Budget Hearing #2 - May 12, 2003
Minutes
BETHLEHEM AREA SCHOOL DISTRICT
BOARD OF SCHOOL DIRECTORS
BUDGET HEARING #2
MAY 12, 2003
BUDGET HEARING #2
The second 2003-2004 budget hearing of the Board of School Directors of the
Bethlehem Area School District was held on Monday, May 12, 2003, beginning at
6:10 p.m., in the superintendent's conference room, at the Education Center, 1516
Sycamore Street, Bethlehem, Pennsylvania.
MEMBERS PRESENT
Members present: Directors Amato, Craig, Haytmanek, Heske, Koch, Leeson,
Venanzi, and Williams - 8. Members absent: Director Gallagher - 1.
OTHERS PRESENT
Others present: Dr. Joseph A. Lewis, Superintendent of Schools; Stanley J.
Majewski, Jr., Board Secretary; administrators, members of the press, and other
interested citizens and staff members.
Director Amato presided. Some revisions have been made to the proposed budget
since the last budget hearing when Director Heske directed the administration to
attempt to reduce the increase to under a mill.
ADMINISTRATION'S RESPONSE TO BOARD REQUESTS: DR. LEWIS - EXPENDITURES
Dr. Lewis stated that administrative direction at the last hearing from the board
was to address several areas of the budget in clarification which Mr. Majewski
will cover. Direction was given to look at reducing the increase from 1.29 mills
to under a mill. Dr. Lewis referred to a handout supplied to the board. Dr.
Lewis reviewed the reductions being recommended:
- $20,000 reduction in the Academic Academy budget. Due to some current research
by Mrs. Cintron's department, some carry-over grant funds will more than
adequately cover that amount.
- $87,500 expenditure to IU, $40,000 approximate teacher cost, FICA and PSERS
associated with that teacher, for a total of approximately $141,590 total
expenditures for Driver Education. It is being recommended that the program
not be offered next year. Out of that $87,500 there is an inordinately high
amount spent to offer the program to non Bethlehem Area School District
students which, by law, is another example of an unfunded mandate. Programs
such as this that are offered must be extended to nonpublic schools. That is
not the rationale for cutting the program, but he wanted the board to be
aware that we are not servicing the number of students you might think at
first glance for that size expenditure. The contribution to the IU 20
reduces what would typically be a $250 per student charge for driver
education to approximately $50 out of pocket for each student.
- $10,000 reduction in conferences listed as Information, Communications, and
Technology. In talking with Dr. Garrigan, it is felt to be an appropriate reduction.
- Increase of $113,434 in Intersystem Payment to the Bethlehem Area Vo-Tech
School.
- $106,400 reduction in Reserve for Encumbrances which are dollars that are
generally held back to cover encumbrances in transition from one budget year
to the next. Mr. Majewski has informed him that we can adequately cover our
encumbrances by reducing that amount.
- S.P.A.R.K./Early Childhood Education is not a reduction, rather a replacement.
Administration is suggesting that new-found PDE funds in approximately the
amount of $80,000 supplant general fund expenditures in the early childhood
program. The program will not be cut in any way.
- $20,000 Student Activities - band uniforms. Traditionally, $60,000 is budgeted
annually for cyclic replacement of band uniforms. This coming year that
will, in actuality, be about $40,000 at Broughal. Typically, when those
dollars are budgeted, they have gone to instrument repair and other musical
needs. It is felt that musical instrument repair can be handled through
other means within the budget. Therefore, an actual cost to replace Broughal
band uniforms is being shown.
- $40,000 reduction in Testing K-12. The district has tentatively budgeted about
$190,000 for testing. Through Dr. Nelson's, Mr. Perfetti's, principals', and
Dr. Conard's review, a need for a reduction in some redundant tests was
indicated. The budgeted amount has been decreased by about $40,000.
MR. MAJEWSKI - REVENUES
Mr. Majewski explained the revenue adjustments. He stated that, typically, when
the budget is developed the district has information that is many months in
advance of budget approval. The information is looked at continually in order to
determine whether or not initial estimates are accurate. In some of those areas,
because of the economy, some necessary reductions were overestimated.
- Per Capita Tax - Mr. Majewski explained with regard to per capita tax, both 679
and Act 511, show exact dollar amounts. We typically have been receiving
about $500,000 the last couple of years even though the population has been
growing, the amount of money collected in per capita tax has been getting
less every year because of the aging population. That trend is starting to
become stable as some additional younger families are moving into the area.
Therefore, he is comfortable in replacing some of that money which was
removed from that account.
- Occupational Privilege Tax - Mr. Majewski reported that last year $396,000 was
received. He projected a fairly sharp cut going into next year's budget with
the assumption that the economy was doing poorly, having no idea how long the
bad economy would last or how deep the job losses would be in the area.
Based on the most recent information, he believes that there will be an
additional reduction from last year to this year in receipts; however, it is
starting to look more stable. Mr. Majewski has placed $10,000 back into that
account.
- Earned Income Tax - Mr. Majewski stated that earned income tax is another area
that, because of the economy, he initially was very conservative in his
calculation. With more months behind us and taking a look at that trend, he
feels very comfortable with increasing the earned income tax budget for next
year because the trends have not been as deep as he had initially projected.
- Real Estate Transfer Tax - Real estate transfer tax is another area in which
Mr. Majewski expected a rapid slow down. The real estate market was very
hot; interest rates were low. This has been going on for some time. It
seemed reasonable to assume that at some point it would start to slow down
and possibly even show reductions. That is not happening as fast as he
projected. It would be fair to put $100,000 back into the budget and
continue to monitor it.
- Social Security and Pension - Mr. Majewski stated that these are offsets and
will be reductions in revenue. As you reduce retirement and FICA costs, the
50% received from the state to subsidize those is also reduced.
Mr. Majewski stated the total revenue increases to the proposed budget for
2003-2004 are $413,366. The total change from the budget as discussed on April
30 is $718,028. If the district receives $2,363,486 a mill it will translate
into a reduction of .31 mills, bringing the proposed increase for next year down
to .98 mills, a proposed increase for next year of 3%.
Dr. Lewis stated that, through Mr. Majewski's efforts and perhaps a little bit of
good luck, the bond refinancing generated $3,400,000 in savings of which
$2,400,000 has been earmarked from the fund balance to the budget. It was stated
that an attempt would be made to use very little of that in balancing the budget.
As presented, none of that has been used to balance the budget. A fund balance
of about $3,000,000 is projected.
BOARD QUESTIONS
Director Venanzi asked if the addition to the S.P.A.R.K. program is left intact
as originally proposed. Dr. Lewis responded that two sections of approximately
40 students have been added. The reduction does not affect it in any way.
Director Venanzi, knowing the importance of the music programs in our district,
asked if the reduction will cause a problem in terms of instrument repair. Mr.
Perfetti stated that, typically, the line referenced is actually a line item
covering replacement of band uniforms and replacement of musical instruments,
typically on a six-year cycle, school-by-school. When all the budgeted funds are
not needed to replace the band uniforms, remaining funds in that same line item
are used to replace musical instruments. Just three years ago, instead of being
on a six-year band uniform recycle, on the seventh year the line item was used
for musical instruments and no uniform replacements. This happens to be the year
that Broughal is due for their band uniform replacement. Broughal has the
smallest band and can replace their uniforms for approximately $40,000. The line
item is $60,000. The $20,000 offset would mean that this year the district would
not replace any musical instruments. Mr. Perfetti stated he thinks we are OK in
proceeding in this manner, but stated that the musical repair budget, a different
line item, has been increasing yearly.
Director Haytmanek stated he understands that the PSERS increase is beyond the
district's control. It represents a 328% increase this year. He asked what the
cost of the increase is to the school district. Mr. Majewski stated that the
detail of employee benefits is shown on page 37. The second item is retirement
contributions. Budgeted for the current year is $801,885. Next year's proposed
budget is $2,703,500. Some salary increases attribute for a small portion of
that. If the increase was based only upon salaries, the increase would have been
closer to about $35,000. The 328% increase has more than tripled the amount of
money required to fund the retirement system. Mr. Majewski pointed out in
tracking the retirement rate over the years, in about 1990, the actual
contribution rate was approximately 20%. It was level for a number of years.
Then, there was a fairly significant decline. During that period of time, as it
was declining, the district reaped some of the benefit because the stock market,
among other things, was doing very well. With the stock market returns being
severely negative, we are now in a position that PSERS needs to increase the
rate. Even at 3.77%, it is still lower than it was even three years ago, when it
was closer to 5%. Mr. Majewski stated he anticipates that it will move up rather
rapidly, but 328% is probably going to be the norm over the next couple of years.
Director Amato questioned if the assets PSERS has in place for retirement
benefits have deteriorated to the point where in order to keep it funded to pay
established benefits, the district must contribute the $2,700,000 to bring the
fund to an even level. Mr. Majewski responded that, based on the actuary
projections, the employer contribution rate is required to be increased
significantly in order to be able to meet projected obligations in the retirement
system. The employee contribution rate was raised a year or two ago and will
stay level. Director Amato questioned if when the economy was booming and
investments were raised out of sight, if a level contribution had continued,
would there not have been more funding than needed in the retirement fund. Mr.
Majewski replied that Director Amato is right. There is no doubt that it would
have been more prudent for PSERS to have level funded instead of placing the
district into this current position needing rather large increases. Looking at
the projections over the next five years is rather frightening. Next year the
district is looking at paying 3.77%, the following year close to 10%, the
following 14%, the following 19%, and then close to 21% based upon PSERS'
projections.
Director Amato asked if there is any discussion on the state level of an
alternate retirement plan like most are doing in the private sector by freezing
pension plans and going to a different structure of pension plan. Mr. Majewski
stated he has inquired about that. The response was that there are folks who are
quite interested in looking at that as an option; however, they are taking a
"wait and see" attitude over the next year to find out if, in fact, the
retirement system is going to improve or remain at this level and possibly
require much, much larger increases in retirement contributions. Mr. Majewski
stated he believes if deterioration occurs in the assets, legislation will be
coming through. He doesn't believe it can affect current employees.
Director Haytmanek questioned if the retirement fund jump is funded from the
Bethlehem Area School District budget with no contribution on the part of the
employee. Mr. Majewski replied that the employee contribution depends on when an
employee came into the system. The rate is different for those who began before
1984 and those beginning after 1984. At that point the employee contribution
rate was changed from 5% to 6-1/4%. Then, the increase was found to be
unconstitutional. PSERS had to have a two-tiered system. The two-tiered system,
depending upon when an employee began, lasted until just several years ago when
PSERS changed the contribution levels with the multiplier. For those who were at
5-1/4% who elected to be part of the new system, as the majority did,
contributions increased from 5-1/4% to 6-1/2%. Those employees who were paying
6-1/4% are now paying 7-1/2%. With the employer's contribution, it is 3.77% of
which the district receives 50% subsidy from the state. The employee is paying a
much larger percentage than the employer is paying.
Director Haytmanek referred to page 16, the new position of assistant
superintendent of curriculum and education, at a cost of $439,000. He asked for
a description of the position and how its duties were handled previously. Dr.
Lewis stated that, essentially, this is a new division. Data and Material
Resources was reduced and that money used to offset the new division. Cabinet
was restructured with different responsibilities. The assistant superintendent
for curriculum and instruction is in the first line along with additional
personnel in the area of ELA and mathematics. There are three salaries in that
first line, totaling $250,000. The second line is for an administrative
assistant currently in the system which is a reassignment. That individual will
be working directly with Mr. Villani and his staff. The third line is for a
secretarial position which is a movement from the academic standards office into
this new office.
Director Amato asked if the three administrative salaries, other than Mr.
Villani, are presently in place. Dr. Lewis stated that the board will vote on
the remaining position next Monday. A third position will be recommended in the
supervisory/coordinator ranks which was discussed previously. It is not
reflected at this point in the budget because it is reflected elsewhere in the
budget. There is not an additional position that is not in the budget. We did
that from the reading recovery lead teacher position.
Director Amato stated his understanding was that the restructuring of cabinet
with the assistant superintendent and Mr. Villani was going to be cost neutral.
He asked if that, in fact, is not true at this point and if positions will be
added. Dr. Lewis replied that for all intents and purposes it is cost neutral.
One secretary was reduced. An academic intervention position was reduced. The
reading recovery lead teacher was reduced. There may be a $10,000 to $20,000
offset on the value of the positions.
Director Haytmanek asked for another review of page 36, Driver Education. Mr.
Majewski stated that the only item listed is the contracted service fee of
$87,000 the district pays to IU for on-the-road training. In comparing it to
detail of the prior year, you can see there was more activity. Several teaching
positions were eliminated. The Bethlehem Area School District on-the-road
training was eliminated and contracted out so that the district could net about
$180,000 worth of savings.
Director Leeson asked what driver education cost the school district while it was
provided in-house. Mr. Majewski replied that an estimated total including
vehicle rental, supplies, and classroom instruction is about $310,000. Director
Leeson asked what the program costs currently. Mr. Majewski confirmed that the
cost is $141,590. He clarified that the reductions of the retirement and FICA as
shown are partly due to the $40,000 reduction and a portion due to the S.P.A.R.K.
reduction. A more accurate estimate would be $138,000 to $139,000. Director
Leeson asked if the theory or on-the-road portion of driver education reduces
auto insurance rates. Dr. Lewis replied that it is the on-the-road training, but
you need to have the theory to begin the on-the-road training. Director Leeson
asked what it would cost the district to offer the theory portion in our schools.
Dr. Lewis stated that the district currently offers theory which is the $40,000
plus benefits, for a total of about $51,000. The other figure is the offset to
the IU to provide the on-the-road training. Director Leeson asked what the cost
would be for each child to pay for their on-the-road training. Dr. Lewis replied
that the cost is approximately $250 per student. Director Leeson asked about the
two driver education teachers. Dr. Lewis stated there is one teacher. That
teacher is dual certified and would be moved into a position in his area of
certification. President Williams commented that this discussion has taken place
one or two years ago. She questioned service to the students. She asked if the
district is eliminating the on-the-road portion and if it is being done through
the IU at greater cost to parents. It is a service to the community to educate
young drivers. Dr. Lewis explained that in the recommendation everything in the
driver education program is being removed. Nothing would be offered in the area
of driver education. Dr. Lewis stated Director Leeson's suggestion could be used
to keep the theory portion and secure on-the-road in a variety of ways. The IU
is not the only source of on-the-road training. If the district would do that at
an approximate addition of $51,000, there would be about a $40,000 impact. It
would translate to two-hundredths of a mill, a one-mill increase if the board
wants to keep the driver ed theory portion; on-the-road training at the will of
the student who would be responsible for the cost of about $250. President
Williams commented that previously the cost was $40 or $50 per student. Director
Venanzi asked why we have responsibility for students that are not in our school
district. Dr. Lewis stated it is a mandate that when the district offers certain
pieces; for example, transportation, driver education, certain nursing services
that we have commensurate service to the nonpublic schools. Director Venanzi
questioned if the nonpublic schools pay us. Dr. Lewis replied, "No." Mr.
Majewski clarified that nonpublic students will pay the same fee that public
students pay; there is no other reimbursement. Director Craig asked how many
districts in our area do not offer driver education. Dr. Lewis stated that a
majority have cut back. Mr. Villani stated that many contract with the IU and
that very few districts in the IU offer the theory. Director Craig asked what
the value of the theory would be if the student does not take the on-the-road
portion. Dr. Lewis stated that some students would not be able to take the
on-the-road portion because of monetary resources. They are in a difficult
situation because their insurance will be at a premium, so they will pay it out
over time to be able to drive in the Commonwealth. To offer just one component
of driver education and expect all students to be able to get it on their own may
not be a reasonable expectation.
Director Leeson stated she thinks there are different opportunities to get the
on-the-road training and not that many venues to get the theory. If we offer the
theory, at least students have a choice. Director Leeson stated her
recommendation is that our high schools set up the coordination and the program,
whether or not students must pay for it. The district needs to supply the
students with information as to where they can find the different programs. If
we do not offer theory programs, she asked how the students can get it. She
remarked that it could be a Saturday or after school program that the student
would pay for. Dr. Lewis stated that all private providers have a theory
portion. It may look different than the school district's, but they do offer
both theory and on-the-road training.
Director Amato stated he thinks the direction of most school districts in the
past few years is to eliminate the driver education program.
Director Heske stated his understanding the last time there was conversation
about driver training was that the theory enrollment was dropping considerably,
indicating less interest by the students. Miss Bentkowski stated that
coordinating the theory class at the time when the student was turning 16 was
difficult because the students are not all the same age at the same time. The
course was offered in a certain grade level; some students already had their
licenses. It was shifted to a younger age. Then, numerous students were not
ready to take the course but had to at that point because it was a requirement.
Now, it is an elective. Students select it as part of their eleventh grade.
Some seniors take it, but it mostly fits into an eleventh grader's schedule.
Director Craig stated he thinks to offer part of the program is not a great
answer. The district should do what it did this year, which was a lot cheaper
than it used to be, or do away with it.
Director Heske asked how the district will save the $80,000 on S.P.A.R.K. Dr.
Lewis stated that about $80,000 of a grant remained which would offset general
fund costs in S.P.A.R.K. Dr. Nelson stated that some staff costs and materials
costs meet the requirements of the grant for this one year only.
Director Leeson asked if full enrollment is anticipated for the Academic Academy,
where the students are coming from, and their age. Dr. Lewis stated he agrees
whole-heartedly with the Academy design which was in place prior to his arrival.
The design was two-thirds retention in model and one-third pass through. That
means that two-thirds of the fifth grade population were failing fifth graders.
One-third of the population was rising fifth graders. They were going to be
given this intensive application of study and move on to sixth grade. What has
happened is that the pool of failing fifth graders has been reduced. Probably 90
or so fourth graders will be seen in a pass through model and 50 to 60 fifth
graders in a retention model. There are still some fifth graders who, for
various reasons, meet the criteria. Dr. Nelson stated there are about 100
students moving from fourth grade to fifth that will not be retained. The
district is in a much better position this year because we know the children have
really benefited because we have had a year's experience. Ms. Moran, the
principal, is visiting every elementary school to talk to staff about all the
students coming to make sure the Academy has exactly the right profile so these
children will benefit maximally. There are about 50 fifth graders who will be
retained and come to the Academy. Dr. Nelson stated that the model is shifting
as Dr. Lewis mentioned.
Director Leeson stated she is anticipating that the board will receive a report
on the Academic Academy and its progress. Mr. Perfetti stated that a full report
will be provided at the June curriculum committee meeting.
Director Amato stated that eight full-time teaching positions are assigned to the
Academy. Mrs. Kostem stated that is correct and there are five additional
positions paid for by a federal grant. The number of teachers will remain the
same in 2003-2004.
Director Leeson inquired about the procedure for tracking textbooks and making
sure we get them back in good condition each year. Mr. Perfetti stated that on
the secondary level a book inventory is maintained of textbooks issued. At the
conclusion of the school year, textbooks are collected. If a textbook is turned
in and it is determined by the instructor that it cannot be issued the following
year due to damage done, the student is charged a prorated amount. If there is
some damage to the textbook that does not preclude it being used the following
year, students could be assessed a dollar or two dollars. At the end of the
school year, report cards are withheld from students until they meet their
financial obligations. Mr. Perfetti stated he could not provide a percentage of
books collected. The following fall, there aren't many report cards still at the
school. Therefore, most parents come in and take care of their obligations.
Director Amato asked for information of the $450,000 budgeted for textbooks for
elementary and secondary on page 10. Dr. Nelson stated that fourth grade social
studies books are the elementary priority. The next priority is fifth grade
social studies books. Mr. Perfetti stated that when textbook adoption is done at
the secondary level, the textbook is adopted for the entire grade level. This
year, eighth grade social studies is being replaced. A typical adoption of a
textbook across the system for an entire grade levels costs between $70,000 and
$80,000. The amount of money in the budget for secondary adoption; therefore,
will replace approximately three or four different textbooks. The priority is
eighth grade social studies, eighth grade science, eleventh and twelfth grade
English, seventh grade social studies, seventh grade science, sixth grade social
studies, sixth grade science, and middle school reading. Director Amato stated
that in discussion at a committee meeting one night he found out that there are
monies elsewhere to buy textbooks. Each principal has a certain amount in the
budget to buy textbooks. Mr. Perfetti stated that, for example, four years ago
textbooks were purchased for a particular subject. That textbook will not be
replaced through the general fund textbook account until it is at least five
years old. Every year, when textbooks wear out, building principals replace the
number of textbooks needed or purchase additional books needed due to increased
enrollment. Director Amato asked what the money is in principals' budgets for
textbooks. He commented that if $450,000 is all we have for textbooks, it is
remarkable for a district our size. He stated he asked that question another
time and no one has provided a figure. Dr. Lewis stated that Mr. Majewski has an
aggregate figure which would encompass all printed matter of about $800,000 a
year. That would incorporate what Dr. Nelson and Mr. Perfetti identified at
$450,000 of which about $250,000 was cut by the board for social studies last
year. Out of the additional $350,000 (taking $450,000 from $800,000) you have
library materials for 23 libraries; approximately $200,000 across the system for
14,500 students of books not returned, or damaged, or needed for new enrollments.
Dr. Lewis pointed out that a bubble is coming up through the more expensive
level in middle and high schools. To sum up, Dr. Lewis stated there is about
$800,000 in print matter, $450,000 in new purchase in which a new discipline gets
cycled in every year, coming from the textbook account. Between $90 and $100 per
student is allocated to each building principal to run their building. Out of
that, principals allocate approximately $200,000 system-wide for textbooks.
Director Amato commented that now he has a figure - $1,250,000 - for textbooks
and now he understands that out of the $800,000 in printed dollars comes
replacements, increasing class size, and reference books for libraries. Mr.
Perfetti added that the line item for building allocation in this budget is
$1,438,000 on page 8. Mrs. Kostem stated that page 19 shows the entire building
allocation. Line 540 for books and periodicals shows $357,000 for the 23
schools.
Director Haytmanek questioned Reserve for Encumbrances which has gone from $2,000
to $3,000 two years ago to $150,000. It has been reduced to $106,000 but is
still a large increase. Mr. Majewski explained that because our budgets go from
year-to-year, if you plan on spending money out of this year's budget, after June
30 passes, it no longer exists. If there is a back order on a purchase which
sometimes may have a delay of several months, the money that you had has lapsed.
This reserve was established to cover those expenditures that are a result of
back orders carrying over from one year into the next. Mr. Majewski stated that
Director Haytmanek is correct in saying that the 2001-2002 year had a very
minimal amount. This year it stands at about $15,000. Prior, we had very
significant expenditures that transferred over from one year to the next:
$112,000; the year before that $67,000; $220,000. In the past that number has
been much higher. We have been stopping spending earlier in the year. Some
money is still set aside for expenditures that may carry over to the next year.
Because of the practices that we have begun now, it is requiring less and less.
We are clamping down on those types of expenditures that may have backlogs. He
feels comfortable bringing that level down. On June 30 he will know if there
will be some. The budgeted amount will be $43,600 in reserve for encumbrances.
Director Leeson stated concern about the fund balance. Fund balance was usually
approximately $6,000,000 per year. This year it will be reduced to $3,400,000.
She knows this is a contingency account and, in past history, certainly would
cover most contingencies the district had to face. She has a concern about
reducing the fund balance that much. One concern is that it is a one-time
source. The second concern is that we had talked about a credit rating and that
the credit rating could improve by keeping a $5,000,000 to $6,000,000 fund
balance. She stated concern that this would actually cost more in the long run
by putting us in a higher category for borrowings. Mr. Majewski replied that
everyone should have some type of savings account. The intent is that during
difficult periods it helps smooth some of the rough edges. The intent is not to
deplete it because that leaves you exposed. Mr. Majewski stated he would never
want to go below the level we have right now. This is bare minimum for the size
of our organization. As far as anticipating that at some point money could be
replaced and try to increase fund balance, the budget process does not end when
the board approves the budget. If ways can be found throughout the year to spend
less money, it is done. We may project that we will use a million dollars. If we
only need $500,000, it doesn't mean that we budgeted badly. It means that we
worked very hard throughout the year to find opportunities that were not present
at the time the budget was planned.
Director Leeson stated that we were anticipating that funding from the state is
going to be neutral, exactly the same. She asked if it is possible that there
will be additional income from state sources and, if so, if that could be used to
shore up our fund balance. Dr. Lewis stated that we are optimistic that there
will be some offsets like Dr. Nelson found with PDE. When you look at current
benchmarks, Bethlehem falls within those program options. It will be the board's
decision whether to take some of those program options if and when they become
law. Prekindergarten is a perfect example of when there could be significant
dollars coming to the district, in which case, a replenishment of dollars being
spent from general fund would go back into the fund balance. Dr. Lewis stated he
is very hopeful that there will be some funding streams. He stated that every
legislator is looking at "How are the schools in my district affected by this
legislation?" That is why there is such consternation and indecision. We have
been told by the house leadership that we will not see a state budget until
November.
Director Leeson asked Mr. Majewski if he is comfortable with the fund balance as
it currently stands. Mr. Majewski stated he believes it provides at this level,
adequate funding for the contingencies that we can anticipate. If something is
greater than this, we have insurance to cover catastrophic losses. He is
comfortable with this level of fund balance. He would like to see it build over
the next couple of years.
Director Haytmanek stated there is probably no area that is more important to the
responsible board members than special education. He referred to page 68. He is
concerned about item 320 Professional Educational Services, going from almost
$12,000 to zero. Mr. Majewski stated that additional IDEA funds were received
that we were able to use for that level of spending. There was no loss of
service, just a new funding source. Dr. Lewis further explained that the
Individual with Disabilities Education Act funding went from nine hundred and
some thousand to $1,300,00 next year. Therefore, Mr. Agretto is shifting some of
these items. That is why you see zeroing out to IDEA funds. We are getting a
few more dollars from the federal source; however, we are getting more students.
Mr. Majewski stated we do not supplant existing funds with these federal monies;
we supplement. We are able to provide additional services that we have not been
able to provide in the past.
Director Haytmanek questioned 580 Conferences and Travel, which dropped to zero
from a little over $4,000. Two lines down, under Books and Periodicals, we are
buying $16,000 more material. Mr. Agretto stated that all conferences will be
handled through IDEA. Concerning Books and Periodicals, he has given each
teacher in the school district an amount of dollars they can spend to supplement
what they are doing in their classrooms.
Director Leeson asked about the million dollars to be spent out of bond monies
for the computers. Her concern is that we are taking a lease, a recurring
expense, from a one-time source. Dr. Lewis stated we have two separate programs.
One has been labeled the one-to-one, the sixth grade laptop initiative. That
program, for the most part, will be a composite purchase with grants, some
roll-over funds, and use of entitlement money. Dr. Garrigan stated that it is
very much a patchwork of funding. That is so that we can make progress even
though it is a very difficult budget year. The intent was to get as much from
grant sources as possible.
Director Leeson asked if we are spending more than $1,000,000 on the sixth grade
laptop initiative. Dr. Lewis stated that in some instances we are spending
2002-03 monies because we have done a better job in certain areas which generates
monies. Mrs. Cintron recently informed administration of one such title program.
Those will not be leases because the entitlement specifies that equipment is to
be purchased. The district is trying to limit the impact on the bond issue in
that program. Our intention is to purchase as many as we can from these nonlocal
impact sources.
Dr. Lewis stated that the second program is a straight lease. That is
approximately 1250 replacement computers. The lease has been estimated to be
about $500,000 annually. What was said earlier is that it will be a reoccurring
cost for four years for that set of 1250. But if next year we don't get the
anticipated assistance from the state and don't see improved funding levels, if
the board says not to go to the next level which is the next 25% of our obsolete
inventory, the obligation would be for the $500,000. Whether or not bond funds
or some other resource is used remains to be seen. There are several options.
Director Leeson stated she is still not quite clear about the million dollars
from the bond. Dr. Lewis replied that originally that was proposed, but now we
are not doing that. Originally, both programs were to come from bond funds. Dr.
Garrigan is working on funding from other sources. At least half of that is
being targeted to come from other sources.
Director Amato asked if there is any money in the budget for the replacement
technology. Dr. Lewis confirmed that it will be funded by grant and bond money
only.
Director Heske stated that a lot of research supports that kind of use of the
money. However, one of the items most often stolen is laptop computers. He is
concerned how the possibility of theft will be handled. Dr. Lewis stated there
is a program in the Bronx concerning this. Dr. Garrigan stated that they had
problems with fewer than one percent of their computers, absolutely minimal
problems in a horrific neighborhood. Research shows that kids especially take
extraordinarily good care of these. School districts realize the potential
problem and structure things very tightly to make sure there is nothing lax in
the program to allow this. As with all technologies, we anticipate some normal
breakage. The three-year maintenance contracts that come with the computers
would cover that. The point at which students get to take computers home is when
the issue of insurance comes to play. There are a number of ways of doing that
and it is being looked into. That has been included in the costs provided.
Director Leeson expressed concern about safeguards that students will not be able
to get onto sites that might be inappropriate.
President Williams suggested that, because the laptop computer concerns being
discussed are not budgetary, the topic be discussed at a later curriculum
committee meeting. The board agreed.
Director Amato asked if the $76,000 increase in salaries, line item 110 on page
20, is due to a new position. Dr. Lewis stated it is less than a 4% increase
which would attribute to salary increases for the year.
Director Amato asked if the same information would apply to the $56,000 increase
on line item 15, on page 20. Mr. Majewski stated that is correct.
Director Amato questioned the increase of $305,983 for contractual obligations on
page 57. Mr. Majewski stated that some of the larger increases are in energy,
primarily having to do with natural gas pricing. Director Amato asked if any
programs are available as far as locking in a price for next year if we pay up
front. Mr. Majewski stated that this is being done.
Director Amato questioned the increase of $232,632 on page 84. Mr. Majewski
explained that part of it is contractual and part of it has to do with increased
demands on transportation. Routes had to be added for nonpublic, charter school,
and the Academy, as well as some additional transportation needs. Mr. Majewski
stated that the nonpublic needs far exceed what had been budgeted.
Director Craig questioned approval of field trips. Dr. Lewis stated that field
trips are approved by the principal and then by the director.
Director Amato asked about line item 510 for student transportation, which is
increased by $46,000. Mr. Majewski explained that this is specialty
transportation for special needs students. One particular special needs child
costs $50,000 a year. Some children are contracted out to go to different
locations as they are being placed.
President Williams referred to the CPI list for December listing some of the
largest cost increases among which was fuel. She asked Mr. Majewski to refresh
their memory on the percent of increase shown on those things which really impact
the school district. Mr. Majewski stated that we were very fortunate last year
in that we bid and were able to lock in some decent pricing. It is hoped to be
as successful, but prices are generally quite a bit higher in all areas than they
were at this time last year. What has helped the district is the move to a
larger diesel operation.
Director Amato asked Dr. Lewis to speak about page two of the handout. Dr. Lewis
reviewed the information shown on the handout.
Director Craig stated that one of the big pushes of Pennsylvania School Boards
Association is to do something about the Prevailing Wage Act. He asked if
anything may be changing regarding this. Director Koch replied that in 10 years
of attending the State School Board, every year they have made this one of their
major issues. However, nothing has changed. Mr. Majewski stated that, if
anything, things have regressed. Even when it was thought that mandate waivers
could lower costs, it was reversed. Further discussion about the Prevailing Wage
Act took place.
Director Leeson asked if charter schools must follow prevailing wage for
renovations or construction. Dr. Lewis stated that charter schools and private
schools are exempt from any of the school code.
Director Amato asked where we stand now with respect to the millage increase.
Mr. Majewski stated that how this has impacted us is that with the changes in
revenues and expenditures as presented, the budget has a reduced millage increase
from 1.29 to .98.
Director Leeson asked if the 19 additional teachers mentioned in the letter of
transmittal reflect an increase in student population. Dr. Lewis stated it
reflects an increase of about 200 students in the upper levels which require more
teachers per student. Mrs. Kostem stated that two of the positions are for
technology and a guidance position has been added. These positions are
indirectly tied to student population.
Director Haytmanek referred to $1,700,000 listed under charter schools and cyber
schools. He asked if it means that the school district would get an additional
$1,730,000 million dollars from property taxes and state funding if there were no
charter schools in the valley. Mr. Majewski stated that if there were no charter
schools the district could reduce the budget by approximately $1,700,000. There
is a flawed theory coming out of Harrisburg that charter schools is a cost shift.
It was pointed out that the $1,700,000 does not include the additional
transportation costs.
Director Leeson asked if the district receives a report on PSSA exams and testing
of charter school children. Dr. Lewis stated they are not required to take the
PSSA tests. That is the uneven playing field being alluded to.
Director Craig stated that there are some requirements from the charter schools
that they are responsible to the public schools for certain things. Dr. Lewis
stated that their annual report is to be reviewed. There is no specified format
for that report. The district makes a determination to review or pull the
charter. Director Craig would like further information on the charter school
requirements, because we owe it to the community to keep informed of this. Dr.
Lewis stated that Dr. Nelson is currently working on some of that information.
Director Amato commended the administration for an excellent job in preparing
this budget and getting the increase down to under a mill. A good portion of the
board had wanted to keep the budget increase between zero and CPI. The CPI for
2002 was at 1.36%. So far, in 2003, it is at 1.5%. The consumer confidence
index is at 1% in this year. Another indicator called the GDP (gross domestic
product) for the first quarter ran at 1.6% and presently is at 2%. He asked the
board to keep in mind, while moving forth on this budget, that we need to strive
to try to pull with some of the guidelines stated. The unemployment rate in this
area of 5.8% needs to be taken into consideration. We want to keep the quality
of programs in place. There has been some creative thinking by our
administrators and business manager. He thinks the budget can be tweaked just a
little bit more. There is another meeting for review and then the final adoption
in June.
Dr. Lewis asked clarification of the board's requests for the May 19 meeting.
Director Amato asked that the administration take another look at the budget and,
if it is possible to reduce a few more items, report back to the board.
Director Craig stated that if any board members have thoughts as to where some
reduction is possible, it should be suggested.
Director Koch stated she has been on the board for 10 years. This is one of the
best budgets she has seen. This is probably one of the fairest lists of
reductions she has ever seen, proving that our administrators truly looked at the
budget and made honest cuts which would not be painful as far as cutting
programs. She thinks that anything else that is cut is liable to start hurting
programs.
Director Amato pointed out that he is not saying to cut any staffing or programs,
but we are in some dire times.
Dr. Lewis asked for clarification if it is the board's request that
administration look to be sure it did not miss, in its calculations of revenues
and expenditures, but that no one is interested in any additional cuts in
programming and staffing or increases in class size.
Director Leeson asked if it is possible that busses have become a little more
efficient, a little longer lasting, so that the district could extend the renewal
of buses a little longer. Mr. Majewski stated that we currently are in a 14-year
replacement cycle. The staff does a wonderful job of trying to extend the life
of the buses. Wherever possible, some vehicles have been kept in service. He
would like to continue in the cycle because it is not a short period of time.
Maintaining buses becomes extremely expensive over time. To take bus replacement
off of its cycle may have a greater impact on getting children to school on time
than just the savings of the money. Director Craig pointed out that since the
busing money is from bond funds, reducing busing costs would not help the general
budget.
ADJOURNMENT
The meeting adjourned at 8:25 p.m.
Attest,
Stanley J. Majewski, Jr
Board Secretary
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