class in Bath, students are scheduled on an IU bus.

Mr. Doluisio stated that the last question the administration was asked to
respond to at the April 23 budget hearing was asked by Director Glancy.  He asked
for a list of the top five items causing increases and the percentages.  Mr.
Majewski provided a handout with the information.  The total increase between
current year budget and next year's budget was $6,658,969.  The administration
was asked to put the top five items and their percentage together to have a
better understanding of what was creating the total increase in the budget.

1.	Contractual salary and wage increases account for $1,808,731 or 27.16% of
	the increase to the budget.  It was pointed out by Mr. Doluisio and Mr. Majewski
	that this is not the percentage increase in that line item; it is the percentage
	increase of the increase in total budget.  The employee benefit increase was
	$1,563,880 or 23.49% of the $6,658,969. 
	
2.	Charter schools accounts for $1,400,000 or 21.02% of the total increase.

3.	Special needs students payments, approved private schools and related costs
	account for $972,362 or 14.6% of the total increase.

4.	Under the category of other, which could be textbook increases, costs for
	fuel or electricity, everything else within the budget including supplies the
	increase is $683,645 or 10.27% of the total increase.

5.	The vo-tech debt service payment has an increase of $230,351 or 3.46% of
	the total increase.

Mr. Majewski explained that the above items added together will equal the
$6,600,000 increase from current year budget to proposed budget for 2001-2002.

Director Venanzi asked, because of employee benefits being increasingly on the
rise, if it would be feasible to look into entering a consortium to obtain better
rates.  Mr. Majewski stated he looks into that annually.  He has involved the
personnel at the IU, as well as their consultant.  Because of the district's size
and the type of structure it has, the district has negotiated a very favorable
contract.  It is still better for the district to remain as is.  There are also
certain flexibilities, not available with a consortium, which have helped the
district reduce some costs.  With a consortium, you need everybody to agree to a
change; whereas, if we see an opportunity, the district can do it on its own. 
Mr. Majewski further explained that one of the things not seen, but done as a
matter of course, is that the district looks at better ways of being able to
provide the same benefits for lower costs.  This was done recently for dental
coverage and unit cost was lowered by about seven percent.  All areas are looked
at.  It is growing faster than we can find ways to make reductions.

Director Amato referred to Category 3, asking how many students are in the CA/MP
program.  Mr. Perfetti stated on an average day there will be between 35 to 50
students at CA/MP.  Through April 1, over 1,200 students cycled through that
program.

Director Amato asked what would be done if the district did not have the CA/MP
program.  Mr. Doluisio explained that the district would revert back to an
out-of-school suspension procedure.  When expelled, the student could stay at
home.  Mr. Doluisio stated that in addition to being an in-school suspension,
there is a component that offers support, analyzes student problems, and a home
support component.  The staff is working via the Code of Conduct on interventions
and evaluations of the students while students attend CA/MP serving their
suspension time.

Mr. Perfetti added that, as the board is aware, each year he provides the board
with a Code of Conduct summary and analysis.  For the last three years there has
been a significant decrease in the number of students suspended three or more
times.  As of April 1, the decrease is the highest since the Code of Conduct was
put into place.  A recent analysis of course failures in our high schools shows
the lowest since statistics have been compiled on course failures.  Mr. Perfetti
stated he believes that if we keep students in school more days, instead of being
suspended at home, we may also be seeing an improvement in academic achievement. 
That is one of the goals.

Director Amato asked the success rate of students going through the CA/MP program
and continuing on.  Mr. Perfetti stated that we have a data base tracking
students in our Code of Conduct since its first year.  A report will be provided
by June 21.  Director Amato explained that he is not against programs that will
help all our students, but he is against programs put in place that the district
gets no rewards for.


COURTESY OF THE FLOOR TO VISITORS

No one wished to address the Board of School Directors.


ADJOURNMENT

The meeting adjourned at 6:52 p.m. 

Attest,



Stanley J. Majewski, Jr. 
Board Secretary


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